It is a well known fact that there are many different credit cards available today. In order to pick a credit card that will work for you, pick one that reflects your lifestyle as well as your ideal spending limit. In order to find the best credit card company and the best possible deal, you will need to do your research to find the perfect card for you.
When picking a credit card, you will first need to decide what you need the credit card for. Some people want a credit card simply for the purpose of cash flow. Making purchases on a credit card, can then free up your income. You can put that money in your bank account and let it draw interest. This allows your money to earn interest, all the while you are still able to buy the things you need. Then, when the credit card bill comes in, you pay it in full, in order to avoid finance charges.
Instant cash purposes is another popular reason people get credit cards. They are then able to use the credit card at any ATM to obtain cash. Credit cards used for these purposes are great for an extended vacation or when traveling in general. If this is your sole purpose for obtaining a credit card, make sure that you find one with the lowest instant cash transaction rate.
With any credit card, it is always important to consider the monthly payments. You will either need to pay the credit card balance off each month or make the minimum required payment. When choosing a credit card, be sure to look at the balance transfer rates, any introductory rates, as well as any incentives that might apply to new credit card holders. Often times, if you have good credit, you can receive some amazing deals.
Credit card incentives are another important area to keep in mind. Many credit cards offer incentives such as reward points or cash back for certain purchases. Simply look around for credit card incentive programs that are appealing to your needs.
The APR or Annual Percentage Rate is another important area to look at. Whenever the incentive period ends, you will then pay the APR. Since APR’s vary from credit card to credit card, it is important to shop around and compare rates. The lower the APR is the better.
The minimum monthly payment is another area that must be looked at when choosing a credit card. Often times, credit card companies require you to pay about 3% of your total balance. Some credit cards are considerably lower, while others require a considerably higher amount. Choose a credit card with the longest interest free period available. This will help to keep your monthly payments lower.
After you have done the research and know exactly what you are getting into, you can then choose a credit card with ease. Credit cards can be a great thing to have. However, they can cause financial troubles if not used properly. If you do your homework, you will quickly be able to find the credit card that is right for you. As long at you pay your monthly bill on time and take care of your card, you will increase your credit rating, allowing you to eventually make larger purchases, like a house or a car.
Wednesday, October 8, 2008
Thursday, September 25, 2008
Creating an Emergency Savings Account
Having an emergency fund is not a luxury - it is a necessity. Most personal finance experts recommend that people have emergency savings to cover at least between three and six months’ worth of regular household expenses. Even if you think you don’t need such an account, it’s true that eventually you will. You can’t predict if you’re going to become disabled, have a devastating house fire, or lose your job.
Let’s look at how much savings you need, and how you can get started saving today.
How much do you need?
Starting an emergency savings account is something you need to do, but it’s also something that you need to put effort into doing. This is a task that you’re going to have to want to do.
The first step in starting your emergency fund is figuring out how much you spend each month. According to the U.S. Department of Labor, each person spends about $40,817 each year (as of 2003, the most recent year for which data is available).
On average, you’ll need about $3,400 at one month, $6,800 at two months, and more than $10,000 at three months. By six months, those cumulative expenses can jump to more than $20,000.
Even if you spend more or less than these numbers, it’s easy to tell that three months’ worth of living expenses is a large number. Your first reaction may be, “How on earth am I going to come up with that amount of money?”
Why that much?
It’s certainly true that the amount of money you’ll need for a proper emergency savings account is a significant figure. This amount is necessary, however, because we do live in uncertain times and are in the midst of a recession. A company having loyalty to you is sadly a thing of the past, and you can lose your job at any time. Other emergencies can be sudden and very expensive. No matter how you cut it, there’s never an opportune time for these emergencies to happen.
We know that you probably don’t have an extra $10,000 tucked under your mattress. But even six months’ worth of expenses, however, is a small amount compared to what you will need for retirement. Very few people don’t doubt that they should save for retirement; three or six months’ of expenses doesn’t look like much when compared to the retirement savings you’ll need for 20 years’ worth of retirement.
Figuring out the numbers
It’s time to start saving now that you’ve put things in perspective. You should approach this goal the same way that you would approach any other financial task. You need to create a plan and then put it into action.
The first step is to figure out how much money you and your family will spend each month. The three largest categories for most people are housing, transportation, and food. Multiply this monthly figure by three to figure out what you need for three months. Saving this amount of money should be your first goal.
The amount that you will need to save over five years or 2 years is doable for many people. Over five years, the amount each month is less than many people spend on their cell phone. The savings each month for the 2 -year plan is about the same as you’d spend on a monthly car payment.
