Prime Rate Credit

Dividends, in my humble opinion, are a great thing. After all, I’ve followed a bit of how world famous investory Warren Buffett, the head of famed conglomerate Berkshire Hathaway, invests, and much of the companies he invests in (mind you, long haul), do pay some sort of dividend.

Dividend investing probably isn’t for those who want a fast growing, quick money type of stock, like the next Google or IBM, or Marvel or heck, Berkshire Hathaway, but they are for people who want a solid, respectable and usually fairly reliable source of steady income over the years they invest for their golden retirement, rather than the risk of losing it all. This doesn’t mean that all dividend stocks are safe, or even steady for that matter, but a lot of the bigger companies like GE and PG (Procter and Gamble) are good solid dividend payers that grow steadily over the years and usually render a nice little return after years of investment.

I for one have have burned on investing in what I thought was going to be the next best thing, and without dividends as an incentive to stay in the stock, I quickly bailed when I realized that the majority of my capital, if not all of it, would be compromised if I kept it in that particular stock.

Dividend paying stocks generally steer clear of a lot of this type of volatility and can often be purchased at bargain prices during recessions and other economic downturns, or heck, even when it’s going really well in the stock market, because this tends to be when people go for high tech stocks, banks and the next biggest thing in hopes of getting more bang for their buck.

It’s important to note that dividends are not always “guaranteed” though, and that dividends can disappear with little or no notice, so it may be important for you to gauge this by looking at the company’s dividend paying history to determine whether their history dictates that you are taking a good risk by buying it for the dividend’s sake.

The results are “in” for April’s spending reports on the American public spending habits, and borrowing habits, and it’s actually what appears to be a bright spot in the otherwise dark doppler forecast for the economy as of late. Apparently, consumer spending and borrowing, mostly in the form of credit card spending and auto loans, went up modestly in March. Yes, it takes almost a full month to calculate these types of numbers, and believe me, even then I feel many times they are unreliable - after all, how can they account for ALL of it? That’s just my inner skepticism though, so ignore me for the moment.

This, paired with news that the GDP, the beacon by which recessions are gauged, has increased modestly as well, and that is counter to what we’ve been hearing about an already-here or pending recession, which is marked by a series of slowing GDP all the way around, which basically means that the whole economy has slowed for so many months in succession. Of course, this can never be accounted for until it’s actually over and all the numbers are reported, so recessions can rarely be absolutely earmarked until they are actually over, since no one can really say for certain one has happened until it’s after the fact.

Borrowing on various types of credit cards, including gas credit cards and low apr credit cards with fixed rates, went up almost a full three percent more annually than they do normally, so that’s good news, depending on how you look at credit card borrowing I guess (wink wink). Does this mean that consumers are still over extending themselves?

Well, that’s a matter of judgment so it really depends on who you ask, but for me, I’ve seen the struggling of my friends and coworkers, and the signs are there that people are having to tap credit sources they normally wouldn’t which many times comes in the form of a credit card, or revolving debt as we’re all aware. Those government issues rebate checks?

Hmm, well most people think that these are going to be spent on paying bills and putting the money away for savings, but that remains to be seen in about another month when we see if the first distribution of the stimulus checks helped with our GDP at all. Let’s be optimistic though, it does seem like there is some positive activity going on her, which is a good sign.

Although banks have historically had a set of criteria to go by when lending money to an individual or couple for the purpose of purchasing a home with it (in other words, a mortgage loan), many admittedly let some of the criteria either slip by or be minimally qualifying in years past, which analysts say is part of why we are facing one of the largest mortgage and subprime meltdowns ever which is just now coming to light now.

However, if it’s been a lesson to anyone, it’s been a lesson to major lenders that they need to tighten the noose on their lending practices, meaning they had to better screen candidates for mortgage loans so that they could keep both themselves out of hot water by avoiding bad loans, and the consumer, by not letting them get in “over their heads” so to speak, by taking on too big a mortgage for their salary and other forms of compensation to cover over the duration of the loan, typically 30 years.

A survey taken in April of major lending banks found that over 2/3 of the banks reported they had adopted tighter lending restrictions and new criteria and guidelines, including proof required of income, before they let a consumer sign on the dotted line and purchase a home with money borrowed from their institution.

Not only that, but banks are also severely tightening (compared to years ago), their restrictions on lending for credit cards and other common loans as well, extending their caution into other fields of concern, since consumers have generally overextended themselves in these areas, which many analysts say has also led to the current economic conditions and “credit crunch”, as it has been termed.

Banks have grown more concerned as well because with the erosion of current credit including mortgages, loans and credit card delinquencies, they are forecasting that even more loans are going to go bad in the near future, only further pulling back on their profits and putting them in the red, so to speak. There are of course some banks that have avoided this crisis as greatly as they can, but most are in some form of trouble because of one thing or another, and many think it will be years before they and consumers recover from this debacle.

