Category Archives: Finance

How Closing a Credit Card Account Affects Your Credit Score

Do you remember the excitement surrounding your first credit card? You probably applied for a credit card when you went to college or maybe your parents offered some advice. Either way, you’ve had that card since your teens or early 20s and it’s probably not the greatest card in your wallet. It might have a high interest rate, no rewards or a lofty annual fee.

Once you starting building good credit you were likely offered better credit cards. Your interest rates are lower, you probably don’t have an annual fee or a it’s a low fee, and you probably have access to airline miles or cash back rewards. So, why keep the card that is no longer serving you?

How will closing the accounts affect my credit?

The important thing to remember is that when you make the decision to close a credit card account you’re reducing your credit utilization rate. Remember that credit utilization accounts for 30 percent of your total score calculation. You’ll need reduce your spending habits when you close a credit card account or you’re likely to go over the recommended 30 percent utilization rate causing your credit score to take a nose dive.

The average age of your credit accounts is another important factor for your credit score. This is two-fold. If you’re newer to credit, it’s best to keep old cards open because they remain on your credit for 10 years. That card, though rarely used, is actually helping your credit – especially if you have good payment history. Closing it could hurt your credit far worse than someone who has been building their credit for more than a decade.

So, what can I do?

If you have a high interest rate or a large annual fee, try negotiating with your credit card provider. Sometimes if you tell them you are considering cancelling the card due to high fees, etc, they may work with you. It costs them far more money to acquire a new customer than it would cost them to waive your annual fee or lower your interest rate.

Sometimes you have to close a card. If it’s costing you money because the credit card company won’t negotiate a waived or lower annual fee, it doesn’t make sense to keep it. Your credit might take a hit, but it will recover. You can’t however, recover lost funds due to annual fees for a card you don’t use.

Closing a credit account should not be taken lightly. Make sure to consider the factors listed above before you close your accounts.

Article Source: http://EzineArticles.com/9493406

My Tips on Improving Your Finances for Life

There is no way to avoid dealing with money and finances these days. Therefore you should try to learn as much as possible to help you make good financial decisions and to increase your confidence about money.

When you make a budget, it should be realistic regarding your income and spending habits. Be sure to include all of your income such as alimony, child support, rental income, or any other. Always use your net income not your gross earnings in these calculations. Once you have the numbers, you can consider how to adjust your spending to stay within your income range. To maintain your budget never exceed your incoming cash flow.

The next step is to total up your expenses, and you should make a list of all monthly expenses. Your list should document each and every expense that you have whether it expense, spontaneous or just a one time expense. Remember that this list needs to have a complete breakdown of your costs. Be sure to add in expenses that you have from restaurant dinners and fast food as well as grocery bills. Reduce expenses linked to your cars, such as gas and insurance. If you have payments that you make quarterly or less frequently, divide them up to reflect a monthly payment. Make sure you include incidental expenses, for instance, baby sitters or storage unit rentals. Try to have the most accurate list possible.

Now that you have a good idea of your income and expenditures, you can start planning a new budget. Look at each expenditure on your list, and decide what you could do without. If you normally buy coffee from a cafe, calculate how much money you would save on a weekly basis if you bought it from McDonald’s instead, or made it at home. Exactly what and how much you are willing to compromise is completely up to you. The first step is identifying expenses that are not necessary so you can use the money for something else.

If your utility bills are rising, you may want to upgrade your appliances to save some money. Upgrading to well-fitted double-glazed windows, for example, can reduce your heating bill dramatically. Besides you can repair any leaky pipes and only run the dishwasher with a full load.

Swap old, inefficient appliances for those that use less energy. Although doing so may cost you some money upfront, over the long-term you will save a fair penny on your utility bills. Unplug the appliances you do not need. In time you will notice significant savings in your energy consumption.

You can make a significant decrease in your heating and cooling bills by improving your insulation, as well as the roof above it. Insulation or roofing issues can be very costly, as maintaining a regular temperature in the home can be expensive. If you invest in the upgrades, it will save you a lot of money in the long run.

Using these tips not only saves you money, but it also helps you start bringing your budget under control. An expensive upgrade can save a lot of money in lowering electricity or water bills. This is one way that you can make your budget more reliable.

Article Source: http://EzineArticles.com/9584484

5 Tips for Improving Your Credit

Troubling financial situations happen in life to a host of individuals and families. The key to solving the crisis is having an action plan that you can follow to resolve your situation. On top of that, don’t become discouraged. With patience and determination, you can improve your credit score and get on the road to financial health.

