Getting Out From Under the Mountain of Credit Card Debt

Credit cards (Photo credit: Wikipedia)

We all know that credit cards are a convenient way to pay for purchases when you're on the go or in between paychecks. According to The Nilson Report, as cited by Forbes, credit card transactions made up for a little over half of total consumer spending in 2012.

Unfortunately, those very benefits also make it incredibly easy to find yourself under a mountain of debt that could take years to pay off. To top it off, you're losing money each month in interest and fees as you pay the balances down. With a little planning, you can chip away at your credit card debt much faster, but you'll need to decide which approach works the best for you first.

Snowball

The debt 'snowball' approach to credit cards is fairly simple. Determine a budget and decide how much extra you have each month to put towards credit cards while covering all your other expenses. Cut out unnecessary spending, such as restaurant meals, as much as possible for now so you have more to put toward your debt clearance.

List all your credit cards in order of total balance from smallest to largest. Each month, put all the extra money you have toward your smallest card and only make the minimum payments on the rest. Once a card is paid off, apply the minimum payment for that card to the next card on the list in addition to whatever you're able to apply based on your budget. As you work your way through the list, you'll see the 'snowball' effect as your payments become larger and larger, working the debt down faster and faster.

The debt snowball method is beneficial in that it's easy to follow, and the results you'll see will encourage you to stick with it. But you may not be paying the debt in the most advantageous way regarding interest using this method.

Interest Order

Under an interest order approach, you'll still need to make a budget to determine what you can afford to put toward your debt, but you're changing the payment order. Instead of listing debts by balance, you'll list the credit cards in order from highest APR to lowest APR. The interest method saves you money by reducing higher interest balances faster, but it isn't as simple as the debt snowball.

Before you commit to a method of credit card debt elimination, try to decide which method is most likely to keep you motivated over the long term. While you can save more over time using the interest order method, it may not be ideal if you're the type of person who needs more immediate results to keep yourself on any sort of program.

On the other hand, if you're a numbers person, the interest order approach may work better for you than the debt snowball method because you'll be keeping a tally of your savings. Regardless of which way you decide to go, make sure to cut as much spending as possible to work down your debt quickly. 

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Stop Your Employees Fiddling the Paper Work

The Greater London Police were called in to investigate fraud committed by staff working for Serco in August 2013. It was discovered that employees had fiddled the paper work to claim prisoners were being made ready to be transported to court, when in fact they were not. They were working for Serco who had been awarded a contract worth £285million to transport the prisoners across London.

Serco had been aware that there were some internal problems when persistent delays were reported in the transportation of the visitors from courts to jails in the summer of 2012. As a result of the delays they created an official improvement notice but that wasn't enough to solve the problems. Instead of improving their work the employees simply fiddled the paperwork. In addition to this problem Serco has also been accused of overcharging for their contracts and as a result they must allow an outside forensic audit to find out if they have been acting and performing dishonestly.

Protecting Your Business

Fraud happens, it’s something that costs businesses in the UK millions of pounds and it can leave companies closed and individuals behind bars. As a business owner it’s very important that you try to protect your company from those who are always looking to make money off the back of others.

The Greater London police have provided a lot of advice regarding fraud for business owners. Fraudsters find all sorts of ways to target businesses, whether they are attacking you from the outside or internally. You may be targeted by a lone fraudster or a gang, either way you must be aware of some of the methods that could be used.

Transferring Money

Criminals will use telegraphic transfer requests to take money from your account. The criminals get hold of your bank details and most commonly send a transfer request from another country. A letter is produced and sent to your bank requesting the money and the bank will send the amount that’s been asked for.

An Inside Job

Employees are increasingly being involved in cases of business fraud. The individuals often work on their own to try and gain personal details in order to commit fraud through identity theft. The criminals will come to work for you with the intention of stealing from you but often they will target other employees within your company. The employees may be questioned in a relaxed or social setting and unwittingly give away some information that the criminal can use to their advantage. Alternatively they may be threatened or blackmailed into delivering financial data of the company.

