Online Financial Tips

Archive for November, 2010

Gas credit cards offer rewards to their clients just like other credit cards do. The lending institutions realize that most consumers are looking to the possibility of getting more gas for their money and that is why the credit card lets them build up points that they can use toward their gasoline purchases. This is a great idea and most customers like it but to make the rewards even more tempting a lot of the oil companies want the customers to be able to use their reward points towards the purchases of other items while they are shopping at the station

The idea behind rewards is to give the customer something back for using their gas credit card on gasoline purchases. The service station makes more sales, the oil refineries can keep the prices a little higher and the lending institutions are making money from the credit they are extending so it stands to reason that the consumer should not be left out of the loop. The consumer is the one who is actually making the profit for everyone with a gas credit card. The consumer is also getting the benefits of having buying power without cash up front. Still the consumer feels that they should be able to get some rewards for their line of credit. That is why the gas credit card reward system is now including other things like oil, transmission fluids, batteries, spark plugs, oil changes and smaller vehicle parts. In some cases since the service stations often provide food products the card can be used to buy these items as well.

Most people know what a mortgage is, due to the fact that many people have one. But, do you know how the mortgage itself came about? Here is some basic history on the mortgage and where it came from:

In the beginning, a mortgage was just a conveyance of land for a fee. The buyer paid the seller a set rate, with no interest, and the seller would sign over the land to the buyer. There were usually conditions that had to be met before the land would be the property of the buyer, just like today, but usually it was based upon the assumption that the land would produce the money to pay back the seller. So, a mortgage was written due to this fact, and the mortgage stayed in effect no matter if the land produced or not.

But this old arrangement was very lopsided in that the seller of the property, or the lender who was holding the deed to the land, had absolute power over it and could do whatever they liked, which included selling it, not allowing payment, refusing payoff, and other issues which caused major problems for the buyer, who held no ground at all. With time, and blatant abuse of the mortgage system, the courts began to uphold more of the buyer’s rights so that they had more to stand on when it came to owning their land. Eventually, they were allowed to demand the deed be free and clear upon the payoff of the property. There were still steps taken to ensure that the seller still had enough rights to keep their interest safe and make sure that their money was paid.

In the U.S., some states have created their own version of the mortgage, which is why they are referred to as “lien states”. In England and Wales, the Law of Property Act of 1925 created a close parallel to the U.S.’s stance on mortgages. In 1934, mortgages began to be widely used again in the U.S., and the Federal Housing Administration helped to lower the down payments on homes to make it easier for buyers to purchase a home. During that time, around 40% of people in the United Sates owned homes. Now, that number is closer to 70%, due to the lower interest rates.

Although mortgages today have evolved into many different forms, they are still basically the same essential contract that they were in the beginning. Now, there are many more laws and regulations to help protect the buyer, seller, and creditor. There are also many different ways to lock in a low interest rate, you just need to talk to your mortgage broker about what the rates are now and what kinds of programs they offer to keep those interest rates low throughout the life of your loan.

Auto loans for people with bad credit are difficult enough to obtain, yet oftentimes they still require a large down payment and higher interest rates. Sometimes, borrowers who already own a car may be forced to offer it as collateral for a short-term loan.

People with bad credit who avail of auto loans that require high monthly payments may find themselves defaulting on the loan and worsening their credit rating. By finding the right lending company, you will be able to obtain a car loan at reasonable rates even if your credit is bad.

If you have a poor credit score, you may be forced to avail of bad credit auto loans. This kind of car loan has the following features:

Interest rate. People with low credit scores cannot avail of prime interest rates on their loan. This means that they may have to pay higher interest rates compared to borrowers with good credit. However, the interest rate is influenced not only by the borrower’s credit score but also by the current state of the economy and competition among lending companies. Thus, you can shop around and look for the best rate even if your credit is bad.

Down Payment. Lending institutions often require people with bad credit to make a large down payment when they avail of auto loans. A large down payment means a smaller loan. This will reduce the risk to the creditor.

Amortization Period. While people with good credit are given 5 or more years to pay off their loan, borrowers with bad credit are usually allowed a shorter repayment period. They are often expected to repay the car loan in 2 to 4 years. Lenders are reluctant to approve the loan for a longer period.

Monthly Payments. Monthly car loan payments can be large if the interest rate is high and the repayment period is short. A large down payment can reduce the required monthly repayments, but in general people with bad credit are saddled with an unfavorable amortization schedule for their auto loan. This often makes it difficult for borrowers to keep up with loan payments.

Tips for Obtaining Bad Credit Auto Loans

People with bad credit can still obtain auto loans at reasonable rates. This can be done by having their parents, spouse or friend as co-signer for the loan. The co-signer assumes responsibility of paying for the loan in the event that the borrower defaults on the loan. Having a co-signer with good credit can lower the interest rate and provide a longer repayment period.

