Category: Credit Cards

Common mistakes new college students should avoid

Common mistakes new college students should avoid

Moving away from home and into the college dorms can be a stressful process. The chapter of your life known as “high school” has come to a close and now a new stage of your life is beginning.

Living away from home for the first time will be an adjustment. Mom will not be there to do your laundry, give you medication cold when you do not feel well, or cook your favorite meal on Sunday… not cool. However, I have some good news for you! If you avoid these 3 common mistakes that many students are new, you will be installed in the college life sooner than you think!

Mistake 1 – Staying Alone

You should try to spend as much time outside your dorm room as you do inside your dorm room. This is crucial to meet other students. Try working in the fitness center campus, or hanging in the center of the cafeteria or student. These are all great places to start a conversation with other students.

Research indicates that 1 in every 4 students leave campus before their second year. I think the inability for students to make friends and feel like they are part of the campus community is the main reason why students leave campus after their first year.

This is why it is important that you go out and meet other students with similar interests! Even if you were shy in high school, and not out of your comfort zone to university is sure to make your college experience less enjoyable.

An upperclassman at SIU-Carbondale said: “The students who remain in their dorms all day are usually the ones who go home in the first month.”

Remember, this is a scary process for any freshman college new others too, so you can take comfort in knowing they probably feel just as uncomfortable as you do!

Mistake 2 – Racking Up Credit Card Debt

Credit cards can be dangerous for new students. Before signing up for a credit card, make sure you understand the terms and are ready to handle this type of responsibility

A credit card is not free money. When you sign up for a credit card, you enter into a contract with the company credit card. In simpler terms, the contract states that you repay all the money you spend including interest.

Most students make the mistake of getting a credit card and go to the mall to load a pile of clothes or shoes, forgetting that the bill will come in the mail later.

If you decide to get a student credit card, here are some things you should keep in mind:

– Do not apply for every credit card student offers to you. Take time to read each application and select the one that has the lowest interest rate, no annual fee.

– If you can not afford it now, then you probably will not be able to afford when the bill arrives. Therefore, you should not use your credit card in case of emergency. Get a flat tire is an emergency, do not have enough money for pizza on Friday night is not.

– Pay your bills on time. Late fees and interest that you will pay just is not worth it.

Tags : , , ,

How to break your worst money habits

How to break your worst money habits

Using some simple rules and tools can help you save plenty over the long haul.

Break bad habits: The science of habit change

Does it really take just 21 days to change a habit? Experts say it’s not that simple. “Breaking bad habits successfully depends on your readiness to act,” says Heidi Beckman, clinical health psychologist at the University of Wisconsin Hospital and Clinics and speaker on financial behavior change.

John Ulzheimer, president of consumer education at SmartCredit.com, agrees. “If it was easy, we’d all have big savings accounts, and none of us would have credit card debt,” he says.

Beckman says habits change more quickly when you’re in the action stage versus the ambivalence or preparation stages that come before. To catapult yourself into action, she recommends using this three-step approach daily.

1. Create a positive picture in your mind of the result you want, and act as if the bad habit is gone. Use a negative picture of the current stressful result of the bad habit to push yourself further toward action.

2. Identify and focus on your positive financial habits, as proof you can do things the right way.

3. Create simple rules to fall back on when tempted, such as: “Don’t browse shopping websites until all my bills are paid this month.”

Break bad habits: Resist impulse buying

“We’re wired for instant gratification,” says Ulzheimer. “But if you can’t afford to pay cash and whip out a credit card without thinking, then you’re on a downward spiral into debt and money mismanagement.”

Using credit cards to spend more than the cash you have while making only the minimum payments on the cards can build up their balances faster than you can pay them, he says. And if you pay late, penalty fees just add to the total. “You forgo the many benefits of the proper use of plastic, such as for reimbursable business traveling, establishing a good debt utilization percentage on your credit report… and for earning easy cash-back rewards,” says Ulzheimer.

Practice telling yourself “no” when tempted to spend, and try these tactics.

• Distract yourself by making a phone call or unwrapping a stick of gum until the “buy” urge passes.

• Make a rule to only charge for reimbursable business expenses or rewards and only when you have the cash to pay for it during the grace period before the date interest is charged. Double-check dates.

