Rejection of Credit Card Application

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As time progresses, more and more people are joining the revolution called ‘Credit card’. Yes, it’s really a revolution. Now you don’t need to worry about how much cash you have in your pocket when you go shopping, just carrying this small piece of plastic (credit card) is enough to assure you of a good shopping treat. You can use your credit card to order things from the comfort of your home (on the internet). So the number of credit card applications seems to be on the rise. However, not every credit card application turns into a physical credit card. Some credit card applications get rejected too. Let’s check why a credit card supplier would reject a credit card application when he has spent so much time and energy (and money) on wooing new customers.

One obvious reason for rejection of credit card application is human error i.e. the error committed by you in filling out the credit card application. These can be small mistakes like a wrong telephone number or wrong name or the postal code might be wrong. It’s normal to make mistakes, after all we are human being and no human being can be termed as perfect. Another strong reason for rejection of a credit card application could be missing mandatory information i.e. when you forgot to fill-in some mandatory information in the credit card application form. Sometimes, the credit card application could be rejected because the credit card application form has been filled-in in a handwriting that is illegible to the people processing your credit card application. At other times, the sales representative (of the credit card supplier) could have made a mistake in either depositing the form correctly or in guiding you in the filling of the credit card application form (newly hired sales representatives can make such mistakes).

However, these human errors are just minor errors that can be corrected later on and hence the only impact would be in terms of the delay in receiving your credit card. The main and the most important cause for rejection of credit card applications is bad credit ratings i.e. a negative credit history. If you have been using other credit cards or if you have taken bank loans/mortgages in the past, you would have already build your credit rating. If you have been making your bill/instalment payments in time (and in the correct amount), you would have already acquired a good credit rating. However, if you have been irregular or if you have been defaulting on your payment dues, you would have developed a bad credit rating. This credit rating is calculated by credit bureaus who receive feeds from various credit suppliers. All credit card applications are checked for the credit rating of the requestor and if it comes up as negative, the application is rejected outrightly.

So, these are the 2 most important reasons for rejection of credit card application and you must pay heed to them (especially the credit rating).

Interest-Only Mortgage

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There are only two things people should keep in mind before taking on an interest-only mortgage. The name interest-only mortgage is misleading. If truth be told, there is no such thing as an interest-only mortgage. In an interest-only mortgage, you will still have to pay for the loan principal. When you get an interest-only mortgage, what you’re really getting is an interest-only payment method which you can combine with other traditional mortgage types.

The other thing you need to keep in mind is that the stated benefits of interest-only mortgages are exaggerated. In a standard mortgage, 95% if each dollar paid to the lender goes to the loan interest. Thus on a $100,000 standard loan with 6% interest, the total payment would be $600 with the $500 going to interest and the other $100 for equity.

A Brief History of Interest-Only Mortgages

Interest-only mortgages are not relatively new concepts. The idea behind interest-only mortgages was spawned from the more flexible and more inventive jumbo mortgage markets. Because of this, interest-only mortgages are traditionally a loan type preferred by savvy investors and well-heeled clients who want to use the principal portion of their payment on other more productive investments.

Because interest-only mortgages are jumbo loans, the difference in monthly payment grows with the larger loan amount.   For example, in a $100,000 interest-only mortgage loan, the per month difference is $100. If the loan is worth $1,000,000, then the difference per month grows to $1,000, a substantial amount that can be put to better use. The savvy investor can make it so that his investment using the money he gets from the per month difference growth of an interest-only mortgage can increase within a short period, thus leveraging incomes to build assets.

This is partly the reason why interest-only mortgages are still preferred by big-time investors. However, it is only natural to assume that there are some considerable risks associated with an interest-only mortgage, especially when it comes to stocks.

Interest-only mortgages have payment periods based on adjustable rate mortgages. This however is not always the case. Interest-only mortgage payment schedules are also offered in fixed rate mortgages as well. Interest-only mortgages have also gone mainstream so virtually anyone can borrow money with this type of loan.

