As part of the new overdraft fee legislation, beginning August 15, banks will no longer be allowed to authorize debt card transactions if they overdraw your account …
… unless you tell them otherwise.
Until this new overdraft fee legislation takes effect, banks can continue their practice of authorizing transactions that put your account in the red, charging you an overdraft fee. Currently, banks also can allow you to withdraw more money than you have at an ATM, charging you an overdraft fee of at least $35.
But once the new regulation comes to fruition on August 15, this practice will be against the rules unless you “opt in” by authorizing your bank to continue automatically authorizing these transactions.
A word of warning: Banks are aggressively finding ways to line their pockets before this new overdraft fee legislation go into effect. I wouldn’t be surprised if they loosened their policy on this practice between now and August 15. You might be authorized for just about any transaction while they sit by and collect the $35 overdraft fee.
Indeed, some banks have already started a direct mail campaign that persuades account holders to opt in so that they are not affected by the new overdraft fee legislation. But I generally think this is a bad idea. If you do not have enough money in your account for the transaction, it stands to reason that you do not have enough money to pay the overdraft fee.
Author: br_admin
“I need a personal loan quick but I have bad credit”
“I need a personal loan quick but I have bad credit.” An old friend of mine was calling for advice. “What’s the best way to get my hands on money? Should I go to one of those places that offers instant cash?”
If you are like many cash-strapped Americans whose scores fall below 720, you should–of course–learn how to build credit. But what do you do in the meantime?
You might think you must rely on high-interest loans with large penalties and lousy terms. But sadly, too many people desperate for money end up exacerbating the situation by applying for loans intended for people with bad credit, which guarantees that they will pay extra fines and interest rates. The irony, of course, is that people with bad credit are the ones who are least able to afford these loans.
If you find yourself saying, I need a personal loan quick but I have bad credit, consider one of two options:
1. If you have a long and strong relationship with your boss, ask for an advance. This is an interest-free way to secure some quick cash, and your boss might let you pay the loan off slowly by simply taking small deductions out of each paycheck.
Only implement this strategy if:
- You have been at your job for more than one year,
- You have a strong relationship with your boss, and
- The company has a solid bottom line.
You should also pay close attention to the amount of the loan. After working for me for only three weeks, a former housekeeper of mine once asked me for an advance on her salary.
“I need a personal loan quick but I have bad credit,” she told me, begging for 10 percent of her salary! I had no idea whether she would work for me long enough to repay the loan, nor did I know whether she was the type of person who took her financial obligations seriously. I refused her the loan, and our relationship was permanently scarred.
To protect your relationship with your boss, follow this general rule:
If you have been employed for more than one year but less than two years, ask for no more than 2 percent of your annual salary. Your boss might feel comfortable lending you 5 percent if you have been with the company for two to three years; if you have been working for the same company for more than three years, you might be able to secure a 10 percent cash advance.
2. Another low-interest option is to ask a relative for a loan. Be upfront about your situation, but be businesslike. Instead of calling in a panic and saying, “I need a personal loan quick but I have bad credit,” try writing out an agreement that details interest, when the payments will be made, and what you will provide as collateral in the event you are late with a payment. By putting everything in writing, and making every payment on time and in full, you will preserve your relationship and secure a low-interest loan.
Finally, be sure to register for our free teleseminar so that you will never again need to say, “I need a personal loan quick but I have bad credit.”
Teaching Children About Credit Cards
With the past 18 months reminding us to be thrifty, many parents are realizing the importance of teaching children about credit cards. In particular, we need to teach children how to build credit by using credit cards wisely and, perhaps more importantly, how to protect their finances from misuse of credit cards.
Though the Credit Card Act of 2009 intended to protect consumers from the credit card industry, the truth is that we should be equally concerned about protecting consumers from themselves! Without proper education, our children risk repeating our mistakes. Indeed, “just charge it” seemed a mantra in the 1990s and early 2000s. Middle-class families ended up paying tens of thousands in interest rate debt.
Leveraging the lessons we learned from the recession, we should all begin teaching children about credit cards so that future generations make wiser choices when it comes to charging debt.
