Prime Rate Credit

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.

Ugh, it’s hard to keep up with what’s going on in the crazy economy today, isn’t it? I swear just a few short weeks ago, I read a headline that promisingly claimed that US consumer borrowing was on the up trend. Not so any more according to this latest headline, claiming that no, consumer borrowing is in fact on a downswing. Apparently it has to do with credit cards (we wonder why we have bad credit these days, read on for more of why) Can’t keep up? Neither can I, so bear with me.

They have all these nifty figures that they use to figure out whether consumer spending and borrowing is up, but what they don’t tell you is that even though it may be technically “up” from last year, it’s still not considered “up” to them because they have already made projections about what it would be at for the next year at the same time.

Not really sure how they come up with all those numbers, since I haven’t heard of a recent population explosion which would lead me to believe that consumer borrowing or spending would skyrocket in one certain year over the next, but I guess we should listen to them because they’re the experts. Economic analysts had expected consumer borrowing to be up more than it actually was, so apparently this is a signal of some sort that yes, we are indeed experiencing a faltering economy right now. News flash, right?!

The bad part is that consumer borrowing went down in relation to non-revoloving types of credit, such as mortgages and loans, but went up ever so slightly for other sectors that really don’t benefit the consumer because they are charged on a revolving basis, which means the consumer is charged on purchases they made months ago but havent’ paid off, over and over and over until the card is paid off. It’s a system where credit cards, even the best credit cards out there, charge interest every month, even on balances that are carried over.

So you don’t just pay interest once on that set of dishes you charged on your favorite low fixed apr credit card, but you keep paying whatever percentage you signed up for over and over again on that amount until it’s totally paid off. Raw deal, but also a great deal when you think about the things you have been able to purchase because of credit cards that would not have otherwise been possible due to budget restrictions.

It’s hard sometimes to spend the money needed to do long overdue home improvements. However, maintaining and upgrading your home is a necessity to hold the value of your home and it can save you money in a variety of other ways. Also, there are some great home equity loans that can let you borrow against the value of your home, especially if it’s for the purpose of home improvement to the home you’re borrowing against.

Replacing old worn windows seems like a large investment, but in the long run, the dollars saved on energy costs will pay off. Replacing worn doors and storm doors can pay off signifigantly, over time, also with reduced energy bills.

Many home improvements can save in other ways by saving you money on your home insurance costs. If you have done large improvements, let your home insurance agent know about it and find out if discounts apply.

Home insurance companies usually offer discounts for substantial improvements such as replacing a roof or roof repair. Other improvements that could translate into insurance savings are upgrading plumbing, a new furnace, or rewiring or upgrading the electrical system in your home.

Security alarms are another discountable item with most home insurers. Good smoke and fire alarms can also add to your savings on discounts.

If you are a retiree or are employed in your home, you may be eligible for a discount since you are present in your home for most of the day. Sometimes, a discount of up to 10% is available for retirees on their home insurance.

If you’re looking to further your education and go on to college, usually the biggest obstacle is the matter of how you can finance this challenge. There’s a variety of student loans to choose from to make college dreams a reality.

To start on your financing options, you need to first obtain and complete a FAFSA, which is a Free Application for Federal Student Aid. The FAFSA has to be completed before you can be evaluated for federal financial aid. The FAFSA should be filed shortly after January 1 of your senior year in high school.

After completing the FAFSA and sending it in, you’ll find out what kind of loans, grants and school sponsored scholarships you qualify for. The various types of loans available are the Federal Stafford Loans, PLUS, and Graduate PLUS loans. There are two types of Federal Stafford Loans, the subsidized and unsubsidized varieties. The subsidized Federal Stafford Loan is based on financial need. With this type of loan, interest is not charged until you begin repayment.

The repayment schedule does not begin until six months after graduation and the amount of time for payment spans 10 years. The government subsidizes the interest on the loan during the time the student is in school. With the Federal Stafford Unsubsidized Loan, interest does accrue while you are in school. As with the subsidized type, you do not have to pay until six months after graduation or leaving school. The repayment time remains at 10 years.

The Federal PLUS Loan is designed for parents to fund their child’s education and may be used for books, living expenses, tuition and room and board. Some of the benefits of this type of loan are a fixed interest rate and the ability of the parents to completely fund the entire cost of their child’s education. Ther is no origination fee with this type of loan, and you should definitely be able to comparison shop for loans like this online.

The Graduate PLUS Loan is for graduate students and, like the Federal PLUS Loan, gives the student the ability to fund the entire cost of their education. The borrowers can defer repayment until after graduation and there is a fixed interest rate. Repayment options are flexible and varied.
There is a credit check, however, the loan is not based on assets or income level.

There are many opportunities for going to college if you just look into and research financing options available to you.

We recently purchased a house, and on top of all the abundance of mortgage information, there are other financing options that you have to look into when buying things that are necessities or “home improvements” for you new home. One of those necessities is furniture and electronics such as TV’s, DVD players and stereos, and also outdoor stuff like riding lawn mowers, and gardening tools.

All this stuff really adds up cost-wise, as you can imagine, so most people opt to either put it on a credit card or use an available financing option that the place they are buying the product from either offer in-house, or through a secondary broker.