My boyfriend and I live together. We do not share bank accounts as I personally do not believe that to be with someone, even married, that you have to share checking accounts, or even credit accounts. We do have our home we bought last year in both of our names, but even that is slightly split in that he is on one of the loans (we got two mortgage loans, it was the best way for us to go at the time), and not on the other because we had varying credit.

Which is funny because now he actually has better credit than I do, perhaps because my name is on the larger mortgage and that symbolizes a higher debt to income ratio for me, especially since I am partially self employed, which is typically a harder income to prove than a regular “salary” job. However, I digress. We both receive plenty of credit offers in the mail, ranging from special loans to balance transfer credit cards, to mortgage lines of credit that can be transferred into fixed rate low interest loans, but he still receives the bulk of the credit card offers.

Like I said, I think that even though I have a higher income and pay my bills on time every month, it is looked at as higher risk to extend more credit to me because of my debt ratio, so he does still get the bulk of the credit card offers. However, when do you know if it’s worth it to transfer a lot of outstanding revolving debt to a card that may be just the same thing pretty much after your introductory period is over? Well, it’s important to read the fine print on these.

Always go for something that says “fixed rate”, otherwise they “reserve the right” to change your APR terms on you any time, which can end up being the opposite of getting you out of debt, but instead steeping your further into it by increasing the interest you owe on your existing debt. Always have your calculator ready.

We’ve sat down and actually calculated, when the term is over, and how much you are paying for monthly payments, you are actually saving in the end on interest when taking on these deals, and sometimes you are better off just sticking with several balances on lower APR fixed rate cards rather than transferring it all to one card. Sure, it’s easier to make one payment a month as opposed to 2-5 payments to separate cards, but who cares when in the end you are paying more money for the luxury to do so?

My boyfriend and I live together. We do not share bank accounts as I personally do not believe that to be with someone, even married, that you have to share checking accounts, or even credit accounts. We do have our home we bought last year in both of our names, but even that is slightly split in that he is on one of the loans (we got two mortgage loans, it was the best way for us to go at the time), and not on the other because we had varying credit.

Which is funny because now he actually has better credit than I do, perhaps because my name is on the larger mortgage and that symbolizes a higher debt to income ratio for me, especially since I am partially self employed, which is typically a harder income to prove than a regular “salary” job. However, I digress. We both receive plenty of credit offers in the mail, ranging from special loans to balance transfer credit cards, to mortgage lines of credit that can be transferred into fixed rate low interest loans, but he still receives the bulk of the credit card offers.

Like I said, I think that even though I have a higher income and pay my bills on time every month, it is looked at as higher risk to extend more credit to me because of my debt ratio, so he does still get the bulk of the credit card offers. However, when do you know if it’s worth it to transfer a lot of outstanding revolving debt to a card that may be just the same thing pretty much after your introductory period is over? Well, it’s important to read the fine print on these.

Always go for something that says “fixed rate”, otherwise they “reserve the right” to change your APR terms on you any time, which can end up being the opposite of getting you out of debt, but instead steeping your further into it by increasing the interest you owe on your existing debt. Always have your calculator ready.

We’ve sat down and actually calculated, when the term is over, and how much you are paying for monthly payments, you are actually saving in the end on interest when taking on these deals, and sometimes you are better off just sticking with several balances on lower APR fixed rate cards rather than transferring it all to one card. Sure, it’s easier to make one payment a month as opposed to 2-5 payments to separate cards, but who cares when in the end you are paying more money for the luxury to do so?

A lot of people I work with were supposed to be getting their stimulus checks that the Federal government is issuing in the next few weeks, in this current week we are in now. Many of them said that the check could not come soon enough for them, many of whom are struggling to pay off old gas bills from the winter and are also struggling to pay to fill their gas tanks large and small just to make the commute to work and back and to make other small necessary commutes as well.

It’s really crazy times we’re living in these days when our citizens in the US can’t even make ends meet and have to pinch pennies just to live, and not even to live on any extravagant means, just to make it by, to buy groceries and other necessities and yeah, maybe to splurge on a little something here and there because after all isn’t that what living is all about?

The government stimulus checks were issued earlier than originally planned, thanks to urges by the president and congress to get them out quicker to help the struggling economy and get it back on its feet faster. Next question is, when is someone going to step in and force these oil companies to stop gouging the gas prices for no good given reason?

The stimulus checks supposedly go by the last few digits of your social security number, and there were numerous places online for the schedule of mailing to be found according to this individual information. I think last I looked married couples could get up to $1200 and people who filed as single or are married filing as single can get back up to $600, all depending on how much money the individual or the married couple makes.

The next question on these stimulus tax return checks is, where are we really getting this money from? Is it hidden somewhere or are we in effect really borrowing social security money from our future generations? These are hard economic times, but the good news is that hard economic times and times of recession, which we are in right now according to most financial analysts, are usually followed by economic booms. So it’ll be a good time to position yourself and your investments for when things pick back up hopefully!