Our society has been spoon-fed the myth that the FICO score is king. We work, we pay bills on time, we are a slave to the almighty credit score.
Every time we turn around, someone wants to sell us credit or help us improve our scores. We are told from a very early age that we must establish credit by opening credit cards and using them repeatedly. We are led to believe that debt is a tool to help us build wealth.
But it is all a myth.
We don’t NEED credit scores.
In fact, by trying to obtain a good credit rating, we are setting ourselves up for failure, or at the very least, for a lifetime of debt.
College students are inundated with credit offers to “help” them get started in the “real world”. They are given limits that far exceed what they are even able to pay while going to school full time. Many of them do not even have jobs with which to earn the money to repay their creditors!
Short-term loans – another credit product used by millions. And you know what? You can get them without credit too! There are many companies, offering emergency loans for bad credit – click here to find out more.
Add to this student loans, and most young adults start off in the real world with a stack of bills that they struggle to pay with their entry-level jobs. In fact, a large number of people that file for bankruptcy each year are college students. But this fact doesn’t stop these credit mongers from chasing their prey or feeding lies to these impressionable young people.
Most people would agree that we don’t NEED credit cards. Sure, they are nice to have, but we could get by paying for the smaller things with cash.
But what about a car? Everyone needs credit to get a car loan, right? The fact is, we as Americans are obsessed with our cars. Where else in the world will you find a couple on the verge of financial ruin, struggling to pay their bills, with two new cars sitting in their driveway?
I say save up the cash! Buy a car outright-it will save you thousands in interest over the years and you will not be saddled with the monthly payments. There really are some nice, inexpensive used cars out there and if you have no other payments, it really won’t take that long to save up enough for a used car.
And here’s the good news: you aren’t married to your car! It is not a lifetime purchase! Most vehicles reach a certain point where their depreciation virtually stops or at least slows down to a snail’s pace. If you buy a cheap used car and continue to save money, chances are you can sell it six months to a year later and get about what you paid for it. Add that to your savings and get a nicer car without ever owing to the bank a dime!
On to the next myth, the biggest one of all: the home mortgage. We have been raised to believe that we will never be able to own a home without a good credit score. While the truth is, you can buy a home with no credit at all. Welcome to the world of manual underwriting. This is the way that our grandparents bought their homes, in a world before we went into debt to buy every little thing our hearts desire. There are still many banks and credit unions that do manual underwriting.
This is a little more work for the bank because it is much easier to just look at a score and say “yes” or “no”, but it still can be easily done. First, they will look at your employment history, to see how long you have been at your job. Two years or more is a big plus. Then they will check with your landlord to see if you have been paying rent on time, or even early.
They will also check with your utility companies to make sure your bills are current and are paid on time. The final things they will check are your bank account balance and history and how much of a downpayment you have. The larger the downpayment the better, because this means less risk for them to loan you the money, but it is also helpful to save nice sized savings account that you can fall back on if you are faced with a crisis. Once they determine these things you are on your way to owning a home!
It may take some will and determination to be different than the average Joe. But imagine the possibilities that would open up to you if you had no payments. Imagine what you could do with your income if you got to keep it. Don’t fall for the creditors’ myths. They are trying to take your money!
Overdraft protection is a handy last defense line. The more you make use of it, the more hazardous it turns to be to an individual’s financial state. If correctly used, it will be a wonderful idea. There are few pros as well as cons when making use of this service on a person’s checking account.
It occurs when individual attempts to make use of one credit card, write any cheque or may withdraw a sum of money from his bank account. But the transaction is incomplete due to insufficient funds.
On the basis of the institution, either one overdraft transaction gets processed or rejected. So in both cases, a fee is charged in the procedure.
Some financial institutions may charge a huge number of a non-sufficient fund or NFS fees, but most of them limit it not greater than $7 each day. If any account stays with a balance that is in negative for a long duration, extra fees are charged.
