Finding the Right Bank

When you’re searching for the right bank to put your hard earned money away in, it’s important to really read between the lines and comparison shop with other banks on a couple different key issues that I like to think are the foundation for whether you are getting a good deal with your bank or not. I remember my first checking account, which incidentally happens to still be the regional Cleveland area bank that I bank with today.

I had gotten the original checking account in college, it was my first checking account ever, and I got it because it was the only show in town pretty much in the town of Kent Ohio, back then that wasn’t a credit union or a bank that was really hard to find anywhere else if you happened to be out of town. It was totally a pick out of ignorance and convenience, however for me, it ended up that the bank treated me really well and offered some incentives to stay with them over the years. So I stuck with them.

Lately, they are also the lender for a personal loan that my fiance and I decided to take out to help with some of the bills around the house and consolidate, which we got a great deal on and saved a lot on interest, so it pays to be loyal to a good bank, because they will definitely cater more to you for your lending needs should one arise – especially if you’ve been a good customer that doesn’t bounce checks or have other bad credit issues.

The first thing to look at is as I mentioned earlier, are these banks going to be easily located throughout the country, or at least in the areas of your current state where you happen to frequent? This means that you won’t be paying outrageous fees to get money from a non bank owned ATM and you can make deposits at several locations. Don’t underestimate the power of convenience!

The next thing I’d concern myself with when searching for a bank would be what kind of interest rates do they offer on their checking, and more importantly their savings accounts? You ideally would like one that is on the higher end of the spectrum. Checking accounts don’t matter so much unless you happen to be one of those people that keeps tons of money in there at once, which is unusual, but the savings accounts certainly will make a difference.

The most important thing to me is the fees they charge. Nothing irks me more than banks that charge outrageous monthly maintenance fees. Or if they charge you exorbitant amounts for overdraft fees and things like that. Get a full description from them of the fees they charge before you make the leap, you’ll be happy you did because there’s nothing more irksome than seeing large fees every month.

One Bank That Seems Stable

When I was searching for bank stocks to buy, and take advantage of the currently extreme negativity about banks in general given the current mortgage crisis which spawned the greatest financial meltdown most of us will see in our lifetimes, one came to the forefront as a promising business model with a promising outlook, and minimally impacted bottom lines from what many other banks too part in.

When I say what many other banks took part in, I mean risky lending practices that involved lending to people who were in high risk categories in order to get more money quicker, and to get more of an interest rate out of them . When these subprime loans dropped the ball, and people couldn’t pay them any more, that’s when the whole mortgage and subsequent financial crisis took off, leading to a downfall of the stock market, and straight up consumer panic. You can see why banks aren’t the most popular stocks right now.

That news, combined with the news that the government was providing the largest, seemingly most stable stalwarts of the banking industry with TARP money meant to help keep them from going under after a series of bad business decisions, is the reason you can get bank stocks on the cheap now. But you have to be extremely careful – there’s a reason why they’re cheap, because they stand a good chance of still having substantial liquidity and profitability problems in the intermediate time frame as well as the distant future.

The one bank that stood out to me as one that has weathered this crisis pretty well, and seems to have a pretty conservative business model (the reason they stayed out of the subprime fiasco a lot more than other banks – one word, greed), is Hudson City Bancorp. This smaller bank has just posted record profits, perhaps because they have gained a reputation as being pretty solid in these uncertain times, but also because they have been voted the best managed bank.

It first came to my attention when I was reading an article in a newsletter from an investing service I subscribe to. It was one that looked like it warranted further research for me to invest in, so I started to research it and found that because of their more conservative approach to making loans to people for homes, they have made good profits and stayed in business, making mortgage loans and other loans, but not ones with substantial downside risks.

It doesn’t mean they will weather this storm without any scrapes, no banks will, but in comparison I really like the way they’ve done business and maintained profitability, unlike their larger competitors. Look where all that greed and risky lending got them – on the TARP program and itching to get out of it as soon as possible!

College Student Loans Harder to Come By?

We have definitely entered a new era in the midst of the national credit crisis which seems to have everyone from mortgage lenders to automobile loan lenders running for the hills or closing up shop because many times these loans are simply no longer profitable to them. Included amongst the victims, you could say, are many private student loan lenders who are either not giving as many student loans or toughening their guidelines for giving them, or are just stopping offering them all together and sometimes not even bothering to send current lendees notice (this has happened actually).

Many would be college students and their parents who often get the loans for their children as collateral since they are more financially established, are asking how they are supposed to find private lenders for their kid’s college tuition and living expenses when many of the banks have flat out rejected them or refused their renewal of an existing loan. Student loans typically have a low interest rate, so maybe they are figuring that giving these loans out too much just doesn’t make much sense because they aren’t as profitable to them as other loans may be.