Temporary Payment Periods

The payment periods for interest-only mortgages almost never run for the entire term of the loan. Even with a fixed rate mortgage, interest-only mortgages are still bound to be only temporary. An Interest First product only lets interest-only mortgage payments for half of the total term.

The expiration schedule of an interest-only mortgage payment is usually at the end of a set period. This makes interest-only mortgages compatible to “amalgam” adjustable rate mortgages. When the interest-only mortgage payment comes to an end your payment will then rise to include principal and interest.

The great thing about interest-only mortgages

Interest-only mortgage payments also have their advantages. Borrowers can find that there are various practical benefits that an interest-only mortgage can offer. First is that, interest-only mortgages can help you in accumulating assets. Because interest-only mortgages do not demand so much during its initial years, you can use the payment differential in a cash investment.

The “spare” cash provided by interest-only mortgages may also be used for college money, retirement money, and even as a seasonal income factor.

Spend Wisely to Save Money

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Have you ever noticed that the things you buy every week at the grocery and hardware stores go up a few cents between shopping trips? Not by much…just by a little each week but they continue to creep up and up.

All it takes for the price to jump up by a lot is a little hiccup in the world wide market, note the price of gasoline as it relates to world affairs.

There is a way that we can keep these price increases from impacting our personal finances so much and that is by buying in quantity and finding the best possible prices for the things we use and will continue to use everyday… things that will keep just as well on the shelves in our homes as it does on the shelves at the grocery store or hardware store.

For instance, dog food and cat food costs about 10% less when bought by the case than it does when bought at the single can price and if you wait for close out prices you save a lot more than that.

Set aside some space in your home and make a list of things that you use regularly which will not spoil. Any grain or grain products will need to be stored in airtight containers that rats can’t get into so keep that in mind.

Then set out to find the best prices you can get on quantity purchases of such things as bathroom items and dry and canned food.

You will be surprised at how much you can save by buying a twenty pound bag of rice as opposed to a one pound bag but don’t forget that it must be kept in a rat proof container.

You can buy some clothing items such as men’s socks and underwear because those styles don’t change, avoid buying children’s and women’s clothing, those styles change and sizes change too drastically.

Try to acquire and keep a two year supply of these items and you can save hundreds of dollars.

The World Wide Forex Market

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Forex is a trading ‘method’ also known as FX or and foreign market exchange. Those involved in the foreign exchange markets are some of the largest companies and banks from around the world, trading in currencies from various countries to create a balance as some are going to gain money and others are going to lose money. The basics of forex are similar to that of the stock market found in any country, but on a much larger, grand scale, that involves people, currencies and trades from around the world, in just about any country.

Different currency rates happen and change every day. What the value of the dollar may be one day could be higher or lower the next. The trading on the forex market is one that you have to watch closely or if you are investing huge amounts of money, you could lose large amounts of money. The main trading areas for forex, happens in Tokyo, in London and in New York, but there are also many other locations around the world where forex trading does take place.

The most heavily traded currencies are those that include (in no particular order) the Australian dollar, the Swiss franc, the British pound sterling, the Japanese yen, the Eurozone eruo, and the United States dollar. You can trade any one currency against another and you can trade from that currency to another currency to build up additional money and interest daily.

The areas where forex trading is taking place will open and close, and the next will open and close. This is seen also in the stock exchanges from around the world, as different time zones are processing order and trading during different time frames. The results of any forex trading in one country could have results and differences in what happens in additional forex markets as the countries take turns opening and closing with the time zones. Exchange rates are going to vary from forex trade to forex trade, and if you are a broker, or if you are learning about the forex markets you want to know what the rates are on a given day before making any trades.

The stock market Is generally based on products, prices, and other factors within businesses that will change the price of stocks. If someone knows what is going to happened before the general public, it is often known as inside trading, using business secrets to buy stocks and make money – which by the way is illegal. There is very little, if any at all inside information in the forex trading markets. The monetary trades, buys and sells are all a part of the forex market but very little is based on business secrets, but more on the value of the economy, the currency and such of a country at that time.