• If you must take drastic measures to curb spending, have your credit card company lower your limit and opt out of over-limit and overdraft spending so your card gets declined.

Break bad habits: Automate finances

Counting on willpower alone is not enough. “When you rely on willpower to meet your expenses, important financial obligations such as timely payments and depositing to an emergency cash or retirement fund are left up to your personal choice and can easily be mismanaged,” says David Bach, author of “The Automatic Millionaire.”

Ulzheimer warns that some use the excuse of not being organized or not having enough money, but paying late just means you pay more because many companies tack on a late fee (typically $39) and many also charge you interest on the unpaid balance as well.

Says Bach: “Make your important payments automatic so bills get paid on time, and important savings deposits that protect you and your family don’t get missed.”

Make payments automatic to avoid late fees.

• Set up shadow payment dates by subtracting seven days from the real due date.

• Make payments automatic using your bank’s or the payee’s online bill pay.

Break bad habits: Pay more than the minimum

Paying just the minimum is a good way to stretch out your debts for as long as you can. “When you only pay the minimum amount due on a credit card, you’re effectively rolling over approximately 97 percent of the balance and adding the interest applied,” says Ulzheimer. This is very profitable for mortgage companies and card issuers, but not you. “The only way to reduce your balance quickly is to pay more than the minimum, avoid fees and stop adding to balances,” advises Ulzheimer.

Pay more than the minimum with every payment.

• Set up automatic timely payments of a higher amount than the minimum.

• For fastest results, create a “debt snowball,” in which you pay as much as you can toward the lowest-balance card until it is paid off. Then you apply that same payment amount plus the new payment amount to the card with the next-smallest balance.
• Consider taking advantage of the automatic biweekly mortgage payment plan your lender may offer. For the one-time fee, the quicker pay-down is worth many thousands of dollars over the life of the loan.

Tags : , , , , ,

Three steps to a great credit score

Three steps to a great credit score

1. Don’t close credit card accounts to improve your credit score.

You might have a good reason to shutter your account — you don’t want to pay an annual fee, you’re concerned about identity fraud, or you want to reduce the temptation to overspend — but don’t do it for the sole purpose of raising your credit score.

One factor in your credit score is your utilization, which is the ratio of balances owed compared to the credit limits on revolving accounts such as credit cards. Utilization is calculated for each credit card you have and across all of your cards. The lower your utilization, the better for your credit score. Closing a credit card account that has a zero balance excludes that credit limit from the overall utilization calculation, which can make your utilization increase and in turn, lower your score.

For the same reason, it’s also a bad idea to ask for lower credit limits on your credit cards if your goal is to improve your score. Doing so can only push your utilization higher.

Tip: If you must close a credit card account but want to keep your score high, pay down balances on other accounts to mitigate the effect.

2. Paying in full doesn’t hide a high credit card balance from your credit score.

If you’re consistently charging near the credit limit on your credit card but pay the balance in full when each bill arrives, you might be hurting your credit score. That’s because your score considers the account balance shown on your credit report. Your credit report will reflect the account balance at the time the issuer supplied it to the credit reporting agency, which will typically be the balance as of your last statement date.

Tip: If you pay in full each month but need to bump your score higher for an upcoming credit check, charge less on your credit cards.

3. Light use of credit cards is best for your credit score.

Maxing out your credit cards can obviously have a negative impact on your score. Using the majority of your credit limit is not good, either. Light use of your cards is best. Using 10 percent of your credit limit will be better than using 30 percent, which in turn is better than 50 percent. A small balance is actually slightly better than a zero balance (though it doesn’t matter to the score if you actually carry a balance).

Tip: If you need to raise your credit score, look at your monthly billing statements to see how your balances compare to your credit limits. Consider increasing your payments, or if you pay in full, using your credit cards less often.

Tags : , , , , ,

Riskiest places to use your debit card

Riskiest places to use your debit card

Gas station payment terminals have many characteristics fraudsters love.

Would you give a thief direct access to your checking account? No? Unfortunately, you may be doing just that by regularly using your debit card. Debit cards may look identical to credit cards, but there’s one key difference. With credit cards, users who spot fraudulent charges on their bill can simply decline the charges and not pay the bill. On the other hand, debit cards draw money directly from your checking account, rather than from an intermediary such as a credit card company.

