Thursday, April 14, 2016

Balance Transfer Checks

Recently we took notice of balance transfer checks. These offers to add to your credit card debt may appear tempting.
Here are a few items to take note of in the rules.

Interest will accrue on new credit card purchases (that are not at 0%) if your balance is not paid in full by the due date. I had seen a recommendation not to use the credit card at all if you are using the card for a balance transfer.

Minimum payments may go to pay off the lowest interest rate including 0%. Some of the companies may apply the money beyond the minimum payment to the highest interest rates first.

When you transfer a balance to a credit card it may not have the normal air miles and rewards.

I was surprised to learn that you can also deposit these balance transfer checks into the bank rather then just using them to pay off another credit card to get a lower rate. Assuming you were willing to get bogged down with using a credit card at all this could sound appealing. I can see many uses where this could come in very handy. The trick would be not to use the card for anything else until it is paid off.

Do the companies send these offers to you when you have a balance on the card or is it just a tool to draw in new business when you are not charging to the existing credit card anymore?

Good luck with your financial future!

Wednesday, April 13, 2016

When Uncle Sam Comes A Knocking...

Did you ever get a rude awaking at tax time?  Ever get a bill bigger than you can handle?
What are your options to pay it?  I will cover one.
A Personal Loan
The quotes will vary based on the lending institution, based on your credit, possibly whether you have an existing financial relationship with them and if you will use the automatic debit feature.

The range of interest rates could span a number of percentage points.  It is best to contact a number of different places.  It is also a good idea to do your homework before you make any final decisions.  Can you finance less money and for a shorter amount of time?
Some lending institutions use the same interest rate regardless of whether you take the loan out for one, two or three years.  That is a surprise to me.  I would have expected to be quoted a lower rate for taking out a loan for one year than for three years.

Here are some helpful tools to help you do your homework.  Knowing the terms of the loan before you walk in the door to sign a contract are key.  You don't want to jump on a loan that you are unsure if the terms are what you need.

401K Cost Calculator for early withdrawal
The 401K Cost Calculator is helpful as more companies are shutting their doors and/or offering their employees their retirement savings early.

Personal Loan Calculator

The personal loan calculator will help you determine what your payment will be as well as how long the loan will take to pay off if you make additional payments.

Hopefully you will not be in need of a loan come tax time.