For example, we purchased a lot of our furniture through a local and huge furniture store that’s been in business for over sixty years, and they offered a six months same as cash financing option that we were more than happy to take them up on, considering the decent chunk of change we spent in the store.

However, when you read the fine print, you realize that you really have to get the thing paid off in six months or else you get charged retroactive interest to the date of purchase, and the interest rate is sky-high for this particular line of credit.

Most of them do work in some way where it benefits the purchaser to definitely get this paid off in that six month time frame, or in the end, they are paying much more interest, sometimes even more than what the actual goods they bought are worth!

You may want to look into balance transferring any high interest debt that’s left over if it’s through a bank of line of credit that a lower interest balance transfer credit card will take as a balance transfer, if for some reason you don’t get it paid in those six months or however long the interest free grace period happens to be. Or, you may want to see if you qualify for a longer grace period if they have the option available, say one year or two years, then you can budget yourself a little better with the payments.

For one piece of good news in what seems like a constant stream of either bad or so so news for our economony and for our personal financial situations, the “Fed” as they’re affectinoately called, has decided to keep interest rates at an even keel for just under a year now, deciding to keep consumers happy and maybe our economy a little less gun shy.

Well, OK, I’ll admit I dont’ know the reason WHY the fed decided to keep it the same. It’s probably all some statistical and math jargon that none of us regular people can understand, but I’m sure at the heart of it all lies what’s best for the economy, right?

What does this mean for us? Well, it means that as borrowers, we can rest assured the rates (for now) aren’t budging for the worse, and as savers, we can rest assured that our savings accounts will be giving a more steady than usual interest rate yield since the rates are leveling off.

While you may not think it affects you, in fact it does in small ways, all our finances are connected in one way or another, and as the economy steadies, so does our job market, and consumers become more “confident” and start buying stuff again.

So that means, small business owners, people will start buying more things and make your business prosper, and those of you that want job security, this can also be a boon for job security and also the new job market if you happen to be in the market for a new job.

Studen Loan Xpress, a student loan company, and officials at Johns Hopkins University are being investigated for a scheme which involved the officials, who are supposed to be unbiased and only steer students in their best interests instead of benefitting from financial gains.

The problem is that an undisclosed kickback scheme was going on where counselors at the school and officials were involved in steering students to get loans from the student loan outfit for kickbacks, some to the tune of many thousands of dollars a year, in exchange for the busienss recommendations.

This may seem perfectly legal, but apparently the whole problem comes in when the officials did not disclose that they were being paid to recommend the student loan to students, and it was not always in the student’s best interest, which is considered steering for financial gains.

The officials records are being investigated, as well as the student loan company. Maybe they didn’t offer the student the best rate for their situation and someone got wind of it or got suspicious, and that’s how authorities at the school were alerted to the problem.

Well, they’re usually bad - very bad. Chances are, if you have a credit card, a car loan or any other type of small loan, or even maybe a mortgage, you’ve probably been solicited by your lending institution to waive a month’s payment for the month of December, when everyone is financially more strapped due to the holidays.

You may have even been offered more than one month of deferrment in some cases. I know some friends who have actually done this, only to find out that they were either charged a high fee for the luxury of waiving a months payment, or “deferring” it, or they received a lot more high interest tacked on to the end of their loan, just making the loan more drawn out, so that - yes - the lender can get yet more money out of you.

Offers like these may be tempting around the holidays, but it is really best if you can just go ahead and make you payment as scheduled.

Or, maybe you can even call your lending inistitution and negotiate a lower payment for that one month with them to ease the financial burden a little, but without an exorbitant fee or additional interest being charged. The worst they can say is no, but at least then you know you tried.

I found this student loan website which offers “good deals” on student loans for kids that are in college, or kids that are thinking about attending a college after highschool.

They offer a loan with no application fees or out of pocket expenses, although to my knowledge, most federal loans for students do not charge out of pocket fees or application fees (maybe a nominal one like $25 when I was a student).

The only thing that scares me about their website is that it is just an application screen, with no navigation to check out rates, offers or anything on the student loans they offer.

I would like it if they had something like that, or maybe even testimonials from other students or something. They may be the best deal in student loans around, just wish they’d increase the usability of their website a little!

I find it funny how you take out a loan with a higher interest rate, and then after you pay it back, you keep getting offers for “free money” from the lender around the holidays and other times when they figure you might be weaker and go for that seemingly easy money all in exchange for paying interest down the road.

Well, thank God I never took the bait, but after I paid off my higher interest rate credit consolidation loan with Citi Loan, I got a new offer for credit every 4-6 months it seemed. I actually still get money lending offers from them, even years after I paid them off.

You have to be careful with the “get it now, pay for it later” mentality. Keep in mind, this has been the same mentality that has gotten so many other Americans in trouble that they find very hard to get out of.

Try to really stick to it if you’ve paid off a significant loan or credit card. You’ll find that after a while, you REALLY do pay these things off, and they don’t come back to haunt you any more. If you need to seek out a lower interest rate loan or credit card to help you out in paying things off faster and more efficiently.