Because of that, even clear-cut cases of fraud where victims are protected from liability by consumer protection laws can cause significant hardship, says Frank Abagnale, a secure-document consultant in Washington, D.C.

He cites the example of the The TJX Companies Inc.’s T.J. Maxx data breach that exposed the payment information of thousands of customers in 2007. The incident resulted in $150 million in fraud losses, and much of it was pulled directly from customers’ bank accounts. While credit card users got their accounts straightened out and new cards in the mail within a few days, the case created major problems for debit card holders who waited an average of two to three months to get reimbursed, Abagnale says.

While debit card fraud is always a possibility, being careful where you use it can help keep your checking account balance out of the hands of criminals.

Tags : , , , , ,

What you should expect from credit report repair company

What you should expect from credit report repair company

When signing up with a credit report repair company, ask the consultant what is included in the service. There are 3 parts to achieving a great credit score:

1.Repair
2.Trade lines
3.Education

A great credit report repair company will not only help with the credit report repair, but also guide you on what type of trade lines to obtain and educate you on how to use and pay those trade lines to maximize your credit score. Education on how to use credit cards for utility purpose only is extremely important!

Discuss your future goals

A great credit report repair company should ask initially what your future goals are. This way you and the credit report repair consultant have an idea of how many points you are away from your goal.

Knowing mortgage and banking guidelines prior to credit report repair

Make sure your credit report repair consultant is familiar with mortgage and banking guidelines. Somebody that is looking to purchase a home in the future, is going to be much different than somebody that is applying for a business loan.

Is your credit report repair company working for you?

Make sure the credit report repair company you are using has your best interest in mind. The reason most people seek a credit report repair company is to obtain a higher credit score in order to save money on interest rates.

Stay away from credit cards with high fees

Do not apply for unsecured credit cards with high fees. A short term fix can create a long term problem. If you are referred to a credit report repair company from a mortgage broker, real estate agent or a builder, ask the credit report repair company if they are going to continue working on your credit after you purchase the home. Your credit score should be the primary focus. You need somebody that is focused on helping you obtain the highest credit score you can achieve.

Does your credit report repair company have an office location?

Ask your credit report repair consultant if you can meet them at their office location. Many credit report repair companies operate out of their home. You want to be able to drop by the office and speak with somebody if you have any questions and concerns. It is important for you to get to know your credit report repair consultant. There is no better way to establish a relationship than a face to face meeting.

Tags : , , , , ,

U.S. downgrade and your credit cards

U.S. downgrade and your credit cards

Interest rates on cards are likely to be affected much differently than those on consumer loans.

Stocks have kept investors on edge during the past week as the Dow swings from boom to bust. For consumers, it’s a good time to step away from the market mayhem to survey the damage and potential threats to their finances.

One area that is getting short shrift — but shouldn’t — is the impact the Standard & Poor’s debt downgrade may have on credit card rates.

First, some background. The downgrade on U.S. Treasury bonds that was issued by ratings agency Standard & Poor’s — from AAA to AA+ — was widely viewed as a wake-up call to the U.S government and its “drunken sailor” approach to spending (though that might actually be an insult to drunken sailors).

While the Fed says it will keep rates near zero, many economists expect major consumer interest rate categories to eventually rise because of the downgrade, including things like mortgage, auto and student rate loans.

It’s no big secret why. Any consumer with a low credit rating knows that he or she is a bigger credit risk to lenders, and thus must pay higher interest rates for creditors to accept that risk and loan the consumer money.

It’s the same thing with Standard & Poor’s and the U.S. government. A lower credit rating means that global creditors face a higher risk of default when lending money to Uncle Sam. To borrow money — usually through the sale of U.S. Treasuries in the bond market — the U.S. government will have to offer higher rates of return to investors.

But here’s an interesting point. Even if Treasury yields do recover and grow again, your credit card’s interest rates may not follow the script. Why? Let’s look at three reasons:

Credit card rates aren’t tied to Treasury rates. Instead, credit card interest rates are tied to the Federal Reserve’s prime interest rate, which still remains historically low, and should continue along that path. Federal Reserve chairman Ben Bernanke has made it clear the Fed’s rate policy is to keep those rates down, despite what S&P says. That should help keep card rates manageable for consumers.