Suspecting Fraud Within Your Company

If you think your company may have been targeted by fraudsters you will need to discover what’s been going on. You can use your internal audit systems and enroll the assistance of forensic accountants in London so you’re fully aware of the extent of the damage to the assets of your company. You must also make a report to the police who will be able to investigate the incident.

The Essential Guide to Trading on Margin

Fundamentally, trading on margin is investing in a given asset using a loan from your broker. There are a number of advantages and disadvantages to margin trading that make it potentially worth your time, and if you’re willing to take a risk with margin calls, this should be a method of investment that you should know about. 

Here’s an essential guide to trading on margin.

Fundamental Facts

You can’t trade on margin if you have a standard cash account with your broker. Instead, you’ll need a margin account where you will need a minimum investment amount of $2,000 – though some brokers will ask you for more. This amount acts as a deposit which then allows you to make trades.

Once you’ve made an investment and closed your position, you’ll need to pay back the deposit you loaned from your broker to make the investment in the first place, and then you’re free to take the rest of the money. Of course, if you fail to be profitable, you’ll still have to pay the deposit to your broker.

Advantages of Margin Trading

One of the greatest advantages of margin trading is that it allows you to make larger investments than you’d be able to use a cash account. 

This is because you’re making an investment using the loan which you’ve borrowed from the broker. This means you could potentially make investments 2, 3, or 4 times the amount of money you actually have as capital. 

If you’re trading currencies via the forex markets, you can use this to your advantage to make substantial profits, particularly if you use a margin calculator.

Disadvantages of Margin Trading

The best advantage of trading on margin is also its largest disadvantage because large margins can lead to great losses, as well as great profits. 

If you make a loss, a very small change in pips can lead to massive losses in your own money because the margin conversion is usually high – this is what allows you to turn a couple of thousand dollars into a couple of hundred thousand dollars. 

Therefore, when you’re considering trading on margin, you should be wary of all the disadvantages before you take the plunge – you could lose large as well as win big.

Ultimately, margin trading presents an exciting, though the risky strategy of investing, so look at all the options before you open a position.

Debit Cards the Safer Bet for Teenagers

At some point, every young person will need to learn how to effectively manage their money. A prepaid debit card will make the process a lot easier. Whether the teenager is a high school freshmen or just entering college, a prepaid debit card will allow them to make their own financial decisions. Here are some of the benefits of a prepaid debit card for teenagers. 

Safer than a traditional credit card

Even the most responsible teenager could get into financial trouble with a traditional credit card. It is just one more hassle that the parents have to deal with on a monthly basis. On the other hand, a prepaid debit card is a lot more user-friendly. There are not any expensive late fees to worry about. 

Limits the amount of money that can be spent

Unlike a traditional credit card, the teenager is only able to spend the amount of money that is on the account. If the teenager depletes the available funds, the parents can simply reload the card by logging on to their account. The necessary money can be safely transferred from their checking account to the prepaid card’s account. 

Teaches responsibility

A prepaid debit card helps a youngster to learn how to budget their money wisely. A prepaid card for students is a great alternative to cash. The teenagers can simply look online to keep track of their spending habits. Whether they are going to the movies or buying a new necklace, the prepaid card will help to minimize overspending.

Why Lenders Deny Your Loans Despite a Good Credit Score

Your credit report gives you a detailed analysis of your credit history and this can make or break your ability to borrow funds for any important reason in the near future. The use of the credit report by the lender helps them carry out essential background checks that can tell a lot about your ability to repay the loans that you may have taken. 

However, sometimes, there is a possibility that you may possess an excellent credit score, yet you may not get a loan approval leaving you startled and wondering what may have gone wrong. To put it simply, the lenders have to look for their profit sources as well. 

Therefore, despite having a good credit score, some factors may hamper your ability to get a loan from your lender. A comprehensive list has been compiled that explains as to why you may be unable to make the cut. 

1.) Opting for short sales:

It goes without saying that short sales call for negotiation. However, this type of a negotiation does absolutely nothing to hamper your credit score. However, a short sale calls for you to pay an amount that is far lesser than the original amount owed by you. This itself can cause the lenders to be on their toes when you apply for a loan. Therefore, you should not be surprised if a lender refuses to support you financially because they will always have inkling that you may flake out on them and pay them much less than you owe based on your past experience.

