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Monthly Archives: August 2017
5 Tips for Making the Most of Your Rewards Credit Card
One of the best things about choosing to use a rewards credit card for your day-to-day spending is the points, miles or cash back you can earn every time you swipe. But it can be tricky. To make sure you’re getting the most out of your card, take a look at the tips below.
Pick a card that offers rewards you’ll actually use
It’s easy to get caught up in the excitement around a new card that’s just hit the market. But before you apply, consider whether the card comes with a rewards program that actually fits your lifestyle. Otherwise, you might get stuck with a bunch of points or miles that you’ll never redeem — something that happens to 1 in 5 consumers, according to NerdWallet’s research on reward cards.
Doing some digging upfront to find a card that will be valuable to you is the key to ensuring you’ll get the most out of your plastic.
Know your card’s rewards earning structure
By investing a little time in reading your card’s terms and conditions, you might find there are ways to score extra points on certain kinds of spending.
For example, it’s common for travel credit cards to award extra points or miles for every dollar spent on dining out. Consequently, using your travel card when you take your family out to dinner or pick up your morning coffee is a smart idea, because it will help you get to your next vacation faster. Knowledge is power, so get familiar with the ins and outs of how to maximize earning your rewards.
Budget carefully every month
If you’re carrying a balance on your card and justifying it with all the rewards you’re earning, here’s a wake-up call: You’re paying out much more than you’re bringing in. Most credit cards return only about 1% of your spending in rewards, and charge double-digit interest rates on unpaid balances.
To make the math work in your favor, stick to a budget so you don’t put more on your card than you can pay off each month.
Keep your account in good standing
One of the biggest mistakes you can make with a credit card is to fall behind on payments. Miss one and your account will no longer be in good standing and your ability to earn rewards could be jeopardized. Also, your credit score will suffer.
The solution? Pay your credit card bill on time each month, preferably in full but at least the minimum due. Online bill pay can make that process fast and easy.
Be smart about redeeming your rewards
Many rewards cards have multiple options when it comes time to redeem points or miles. For example, in some cases you’ll be able to choose between travel credits or merchandise.
However, it’s common for points or miles to vary substantially in value depending on how you cash them in. Before you go through with a rewards redemption, do the math to figure out which choice will give you the most bang per point. After all, there’s no sense in using your rewards on a vacuum when they would go further if redeemed for airfare.
Following these tips can help sweeten the treats a rewards card can provide while you navigate the tricky ins and outs of how it all works.
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Congratulations to our 2017 John B. White, Jr. Memorial Scholarship Recipient, Edward Holliday!
What is a Jumbo loan?
If you’ve ever purchased a home, you know that there are a variety of mortgage loans available to buyers. There are FHA, VA, construction, and subprime loans, fixed–rate, adjustable-rate, and interest only loans. There’s also one called a jumbo loan, which clearly implies it’s going to be huge. Wouldn’t you agree?
If you’re thinking about a jumbo loan, there are a few things you should know. After all, you’re investing in your dream home, and it’s important to be well educated on the type of debt you’re taking on to help fund it.
Conforming vs. non-conforming loans
A conforming loan is one whose loan amount falls within the servicing limits for Fannie Mae and Freddie Mac. In other words, it’s the maximum loan amount that can be purchased from lenders by Fannie Mae and Freddie Mac, two government-sponsored agencies, and sold to investors for the purpose of providing liquidity in the mortgage markets. This frees up the cash necessary for lenders to continue writing real estate loans for other borrowers.
Currently, the conforming loan amount is $453,100 for a single-family home in all States, except for Hawaii and Alaska and a few federally designated high-cost markets.
Regardless of its high credit quality, if the mortgage amount exceeds the conforming loan limit, it is considered a jumbo loan or a non-conforming loan. Jumbo loans are not eligible for purchase by Fannie Mae or Freddie Mac and the lender bears all the risk.
Jumbo loan requirements
Because jumbo loans have higher purchase limits, they’re typically used to purchase luxury homes, vacation homes, or even investment properties. While traditional mortgage loans have strict lending standards, jumbo loans have even more demanding requirements.
Jumbo loans pose an additional amount of risk for lenders, mainly due to the size of the loan. That’s one reason that the down payment requirement is typically 20%. Generally, if a jumbo mortgage loan defaults, a home of that caliber is unlikely to sell quickly and for full price. The lender mitigates some of the risk by requiring a certain amount of equity in the home. Interest rates for jumbo loans are typically a little higher than conforming loan rates as well. Most often, a 1/4 to 1/2 percent increase would be a fair expectation.
Borrowers will also be required to demonstrate financial strength, too. Their debt-to-income ratio should be roughly 45 percent, and they’ll need to plan on a required reserve amount that could potentially be as high as 20 percent of the value of the loan.
If you are able to meet the requirements, a jumbo loan might be the right fit for your financial situation. Of course, there are other options. Be sure to speak with your lender to help you decide which product meets your mortgage needs best.