Consider the following 5 Tips for improving your credit:

Debt Merging: This May Be the Right Path for You

What is Debt Merging? This type of loan is a single loan that enables you to repay your debts to a number of or all of your creditors at once. This type of loan usually comes from a financial institution.

Consequently, you have only one outstanding loan remaining – to the financial institution. However, remember to contact a variety of financial institutions before you select this type of loan. The interest rates offered by competing financial institutions may be different.

Study Your Credit Report

The reason to do this is to determine which items you can pay. A credit report contains a history of how an individual has paid their bills and how much open credit they have. It also contains anything else that would affect a person’s creditworthiness. A credit score is a judgment about an individuals’ financial health, at a specific point in time.

Banks or other consumer agencies, which are considering a person for a loan or other financial products, will check one’s credit history. Your credit score calculated by the credit reporting agencies is available to you. However, you must pay a fee.

You may want to know your credit score if you suspect it requires improving. Additionally, you may want to know it if you’re planning to acquire a loan or other new credit in the coming years.

Work With Your Creditors

Make contact with your creditors to arrange payments to them. Many creditors will allow you to move forward with a special payment plan. Your goal is to work out a payment plan with them that you can afford. These relieve financial stress on you, while allowing you to pay down, consistently, your debt. Essentially, it’s a good solution that benefits you and the creditor.

It’s important to get all the details of the arrangement – the agreement – in writing. Remember to calculate whether you can actually make the regular payments that you’ve agreed to with the creditor(s).

Budget, Budget, Budget Your Typical Daily Expenses

Part of the process of improving your credit is saving money so you can use ‘saved money’ to pay down debt. You goal is to get out of debt sooner rather than later, while still being able to afford your debt repayment responsibilities.

Look at your household budget and cut out spending of extraneous goods and services you really don’t need. Be honest with yourself and do without where you can. You will be happy down the road when that debt load is lifted and your credit score has improved.

Consider a Financial Expert

There are many expert financial specialists available who have the experience to help you make informed financial decisions. A financial specialist such as an accountant assists people in planning and managing their financial resources. They offer information, insight, advice, tips, and more that you may not be aware of to help you get back to a healthy financial state. Use them when you feel your efforts alone may not get you the desired financial results you require.

Consider the above 5 tips for improving your credit. Stay positive and take the necessary action now to improve your financial situation. You can do it with a concerted, methodical, disciplined effort. Moreover, consider that help from a seasoned professional. Your plan of action for better financial health begins today!

Article Source: http://EzineArticles.com/9572188

5 Tips For A Factoring Application

Businesses monitor the cash flow demands on a regular basis. Nowadays, they use the invoice factoring, especially when they don’t want to get loans from banks. If you own a business and you want to submit a factoring application, consider the 5 tips given below before you go ahead and submit your application.

1. The Factoring Application

First of all, you need to get in touch with the factoring company so that they get to know more about your business. You can also talk to the company on the phone. The information you will provide is given below:

· The name of your company

· Business type

· Information about your valued customers

· Your contact information

The acceptance of your application depends largely upon the type of your business and customers. Most factoring companies prefer invoices owed by trusted businesses. Individual consumers are not that important in their eyes.

2. Aging Reports

In the aging report, details for the initial application are included. The report mentions the amount that the customers owe and the time they will take to make payment. Usually, customers that make payment within 30 days are considered better than those who take more time.

3. The Process of Factoring

The buying of accounts receivable at a good ratio of discount is called factoring. The factoring provider offers an upfront payment on invoices that are approved. The factor takes care of the collection process and then releases the balance as soon as the invoice is paid by the customer. The fee is deducted by the factor before the balance is released.

4. The Cost of Factoring

So, how much will the factoring cost? This is a common question. The cost depends upon the industry, customer strength and the time it takes for the payment to be received.

The pricing is also affected by the value of invoices. The rates will be better if the volume is higher.

5. The Underwriting Process

The factor is interested in your customers’ strength because they are going to buy the account receivable instead of putting together a plan. Moreover, the factor will conduct an evaluation of the creditworthiness of each customer.

Aside from this, the factor will look at the public records of the company to verify the titles. This search involves liens, judgments, corporate status, pending litigation, UCC, criminal records, back taxes and so on. It also includes other items that may affect the process of receiving payments.

On average, the process of due diligence may take 5 to 10 days on fresh accounts. As soon as the starting review process is finished, the approved customers can receive cash within 24 hours. So, the process is not as complicated as most people think and the cash can be received easily.

Factoring offers cash flow solutions for old and new businesses. And they can offer funds for expansion, growth, and expenses.

So, this was a brief introduction to the process of factoring. Hopefully, you can take the right steps now.

