Archive for March, 2008
The Motley Fool offers useful tools for comparing credit cards for use by online consumers. Credit card offers are arranged by major incentive type. Would you prefer a 0% balance transfer to lower the interest on a high interest card? Or perhaps you plan to put a number of transactions on a new credit card within a short period of time, and would prefer 0% on new purchases? (Better yet, you may want to select a card that offers both, if you can make that work to your advantage.) For many consumers, simply having a lower standard APR makes more sense if you use your credit card at a steady rate and carry a balance.
Whether any of these, or some other form of incentive, is your preferred choice, you can search from among credit card offers that include your particular best incentive option. Easily compare such important features as standard APR for each card, any loyalty incentive details, the interest rate on balance transfers and new purchases (and deadlines), as well as other relevant information to help you easily choose the credit card that best suits your personal financial needs.
Be sure to take advantage of the informational links as well, such as the explanation of which consumers can benefit from a lifetime balance transfer card. (Companies interested in keeping those customers which tend to flit from one balance transfer deal to another as they expire are offering a flat low rate on balance transfers until the debt is repaid, making life much simpler for you if you have been switching credit cards every time the initial period expires.)
Once you have decided which card is the best for you, you can easily apply for a credit card from the chosen offer directly from the Motley Food website, which will link you to the card issuer’s site with a single click.
I have been familiar with the “Motley Fool” information services for some years, and they offer sound advice on a lot of financial topics. Mortgage information is one of the areas they offer especially helpful tools for consumers conducting online research into their personal finances and mortgage options in the process of making decisions.
Helpful articles and calculators guide those seeking mortgages to information that will help you make the best decision. For example, if you wish to know how much you can borrow, by entering you and your partner’s monthly income you can receive a general estimate. If you want to know how much a particular mortgage amount will cost, you can enter the mortgage amount, the term, and interest rate and see how much the interest will cost each month, and the amount of payment required for a repayment mortgage.
For consumers seeking mortgage quotes in the UK, the side-by-side comparison chart of current offers makes evaluating the various lenders easy. Initial interest rates and subsequent rates are calculated to form a cost comparison between lenders, including detailed relevant information regarding arrangement fees and early repayment charges as well as the maximum percentage value allowable for financing. Links allow the consumer to inquire of the listed lenders directly from the Motley Fool website. Various mortgage types have their own comparison list, such as buy to let mortgages, fixed rate, offset, and others, depending upon which will suit the particular consumer’s needs.
There are several principles to employ when managing accrued debt, and making plans to pay off debt. While these can be accomplished by filling out a plan on paper, some people prefer to use software to develop a plan to payoff debt legally. The benefits are that it is easily managed in your computer and it becomes much easier to view the overall picture, and ability to view the projected savings can be a good motivation to continue.
There are several factors to consider when developing your personal debt payoff plan. First, you need to honestly consider your current and potential earnings and your total monthly expense for your current debts. If you are behind on payments, or if your income doesn’t adequately cover your current obligations, it may be wiser to seek a debt consolidation loan. The goal of such a loan is to bundle high-interest debts together and lump them into a single loan of lower interest, thereby lowering the monthly payment so that it becomes more manageable. The danger is that the “extra money” each month is no longer going to reduce debts, and particularly if it creates the illusion of having more money to spend and lulls the consumer into acquiring more debt, the overall financial position becomes worse in the end. In the hands of responsible consumers and those who must reduce monthly payments in order to survive, it can be very beneficial.
If you are fortunate enough to have income sufficient to meet your current obligations, a better choice for overall financial health can be a debt stacking repayment plan. The benefits of debt stacking are that the overall amount spent on monthly payments does not increase, but the time needed to become debt free is reduced, along with a substantial savings in overall monies paid to debtors due to less interest being paid over those years you save.
The principle is to list all of your debts and the amounts being paid. Generally, you will list these in the order they will be paid off under your current monthly plan. It can be beneficial to adjust this to list debts with higher interest rates first, especially if they can be paid off within a reasonable amount of time. A caveat here … often credit card companies will require only a very small monthly payment relative to the overall debt owed, and usually charge the highest interest rates. These debts should be paid off as quickly as possible, so it is better to allocate more funds each month than the minimums required and most importantly, DO NOT further increase your debt by continuing to use those cards!
Any debt that can be paid off, particularly those with higher interest rates, should be concentrated on first (while of course making payments as required to all of the others). If any extra money is available, it is usually best applied this debt. If you use some money each month for investment or savings, it is usually a better return to apply this money to your debts instead, once you have a sufficient amount in your savings account to cover an emergency situation (usually about two months’ worth of expenses). The reason for this is that the interest you pay on your debts probably far exceeds the interest you receive on savings or the return on any investments.
Concentrate on paying off one debt at a time. As soon as that one is paid off, take all of the money you had been sending each month to that creditor, and add it to the payments you are sending to the second creditor, increasing the amount paid for the second debt. This will of course result in the second debt being paid off even sooner. When that one is repaid, take all of that money and add it to the amount being paid to the third creditor, and so on. By the time you reach your longest-term or lowest-interest bill (usually the home mortgage in both cases) you will be able to send considerably more than the regular monthly payment, and will pay down the principal much more quickly than with your regular payment schedule. Your mortgage (along with all of your other debts) should be paid off years sooner than it would otherwise be, saving you a substantial amount of interest.