Depending on the fee schedule of a bank, these may get charged every day or weekly. An extended overdraft fee may equal out to $10 each day at some of the institutions.
It comes in many different forms. The basic idea is if an individual makes one transaction on his debit card and it exceeds the amount present in your account, the overdraft protection will be providing you with the additional fund that you require for covering it.
However, it is one such service that will not be performed without a charge often. It saves you from the embarrassment of declination of your card.
The type of overdraft protection that comes first is by linking your checking account to another, mostly a savings or one credit card.
Some financial institutions allow individuals to link several accounts.
As an account holder, if you overdraw your checking account then funds get transferred from your linked account for covering that transaction. You will get charged with a transfer fee.
Another type of overdraft protection is known as an overdraft line of credit. This type of overdraft protection allows a bank to loan you fund for covering your overdraft cost.
Depending on a certain bank, you may be charged interest on such a line of credit as well as be always charged with a fee for an overdraft in order the cover that transaction.
If you use overdraft protection, ensure it is via a linked savings account and no credit line.
Linking one credit card to the checking account is a better alternative than a credit line because using it too frequently might get you involved in bad habits that cost a lot in the future.
IBAN is also known as International Bank Account Number. It is the international standard for identifying the account numbers. SWIFT or BIC is known as Bank Identifier Code. It is an international standard for bank identification.
Society for Worldwide Interbank Financial Telecommunication is the full form of SWIFT.
It is assigned not only to financial but also to non-financial institutions. When it is assigned to any business, it might also be called a Business Entity Identifier or even BEI.
Despite this oversized name, it is a bank ID that is well-known worldwide. Unlike IBAN, which identifies certain bank account, SWIFT actually refers to a certain bank such as banks present in the US.
Around 40,000 banks, as well as offices in the entire world, are a part of the SWIFT network.
Its purpose is to let easy transfer of money between different banks mostly from a country to others. Additionally, the banks communicate with one another by using this code.
It can supply software along with other services to the banks as well as other financial institutions.
It allows other institutions to become aware of three main things such as the bank’s name, the location of its head office and the city of the head office.
It is an alphanumeric number that contains information which identifies a bank as well as a branch.
It is either 8 or 11 characters long and it depends on which bank office it actually refers to.
NFBKUS33 is an instance of a SWIFT code that is for Capital One in the city of New York.
It can be broken down for discovering
If you reside in a country that takes part in SWIFT, find the number on the bank statement by logging in to the banking system online or by contacting your bank.
If you send any money internationally and require a SWIFT number then ask the recipient for the bank’s SWIFT number to which the account belongs.
International Bank Account Number is the full form of IBAN.
It is one unique number that is assigned to a certain bank account that is involved in the business internationally.
IBAN is used for identifying the bank accounts present in different countries. It is not exclusive to Europe, but IBAN is used in most of the countries in Europe.
US does not make use of IBAN numbers, but you can encounter them while sending money to any recipient internationally by specifying that IBAN number that makes the transactions faster.
IBAN has 2 formats; one is an electronic format that is without blanks and the other is written representation that is with groups of 4 characters which are divided by blanks.
It is an alphanumeric number that contains information identifying a bank, account number as well as country.
The length of the code is fixed by a country. It can be till 34 characters long.
GB 29 NWBK 601613 31926819 is an instance of an IBAN code that is for National Westminster Bank in Great Britain.
When a UK IBAN code is broken down the following things are discovered:
If you reside in a country that makes use of IBAN, then you can find it on the bank statement or by logging to your banking system online. If you wish to send money internationally and require an IBAN number, then ask the recipient for their deposit account’s IBAN number.
SWIFT and IBAN both are used in relation to financial systems. They are used for transactions internationally. So sometime it might be a little tough to understand the differences between SWIFT code and IBAN.
However, both of them are different from the other in various ways. Both the SWIFT and IBAN codes are actually referred to when there is a context of transfers between accounts internationally.
But both are different from one another. The format is different and there are some main differences that lie between them.
