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Switching Credit Cards For A Better Deal

Jan 28

Posted by admin in Credit

You may think that a credit card is for life ? but with the level of hot competition among credit card providers these days it has never been easier for people switching credit cards to get a better deal than the one they currently have! So, if your credit card provider is not offering you the best current market conditions, the time may have come for you to consider a switch.

Essentially there are two ways in which you can move your current credit card balance to a new card provider:

- you get an offer (usually in the post) to move your current balance to a new provider offering better terms and conditions than what you currently have;

- you make an application to a new provider and in your application you inform the new provider that you intend to move a balance over from your previous provider.

Either way, once your new card has been approved, you simply switch over the balance of the old card to the new card and then cancel the old card. In fact it could not be made easier for you to move your balance as the new card application form will likely have a space for you to fill in your current details and your new card provider will then arrange for the balance to be transferred once your new card has been approved!

Keep in mind that card providers today like the idea of customers moving over existing balances that are earning them interest income and competition is fierce to get people to move over to their card, so make sure when your are considering switching your credit card provider that you get:

- a better APR deal than you currently have;
- a better rewards system than you currently have;
- if possible, no membership or annual fees.

Also, if you don?t want to, you don?t actually have to close an account just because you have moved the balance to a new card. Consequently, if you have two credit cards and one of these credit card provider is offering a lower APR than the other, but the other is offering a better rewards system, you can keep both cards active and every now and then you can arrange to have the balance of your more expensive APR-charging card switched to your less expensive APR card. That way you can enjoy the best of both worlds!

Joe Kenny writes for CardGuide, offering the latest information on credit cards, visit them today for more best buy credit cards.

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How To Deduct Points On A Real Estate Loan

Jul 17

Posted by admin in Taxes

A point on a mortgage loan is one percentage point of the loan. For example, two points on a $200,000 mortgage loan would be $4,000 ($200,000 x 2%). Points represent prepaid interest.

A taxpayer who uses the cash method of accounting may deduct points paid on a loan to buy or improve a principal residence as long as the points are a normal business practice in the area, are reasonable in amount, and the loan is secured by the residence (Sections 163(h)(3)(B) and 461(g)(2)). Interest, including points, on a loan to acquire or improve the taxpayer\’s residence is limited to the interest on the first $1,000,000 of the mortgage loan.

The limit on deductibility of interest on a loan to acquire a residence applies to the taxpayer\’s principal residence and one other residence (Section 163(h)(4)(A). However, a taxpayer may deduct points paid in the year paid only in connection with a mortgage loan on the taxpayer\’s primary residence (Section 461(g)(2)). If a taxpayer pays points on a mortgage loan to purchase a second home, the taxpayer must amortize the points over the life of the loan.

A taxpayer claims the deduction on Schedule A of Form 1040. A buyer may deduct the points even if the seller pays them (Rev. Proc. 94-27, 1994-1 CB 613). A taxpayer who uses the accrual basis of accounting must amortize the points over the life of the loan.

If a taxpayer pays points on a home equity loan, the taxpayer may not deduct the points immediately unless the taxpayer uses the proceeds of the home equity loan to improve the property. If the taxpayer does not use the proceeds of a home equity loan to improve the property, the taxpayer must amortize the points over the life of the loan (Sections 163(h)(3)(C) and 461(g)(1)).

The deduction of interest, including points, on a home equity loan is limited to the interest on a home equity loan up to $100,000 unless the taxpayer uses the home equity loan for business purposes. If the taxpayer pays the loan off early, the taxpayer may deduct the unamortized points in the year paid (Temp. Regs. Sec. 1.163-10T(j)(3)).

The same rule that applies to a home equity loan also generally applies to a refinancing of a taxpayer\’s mortgage loan. The taxpayer may not deduct the points immediately. The taxpayer must amortize the points over the life of the loan. If the taxpayer pays the loan off early, the taxpayer may deduct the unamortized points in the year paid.

However, for taxpayers who live under the jurisdiction of the U. S. Court of Appeals for the Eighth Circuit, if the taxpayer pays points on a mortgage loan and uses the proceeds to pay off a short-term bridge loan, the taxpayer may deduct the points in the year paid (Huntsman v. Commissioner, 90-2 USTC Para. 50,340, CA-8, 1990, rev\’g 91 TC 917). The U. S. Court of Appeals for the Eighth Circuit has jurisdiction over taxpayers in the states of Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota.