2.) Paying the minimum acceptable amount:

When you pay a minimum amount but something that is of an acceptable standard it will cause absolutely no harm to your credit report. Therefore, it will have “pays as agreed” stamped on your credit report. While your report will look clean and acceptable, if a lender performs close background checks and comes across this flaw, he is likely to severe any professional relationship that may have had any kind of scope. The simple reason for this is the fact that minimum payments are an indication of underlying debt issues and no lender wants to be put on the spot in terms of debts and outstanding loan payments.

3.) Registering credit cards in a successive order:

It is completely alright to have a few credit cards in your name. As long as you are good with your payments, your credit score cannot be harmed. However, lenders do not take too well to people who have a knack of opening credit cards in a rapid succession. Therefore, if you want to have easy and hassle free access to loans in the future avoid opening cards within weeks or even months apart. Lenders fear that although your credit score is currently decent enough, the scenario may change with the arrival of several credit cards. Therefore, they may refrain from giving you a loan despite a good and clean credit report.

4.) Think twice before co-signing a loan:

You may do this out of good will and may extend a helping hand to a friend or family member in need but this in turn can jeopardise your own attempt at getting a loan at a future date. This is simply because of the fact that while you may be asked to pay off the loan for the person you have co-signed, you may find it increasingly difficult to pay off 2 loans at one time or in quick succession, thus decreasing your chances tenfold despite a good credit score.

Author’s bio:

Julianne Farmer is a finance analyst working with a well known financial firm. Her job requires her to do regular background checks and keeping in touch with investors and other management teams for the company. She likes to keep up with the stock market changes.

Your Guide to Moving Abroad

Moving house has been proven to be one of the most stressful periods in anyone’s life. Right up there with things like starting a new job, heading off to University and having a child, moving house brings about a whole range of emotions that leave many questioning whether it’s worth all the hassle. It also brings back memories that you’ve had in that particular home, either as an individual, a couple or as a family - putting it all into a box can seem like the end of an era.

But it can also seem like a brand new chapter in your life, especially if you’re doing something as drastic as moving overseas. According to the foreign exchange company World First, there are “around 4.7million British nationals living outside the UK on a permanent basis. In the year to June 2012, 352,000 people left the UK.” That’s quite a startling figure however you look at it, and many will be left wondering just why so many people are packing up and heading abroad.

If you’re thinking of doing the same thing, you’ll have your own reasons. It might be that you’ve found a new job or you’re looking for better prospects overseas. You could simply be tired of the cold weather and want somewhere warmer to live. Or maybe you’re looking for a more relaxed environment than the one you’re in at the moment, ensuring your children have the best chance of having an enjoyable life, getting a good education and going on to find careers they enjoy.

Before you go, however, you might want some help with reducing the stress that will inevitably build. It’s a big step leaving your friends and family behind, so take a look through the worldfirst.com guide to moving abroad which is full of advice on where to go, what you need to do before you leave and when you get there, and how to go about finding work – if you haven’t already of course – as well as more really useful information.

A lot of people struggle to adapt to their new surroundings, especially in the early days. While you’re moving into your new home and getting used to the unfamiliar surroundings, you will inevitably start to miss your friends and family from back home. The key to battling these hard times is to prepare yourselves in advance by coming up with a method of coping, a bit like breaking up with a partner! You either throw yourself into your new project, taking on the challenge with both hands and trying to transform your house into a home, and getting out to meet new people in the local area by introducing yourselves, trying to speak the language and even visiting local bars to try and make some new friends.

You may have your own plans in place to help you deal with the early days of your new venture, but the important thing is that you do as much preparation before you go away as possible. If you can get certain items before you travel, do so, if nothing else it will give you piece of mind that everything is hand. The last thing you want to be doing is worrying, you want to be filled with that nervous excitement ahead of a big event so you can really enjoy life in a new country.

Bon voyage!