The CARD Act has a built-in safety net. Government can do something right once in a while. Take the credit card legislation passed in 2009: Inside the CARD Act is a provision that limits how much card issuers can raise rates. The reforms are limited to “current account balances,” meaning card companies can still raise rates on new charges, so be careful of new spending going into the last four-and-a-half months of 2011. But any charges you’ve already made are tied to current rates, which still remain relatively stable. A quick glance at BankingMyWay’s credit card rate search tool shows card interest rates stable between 11% and 20%, with the average credit card rate around 14%.

Standard & Poor’s doesn’t speak for everyone. Right now, S&P is out on its own with its debt downgrade. The other major U.S. credit agencies — Moody’s and Fitch ratings — didn’t go along. And until, or even if they ever do, don’t expect your credit card interest rates to rise significantly.

So call it a cloud with a silver lining. Yes, the stock market is taking a huge hit, but at least your credit card rate isn’t.

Tags : , , , , , , , , ,

How to read your credit report

How to read your credit report

The x-ray of your credit health can be dense, so just look for these six items.

You have one shot of your credit reports. And now? As you’ve probably heard about now, you are entitled to free copies of your credit reports. Federal law gives you the right to request your credit reports from three, one from each of the three major credit reporting agencies each year.

You can get them at a time or throughout the year. Personal finance gurus often recommend taking a report every four months that you regularly monitor your records. Anyway, checking your credit reports is a smart move considering that the information in your credit report determines your credit score.

But once you get the report, what do you do with it? How about giving the treatment of six minutes? Then you definitely want to read the full report in detail, a quick check on a handful of indicators can give you an instant assessment of how good – or bad – your credit is right now.

Here are six markers that can provide an X-ray of your credit health.

Late payments

Delinquencies are “enormous influence” on the credit score, said Stephen Brobeck, executive director of the Consumer Federation of America. In fact, they represent 35 percent of your FICO score.

If you see the ratings invoices were paid 30, 60, 90 or 120 end, “it is very damaging” to your credit, he said.

The other factor is important here: the timeline. How was the end of the payment, and how long you make this mistake?

Following payment, the more it hurts your credit, says Evan Hendricks, author of “Credit scores and credit reports. How the system actually works, that you can do”

But the more time that has elapsed since you made a late payment, the less it will affect your credit, he said.

Limit high ratios of debt to credit

Credit scores typically look at your debt-ratio limit credit or “use” in two ways: They compare the balance on a revolving account to your credit available from that lender. For example, if you have a credit card with a balance of $ 1,000 and a $ 5,000 credit limit, this ratio would be 20 percent.

Scoring formulas also look at your debt-credit limit ratio is a second way: the calculation of the total of all your debts on the accounts revolving lines of credit against your total of these accounts.

So if you have four credit cards each with a credit line of $ 5,000 ($ 20,000 in credit), and you have a balance of $ 1,000 on two of them and nothing on the other two ($ 2,000 debt), this ratio would be 10 percent.

“In an ideal world, you want to have (ratios) of less than 10 percent,” said Hendricks. “But certainly you want to keep them under 40 percent. There is no magic.”

But if you use a balance of $ 2,000 to $ 3,000 with a card that has a $ 5,000 limit, “which will really hurt your score,” said Brobeck. “And what is worse, running up balances on several cards.”

Collection activity

In most cases, if you have an account that went to collections or have been written off as bad debt, you know about this, said Rhonda Bailey, credit counselor and manager of the review of credit report for Credit Counseling Non-profit Arkansas. But not always.

“There are a few cases, as an old utility bill after you have moved, (where) the collection agency and not find (the consumer) has forgotten about it,” she said. “I see that sometimes.”

If you find an article that is not yours, you can dispute and have removed from your report.

If the item is yours, you have decisions to make, says Bailey. Can you afford?

It’s a good idea to check the law of your state of limitations, which is the period of time creditors have to sue you over a debt. Your state attorney general’s office can give you that time, she said.

Separate this time, the question may remain on your credit report for seven years. Plus it was on your report, unless it affects your score.

Judgments, liens, bankruptcies

Hopefully you know if you have had major financial difficulties that involved judgments, liens or bankruptcies. However, if someone else uses – and looting – your financial identity, a notation on your credit report could be your first clue.

Same if a collector less-than-scrupulous you marked with another debt or taken action against you without proper notification.