Article Source: http://EzineArticles.com/9610716

5 Things to Consider While Selecting a Financial Planner

Unlike someone calling himself a CPA or a physician, just about anyone can call himself a “financial planner” or a “financial advisor” regardless of their educational background and professional experience. Moreover, not all of them are unbiased in their advice and not all of them always act in their clients’ best interests.

To ensure your financial planner is well-qualified in personal finances and impartial in his advice, consider the following five things:

1. Planning Credentials: Having a highly-regarded credential in financial planning, such as Certified Financial Planner (CFP) or Personal Financial Specialist (PFS), confirms that the professional you intend to work with has acquired the education and experience necessary to serve as a financial planner. CFP and PFS credentials are awarded to only those individuals who have met the certification requirements of education and experience in planning for personal finances. In addition, they have to pass the certification examinations and agree adhere to the practice standards and continuing education requirements.

2. Subject Matter Expertise: Financial planners are planning professionals, not necessarily subject matter experts. For example, a financial planner will be skilled in tax analysis and planning,but unlike a Certified Public Account (CPA) or an IRS Enrolled Agent (EA) he might not necessarily be a subject matter expert when it comes to tax rules Similarly,a he could be skilled in chalking out an investment plan, but unlike a Chartered Financial Analyst (CFA) he may not be an authority in the subject of investments. Work with a financial planner who is also a subject matter expert in those areas of personal finance that are important in achieving your financial goals.

3. Client Specialization: Not all financial planners serve all types of clients. Most specialize in serving only certain types of clients with specific profiles. For example, a personal planner may build his expertise and customize his services to serve only those individuals and families who are in certain professions, or a particular stage of life with specific financial goals and net worth. Ask whether the planner specializes in serving only certain types of clients with specific profiles to determine whether he is the right fit for your situation and financial goals.

4. Fee structure: The fee structure largely determines whose interests he serves best – his client’s or his own. A Fee-Only professional charges only fees for their advice whereas a Fee-Based professional not only charges fees but also earns commissions, referral fees and other financial incentives on the products and solutions they recommend for you. Consequently, the advice from a fee-only one is more likely to be unbiased and in your best interests than the advice from a fee-based financial planner. Work with a professional whose fee structure is conflict-free and aligned to benefit you.

5. Availability: He or she should be regularly available, attentive, and accessible to you. Ask the planner how many clients he currently serves and the maximum number of clients he is planning to serve in the future regularly. This clients-to-planner ratio is one of the key factors in assessing your planner’s availability to you in the future. Also, ask which planning activities are typically performed by the planner and which ones are delegated to a para planner or other junior staff members. Lastly, make sure the planner is easily accessible via phone and email during normal business hours.

Once you have shortlisted a few well-qualified and unbiased financial planners in your local area, consult the ones who offer a FREE initial consultation first. During the initial consultation, assess the planner’s availability and any other professional attributes you are seeking in your financial planner.

Having a well-qualified and unbiased financial planner by your side is extremely important in your journey towards your financial goals. When searching for one, consider the planner’s professional credentials, client specialization, subject matter expertise, fee structure, and availability to select the right financial planner for your needs.

Article Source: http://EzineArticles.com/9594471

Important Things You Must Know About Fixed Capital Investment

It can be quite daunting to decode the jargon of financing businesses. In most cases, because of the similarity in the objectives of the different financing solutions, many have a tendency to exchange one for the other.

To simplify these very technical terminologies, most especially when you just have ventured into business and you do not have enough knowledge about it, here are some useful information regarding a fixed capital investment, which is one of the relevant business solutions businesses, either big or small, can opt for.

Facts About Fixed Capital Investment

First, they are often used to launch or perform businesses. Over a long period of time or about 20 years, they depreciate on the accounting statements of the company.

Second, though these investments can depreciate over time, they won’t depreciate the same way. Be reminded that there are investments that lose their value faster than the others. The perfect examples of those that devalue fast are communications equipment or devices since there is a rapid turnover of technology for these. Another excellent example is the company vehicles. Within the year of purchase, the value of a brand new company vehicle can depreciate by as much as 40%.

Third, fixed capital investments won’t devalue rapidly. There are actually cases where it can even increase in value. Real estate properties like the company’s office buildings and land are among the examples.

Fourth, these will include the acquisition of tools and equipment required for daily operations, along with the real estate properties where the goods are to be produced and stored. Remember though that the materials used in the production of goods are not included due to the fact that these aren’t retained by the company.

Sixth, the amount of fixed capital will be different from one industry to another. There are enterprises that would require higher fixed capital investment than the others. These will include oil companies, telecommunications providers, and the engineering and manufacturing firms. On the other hand, businesses that will just require limited fixed capital are those that within the service industry. And these will include the law and accounting firms since they require more compact devices, tools and regular office appliances.