Put your plan to work
There are many small steps that you can take to come up with your monthly or yearly savings goals. You may want to consider canceling your cell phone (or your land line) or buying a less expensive car. You can also skip your two-week vacation, save your next bonus, or reduce the amount of money you spend at restaurants and coffee shops.
You should treat your emergency fund like a bill that you pay every month. It might be a good idea to always remember to pay you first. Even though many people don’t have problems sending money to their credit card companies every month, it is harder for some people to remember to send money to themselves. Figure out how much you need from your paycheck, and set that aside each month.
There is no time like now to start savings. Even if you can’t afford to make large monthly payments to your account, you can take other steps. You can empty the change from your pockets at the end of the day and put it in a jar. You can eat at home instead of out, and “tip” yourself by adding to your emergency account. You can save $5 a day, and find yourself with more than $9,000 in only five years.
Start saving!
You must view your emergency savings account like your insurance policies not a debt loan with credit you have to pay back to yourself. Guard it carefully when you have your account fully funded. This is not a piggy bank for you to dip into any time you’ve overspent your budget and need some extra cash. This is money that you only spend if you have an emergency.
Remember this: Once you spend that money, it is gone. It will take longer to replace it than you may anticipate, and you don’t know if you’ll need it again in the mean time. Someday when you do have a big emergency, you’ll be glad that you were so diligent in saving your account funds.
Let’s look at how much savings you need, and how you can get started saving today.
How much do you need?
Starting an emergency savings account is something you need to do, but it’s also something that you need to put effort into doing. This is a task that you’re going to have to want to do.
The first step in starting your emergency fund is figuring out how much you spend each month. According to the U.S. Department of Labor, each person spends about $40,817 each year (as of 2003, the most recent year for which data is available).
On average, you’ll need about $3,400 at one month, $6,800 at two months, and more than $10,000 at three months. By six months, those cumulative expenses can jump to more than $20,000.
Even if you spend more or less than these numbers, it’s easy to tell that three months’ worth of living expenses is a large number. Your first reaction may be, “How on earth am I going to come up with that amount of money?”
Why that much?
It’s certainly true that the amount of money you’ll need for a proper emergency savings account is a significant figure. This amount is necessary, however, because we do live in uncertain times and are in the midst of a recession. A company having loyalty to you is sadly a thing of the past, and you can lose your job at any time. Other emergencies can be sudden and very expensive. No matter how you cut it, there’s never an opportune time for these emergencies to happen.
We know that you probably don’t have an extra $10,000 tucked under your mattress. But even six months’ worth of expenses, however, is a small amount compared to what you will need for retirement. Very few people don’t doubt that they should save for retirement; three or six months’ of expenses doesn’t look like much when compared to the retirement savings you’ll need for 20 years’ worth of retirement.
Figuring out the numbers
It’s time to start saving now that you’ve put things in perspective. You should approach this goal the same way that you would approach any other financial task. You need to create a plan and then put it into action.
The first step is to figure out how much money you and your family will spend each month. The three largest categories for most people are housing, transportation, and food. Multiply this monthly figure by three to figure out what you need for three months. Saving this amount of money should be your first goal.
The amount that you will need to save over five years or 2 years is doable for many people. Over five years, the amount each month is less than many people spend on their cell phone. The savings each month for the 2 -year plan is about the same as you’d spend on a monthly car payment.
Put your plan to work
There are many small steps that you can take to come up with your monthly or yearly savings goals. You may want to consider canceling your cell phone (or your land line) or buying a less expensive car. You can also skip your two-week vacation, save your next bonus, or reduce the amount of money you spend at restaurants and coffee shops.
You should treat your emergency fund like a bill that you pay every month. It might be a good idea to always remember to pay you first. Even though many people don’t have problems sending money to their credit card companies every month, it is harder for some people to remember to send money to themselves. Figure out how much you need from your paycheck, and set that aside each month.
There is no time like now to start savings. Even if you can’t afford to make large monthly payments to your account, you can take other steps. You can empty the change from your pockets at the end of the day and put it in a jar. You can eat at home instead of out, and “tip” yourself by adding to your emergency account. You can save $5 a day, and find yourself with more than $9,000 in only five years.
Start saving!
You must view your emergency savings account like your insurance policies not a debt loan with credit you have to pay back to yourself. Guard it carefully when you have your account fully funded. This is not a piggy bank for you to dip into any time you’ve overspent your budget and need some extra cash. This is money that you only spend if you have an emergency.
Remember this: Once you spend that money, it is gone. It will take longer to replace it than you may anticipate, and you don’t know if you’ll need it again in the mean time. Someday when you do have a big emergency, you’ll be glad that you were so diligent in saving your account funds.
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