If a taxpayer pays points on a mortgage loan to acquire undeveloped land, a commercial building, or rental real estate, the taxpayer must amortize the points over the life of the loan. If the taxpayer pays the loan off early, including a sale of the property, the taxpayer may deduct the unamortized points in the year paid.

Taxpayers should remember to deduct points paid in connection with a mortgage loan to purchase or improve their principal residence, whether the purchaser or seller pays the points. For points paid in connection with a refinancing of a mortgage, to obtain a home equity loan, or to obtain a mortgage loan on rental or commercial property, taxpayers should remember to deduct the points over the life of the loan and deduct the unamortized points in the year the taxpayer pays the loan.

Alan D. Campbell is a CPA in Arkansas and Florida and is self-employed primarily as an author of tax publications. He earned a Ph.D. in accounting with an emphasis in taxation from the University of North Texas. He is also admitted to practice before the United States Tax Court. He has published numerous articles on tax topics in professional journals. He is the co-author of the book Tax Strategies for the Self-Employed and the revision editor of CCH Financial and Estate Planning Guide, 15th edition. For more tax savings strategies, please see his blog: http://taxsavingsstrategies.blogspot.com

Writen By : Alan D Campbell

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An Investor\’s View Of The Fair Tax: A Resolution

Jul 17

Posted by admin in Taxes

The vast majority of Americans are investors, although many don\’t realize it. The vast majority of Americans are creative with their 1040 numbers, although most won\’t admit it. The majority of Americans would agree that investing, retirement planning, and estate preservation would be easier to manage if the Internal Revenue Code was comprehensible. A landslide of American voters would elect any candidate championing IRC replacement surgery.

All of us aspire to some degree of economic security and none of us would be so critical of the wealthy if we had a shot at joining their ranks. One side of the legislative mouth encourages savings and investment while the other treats it with totally \”unearned\” disrespect. One wealthy political party wants us to hate anyone with indoor plumbing while the other (wealthier) one spends most of its time trying to protect its diminishing turf and powerful cronies. All levels of government view businesses small and large as their all-purpose Reserve Accounts and, as a result, both prices and taxes suffer from a terminal case of \”downward stickiness\”. Not surprisingly, in a DC crowded with 10,000 combative fiefdoms, nowhere can a PhD in dot connecting be found. We can change this!

It is likely that most of you are more familiar with the controversial Fair Tax Legislation than I am, but what I have found most shocking is just how thoroughly The Act\’s refreshingly new ideas have been swept under the congressional carpet. Neither political party really wants to change the sacred IRC, and why are our media heroes keeping their heads in the sand on this one? Let\’s squeeze some meaningful change out of the next administration. From an Investor\’s point of view, implementation of just three elements of the Fair Tax would be an outstanding starting point, even without the more sweeping changes that the Bill addresses.

[The Fair Tax Act of 2003 was authored by Representative John Lindner and co-sponsored by 54 others. Its purpose is: To promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States.]

Now this is pretty heady stuff, for sure, but every bit as easy to implement as real Social Security reform would be. The three changes reviewed briefly below would be an excellent Phase One.

1) Eliminate the Corporate Income Tax, and all other nuisance fees and taxes that businesses must pay just for existing. Whatever any business is charged in fees, taxes, and mandatory assessments is translated into higher prices for goods and services? and at more than a 1/1 ratio. Governments need to look at businesses as employers and wealth generators, not as rateables. Lower expenses should result in lower prices and higher profits, and this would be comparatively easy to monitor for compliance.

Corporations would have more incentive to control their general expenses if such savings would actually make it to a bottom line that could be used to grow the business, compensate owners, and reward employees. More, higher paid, employees and more spendable (untaxed) corporate dividends are good for the economy. How many billions in lobbyist fees would be removed from corporate pricing formulae? With no income taxes or mandated charges to fork over, corporations could focus on growth and innovation. Investors would own more viable companies, selling more competitive products, to a more affluent population. Additionally, fewer jobs would be exported, more foreign companies would invest in the US of A, and GNP would rise at a faster pace. Rising profits would increase dividend payouts, stock repurchases, debt retirement, and employment opportunities.