Every currency that is traded on the forex market does have a three letter code associated with that currency so there is no misunderstanding about which currency or which country one is investing with at the time. The eruo is the EUR and the US dollar is known as the USD. The British pound is the GBP and the Japanese yen is known as the JPY. If you are interested in contacting a broker and becoming involved in the forex markets you can find many online where you can review the company information and transactions before processing and becoming involved in the forex markets.

How to Deal With Creditors

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Successful Dealings with Creditors

Interactions with creditors, especially if you don’t have the money to pay them, can be quite stressful and frustrating. The challenge here is to be able to get them on your side in spite of a difficult financial situation.

There are certainly several ways of putting an end to unnecessary harassment and even bargaining for better repayment terms, deferred payment schedules, and other possible arrangements when tough times strike. Unfortunate financial circumstances shouldn’t lead to a rift in your good relationship with the creditors. Consequently, the creditors must be cognizant of the fact that you have a right against unfair debt collection and credit reporting practices no matter what is stipulated by the Fair Debt Collection Practices Act.

As soon as you encounter problems with your personal cash flow, don’t wait until you have missed your payment schedule. Inform your creditors early on of your concern. In such a way, you don’t create a delinquent image as you manifest sincerity to settle your responsibilities. Likewise, solutions to the problem may be given ahead of time. Creditors will be willing to help if they are aware of your situation.

Early intervention is indeed the key here. Such may eliminate or lessen late charges. You may even have the option of paying only for the interest in the meantime. The service or utility may not be halted as well. Depending on the need, it may also be possible that your payment be deferred to as far off as the end of your contract. In other words, you may be able to negotiate for a more manageable payment scheme. As such, your account will remain under their care instead of those collection or credit reporting agencies.

Make sure though that before contacting them, you have figured out a certain plan of action. This plan should be realistic but, at the same time, auspicious to you and the creditors. Consider how much is left of your income for other expenses. List down all your fixed payments such as those for mortgage, loans, etc. Since you are on a tight budget already, you might want to reduce your flexible expenses such as clothes, night-outs, etc. It would also be wise to think of possible ways of incurring additional income. When your own financial status has been laid down with which you have identified some sound courses of action, present it to the creditors. They will give you feedback about it as well as suggestions, if any.

You creditors may come from different institutions and make sure that you give priorities to them accordingly. Creditors from law enforcement agencies imposing on you as a result of court judgments such as those for child support, for example, are usually the strictest when it comes to making payments on time. They may disrupt your tax returns, collect your income, enforce encumbrances on property or suspension of licenses, and many others. They should normally be on top of your priorities. Next would be those for investments such as houses and cars as they can easily order turn over of the property. Of course, creditors from insurance, utility, and credit card companies should be prioritized as well but they normally have programs that offer some sort of a leeway during hard times. To get those is what you want to negotiate properly so work it out as soon as you observe symptoms of financial crisis.

There are several ways of contacting them. Initial explanation may be done over the phone. It will help if you are ready with a script so as to keep you composed and alert while you clearly give the details of your situation. Take note of what the other person is telling you. Further meetings, for example, may be set up and you definitely don’t want to miss those. If, in case arrangements were finalized over the phone, it would be advantageous to send a confirmation letter stating what you actually have agreed upon. This documents your conversation and safeguards you from possible denial and inconsistencies in the future.

The bottom line here is that whoever the creditor is, you must understand the consequences of not being able to pay them on time and weigh it out against realistic figures. Don’t expect that, by doing so, they will just forget about your credit. It will definitely still remain your responsibility but you can make it more controllable at the moment.

Different Types of Stock

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The different types of stock are what confuse most first time investors. That confusion causes people to turn away from the stock market altogether, or to make unwise investments. If you are going to play the stock market, you must know what types of stock are available and what it all means!

Common Stock is a term that you will hear quite often. Anyone can purchase common stock, regardless of age, income, age, or financial standing. Common stock is essentially part ownership in the business you are investing in. As the company grows and earns money, the value of your stock rises. On the other hand, if the company does poorly or goes bankrupt, the value of your stock falls. Common stock holders do not participate in the day to day operations of a business, but they do have the power to elect the board of directors.

