Monthly Archives: January 2017

Some Tips for Financial Planning Together

When you and your partner are busy balancing everything in your lives, sometimes financial planning can fall to the wayside. Following are 10 quick tips about financial planning together for when life gets hectic.
Set priorities and specific goals. Don’t assume you both have the same goals without discussing them.
Discuss values. Sometimes differing values make agreement on goals difficult. When one person wants to spend now and one wants to save for later, it can be a source of friction. The same is true when one spouse tends to be less risk oriented than the other about investments.
Plan in five year units. When planning for five year blocks, you can set both intermediate and long-range goals without feeling you’re being deprived forever.
Budget together. Set up a manageable system for your cash flow together.
Know where your money is going. Keep records of your spending.
Don’t assume that because you’re both working that you have a lot more to spend.
Save regularly so you aren’t locked into that second income.
Who handles the actual paperwork can be a matter of personal preference, although both of you should practice at it.
Don’t confuse the task of doing paperwork with the act of financial decision making.
Sit down together and discuss finances at least once a month.

Best Credit Card Tips For 2017

The No. 1 rule for savvy credit card use: Always pay your bills on time. But smart credit card use also means protecting yourself from fraud, using rewards to your benefit and allowing your plastic to help build your credit score.

Here are 10 tips to help you accomplish all of these goals in 2017.

1. Have patience with the chip card rollout

There is good news on the horizon for anxious credit card shoppers: In 2017, you won’t have to ask as often, “Do I dip or do I swipe?”

Fewer than half of all retail merchants today are able to process chip-based credit and debit cards, as the rollout of chip-enabled payment terminals has been much slower than anticipated. That’s why you’re still using the magnetic stripe on the back of your card to pay at many retailers.

But global payments consulting firm The Strawhecker Group says you’ll be dipping at 62 percent of all retailers by March 2017; acceptance of EMV (or Europay, MasterCard and Visa) chip cards throughout the year will gradually climb to 90 percent.

This is all in the name of fraud protection. Chip-based credit cards make it much harder for the bad guys to use your credit card information for in-store fraud.

So have a little patience during this continued transition.

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2. Be wary at the gas pump

While in-store fraud should fall as a result of the EMV switch, that’s not the case at gas stations, which largely haven’t converted to chip-enabled terminals. Gas stations were supposed to make the switch in 2017, but in December, the major card processors pushed the deadline to 2020, citing the cost and complexity of the switchover for fuel merchants.

That means swiping at the pump will remain risky for some time, as gas stations throughout the country have been victimized by crooks who place difficult-to-detect skimmers on top of existing credit card readers to capture customers’ card information.

Here’s how to protect yourself:

  • Use pumps that are closer to the gas station convenience store. Criminals tend to install skimmers on out-of-the-way pumps.
  • Pay inside rather than at the pump.
  • If you must use the card reader at the pump, use a credit card and not a debit card. If the credit card is skimmed, you’ll face no liability with the card company — and you won’t risk having money stolen from your bank account.

3. Check statements and your credit report

Even if you avoid risks — like swiping at the pump — you should remain vigilant against fraud. That means checking your monthly credit card statements and regularly looking at your credit reports.

Your statement will reveal signs of fraud, such as whether a criminal took your existing credit card number and used it to make illicit purchases. If you find an unusual charge, contact your credit card company immediately.

Your credit reports will reveal whether someone used your personal information to open new accounts in your name. If you find a credit card, mortgage or other account on your credit report that doesn’t belong to you, contact the creditor immediately.

You are entitled to a free credit report from each of the three major credit bureaus once a year. You can get the report at AnnualCreditReport.com. Stagger the requests so that you’re looking at a new credit report once every four months.

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4. Set up mobile alerts

If you’re not the type of person who is disciplined enough to regularly check your credit card account, you can automate the fraud detection process. Many large issuers now will let you set up mobile alerts that will alert you:

  • When you’re approaching your credit limit.
  • If the card company detects unusual activity, like spending that doesn’t fit your usual pattern, or transactions in unusual or unfamiliar locations.
  • When your card has been used. You can set this for large purchases, all purchases or anything in between.