2) Eliminate the Capital Gains Tax: I\’ve often referred to taxes (or tax avoidance decisions) as one of two \”Tails\” that \”Wag the Investment Dog\”. Every year, millions of people go out of their way (with professional encouragement) to lose money on perfectly good securities. Those who take profits too soon are punished severely and those whose behavior is tax-wise may severely damage their investment portfolios\’ future. Although it is clear that the Capital Gains Tax was originally designed to pick the pockets of those terrible folk wealthy enough to play the stock market for profit, it now inflicts considerable pain on all of us? particularly those who foolishly subscribe to the archaic Buy \’n Hold investment (mismanagement) strategy. Times have changed, and the average investor is now a pretty average guy indeed, willing to build a future if Uncle will let him.

A Government that bemoans the population\’s low savings and investment rates has only itself to blame, and Wall Street Institutions are happy to exacerbate the problem with their own financial pandemic of products, strategies, and tax deferral/avoidance schemes. Fair Tax advocates estimate that Billions of Dollars, Hours, and Antacids could be allocated more productively every year, just from eliminating this portion of the tax form preparation process? not to mention the trees.

3) Eliminate taxation on all forms of investment and Retirement income: Dividends, Interest, Rents, Royalties, Social Security, Pension, IRA, 401(k), etc. It just makes abundant sense, doesn\’t it? Without taxation, interest rates, rents, and professional\’s fees, just to name a few, could fall. Personal disposable income would rise and a much larger number of retirees would be able to live comfortably. Isn\’t this what periodic IRC tinkering is all about? Wouldn\’t it be cool if all of those different IRAs and self directed plans could be combined and relabeled: \”My Untouchable Retirement Plan\”? We would all save more and spend more if we had more to deal with.

No one expects a hundred million taxpayers to agree 100% on the final plan. I have problems with taxing education and health care spending, for example, and there is no doubt that displaced IRS bureaucrats will populate new compliance entities that monitor corporate operations. And most would agree that three separate sales taxes would be unacceptable. But real win/win/win change is in sight. We just need a positive leader with some?

Here\’s my proposed 2006 (and beyond) Voting Resolution for anyone with even the smallest start-up IRA account: \”I promise to never, ever, cast my vote for any incumbent, at any level of government and from any political party, that has not clearly demonstrated that the repeal and replacement of the existing IRC is at the very top of his or her political agenda.\” It\’s time to reinvent this wheel!

Steve Selengut
http://www.sancoservices.com
http://www.valuestockbuylistprogram.com
Professional Portfolio Management since 1979
Author of: \”The Brainwashing of the American Investor: The Book that Wall Street Does Not Want YOU to Read\”, and \”A Millionaire\’s Secret Investment Strategy\”

Writen By : Steve Selengut

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Building Wealth By Paying Yourself, Not Others

Jul 1

Posted by admin in Wealth Building

One of the interesting things about many ?average? individuals who are well off financially is just how frugal they are. That doesn?t mean they don?t spend their money, but they are very selective about doing it in that they consider how it impacts their long term financial health.

Anyone interested in building a nest egg large enough to give them financial freedom should also consider such a perspective. Following are three examples of differences in spending patterns and how they can contribute to financial success.

? Many home owners (and I?m using this term loosely, since they don?t really own it) don?t mind paying interest on a house loan because they can write off that interest on their taxes, thereby reducing what they give Uncle Sam. However, what they don?t consider is just how much money they?re going to give to the financial institution over the time period of the loan (it may be as much as twice what they paid for the house!). If they instead paid off the loan sooner then invest the extra funds, they can end up earning interest instead of paying it. They?ll be paying themselves instead of the bank.

? Leasing an automobile is less expensive than buying one if you only consider the monthly payment. But, not only have you given a substantial sum of money to the finance company during the lease, but at the end you don?t own anything and have to start all over. Purchasing a vehicle (especially if it is 2 years old, after which a lot of the depreciation has occurred and you can get it for much less than when it was new) is a lot less expensive in the long run, and the money saved can be invested. You?ll be paying yourself instead of the leasing company.