Not only are people being turned down for student loans, but they are also having a hard time finding lenders who still find it “worth their while” to actually offer student loans. This has boiled the choosing pool down, and many are complaining that it’s hard to find someone willing to loan them money for their child’s tuition and other expenses. Increasingly, students are also having to rely on college student credit cards to make up the difference in living expenses rather than overages on their student loans, as was traditional in the past with traditional government backed student loans.

Bank Failures : Who Might be Next?

We are seeing one of the most trying economic times of our lifetimes, and experts are saying that it’s just going to get worse. Banks are failing and the government is needing to step in, many banks are not remaining solvent, and some are struggling just to avoid a major takeover, and others still are being taken over by the FDIC, which is the government regulating agency that steps in when a bank becomes a failure, and takes over, insuring people’s deposits for up to one hundred thousand dollars as far as I know.

The run on the banks is going to cascade down further into other areas, and many people are scrambling to get their money out of their accounts if they sniff trouble in their individual banks, which causes further spiraling of economic solvency in institutions such as insurance companies and other publicly and privately owned equity corporations.

For now, what we need to focus on is staying calm about our own banks going under, and some say to look for signs that there may be trouble, although often even those that work for banks are some of the last to know about troubles. As one financial pundit says, watch out for when your bank starts putting the deposit slips on obvious display and starts to hide the withdrawal slips, as that is a sure sign that they may be in trouble.

We are even hearing about federal regulators sniffing around Wachovia for fraud possibilities, although no particular person is being investigated, but the whole company is being ivestigated for fraudulent practices. Indymac, one of the pacific northwests largest mortgage lenders, is currently being taken over by the FDIC assuming for reasons that they may have been insolvent, and need to have their deposits insured by the arm of the government who insures the customer deposits up to so much money.

These are some very scary times indeed when it comes to financial and economic security. We know people are having a hard time with it, but when the major banks who supposedly have millions or billions of dollars in backup start to buckle, that’s when people start to really freak out and lose confidence. I’m hoping that this is the last bank failure for a while but the truth is no one knows right now where this might be headed.

Current Prime Interest Rate for Loans?

Forecasts for the Prime Rate – which is the best going rate you can possibly get in a given time period, are usually given by financial forecasters and banks about once a month. Yep, the Prime Rate changes that often.

It just goes to show the true volatility and dynamics of the financial and lending industry. Below you will see the most recent forecasts – which means they are estimates.

Why Knowing the Prime Rate is Important

Knowing what you’re getting into, and what the rate is that you would be getting a great deal at is important because it allows you to go into the lending game as a knowledgable consumer who knows a good deal when they see one. Basically, it helps prevent you from getting a raw deal on your loan.

Prime Loan Interest Rate Forecast for the Next Few Months in 2006

May 2006 – 8.0
July 2006 – 8.0
August 2006 – 8.25
September 2006 – 8.50
October 2006 – 8.50

Building Good Credit

We all know that in order to get the best loan rates, mortgage rates and general loan rates including car loans, you need to have good credit and be deemed a good risk so that the lender will place a higher value on your business (they know you are more likely to pay them back, and in a timely manner if you’ve established a good credit history).

So, the next few posts are going to be on what you can do to establish and maintain good credit, so that you pay a lot less in the future for both long term and short term loans, mortgages and credit cards. I have to admit, I’m going to have to do a little investigating, as my knowledge in this area is just about the same as the average joe on the street.

There are some ways to building good credit that aren’t all common sense, or common knowledge for that matter. We’ll discuss those in the coming days.

My Personal Savings Plan for Buying a Home

This is really just personal commentary, but who knows, it might mean something to someone! I’ve decided that my goal for this year is to have $20,000 in the bank by the end of 2006 for a nice, fairly hefty downpayment on a home. How do I think I can do that?

Hi and Welcome to Prime Rate Credit Blog and Credit and Loan Help Site

Hello everyone.  I’m glad you’ve found this site.  I have put this weblog together because almost everyone I know is struggling with debts that seem to be out of their control, and credit card companies just seem to be increasing interest rates, as well as loan rates and mortgage rates.  With all of this against us, how can we ever get ahead? 

That’s what this weblog is all about.  I’ll share with you my personal journey from drowning in credit card debt to getting every cent of that debt cleaned up and paid off.  Also I’ll share with you how to find the best credit cards with the best interest rates, and how to also budget your spending and strategic ways to pay your bills so you pay yourself first – not the mortgage companies, credit card companies and loaning banks.

So welcome, and I hope you learn a little something here!