5. Freeze your credit

In other countries that have adopted EMV credit cards, in-store fraud lessened, but application fraud increased. Expect that in the U.S., too.

Thwarted from using stolen credit card numbers to commit crimes, thieves will turn to using personal information stolen in other breaches to open new credit accounts in your name.

You can catch this type of fraud by regularly checking your credit reports. But that will only identify fraud that has already occurred.

You can prevent new-account fraud by freezing your credit. When you order a credit or security freeze, you tell the major credit bureaus that you don’t want anyone looking at your credit file. Most reputable lenders won’t open an account without first pulling your credit, so this should prevent most application fraud.

It means the bad guys can’t open a credit card in your name. Of course, neither can you without a temporary or permanent thawing of your file.

6. Pay off high-interest debt

After you’ve thoroughly protected yourself from fraud, it’s time to start looking at how you actually use your credit cards.

Do you frequently carry a balance? Now’s the time to get that under control.

The Federal Reserve just raised interest rates for the second time since 2006. It has indicated it could raise short-term rates three more times in 2017.

That will impact what you’ll pay to finance credit card debt, as credit card companies are likely to raise rates in tandem with the Fed’s actions.

The credit bureau TransUnion recently calculated that after the Fed boosted rates by a quarter percentage point, 82 percent of consumers with a variable-rate credit account will see their monthly payments increase by less than $10. A much smaller percentage of consumers will see monthly payments increase by $50 or more.

Further rate hikes would increase monthly minimums, causing “payment shock” for some, according to TransUnion.

The lesson: Start paying down credit card debt now before a rate hike takes a bite.

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7. Get a rewards card now

Credit card companies are engaging in a fierce battle for your loyalty, meaning it’s a good time to take advantage of sign-up bonuses.

In October, JPMorgan Chase reported a 35 percent increase in new credit card accounts for the quarter. No doubt, the popularity of the Chase Sapphire Reserve card helped drive that growth.

New cardholders can snag a 100,000-point bonus and generous travel rewards, including an annual $300 travel credit. The card comes with a hefty $450 annual fee, but that has done little to turn off consumers, who flocked to grab the card.

It’s unclear, though, how long this bonanza can last, as Chase reported the rewards payout cut profits by up to $300 million.

If you spot a deal that’s right for you, snag it now.

8. Use the right card

Rewards are only good if you use them. If you don’t travel much, the Sapphire Reserve card is probably not a good fit.

Consumers leave millions of rewards points and miles unused every year. A recent survey found that 58 percent of Americans say using a card to earn travel rewards is smart, but just 15 percent have ever paid for all or part of a trip using rewards points.

If this is you, consider a rewards credit card that pays you cash-back instead.

And if you carry a balance — as about half of Americans do at least occasionally — a rewards card may not be the right fit at all, since they tend to have higher interest rates.

In that case, you should seek a credit card with the lowest interest rate possible.

9. Mind your credit score

If you regularly carry a balance, that could have a negative impact on your credit score, even if you make on-time payments every month.

That’s because your credit utilization — how much credit you use versus how much total credit you have available — counts for about 30 percent of your FICO credit score.

The lower the utilization the better, but if you regularly carry a balance — especially one that puts you at or near your credit limit — that could damage your score.

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10. Ask for a higher credit limit

If your credit score could use some help, here’s a simple way to boost it: Ask your credit card company to raise your credit limit.

A recent Bankrate survey found that 8 in 10 U.S. credit card holders who asked for a credit-limit increase were approved. But just 28 percent of cardholders had ever bothered to ask.

A higher limit could help your score because it would boost your available credit, lowering your utilization in the process

 

Simple Tips For Saving Money In 2017

Doing some spring cleaning this year? Don’t forget to tidy up your savings, too.

Follow these top savings tips to get your financial house in order.

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No. 1: Set a savings goal

Start by setting a savings goal. It should be measurable, achievable, realistic and timely. You might feel ambitious and set a super-high savings goal, but you’ll also be setting yourself up for failure.