When you get this report, the digitization of “public records” section, explains Michelle Doshi, the editor of publications for the Consumers’ Association Credit Union National. “If there are liens or bankruptcies, it is a good way to check. ”

Active accounts you have closed – Or never opened

You close a store card after moving. Or you finally had time to ask your daughter to close the card account you have co-signed for her when she was in college.

The next time you pull your credit report, if enough time has passed, we must show that these accounts are closed, said Doshi.

Looking back on your credit report “is a way to verify that you have closed and their dates are correct,” she said. If this should be a closed account on your credit report open lists, it’s a good time to contact the issuer and find out why.

Information drive

Another thing to watch is the accounts you do not remember opening the first place. The absence of a mix-up, which could be an “indication of identity theft,” says Doshi.

Your credit report will tell you who else has looked at my credit report. Called “investigations” into the credit-speak, they are of two types.

Applications are hard when you actually asked for new funding – has completed an application, signed documents, etc. – and asked a lender to verify your story. When you get a hard inquiry, your credit can take a slight decline. Hard inquires could affect your score for one year, but you will see on your report for two years.

Soft inquiries are what the credit bureaus put on your report when someone looks at your credit, but you did not request new loans. If you pull your own credit report, which is a soft inquiry. You’ll also see if a potential lender pulls your credit for marketing purposes. Applications software do not affect your score.

Applications are disks “such a small part of your credit score,” said Kelly Rogers, Chief Development Officer of the Consumer Credit Counseling Service a non-profit Orange County, California, and assistant professor at the University Chapman. “But that’s a great way to see if someone has used your information.”

Tags : , , , , , , ,

Eight of the most annoying fees on credit cards

Eight of the most annoying fees on credit cards

There seems to be little logic to why some companies tack on nuisance charges.

Fees for this, fees for that — even a fee for paying a fee. Where does it end? I’m afraid I know the answer …

In this tough economy, businesses of all types are trying to nickel and dime us with add-on charges. They want you to believe these fees are necessary to cover the cost of doing business, but more often than not, they simply mislead the consumer by adding a hidden mark-up to the advertised price.

Sometimes the fees are small, but other times they can be severe. The mortgage loan industry has been doing this forever, but now the practice has spread like the plague to many other services. I can’t be the only person who is outraged by this continuing practice. Or am I?

Here are eight classic fees that really gnaw at me. Some of them I do a pretty good job of avoiding. Others, not so much …

1. Unlisted Phone Number Fees

This is arguably the granddaddy of them all. I currently get charged $1.75 per month for my unlisted telephone number — $21 per year. Why does it cost the phone company more to keep my number out of the phone book than in it? That’s a rhetorical question, but I’ll answer it anyway: It doesn’t.

2. Convenience Fees

I recently bought four tickets online from Ticketmaster so I could take the wife and kids to see the Harlem Globetrotters. Cost: $300 for the set. But on top of that was a “convenience charge” of $5 per ticket that added $20 to my bill. Usually, buying online saves a company money that they’d otherwise spend on a telephone operator or a store clerk. So why am I being charged to make Ticketmaster’s existence more convenient?

3. Fees for Printing Tickets

I’m not done with Ticketmaster. After gagging on the $20 “convenience” charge for my Globetrotter tickets, Ticketmaster wanted to charge me $2.50 so that I could print the tickets from my home printer. Keep in mind that I also had the option to get the tickets via the postal service — for no charge. Where’s the logic in that? How much do you think it costs Ticketmaster to print the tickets on heavier stock paper, using their ticket machines, and then pay their staff to place the tickets in envelopes with the proper postage and mail it to my house? I don’t know either, but I made sure that’s exactly what Ticketmaster did.

4. Hotel Safe Fees

There are more than a few hotels out there that charge you just for the privilege of using their in-room safes — whether you use it or not. Here’s one hotel that charges $1.69 per night. What a joke. Whenever I see this fee, I ask to have it waived.

5. Tax e-Filing Fees

Among the most egregious fees out there are the ones that charge money for essentially doing nothing more than making a mouse click or pushing a couple of keys on a computer keyboard. How much money does it cost to send some bits of information through the Internet? Well, if you ask TurboTax, it’s $36.95. That’s what they charge to e-file a state tax return. So rather than printing out the return and sending it through the mail, I clenched my teeth and reluctantly paid it. Hey, if you paid attention you’ll find a lesson on opportunity cost buried in there.