A secured car loan is also a good option for a borrower with low credit scores. By offering property or the car itself as collateral, you will be able to avail of more favorable rates. Take note, however, that the lender will repossess the collateral if the loan is not paid in full.

In today’s competitive business environment it’s important that you have all the tools possible to achieve success. If you’re planning on doing business online and you need to take payments for your products or services, it’s critical that your website have credit card processing utilizing an internet merchant account.

Why is an internet merchant account so important?

Customers like to use their credit cards when making purchases from businesses online because they know it adds an extra level of protection. If they buy something and for whatever reason they’re not happy with the product or service, they have more control of the situation. If the business does not fix the problem to the customer’s satisfaction, the customer can dispute (charge back) the transaction and potentially recover their funds. They can’t do that with a money order or check.

Your business has to get approved for a merchant account. Since there is an approval process regulated by the Visa/MasterCard associations, your business looks much more legitimate if you accept credit cards. Customers know that your business has been checked out by a third party who has approved you to sell your product or service online.

A few other advantages of being able to accept credit card purchases are:

High ticket items – If you sell expensive items it’s even more crucial that you provide your customers with credit card processing. Your potential customers might not have enough money in their checking account to buy your product or service. If they have the option to put it on their credit card and make monthly payments, the chance of converting them to a sale is much higher.

Impulse buyers – If a customer visits your site and a competitor’s site, whom do you think they’ll buy from: the site that offers credit card processing and can ship in 1-2 days; or the site that doesn’t have an internet merchant account and has to wait 10-14 days for a check to clear? Merchants with credit card processing services can ship product much quicker, since they can get real-time approval on credit cards.

Rewards programs – People love to use their credit cards because of all the perks they receive from their issuer.

If you’re going to do business online you need credit card processing services on your website. There are plenty of cheap internet merchant accounts out there if you shop around and ask the right questions.

Debt relief hasn’t always been a sure thing and options like financial settlement been quite a risk for many years. Although debt settlement has been around for over a decade and consumers could use it to clear unsecured debt, it has only recently become popular as more and more consumers could not afford to pay back their loans.

The increase in popularity also meant that irresponsible debt settlement companies would appear as well as fake ones. This reached the peek at the beginning of 2010 when the number of shady debt settlement companies had equaled the one of the professional debt settlement companies. This made for many consumers to suffer from online scams and lose a lot of money on upfront fees without getting any results. Complains started to pile up at the BBB and a change came in 2010 when the FTC issued a new law.

This new law states that every debt settlement company can no longer take upfront fees; only when the negotiations are done and process is complete, can they charge the client for the amount they settled on. These fees are usually a percentage of the reduced amount and so they have all the reasons in the world to do their best and get a good deal. With the release of this law, the number of shady financial settlement companies will drastically be reduced and many consumers will win trust in debt settlement. The small companies will also find it difficult to survive and will rather merge with bigger companies or file for bankruptcy.

The financial settlement industry seems to be more legitimate and the deals made between creditors and debtors are advantageous for both parts. The debtor is no longer forced to file for bankruptcy and ruin his long term credit and the creditor gets a part of their loan back rather than nothing. It can be very easy to take advantage of this new law and legitimate financial settlement companies can now be found very easy on the internet without worrying about scams. A bit of research can result in a great settlement deal and eventually in the clearing of debt.

When considering the cost of flood insurance, first and foremost, you need to weigh its potential cost versus the potential cost of being uninsured. The discrepancy would be astronomical. Most American’s could not afford to rebuild their lives out of their own pockets if their home was destroyed by a flood. That is the purpose of flood insurance; to defer the cost of picking up the pieces after a devastating flood.

The cost of insurance varies from area to area. If you live in an area with a low risk for flooding, your insurance rates are going to be much lower than if you live in a high risk area plagued by hurricanes or flash flooding. According to many surveys, as of 2009, the cost of insurance premiums vary from less than $350 annually to upwards of $3000, depending on the predetermined flood risk in your area. While this cost may seem prohibitive to some, you need to take into consideration that you couldn’t possibly rebuild a destroyed home for anywhere near even the highest end of the flood insurance spectrum.

Keep in mind insurance rates are determined by your home or businesses’ risk of flooding. If you want the lowest rates possible, you should attempt to purchase your insurance through a National Flood Insurance Program approved agent. The NFIP was created to ensure that all homeowners would have the opportunity to purchase insurance at a reasonable price. The rates are actually determined and regulated by the federal government, so you should be quoted the same price by any agent participating in the National Flood Insurance Program. Also, consider including excess insurance as the NFIP program has upper limits that are too low for full replacement coverage in many areas.

Even though flood insurance is not required for all home owners in all situations, it is an invaluable asset if the worst happens and your home is affected by a devastating flood. The federal government created the National Flood Insurance Program for this very reason, to ensure that insurance is as affordable as possible to all homeowners. Do not let yourself become a statistic; protect your home and your possessions. Flood devastation is more common than you think.