When deciding on a savings goal, think of a specific purchase or benchmark you could realistically reach in 12 months. The goal should require self-discipline and a little sacrifice when it comes to spending (it is a goal after all), but you shouldn’t overreach.

Then, find a friend or family member who can hold you accountable, or write the goal down in a place where you’ll see it every day, like your planner.

No. 2: Choose a savings account thoughtfully

Be picky about where you keep your savings. Savings accounts vary widely when it comes to interest, fees and minimum balances, so do your research and find the one that’s perfect for you. Consider extra charges like monthly service and ATM fees.

While the interest rate might sound minimal at first, it adds up. And every little bit counts when you’re saving toward a specific goal. Check out online banks too; online savings accounts sometimes have higher interest rates.

Compare savings accounts to find the right one for you.

No. 3: Make saving automatic

You might not have the self-discipline to set aside a portion of your paycheck every month for savings. So, make your contributions automatic. Banks often offer free services that will transfer a fixed amount of money from your checking to your savings account every month.

Or, ask your HR department if you can direct deposit a percentage of your paycheck every month into a savings account.

No. 4: Establish an emergency fund

While your savings account might double as a rainy-day fund, if you’re super savvy about saving you’ll have a fund dedicated solely to emergencies. Your savings account might be for big purchases — like for a down payment on a house or car — but you should not touch the money in your emergency fund unless there’s an actual emergency. If you lose your job or have to go the hospital, you’ll have something to fall back on without having to sacrifice that big purchase you’ve been saving for.

Typically, an emergency fund should have enough to cover four to seven months’ worth of expenses. Experts recommend starting your fund with small goals — such as saving $1,000 — and then working your way up.

Looking for a great home for your emergency fund? Shop Bankrate today for top rates on savings accounts.

No. 5: Monitor your monthly expenses

For one month, track every single purchase down to the cent. You’ll know exactly where your paycheck is going and which areas you’re overspending on. You’ll feel more in control of your money, and it’s a key step toward forming a realistic budget.

You might realize, for example, that you’re spending an obscene amount on coffee every week. Once you’re aware of that, you can limit your coffee-shop stops to three times a week and put the rest of that money into savings.

No. 6: Then set a budget

Once you know your spending habits, you can draw up a realistic budget. Budgeting will help you save by helping you cut out frivolous spending. It might be a bit of a trial-and-error process at first; you have to figure out what works best for your lifestyle.

You don’t have to cut out all of the fun stuff, but you do need to pay your bills on time and eventually meet your savings goal.

No. 7: Be smarter with shopping

Be a savvy shopper. A few ideas:

  • Rack up rewards by signing up for loyalty programs at your go-to stores.
  • Sign up for a warehouse club and buy in bulk.
  • Clip coupons when you can.
  • Plan your shopping trips around sales and daily deals.

When shopping online, check out price-comparison websites or use browser plugins to make sure you’re getting the best deal. Just because something is advertised as being discounted doesn’t necessarily mean it’s a good deal.

Find the right rewards credit card for you today.

No. 8: Take advantage of apps

Whether you want to order a car to come pick you up or just want to socialize with your friends, there’s an app for that. So why not use that technology to become a better saver?

There are many apps that help you budget, find the best local deals, and sell your old junk. This year, find one or two apps that will help you save and use them on a regular basis.

No. 9: Consider a flexible spending account

Explore signing up for a flexible spending account where you work. FSAs are often offered by employers as part of a benefits package, and they can save you money on health care costs not covered by insurance, including copays and deductibles.

After enrolling, you decide how much you want to contribute for the year. That amount is then deducted from your salary over time, before income tax. You withdraw money from the account to pay for certain eligible medical expenses, which are effectively discounted thanks to your tax savings. But you must use up all of the funds within your benefits year.

No. 10: Check your progress

In order to save effectively, you need to know exactly where you stand with your finances each week. Make a “money date” with yourself every Sunday and go through your transactions to ensure you’re on track with your budget. If you fall off track (maybe you spent too much one week or didn’t sock away a single penny from your paycheck), don’t give up! Get back on t8rack.

When you hit savings goals, celebrate and reward yourself a bit. Saving is all about moderation, but not completely cutting out shopping and spending.