In SWIFT code, messages are exchanged securely as well as reliably between various financial institutions globally. On the other hand, IBAN is only primarily used between the European banks. It is used to transfer money electronically from an account to another. SWIFT code is used for both financial as well as non-financial purposes.
Before the introduction of such identification methods, there have been no such methods that were recognized and standardized internationally for identifying bank account.
Introduction of both of the identification methods was important to assist in streamlining the procedure of making some money transfers internationally.
Negotiable instruments have been considered to be a very vital tool if it is concerning any business or finance. They aid every party to smoothly conduct the business. They can also become a source of funding if in need of money.
It is a document, basically a written order with the name of the payer mentioned on it.
Thus it guarantees payment of a certain amount of money immediately or maybe at a scheduled period that is future dated.
It promises payment without any condition.
You can use as well as interpret the document in a little different way on the basis of what country you are using it in as well as what law is getting applied along with its context.
The best instances of these instruments are banknotes such as dollar bills and pound notes along with cheques, demand drafts, bills of exchange, promissory notes as well as certificates of deposits.
As the money has been promised to be provided on demand or at some certain time, this instrument is at times used by any holder as a value store and he holds on to that.
Negotiable instruments technically call for money payment. Lading bills and receipts of warehouse calls for merchandise delivery and thus can never be considered as negotiable instruments in the legal sense. But they can be negotiated if order documents are made.
Negotiable instruments are beneficial business channels revolving around the financial market of a country.
Their unique specifications such as liquidity, transferability, safety, etc. make these negotiable instruments very famous in conducting business not only domestically but also globally.
NetSpend comes with high fees. However, it is very generous with its limits of withdrawal as well as deposit compared to other cards. It also has various options to load funds and also high limits of withdrawal.
The applications of NetSpend are fast as well as easy. It just requires an individual’s name, address as well as an email address. All the applicants get guaranteed approval after the identity of the applicant is proved. Through mail new cards are sent within 7-10 working days. You need to fill up an order form online and your personalized card will be shipped. No credit check is performed. There also lies no such upfront fee. For activating your Card Account, you need to provide your name, date of birth as well as other details that will help them in identifying you.
When you make use of NetSpend cards in the stores, then if you select credit at the checkout and give your signature, the transaction fee for that purchase will appear to be $1. The funds will get deducted from your card account. In case you select debit, you need to provide a PIN or personal identification number and you will be charged a transaction fee of $2. You can avoid fees for individual transactions if you subscribe to a premium Fee Advantage Plan and it charges service fees monthly. The pay as you go plan is the common fee plan of NetSpend accounts. Some fees are charged per credit usage, debit usage and domestic withdrawals from ATMs.
NetSpend card comes with one of the best specifications and that is how easily one can add funds to this card. You can add funds to this account via direct deposit, reload network locations, account transfers, and bank account transfers. But if you do not wish to incur fees then add funds via direct deposit or via the online account center of NetSpend.
An individual holding a NetSpend card can use it at several locations internationally. It is a wise decision if you are traveling to any international destination. If it gets stolen or is lost, then as an account holder you can contact the customer service and deactivate your card immediately. If you are a traveler, you can also receive funds on your card from your close ones who are cardholders of NetSpend cards.
They can also send and receive money through Western Union to more than 200 countries. Cheques can also be deposited in your NetSpend account via the mobile application.
There are some cons to using the card when traveling overseas. For instance, it does not come with the latest technology of chip and signature specification. It is used for decreasing the levels of theft as well as fraud. Moreover, since this latest technology is not present in it some shops, restaurants or hotels might be unable to process the charges.
There are hardly any or very few reload locations of NetSpend outside the UK. Some extra fees are also present if you use it internationally.
There are foreign transaction fees if you buy any items or services abroad. If you withdraw cash from any international ATM, a fee is charged per withdrawal apart from the individual transaction fee of the ATM. The transaction fees abroad and withdrawal charges from the international ATMs can also add up.