6. Tax Refund Fees

After spending four hours doing my taxes with the online edition of TurboTax, I was due a refund. “Perfect!” I thought, “I’ll have TurboTax simply deduct what I owe them directly from my refund.” Unfortunately, it turns out TurboTax charges an additional $29.95 if you choose to go that route. My only other option was to pay by credit card — at no charge. How does that make any sense? So I paid with plastic. I hope TurboTax had to pay the credit card company an interchange fee for me using it too. Dummies.

7. Mortgage Junk Fees

There are dozens of mortgage junk fees out there, some more dubious than others, that make you scratch your head and ask what the heck is that for? Re-conveyance verification fees, commitment fees, and the infamous “warehouse fee” are just three classic examples.

8. And Then There’s This…

It’s bad enough that airlines almost universally charge fees to people who have the audacity to travel with luggage. But a while back, United, US Airways, and Delta took things a step further by charging their “valued” customers who chose to pay for their bags at the airport, rather than online, an additional fee of between $2 and $3 per bag.

Tags : , , , ,

Top mistakes to avoid when refinancing

Top mistakes to avoid when refinancing

Low interest rates do not necessarily mean owners will save on their mortgages.

When interest rates are low, leading many owners to refinance before assessing the true consequences of their actions. A mortgage refinancing can benefit some homeowners, especially if they intend to stay in their homes for the long term or whether they can significantly reduce their interest rates. Sometimes, however, a mortgage refinance may be the wrong choice.

“People often make bad decisions because of what I call” the envy of interest rates “around the coffee table,” says AW Pickel III, CEO of Financial LeaderOne in Overland Park, Kansas “They jump to refinance just so they can tell their neighbors they got a lower rate.”

Here are five of the biggest mistakes homeowners make when refinancing.

Not comparing the actual rate

“Borrowers should shop around for a mortgage by comparing the APR (annual rate) of each loan, rather than the interest rate quoted,” said Gregg Busch, vice president of First Savings Mortgage Corp. in McLean, Va. “You must look at the actual cost of the loan and compare it to your current APR to ensure that you will really save a half point or more on the new loan. ”

Busch points out that many owners today are finding that their home is worth less than they assumed when they have an appreciation.

“Fannie Mae and Freddie Mac have added fees on loans with high loan to value, so borrowers need to reassess the rates and fees before they decide to refinance,” said Busch.

Borrowers who have little or no action may be eligible for refinancing under Home by the Government of affordable refinancing program, or harp, available to those with an existing mortgage owner or guaranteed by Fannie Mae or Freddie Mac.

“The beauty of the HARP program is that it does not require an appraisal, so if you think you are underwater on your loan, this could be a good option,” said Busch. “Just make sure to compare rates and fees to see if the new loan is worth the cost.”

Choosing the Wrong Loan

Pickel said the first step when deciding to refinance is to establish a clear objective.

“If you think you can lose your job, but you have a moment, your focus should be to reduce your overall payments regardless of the length of the loan,” says Pickel. “If you want to be debt free by some years, then you need to find a loan that meets that goal.”

Pickel said that sometimes, even with a lower interest rate, you could end up making higher monthly payments due to packing in closing costs has increased the size of your mortgage.

Each borrower must look at the cost of refinancing and the financial benefits before choosing a loan, said Busch. Forget that some borrowers to refinance into another 30-year mortgage can add years of payments, especially if they have paid on the loan during a long time.

“A ARM 10 / 1 (variable-rate mortgage) or a 10-year fixed rate loan can sometimes be a better choice depending on the individual circumstances of the borrower,” said Busch.

Not Shopping Around

While many borrowers to compare loan offers from more than one lender, they can also shop for title services and save hundreds or sometimes thousands of dollars on their loan.

“Check at least three lenders and at least three companies before choosing a title,” said Busch. “It can be an advantage to go to the Management Authority that manages your loan the same now, because they may require less documentation, but I recommend also searched at least one other direct lender to compare rates and expense. ”

Ask the company as a reissue rate on title insurance own your vehicle – Busch believes that this can save up to 35 percent on premiums.