? Eating meals out instead of at home certainly has advantages ? someone else does all the work. But it is very expensive when compared to home cooked meals (e.g., 3 meals a week at $35/meal is over $5000/year). You could instead be paying yourself instead of the restaurant, and earning interest on what you save.

These are just a few examples of how putting your money into your pocket, instead of someone else?s, can help you become what some call ?financially free.? That is, they don?t worry about their next paycheck, since they have a steady stream of income from their investments they can rely on. But getting to this point requires a long-term perspective, rather than just thinking about what you want today.

Duke Okes helps individuals and organizations operate more productively and professionally. He can be contacted at http://www.aplomet.com

Writen By : Duke Okes

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Understanding Your Bank Account Details Better

Jun 26

Posted by admin in Personal Finance

With so many different terms floating around, banking terminology can get really confusing. If you are someone who doesn?t know their AER from their APR and their PIN from their Chip, then this guide to common banking terms could enlighten you.

AER

AER stands for Annual Earnings Rate. AER is used to calculate the annual amount that you earn on an investment or savings account. The higher the AER, then the better the investment or savings account. If you are looking for a savings account then compare AER?s to work out where your money is going to make the most profit.

APR

APR stands for Annual Percentage Rate, and is the amount of interest that you pay each year on a loan or mortgage. The lower the APR then the less you will pay yearly on that item of borrowing. Items with high APR?s like credit cards have APR figures around 15-20% whereas mortgages have a low APR figure of about 5-7%. The quickest way to compare loans is to look at their APR values.

Chip and PIN

Chip and PIN is the current system used to pay for items or withdraw cash using a credit or debit card. The card has a 4-digit PIN, or personal identification number, that you enter into a cash machine or till machine in order to retrieve money or pay for goods. The chip on the card holds information that, combined with the PIN, allows the machine to identify you as the correct owner of the card. Chip and PIN is more secure than the previous magnetic strip and signature technology that was used a few years ago.

Overdraft

An overdraft is a sum of money that you are minus within an account. If you go beyond the amount of actual money you have in an account, then you go into the overdraft. Many accounts have a pre-arranged limit that allows you to go overdrawn, which can be useful, as unauthorised overdrafts will cost you a lot in interest and fees.

Phishing

If you use online banking, then Phishing is a term you might have heard of but you might not know what it means. Phishing is a form of scam or illegal attempt to get hold of your bank details online so that they can withdraw money from them. When online banking started this was a big problem, but with increased security measures the problem is getting better. Most Internet browsers include a Phishing filter to stop such practices from occurring.

Standing orders and Direct Debits

Standing orders and Direct Debits are similar in some ways, but different in others. Both involve a regular amount being transferred from one account to another. Standing orders are a regular, fixed amount that you pay to another person or company, usually monthly. Direct Debits are an amount of money, which can be fixed or varied, that is removed from your account at set intervals. One example of a Direct Debit is mortgage repayments.

Getting advice

If you are unsure about any other banking terms, then visiting your local bank branch or looking online might help. Never be afraid to ask about something, because if you don?t understand something that is part of your account policy, you could lose money or not be taking full advantages of the features on offer to you.

Peter Kenny is a writer for The Thrifty Scot.
Please visit us at Best Current Accounts and Child Trust Funds
Visit http://www.thriftyscot.co.uk

Writen By : Peter Kenny

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Is A Payday Loan Really A Good Deal

Jun 19

Posted by admin in Finance, Loans

All of us have had those times when could simply use another couple of hundred dollars to get us by until the next paycheck. Financial tight spots can come unexpectedly. One way that might help you to cover those sudden needs or want of extra cash is by getting a payday cash loan. These loans are real easy to get. Here is a little more information to show you what is involved.

Easy To Get

A payday loan has got to be one of the easiest loans to get. Very little is needed in order to qualify. in many cases, you simply need to prove that you are at least 18 years old, have lived in one place for the last six months have a checking account, and make more than $1,000 (some say $1,500) per month.