Along with common stock, there are also different classes of stock. The different classes of stock in one company are often called Class A and Class B. The first class, class A, essentially gives the stock owner more votes per share of stock than the owners of class B stock. The ability to create different classes of stock in a corporation has existed since 1987. Many investors avoid stock that has more than one class, and stocks that have more than one class are not called common stock.

The most upscale type of stock is of course Preferred Stock. Preferred stock isn’t exactly a stock. It is a mix of a stock and a bond. The owner’s of preferred stock can lay claim to the assets of the company in the case of bankruptcy, and preferred stock holders get the proceeds of the profits from a company before the common stock owners. If you think that you may prefer this preferred stock, be aware that the company typically has the right to buy the stock back from the stock owner and stop paying dividends.

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Determining Where You Will Invest

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There are several different types of investments, and there are many factors in determining where you should invest your funds.

Of course, determining where you will invest begins with researching the various available types of investments, determining your risk tolerance, and determining your investment style – along with your financial goals.

If you were going to purchase a new car, you would do quite a bit of research before making a final decision and a purchase. You would never consider purchasing a car that you had not fully looked over and taken for a test drive. Investing works much the same way.

You will of course learn as much about the investment as possible, and you would want to see how past investors have done as well. It’s common sense!

Learning about the stock market and investments takes a lot of time… but it is time well spent. There are numerous books and websites on the topic, and you can even take college level courses on the topic – which is what stock brokers do. With access to the Internet, you can actually play the stock market – with fake money – to get a feel for how it works.

You can make pretend investments, and see how they do. Do a search with any search engine for ‘Stock Market Games’ or ‘Stock Market Simulations.’ This is a great way to start learning about investing in the stock market.

Other types of investments – outside of the stock market – do not have simulators. You must learn about those types of investments the hard way – by reading.

As a potential investor, you should read anything you can get your hands on about investing…but start with the beginning investment books and websites first. Otherwise, you will quickly find that you are lost.

Finally, speak with a financial planner. Tell them your goals, and ask them for their suggestions – this is what they do! A good financial planner can easily help you determine where to invest your funds, and help you set up a plan to reach all of your financial goals. Many will even teach you about investing along the way – make sure you pay attention to what they are telling you!

Determine Your Risk Tolerance

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Each individual has a risk tolerance that should not be ignored. Any good stock broker or financial planner knows this, and they should make the effort to help you determine what your risk tolerance is. Then, they should work with you to find investments that do not exceed your risk tolerance.

Determining one’s risk tolerance involves several different things. First, you need to know how much money you have to invest, and what your investment and financial goals are.

For instance, if you plan to retire in ten years, and you’ve not saved a single penny towards that end, you need to have a high risk tolerance – because you will need to do some aggressive – risky – investing in order to reach your financial goal.

On the other side of the coin, if you are in your early twenties and you want to start investing for your retirement, your risk tolerance will be low. You can afford to watch your money grow slowly over time.

Realize of course, that your need for a high risk tolerance or your need for a low risk tolerance really has no bearing on how you feel about risk. Again, there is a lot in determining your tolerance.

For instance, if you invested in the stock market and you watched the movement of that stock daily and saw that it was dropping slightly, what would you do?

Would you sell out or would you let your money ride? If you have a low tolerance for risk, you would want to sell out… if you have a high tolerance, you would let your money ride and see what happens. This is not based on what your financial goals are. This tolerance is based on how you feel about your money!

Again, a good financial planner or stock broker should help you determine the level of risk that you are comfortable with, and help you choose your investments accordingly.

Your risk tolerance should be based on what your financial goals are and how you feel about the possibility of losing your money. It’s all tied in together.

About Online Trading

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The invention of the Internet has brought about many changes in the way that we conduct our lives and our personal business. We can pay our bills online, shop online, bank online, and even date online!

We can even buy and sell stocks online. Traders love having the ability to look at their accounts whenever they want to, and brokers like having the ability to take orders over the Internet, as opposed to the telephone.

Most brokers and brokerage houses now offer online trading to their clients. Another great thing about trading online is that fees and commissions are often lower. While online trading is great, there are some drawbacks.