Lastly, getting fixed capital often takes a considerable amount of time. Thus, it is crucial to work with a reliable, competent financing institution that can efficiently minimize the risk of financial losses through a wide variety of proven methods.

Article Source: http://EzineArticles.com/9532303

Check Out This Opportunity to Learn More About the World of Finance

Getting a taste of the real world jobs out there that pertain to your area of study can be an eye opening experience. You will work side by side those that do this type of work day in and day out. Such information can further fuel your passion for the career path you are on. It may help y to narrow down the specific area of the field you wish to go into.

With a Citi summer internship, you will have an unforgettable opportunity to get onboard for such learning experiences. These positions are limited though so you need to pay attention to the deadlines for applying. You also need to submit all of the requested materials with your application. Otherwise, you may not get that position you really wanted.

Large Financial Institution

They are one of the largest financial institutions available. They want to do their part to help encourage others to get involved in the world of finance. There is a wide spectrum of types of jobs that fall under the umbrella of their services. The various Citi summer internship areas include finance, technology, human resources, global transaction services, and commodities.

Apply for the ones that you are the most interested in. If you apply for more than one, you can only select one to take part in. However, applying in more than one area does improve your chances of being selected. Your dilemma at that point would be deciding which one to accept if you accepted for more than one. That is a bridge you can cross when you get to it!

Who can Apply?

You are eligible to apply for a Citi summer internship if you a junior or senior in college, you are a graduate student, or you have recently graduated from college. In addition to business skills and experience, they are looking for those who excel in the areas of communication and integrity. A passion for a career path in business is a strong asset they look at when deciding.

You can apply for a position in the USA, Africa, Europe, or the Middle East. They have a very diverse business culture with locations all over the world. Being able to work in your location or being able to get an internship in a location you wish to travel can be very appealing.

Payment

It is also encouraging that you will get paid for your participation in a Citi summer internship. This is good news because many companies offer internships that aren’t paid. They feel the experience they teach you is compensation enough. Being able to work for an excellent company like this and get paid to do so is the icing on the cake!

The amount you will earn depends on where you work and the common entry level salary offered by Citi Bank in that area. The specifics about work hours and payment for the position can be discussed once the offer is extended to you.

Application that Rocks

As you can imagine, there are plenty of people applying for the various opportunities. You need an application that rocks to be considered for one of the Citi summer internship positions. Complete the application neatly and providing as much information as possible. Your supporting documents including your resume and cover letter need to be exceptional.

Focus on sharing your experiences, your education, and your future goals relating to the world of business. You will need to provide letters of recommendation so ask for those early. Get them from professionals you have worked with, long term family friends, past employers, and others who know your work ethic and character. The Citi summer internship can be a dream come true!

Article Source: http://EzineArticles.com/9600351

Personal Finances Is All About Breaking Bad Habits And Creating New Ones

People are often tempted to give unsolicited advice to others about the best way to manage finances. You’ll come across ideas that work and get you places, but often people are offering up such generalized advice. Trying to put together bits of information and use it in a meaningful way is not usually the best plan, as some of the information may be flawed and other parts confusing.

How can you take good care of your money and your finances so that you do not end up frittering away your savings on things you don’t need?

Generally, the problem is that most people lack a good understanding of just how important saving for the future is. Most people are going to do everything else with their money first before they even think about saving. Although saving in this way is better than not saving at all, it is in fact a highly ineffective way to build any kind of financial independence or security.

Managing Your Personal Finances

If you want to save money for the future, you’ll want these tips to help you on your plan. Many people who practice these methods are surprised at how easy they are to follow.

Simply set aside 20% of your paycheck.

Just reverse your spending and saving habits, instead of putting away your savings after you spent what you thought you needed from your income. Take 20 percent of your earnings first and put it towards savings before spending it all. Make sure to deposit this money as soon as you get paid. Whatever is left after the 20 percent has been saved can then go to paying bills, buying groceries and even getting yourself a new pair of shoes.

This method ensures that you’ll have the cash on hand that you need for your future and helps you to be more effective when you develop your budget. It’s a good feeling when you know that you have cash on hand for emergencies.

Keep Things Simple

There are too many people who are going to look at the latest gadgets and get wooed. You cannot let others around you dictate what you are doing with the money that is in hand. You want to buy the latest iPhone, but there is something you must ask yourself. Think about it, do you really need to spend the money on one?