No Credit Check Or Collateral

These things are real quick to apply for. No one is turned down who meets the basic requirements. There is no credit check since the money is actually deposited into your checking account – and then withdrawn from it, too. When you ask for the payday loan, you give them a check made out to them for the amount of the loan, with the interest added on to it. Then, if everything is in order, you will have the money in your account within 24 hours. No one checks your credit rating, or asks for any collateral. They will, however, look to see if you have any other outstanding payday loans – which will make the current loan null and void.

High Interest

Apart from being extremely convenient – you don\’t even have to fool around with a bill or a credit card, it sounds like just the thing. One problem, though, is that it may be too easy. All of us run into hard times, sometimes. For those who have a hard time controlling their finances, though, this could hurt them even more. For those who regularly run out of funds each month because they cannot control their finances quite like they should, this makes money too convenient, and the high interest on payday loans will make their money disappear even faster.

The interest on this type of loan comes to about $25 to $30 for every one hundred dollars of the loan. This interest is usually for a two-week period.

Can Be Rolled Over

After the first two weeks, the individual has the option to roll it over. This means extending it another two weeks – and another two weeks if needed. But with each two week period, the interest is again added. This means that after six weeks a $400 loan will cost $475. This is an awful high price to pay for a little convenience.

Quite possibly, a credit card may be the better deal, but you will have to decide on it for yourself. With the ads for payday loans all around us, that may be the first thing you think of when your funds fall a little short – but isn\’t that what the ads are all about?

Joe Kenny writes for the UK Loans Store for the latest UK loans and offer more information on UK payday loans and other loan topics available on site.
Visit Today: www.ukpersonalloanstore.co.uk

Writen By : Joseph Kenny

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Why You Should Reject Most Credit Card Offers

Jun 18

Posted by admin in Credit, Finance

A lot of credit card companies want you to think that their offer is a good one – without really offering you good features. For instance, this morning, a credit card offer came in the mail. After looking it over, it was rejected – because it lacked the \”right features.\” It would have been unwise to sign up for that card. If you are thinking about getting a credit card – or maybe another one, there are some reasons why you may not want to fill out the next application that comes to you in the mail. Here are some things you need to look for to see if it really is such a good deal.

The Interest Rate

The first reason that this credit card was not a good one was because there were no introductory interest rates on the card at all. It was just for one rate – 9.9%. All purchases came into that interest bracket. Many cards will give you a 0% interest rate as their introductory offer for up to 15 months. That means that you pay no interest on your purchases for up to one whole year, unless your payments are late, or if you allow a balance to be carried over to the next month.

This particular interest rate, while not bad, is certainly not the best, either. Some credit cards go as low as 6.9% interest, and others may go as high as 17.9%. After the first year, though, your interest level becomes the regular amount of the card. Interest rates can change for many reasons – one of them being late payments. One of the things that will effect what interest rate you are able to get is your current credit rating.

Reward Options

Another reason why you should not accept just any credit card offer is because it may not give you the greatest opportunity to benefit from the rewards. Applications sent to you, or ads on the Internet may not cater to your particular needs. Find a card that offers rebates and rewards on the products and services that you use the most. Things like gasoline, air miles if you travel a lot, groceries, discounts on hotels, etc., will benefit you much more if you use these things on a regular basis. Things like air miles can actually help you to get enough air miles to make that trip that you have always wanted – just remember to find out how long they are good for – there is usually an expiration date after a couple of years.

Other Fees

This is one area where some credit cards can really take away a lot of your benefits. Look for things like processing fees, yearly fees, balance transfer fees, and fees for cash advances. The best cards, if you can get one, often will not have extra fees ? or, possibly a minimal one.

In addition to the above, you need to know that things like only one late payment can remove your desired benefits and put you into the regular interest rate for the card. Other
cards may require you to have a minimum balance in order to get their benefits.

Every credit card offer will always have some nice feature in bold print that will get your attention. That\’s not where you should look, though. Instead, focus on what is in the small print – that\’s where the nitty-gritty details really are, and you will want to read these first.

Joe Kenny writes for CardGuide.co.uk, offering the latest offers on UK credit cards, visit today to compare credit cards in the UK.
Visit today: www.cardguide.co.uk

Writen By : Joseph Kenny

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