You will then be debt-free, often in far less time than your mortgage was scheduled to run. The savings for each person will vary, of course, depending upon your personal debt profile, but for almost everyone the savings of both time and money will be significant. If it is possible for you to use a debt stacking plan, you can be debt free in much less time than with traditional repayment methods and save substantially on interest.
There are several ways to save money on auto loans. The first thing is to make sure your credit score is as good as possible, since you will probably be offered a rate that depends upon your creditworthiness. This is not a quick-fix though … it is something that takes time and must be monitored. If your credit rating is poor, it may be possible to receive a better offer if you have a co-signer with good credit.
Another helpful resource is a loan broker. By applying to a loan broker, you can easily get quotes from a number of lenders, which will make it easier to choose one that offers the best rates and options for the loan you need. Quite simply, it’s better to have the lenders competing with one another for your business.
You may also want to consider alternative methods of finance. In some cases, the equity in your home may prove to be a better financing option. If you can take out an additional homeowner’s loan instead of an auto loan at a better interest rate, you may save money. However, you do place your home as collateral on your automobile in this case, which if there is any question at ALL in repayment is a riskier option.
Dealer financing is often a poor option. Before you decide to accept their terms, no matter how good they may sound, check into the terms you can receive from an independent lender. And before you are swayed by the $500 rebate they offer along with their financing, or the offer of a period of time with no payments, be sure to add up the total payments in that case and compare the bottom line. You will usually find that the higher interest over time will end up costing you more than you save with the rebate, or that the free period costs more than if you made payments all along with a different lender.
You might even want to consider leasing a vehicle instead of buying one, if your credit is good enough and you can find a good lease offer. Payments are often less than those for buying a car outright. However, the flip side is that you don’t own anything in the car, and after the lease expires you own nothing.
Careful consumers will explore all their options, and factor in the downpayment, total payments over time, and any other factors that enter in to the deal in order to make a decision. While you are researching, find out how much your insurance payments will be as well, so that you get the whole picture of your financial obligations before you make a commitment. And with the price of gas these days, it is wise to also consider how one model compares with another regarding fuel costs, as this is becoming more and more of a factor as well.
There are different types of home insurance policies available, depending upon your particular needs. Most homeowners opt for coverage of the property, contents, and liability, at a minimum.
The first important part of homeowner’s coverage to consider is the structure itself. Structural insurance policies will pay to repair or rebuild your home if it is damaged by such things as fire, hurricane winds, lightning, hail, or other covered disaster. The coverages should be specifically listed in your policy. Flooding is not covered (and be careful, while hurricanes may be, usually only the part of damage determined to be caused by winds and rain will be covered and not any portion assigned to flooding), and usually such things as earthquakes are excluded as well.
Coverage for the structure will generally also cover detached structures, such as garages, storage buildings, and possibly fences. Check your policy and ask specific questions to make sure. These structures are usually limited to a percentage of your overall policy. Do make sure when purchasing structural insurance that the amount you purchase is enough to rebuild your home if necessary, and update your coverage to keep up with rising costs if needed.
Personal belongings are another category of coverage. If your furniture, appliances, clothing, sports equipment, or other belongings are stolen or damaged by fire, hurricane, or other covered disaster, your policy will pay you for them if you elect this type of coverage. Some policies cover replacement cost, but most are limited to an amortized value. Some policies will also cover your belongings anywhere in the world, so if you are traveling or moving, your coverage may still be in effect.
Certain items, especially expensive ones, such as jewelry, furs, pieces of art, and often collectibles and antiques must be covered separately, or they will only be insured up to a certain limit. You should check with your agent to be sure about these. Also, if you own your own business, items which are a part of your business may not be covered under your homeowner’s policy.
Most policies cover plants, trees, shrubs, etc. under this part of the policy if they are damaged by fire, collision, or are stolen. The policy will not pay in case of disease, wind, or water damage.
Liability is another portion of homeowners insurance that can offer important protection. If someone is injured on your property or by your pets, your coverage should take care of the medical bills. If you, your children, or your pets damage someone else’s property, your homeowner’s liability will usually cover this as well. However, the liability coverage will not pay for damages to your own property.
Another category of coverage is additional living expenses. This type of coverage will pay for your extra expenses if your home becomes unlivable due to a covered event. Generally this is to pay for such things as hotel bills and eating out. Sometimes this coverage is included in a homeowner’s policy, and sometimes it must be purchased separately. You can usually purchase extra coverage, and this may be wise if, for example, you are offered this coverage but only for a short time, and you might need some other accommodations while your house is being rebuilt in case of fire.
Coverage for additional living expenses may also reimburse you for part or all of the rent you would receive if you rent your home out, and it becomes unlivable due to a covered disaster.
Certain types of disasters are excluded from almost all homeowners policies, especially flooding. Generally, you must purchase a separate flood insurance policy in order to be protected against flood damage. The availability and cost of such coverage is determined by the rating of your home relative to flood zones.