Tips on Managing your Credit Card

With the advancement of technology comes the improvement of banking and financing processes. This includes transaction that involve a credit card. Credit cards have started a long way back but banking institutions have kept their credit card services improving.

Credit card nowadays have become one of the most essential financial tool for payments and transactions. Credit card have become so infused in any financial process that involve payment that it becomes a very essential tool for convenience and efficiency. But having a credit card requires proper management. Without it, you will most likely end up in debt.

Here are 2 ways of how you can manage your credit card properly.

  1. Monitor your usage and pay in full

Credit card use is for convenience and efficiency. Always have that in mind. It is not used to replace money for which you can pay your purchases. Having this in mind creates a mindset of purchasing with what you have not with what you can. A credit card gives you a credit line that you can use which is actually a loan from the bank. This loan earns interest and eventually needs to be paid. Without having enough cash to pay your purchases, the credit (or loan) stays outstanding until it has been fully paid. Unless you have enough cash to pay off the purchases you charge with your credit card, avoid using them.

  1. Avoid revolving your credit as much as possible.

The convenience of a credit card is having the ability to revolve your credit and only paying a minimum amount due from the total outstanding balance. It would be a good way to create an opportunity to pay off a large purchase slowly but making sure that you pay more than the minimum amount. What is important is that you should be able to create a monthly payment scheme that can eventually pay off your outstanding balance in a short period of time. Avoid paying just the minimum as you are only paying for the interest.

Managing your credit card is the best way to avoid getting in debt. Never take a credit limit for granted as it can cause you to slowly get into debt.

Personal Loan Scam and Dealing with It

Personal loans are financial means for both the borrower to raise funds and licensed moneylender to earn interests for lending money. Unfortunately, there are people who take advantage of these means to gain from the other without the intention of keeping the agreement. These fraudulent activities often leave the victim losing a large sum of money.

Here are some of the fraudulent activities that scammers often engage in.

  1. Lending with High Interest Rates and Fees

Some lenders take advantage of those who take in personal loans as an option to raise funds. Often, these types of lenders will hide fees and other charges and incorporate it with other requirements. They also charge high interest rates especially to those who need the money the most. Lenders who offer low interest rates may at times adjust the rates to double to cover additional payment requirements. These adjustment creates a very high interest rate that needs to be paid.

  1. Personal Information Theft

Personal information theft can happen on the side of the borrower where the thief makes use of the information for illegal purposes. This is common with online lending companies who offer “Guaranteed” approval of personal loans. When making the application, the lender asks you to complete an online form indicating all the necessary information to commit illegal transactions. It is important to be wary of these lenders who try to steal personal information.

  1. Upfront Payment Fees

When a lender is asking to pay for fees in advance before releasing the loan amount, this is often a sign of fraudulent acts by the lender. It is rare to require fees to be paid in cash upfront before you can receive the amount you are borrowing.

  1. Fictional Identity

There are often applications that go through brokers that where the borrower is fictitious in character. These are often committed by brokers themselves or applicants trying to scam lenders. These fictional characters often get through because of getting shielded from credit checks from having a third party involved in the application.

Managing Your Mortgage Loans

With every debt management, you need to have a good plan and an established strategy in managing them. Mortgage loans are no different. Like any other debt, you may get into it deeper without managing them and missing out on important matters that concern the debt.

Mortgage loans are one of the high value loans that an individual or company may get into. If the amortizations are unpaid and the debt is starting to balloon, then the borrower may risk losing the property and the money that has already been paid.

Here are a few tips to help manage a mortgage loan.

  1. Read and Learn How Penalties Work

Understanding the penalties and how they work is the best defense you can have to avoid incurring them. Penalties on mortgages are very high and can be avoided. Incurring these penalties only cause you to lose money when these could have been prevented.

  1. Minimizing the Principal

During instances where extra cash is available, it is advised to overpay your amortization to minimize the principal amount. Like any other debt, an interest occurs on the outstanding balance of your principal which serves as a rent payment for the money being borrowed. The interest being paid can be minimized by paying off a portion of the principal when extra cash is available. This can also lessen the loan period that is needed to be paid.

  1. Applying an Offset Mortgage

Offset mortgage are faster ways of paying off your mortgage. It can be done if you have a good amount of cash in your savings which you can restrict for the outstanding loan balance. You maintain the same amount of amortization payments with the calculated value with the applied offset. This gives an opportunity of the bulk of the payment being applied to the principal as the interest is only computed at the net offset value.

Mortgages are a great way to purchase real properties at an affordable price. By learning how to manage your mortgage can help you pay off the loan sooner than expected.

Managing Your Business Loan

Getting a business loan is one of the most important decisions that an entrepreneur needs to make. These business loan decisions can be made for startups, expanding to another location, or even growth. With a lot of things that go on during business growth, a business owner often neglects focusing on the obligations of the business. It is a must that obligations, including business loans, must be planned and managed well. Without proper planning and management, business loan can prove to be disastrous instead of bringing benefits to your business.

Applying for Business Loan

Make sure you look for the best loan package that a lender can offer. Scout for lenders and compare them and their loan packages. Identify what benefit the lenders and their packages can give your business. A compare sheet is advised for you to identify the difference being offered. Don’t hesitate to ask or interview the lender. Don’t hold back on asking for deals. Remember that getting a loan is doing business with a lender.

A lender will try to sway with what they can offer but never lose sight of the small but important details. Interest rates, penalties and fees are things you would need to review. Make sure that you have read and understood the terms of the deal to avoid any surprises throughout the term of the loan.

Reason for Getting a Business Loan

Make sure you have a goal that is set and the need for the loan has been identified. Having a goal and a need helps you maximize the use of the fund and allows you to benefit more on getting a business loan. Like any other loan, without knowing your goal and your need, the funds collected can end up in unnecessary spending. These unnecessary spending will neither benefit the business in any way nor achieve the goal that the business is aiming for.

Once you have identified a goal, make sure that the plan prepared in managing your loan is executed well.

Tips on Managing Your Payday Loans

Payday loans, like any other loan, require proper planning and management. Without clearly identifying your strategy can contribute for you to end up in a great deal of debt. Always remember that most people go into a payday loan is because the income they receive is often not enough to cover their entire expenses for the month.

Here are a few tips that you can keep in mind to ensure that you manage your payday loans properly.

  1. Avoid Getting a Loan to Pay Off a Loan

When getting a payday loan, make sure that you don’t have an existing loan in place especially you are already “just getting by” with your existing income. Getting a payday loan to pay off a loan or for paying off expenses when a loan is in place can bring you into debt without even noticing it. You will just realize that you are paying off loans with most of your income rather than paying for your needs.

  1. Get a Loan Which You Can Pay

Always remember that licensed money lenders (especially brokers) will offer you higher loans to be granted. This allows the lenders to charge higher fees based on interests and allows the brokers to get a bigger commission. Always evaluate what your actual needs are and base your loan from there. Avoid getting more than what you need as it would mean paying of a higher amount, oftentimes higher than what you can pay for.

  1. Payday Loans as a Last Resort

As much as possible, avoid payday loans as much as you can since they are known to charge very high fees and interest rates. If you find yourself short of funds for your expenses, try to find someone who can lend you an amount who won’t charge interest. Always consider payday loans as your last resort especially when you already find yourself short of cash paying off your expenses. Payday loans will be an additional expense come the following month.