Teaching children about credit cards starts at home by allowing your children to make small, approved purchases with your existing credit cards. I know this sounds crazy, so let me clarify: I do not think you should give your child unlimited access to a credit card with a $20,000 limit. That would be a recipe for disaster.
But how about handing your seven-year-old daughter your credit card when she wants to purchase an $11 toy? Allow her to participate in the process by handing the credit cards to the cashier. Tell her to hold onto a copy of the receipt showing you how much money she owes you. Then have her repay the debt by handing you cash she earns from household chores or an allowance.
And how about older children? Teaching children about credit cards can continue when your children enter their teen years. Hold monthly finance and credit meetings where you review credit card statements, discuss interest rates, and explain how the credit scoring systems works. Consider your own “credit card score,” a term I coined to describe how helpful a person’s use of credit cards is in building his or her credit score.
If your finances (and your utilization rate) can handle it, allow your teenager to make a larger purchase. Then charge interest. If your child fails to make a payment on time, charge a late fee.
Do not, however, get angry or ground your child. When teaching children about credit cards, try to establish a scenario that would happen in real life. The credit card companies would never ground a customer for failing to pay a bill on time. They would, however, call their customers at 8 a.m. to remind them that the bill is due. Feel free to call your teenager’s cell phone at the crack of dawn to remind her that her payment is past due.
In fact, you should embrace a mistake that your child makes while at home. Learning lessons early, when the repercussions are minor, is far better than learning them when the stakes are high.
“Buy Now Pay Later No Credit Check
Are the buy now pay later no credit check offers good for your credit score?
Probably not.
As you learn how to build credit, you should consider that certain credit types of credit, including buy now pay later no credit check offers, will probably hurt your credit score.
You can probably surmise that buy now pay later no credit check offers usually come with Goliath-sized interest rates. People who apply for these loans are often risky borrowers who are unlikely to repay their loans, so creditors who offer buy now pay later no credit check loans know that many of their customers will default once the grace period expires. To make these loans worthwhile, creditors attach high interest rates. The people who do repay their loans pay an arm and a leg in interest to compensate the creditors for the cost of those who default.
Aside from the high interest rates, buy now pay later no credit check offers are probably a bad idea for another reason. The creditor might not check your credit before granting you a loan, but the creditor will most certainly report the buy now pay later no credit check offer to the credit-scoring bureaus. And credit scoring systems frown upon any buy now pay later loans. These loans suggest that the borrower is not currently able to meet the financial obligations of the loan, and this gives the credit-scoring bureaus reason to believe that you are a credit risk.
One of the rules of how to build credit is that you should never do anything that suggests you are experiencing financial strain. Even if you plan to repay the loan in a timely manner, the buy now pay later no credit check loan tells the credit-scoring bureaus that you are in such a financial bind that you will agree to sky-high interest rates. A person whose finances are stable probably would not agree to high interest rates, so credit-scoring bureaus will lower your credit score if you apply for these loans.
One more reason to steer clear of buy now pay later no credit check offers: These loans often result in a high utilization rate. Remember that your utilization rate is the balance you have on a loan or credit card as compared to the limit. The lower your utilization rate, the better your credit score. Because the balance on these loans often does not decrease for many months (remember, you will pay later), your utilization rate stays high until you start paying.
Though the buy now pay later no credit check offers might be tempting, if you really want to take the steps and learn how to improve your credit score, you should turn your back on these offers.
Credit Lesson #1
Are you a Father with a Daughter? Then, you will appreciate this….
As many of you know, I have four kids, all less than four years apart. My wife Lily is a true super star.
So I went to my daughter’s preschool to read to read to her class. As all the kids gathered around, instead of my daughter sitting with her classmates, she wanted to crawl up next to my leg and sit there.
While I was reading, I didn’t even realize what was happening until I saw this picture my wife took:
Isn’t this the most precious picture you have ever seen? It melts my heart… I’m the luckiest man alive.
She didn’t want to watch “Dad” read…. she wanted to just be close to “Dad.”
Tell me what this picture says to you….
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