If you are new to investing, having the ability to actually speak with a broker can be quite beneficial. If you aren’t stock market savvy, online trading may be a dangerous thing for you. If this is the case, make sure that you learn as much as you can about trading stocks before you start trading online.

You should also be aware that you don’t have a computer with Internet access attached to you. You won’t always have the ability to get online to make a trade. You need to be sure that you can call and speak with a broker if this is the case, using the online broker. This is true whether you are an advanced trader or a beginner.

It is also a good idea to go with an online brokerage company that has been around for a while. You won’t find one that has been in business for fifty years of course, but you can find a company that has been in business that long and now offers online trading.

Again, online trading is a beautiful thing – but it isn’t for everyone. Think carefully before you decide to do your trading online, and make sure that you really know what you are doing!

Student Loan Repayment Tips for the Life of Your Loans

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It is often said that the most effective debt management strategy is to be debt-free.   But, in order to pay for your college education, you may need to take out student loans.

Student loans are applied by many people these days.  It is for the hope that student loans can greatly support their education.  Well, that is primarily the purpose of student loans, but there are some instances that getting student loans is what lead people to be buried deep in debt.  This is common among those who failed to repay their debts or those who actually escape from their obligations.

Now, planning for successful repayment involves a lot of considerations.   The planning should start before you place and strike your pen on your first promissory note.  Just as you are making a commitment to your career by way of investing time and money in higher education, you should also make a commitment to your financial future by way of effectively managing your student loans from the beginning.

Here are the most recommended tips and tactics that may help you handle your student loan debt effectively and repay the loans successfully.

Tip #1:  Do Your Own Research

Always note that not all loans are the same.   Some of them, such as the ones provided by the Indiana Secondary Market for instance, offer benefits during school as well as after graduation in the form of repayment incentives, while other do not.   They will pay the 3 percent origination fee normally charged on Federal Family Education Loan Program (FFELP) loans, and this process actually means more money for the books, school supplies and living expenses.  And, after you graduated, there is a chance that you will be qualified for reduced interest rates especially when you ready your payments up on automatic withdraw.   So, with the differences in student loans, it is necessary that you do your research before signing the first promissory note.

Tip #2:  Pay Attention to the Mail

Typically, every borrower receives important information regarding the student loan he or she took out.  The mail usually comes in before, during and after school.  So, it is somehow important that you read all of the materials you receive carefully.  In case, you have questions, the source of the materials is available to welcome you with your questions.   Don’t hesitate to ask, and never ignore the correspondence or you may miss out a very vital deadlines or details about your loans.

Tip #3:  Be Organized

When taking out student loan from a particular institution, it is always best to save all of your student loan documents and correspondences.  This makes you aware of what exactly you’ve agreed, what is expected from you as a student loan borrower, and how much you have borrowed.   At the start of the student loan process, you may find it unnecessary to keep all the documents, but when the repayment period is approaching, there is a great possibility that you may refer to some or all of these documents.

To makes things easier for you, begin by setting up an easy to use record-keeping system where you can store your student loan documents and correspondence.   As you may know, there are a number of books and software products on personal finance to help you get started.   Whatever you may use, whether file folders, binders, portfolios, or envelopes, it is a good idea that you set up one folder for every type of loan or account you have and keep the items sorted accordingly.

Here is what you should keep:

  • Important documents like your student loan applications, promissory notes, disbursement and disclosure statements, as well as loan transfer notices.
  • Copies of all correspondences between you and your student loan lender, loan holder, and/or servicer, including your school’s financial aid office.
  • Addresses and telephone numbers of your lender, loan holder, and servicer.  These must be maintained up-to-date.
  • The name, the date and time of the conversation, as well as a summary of what you have discussed.  These must be considered especially when you are speaking with anyone regarding your student loans as these may be valuable for future reference or clarification.

Also, when setting up your record-keeping system, be sure that it is comfortable to use.  This means a system that you will find easy to maintain over the life of the loan.  This record-keeping system must also be secured from theft or fire.  Many experts also suggest that you should keep all your student loan related documents and correspondences until all the education loans you’ve taken have been fully repaid.