When refinancing you should not

Charles A. Myers, president and CEO of Home Loan in Jackson, Mississippi, said refinancing can be a mistake if you do not plan to stay in your home for many years.

“One client wanted to refinance to improve his property and rent it, but it would have ended up with a larger mortgage and then need a different loan because the property is no longer the principal residence,” says Myers. “The key is to ensure that the refinancing has a net tangible benefit to the owner.”

Borrowers must decide how long they intend to stay in the property and determine the break-even as economies outweigh the costs before deciding to refinance, said Myers.

Does not follow the Borrower responsibilities

Owners should rely on a lender to refinance, but they have obligations of their own that they are not met, could derail the mortgage refinancing. Borrowers must have good credit to refinance with most lenders require a credit score of 640 and above even for a loan insured by the Federal Housing Administration, said Myers.

Lenders can check credit borrowers again just before closing, if you need to maintain good credit and avoid a new debt, even after the refi was approved.

“Check the lock-in date to the interest rate on your new loan to make sure you can close before the rate expires,” said Busch. “Be sure to turn in all your documents as soon as it is required, because a delay could mean that your date should be postponed.”

Tags : , , , , , ,

Protect yourself from new skimming scams

Protect yourself from new skimming scams

Experts say you should always wiggle your card when you insert it into the ATM.

A one-time victim of identity theft, I’m all too familiar with the residual headaches of losing control of your critical personal information. So I pay particular attention anytime a new scam surfaces — like the recent debit-card skimming scheme at Michael’s Stores, a national chain of specialty shops.

OK. Skimming isn’t actually new. It’s been around for a few years. But until now it’s mostly been practiced at gas stations and remote ATMs. Today, it’s everywhere and growing.

Skimming has become the identity theft of choice for many crooks. You have a one-in-five chance of being a victim; losses will total about $1 billion this year. Other forms of identity theft include dumpster diving, phishing and pretexting. But skimming generates far quicker and richer rewards for perps, who essentially gain immediate access to cardholder bank accounts.

At Michael’s Stores, thieves managed to hack the debit-processing equipment at 80 locations in 20 states. They were able to instantly duplicate customers’ cards and begin making cash withdrawals from the associated bank accounts, $500 at a time.

How did they do it? The crooks tampered with debit-card processing equipment at the point of sale, inserting a tiny device into the store equipment that enabled them to read the magical magnetic strip on the debit card as it was swiped. Evidently, a pinhole camera then recorded customers as they entered their PIN.

This is a frightfully difficult crime to defend against. Technology has advanced to where miniscule cameras and card reading devices are virtually undetectable. Some devices allow criminals to download the information stored on skimming devices remotely without even having to retrieve the device. You might consider just using a credit card, which has greater protections.

Young or old, if you are going to use a debit card you need to take precautions. Here’s how:

1. Cover your PIN. Your bankcard won’t work without the PIN. Thieves usually obtain the PIN with a small camera stationed near the card processor. So keep an eye out for anything that seems out of place. It might be a camera. In any event, shield the keypad with your body or free hand when entering your PIN.

2. Be selective with your ATM. Again, look for anything out of place. Any wires exposed? Tape evident? Hardware loose? If so, find another ATM. Use an ATM inside a bank whenever possible. Stay away from ATMs in remote locations or that appear seldom used. These are easy to tamper with and might even be dummy cash machines.

3. Leave some wiggle room. When you insert your card, wiggle it while it’s in the slot. If something seems loose, there might be theft device attached to the swipe hardware. Wiggling the card might jar the theft device from its hiding place.

4. Monitor your accounts. One of the best protections against continued use of your stolen information is to check bank statements regularly. With a debit card, you may be responsible for the first $50 and you must report theft within two business days of discovery and no later than 60 days after the theft for protection. Credit cards have more protections and might be a better choice if you have any reservations about an ATM or processing machine.

5. Look for security cameras. ATMs and gas pumps that are under video surveillance and have cameras aimed directly at the card readers are less likely to be fitted with card-skimming equipment.

6. Keep an eye on your card. When you give your card to a waiter or clerk, be skeptical of any request to swipe it through multiple devices or if they must leave your sight.

7. Be careful at the gas station. Gas stations are among the most prone to skimming. Use a credit card or choose the credit option on your bankcard.

Tags : , , , , ,