Is there something in the newer model that is not there in your present one? There is no shame in being rewarded with luxurious items, but you need to keep it under control. You should never forego important expenses to purchase luxuries, and your twenty percent savings rule mustn’t be violated.

You Want Cash Over Credit

Don’t fall for fancy credit card marketing. So many people end up with huge debt due to starting to buy small items using their credit cards. It’s easy to get lured into the trap that a $50 purchase won’t wreak financial damage in the future because it can be paid off within the month. Actually, once the billing cycle rolls around, you are probably like most people who just pay the minimum amount of money towards the bill, making that $50 dress cost close to $100 in interest.

Try to use cash whenever possible. Save your credit cards for emergencies only. Replacing your credit cards with debit cards is an even better idea if possible.

Taking charge of a budget and getting your finances in order is simple. You just need to create good new habits to replace the bad old ones.

Article Source: http://EzineArticles.com/9557087

Handle Your Finances With Care

It takes years to gather a handsome amount of money, and if it is not handled properly, your most prized possession would soon escape from your hands like sand. This is the reason why people go for financial planning. It gives you a great sense of satisfaction when you know that your money is in safe hands and is being handled with utmost care.

However, not many people are aware of the process involved in financial planning. Based on your financial position, it is very important to go ahead with personal planning because if you don’t start planning well in advance, then you might face several challenges in the future.

Financial advisors suggest all individuals follow these six basic key principles for financial planning.

• Analyse your current financial status: To be able to plan for future you should first be very confident about your current financial position. Make a checklist of all the assets and liabilities and your income and expenditure. Having this information at hand, you would be in a clear position to understand how you can achieve your financial goals. Your total financial worth would help you to determine the ways to accomplish your set goals, which include paying for your children’s education, buying a new property or being ready for any financial emergency like the loss of a job.

• Chalk out your financial goals: In order to accumulate wealth, a lot of planning has to be done in order to achieve the desired goals. Setting goals would give you an urge to go ahead to achieve it. Your list of financial goals should be very specific, which would show that they are crystal clear in your mind.

• Plan for alternatives: You cannot expect your planning to go as per your wish, so you should always have a plan B at hand. After listing down your goals you plan for alternatives as well.

• Analyse the alternative options: You should ponder upon the feasibility of the alternative ways taking into account your social, personal and economic condition at present. The liquidity of your assets also matters in this regard.

• Creation and execution of your financial plan of action: Once you have planned about your alternative options and have analysed its feasibility, it is time for you to put these plans into action.

• Review your plan: Since financial planning is very dynamic process it is subject to change at any moment. So, it is always advisable to keep reviewing your plans every now and then.

Thus, in order to achieve your financial goals successfully, these basic points should be kept in mind for better handling of your finances.

Article Source: http://EzineArticles.com/9450018

The Top 3 Export Credit Financing Mistakes Businesses Need To Avoid

Any type of business requires funds to sustain their day-to-day operations. Import and export companies face the same situation as well. Fortunately, there are various export credit financing solutions that importing and exporting businesses can rely on. With these solutions, these businesses will have fewer worries regarding the funds they will need for their operations.

To be successful in acquiring and getting the most out of these export credit financing solutions, it is important to avoid certain mistakes. These top 3 mistakes you have to avoid are:

1. Failing to fully understand your credit utilization ratio. Banks and financial institutions may examine the existing debts you have on your business’ books to see if your current and projected cash flow can handle taking on additional debt. You can avoid getting a rejection from these establishments by learning beforehand how to calculate both your personal and business’s credit utilization ratios (the amount you owe compared to your credit limit) before applying for a new loan or any type of financing option. Financial experts say that a good rule of thumb is to keep your utilization rate below 30 percent for both overall and for each revolving credit line.

2. Not calculating your annual percentage or APR. There are many numbers and fees involved with any financing offer. Interest percentage rate, daily debits, and service fees are just some of these numbers. You can understand and make sense of all these numbers by first calculating the APR of your offer before signing any contract. The APR pertains to the true cost per year of borrowing money and is usually higher than the advertised interest rate. It takes into account the interest rate and compounding effects as well as any additional fees and charges. As such, it is essential to ask about the APR when looking at loan offers. If you can, learn how to calculate it yourself. If a bank or financial institution won’t give you the information you need to calculate the APR, they may not be looking out for your best interests and it would be best to consider another company.

3. Not asking for feedback from banks or financial institutions that rejected your application. Lastly, if one of your financing applications is rejected, don’t give up easily. Ask the institution for feedback and make an effort to learn from the process. Business financial consultants say you should politely ask for an explanation of the lender’s decision to see what and how you can improve for your next attempt.

Article Source: http://EzineArticles.com/9531070