Tip #4:  Be present at All Required Entrance and Exit Sessions

When you take out student loan, you will be required to complete student loan counseling sessions.  This is often considered when you first obtain the loan and upon graduation.   Also, it is worth noting that some schools these days offer this on-line and the sessions will not require a great amount of your time.  However, they will provide you with a great deal of information on your right and responsibilities as a borrower.

Tip #5:  Learn to Manage Money like an Expert

It has been said that if you live like a professional while you are in school, you will live like a student once you’ve finished your degree.   In other words, it is important that you know very well how to handle your money while you are attending school.  This will help you lessen the total amount you end up borrowing, and in turn, the amount you will responsible for repaying.

Here are some of the tactics that are worth considering:

  • Develop realistic budgets for while you are attending school and even after you graduate.   This will allow you to borrow not more than you need, giving you a great chance to repay your loans.
  • Learn to live as cheaply as you can.   Always remember that you are just a student.  You will enjoy a more comfortable lifestyle once you’ve graduated especially if you lessen your borrowing while you are in school.   Some of the most recommended ideas for how to be thrifty include getting a roommate, renting a movie instead of going out to the theater, as well as bringing your lunch from home instead of eating out.   Be thrifty as possible.
  • For any credit card bills you receive, try to pay the full amount due.
  • Establish a budget for yourself and follow it.   While you are in school, it is important that you know how to resist the urge of using credit cards or your student loan funds to purchase things that are included in your budget.  Don’t just buy unnecessary things.
  • If possible, explore work-study or other part-time employment.  As often said, it may give you an opportunity for you to study or obtain valuable professional experience, other than help cover overheads.

Tip #6:  Maintain at least Half-Time Enrollment

Considering a half-time enrollment is highly necessary in order for you to qualify for an in-school deferment.   The half-time enrollment normally takes six credit hours.   Regarding your school’s requirements for half-time status, see your financial aid officer.

Tip #7:  Take Advantage of Tax Savings

Some of the student who takes out student loans qualifies for tax credits.  To see your own status, check with your tax advisor.  The credits are actually based on your qualified tuition payments, and they can help reduce the amount of Federal tax you pay.  Now, if you are paying interest on a student loam, you may also be able to take a deduction on your Federal tax return for those interest payments.  Therefore, to obtain the full benefit of the credits as well as the deductions, grab the opportunity of employing the additional tax refund to pay down your student loan debt, or perhaps to handle your educational overheads.

Tip #8:  Repayment Tips

As you enter the repayment period, note that being aware of your student loan obligations is very crucial.   This is where the student loan default usually happens.  It occurs when you fail to pay back the loan as agreed or meet the other terms of your promissory note.  The promissory note for each of the loans must then be referred prior to your graduation or before you leave school so that you know what your rights and responsibilities are in repayment.

Here is what you should do as you enter the repayment period:

  • Send your education loan payments when due every month, for the full monthly payment amount or more.   This must be done regardless of whether or not you receive a bill.
  • Note and understand the repayment options provided by your student loan lenders.  With some available options, there is a possibility that you can lessen the total cost of the loan by making a high monthly payment.  Other options may even lessen your initial monthly payments and may make it easier for you to pay back your leans early in your career.
  • Understand the deferment as well as forbearance.  In case you need them, just learn to exercise your options.
  • Remember that the loan consolidation and its repayment options have its pros and cons.  So, understand them.
  • Keep your school, lender or servicer informed of your whereabouts.  Contact them immediately if you change your name or address; have questions about billing statements; have problems making your scheduled payment on time; or if you want information on or application for deferment or forbearance.
  • Read, note and understand all the correspondence you receive from your student loan lender, loan holder, or servicer.  And, respond them promptly if asked to do so.

For Further Information

If for instance you need further information regarding your student loans, always remember that the financial aid staff at your school is probably your most important resource.   However, there are also some consult publications from federal and state governments, lenders and scholarship granting organizations, and financial aid guidebooks that are available from your local bookstore.  They are great enough for you to start your own search.