NetSpend cards are thus popular cards that need no such minimum balance as well as credit checks. If you are a NetSpend cardholder, then you can make purchases from in-store, over the phone as well as online and withdraw cash globally from ATMs.
Cashier’s check and money order both are beneficial tools to make payments and they also come with a similar appearance.
But there are some significant differences among the two that will determine which is the best for a person’s requirements.
In general, cashier’s check includes higher limits, but are can only be availed from any financial institution.
It is a type of official check which is issued by a bank. You should never confuse it with any certified check that is also issued by a bank.
A cashier’s check is secure as the bank directly takes the money from the account and then puts it on its own. Thus it is guaranteed that the check will not bounce. So whoever you require to pay the money will surely get it.
You do not need to worry about an overdraft or non-sufficient funds fees that are charged if you do not maintain sufficient money in the account for covering a check.
If you require to make any large payment for your car, then due to the safety factors cashier’s check will be a better option. Sometimes a cashier’s check might be the only payment alternative available for you. While buying a home, the lender will need you to bring a cashier’s check for paying whatever you owe at the time of closing.
Cashier’s check can also be fraudulent and involved in financial scams. Scammers are seen to give you something that looks similar to any official cashier’s check that you deposit in your account. After a few weeks, your bank will discover that this check is fake. So always be sure to check the authenticity before depositing the check or trying to cash it.
It is a secure payment. Money orders can be bought easily and are less expensive. Thus they are best suited for smaller payments or if you cannot write any personal check.
For example, you can make use of money order for paying your rent or sending $100 to a dear one who is running out of cash. If you purchase any money order, you need to pay for that with cash, debit card or a traveler’s check.
You can never use a credit card or write any personal check. If a credit card is used it will be treated as a cash advance. You also need to pay a fee for it but it is less expensive. On the basis of where you purchase a money order and what the amount is, the fee might be lower than $1 or equal to $5.
It is easier to replace a money order if they are stolen and lost.
You can replace a stolen or lost money order by returning with the receipt to that place from where you purchased it and then asking for a refund or a replacement. A fee may be charged by the issuer for replacing it. But you will receive it then only and do not have to wait for months.
The main difference between cashier’s check and money order is the cost and from where they have been purchased. Typically money orders are usually offered in small amounts, can be obtained at several varied locations and are priced at a few dollars.
On the other hand, cashier’s check is mostly issued in huge amounts, can be obtained from a bank and cost more.
On the basis of what the money is used for, there lie some differences between the two type of payment options as mentioned here:
A money order is a piece of paper that is prepaid. It is exactly the same as a check that you receive in exchange for some cash. It can be used to send money to people and the recipients can also deposit them easily in their bank account.
You cannot get them from a bank. There are various places that sell these money orders such as post office, Western Union and convenience stores along with supermarkets. You can also cash your money order from these places. Money orders will cost you a few dollars and can be purchased until $1000.
A cashier’s check is almost similar to a money order, but it is issued by a bank and needs a bank account. If you obtain a cashier’s check, a bank will be holding or removing funds from your bank account and then send you a check issued from the bank in your requested amount. You need to pay a fee for it to the bank. You can use it similarly like a money order or a personal check.
The one and only difference is since the approved funds are guaranteed by a bank and then removed from an account, recipients can immediately access the funds. Cashier’s check is more costly than money order but is known to be more reliable as it backed by a bank. Although it is still received for a few dollars generally under $10.
If you plan to purchase anyone, check the fees that are involved and any limits put by the issuer on the money you can obtain them for. You need to keep a receipt or statement that shows when they were purchased if they are stolen, damaged or lost.
Most car loans use simple interest, a type of interest of which the interest charge is calculated only on the principal.
The car loan interest rate varies from one bank to the other and is influenced by your monthly income, profession, existing EMI, credit score, etc.
While applying for a new car loan, you will need to meet certain eligibility criteria and these requirements can differ from lender to lender. Car Loan Interest Rates are a factor of the loan amount, your occupation and the company you are working with.
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