What to do if you’re a victim of Identity Theft
Every day, thousands of honest, hard-working people unknowingly have their personal information stolen by identity thieves. Information including your full name, social security number, credit card or bank account number, and medical insurance account number can be fraudulently used by a thief to assume your identity for their own financial gain.
With your personal information in hand, a thief can use it to apply for credit, steal your tax return, open a phone, gas or electric account, rent an apartment, and even receive medical care. Any one of these acts can substantially damage your credit when bills go unpaid because (1) they aren’t your charges and (2) you’re unaware of the activity. It’ll also cost you a considerable amount of time and energy to restore your good name and credit standing.
Best ways to prevent identity theft
While we all may be at risk for identity theft, there are some steps you can take to protect yourself and your personal information:
- Keep your social security number secure; don’t carry your card with you and only provide the number when absolutely necessary.
- Be selective when providing personal information by phone, mail or online and never respond to unsolicited requests.
- Keep passwords private and protect them from view when typing on a computer or ATM. Make sure they’re complex and not easy to guess.
- Request a free copy of your credit report once a year. Review it for open accounts, credit inquiries, delinquencies and any other suspicious activity.
- Review your monthly credit card bills for any unauthorized charges and pay attention to billing cycles.
- Promptly collect your mail every day and put a hold on your mail when you are out of town.
- Shred receipts, credit card offers, account statements, expired cards, and any other documents that include personal or account information.
- Install firewalls and virus-detection software on your home computer.
Look for the signs
Your identity is one of the most important assets you own and should be guarded and monitored with that in mind. Look for the warning signs that your identity may have been compromised, which can be alerts from your bank, unfamiliar activity in your credit card accounts, changes in your credit score, missing bills for standard services like gas or electric, or any other suspicious activity.
What if you’re a victim?
If you’ve been a victim of identity theft, it’s important to act quickly. Here are the steps you can take to minimize the negative consequences and to alert the necessary authorities in the most efficient way possible:
1. Put a fraud alert on your credit reports
A fraud alert notifies lenders and creditors to take extra precautions when verifying your identity before extending credit. Contact one agency, (Experian, Equifax, or TransUnion) and they’ll contact the remaining two. Initial fraud alerts are free and remain in place for 90 days.
2. Check your Social Security number
One of the first things to do is check and see if your social security number has been compromised. If your number is part of the theft, it’s important to contact the Social Security Administration (800-269-0271) and the Internal Revenue Service (800-829-0433) to report and correct the activity.
3. Report the fraud to your financial institutions
If your credit card was stolen, report it to the credit card issuer. If your checkbook or debit card was stolen, contact your bank. It’s especially helpful if you have a list of institutions and phone numbers prepared in advance. Make sure this file is encrypted and not able to be easily accessed by identity thieves.
4. Contact the authorities
The Federal Trade Commission (FTC) allows citizens to file an Identity Theft Affidavit to create an Identity Theft Report. In order to fully file an Identity Theft Report, you need to report them the theft to local law enforcement. Have the police department send you a copy of the report and take down the report number. You can file an identity theft report online by clicking here or call the FTC at 1-877-438-4338. Filing an Identity Theft Report is a smart way to help credit reporting agencies identify who the thief may have contacted and determine where accounts were opened in your name.
5. Check-in with the Post Office
It’s not uncommon for identity thieves to submit a fraudulent change-of-address in order to access checks and new credit cards. It’s smart to check with the Post Office to see if any unusual activity has occurred. If there is fraud, you may need to contact the Postal Inspection Service to file a formal report.
Learning that you’ve identity has been stolen can be incredibly stressful, especially when the consequences can wreak havoc on your finances. Being diligent and protecting your personal information can help save you from that anxiety. But even if you do fall victim, acting fast and knowing who to contact will still offer some sense of control.
What is “Power of Attorney” and who should I give it to?
A power of attorney (POA) agreement is a written document that allows you to legally appoint a person or organization to manage your affairs if you are unavailable or become unable to do so. When you set-up a Power of Attorney agreement, you create a legal relationship in which you are the principal and the person you appoint acts as your agent.
Types of powers of attorney
There are several types of powers of attorney arrangements. Each one serves a different purpose and grants different levels of control over your decisions. Here are the three primary types of Powers of Attorney:
General Power of Attorney – broadly authorizes your agent to act on your behalf in your personal and financial affairs. It’s ideal if you will be out of the state or country and need someone to handle matters while you are gone, or if you are physically or mentally incapable of managing your affairs yourself.
Special Power of Attorney – allows you to specify more limited powers to you agent, like the ability to access your safety deposit box or to sell a home in your absence. This is often used when you cannot manage certain affairs due to other commitments or health reasons.
Healthcare Power of Attorney – legally authorizes your agent to make decisions about your medical care when you are unconscious, mentally incompetent, or otherwise unable to make decisions. It is not the same as a Living Will, however. A Living Will only allows you to communicate your wishes concerning life-sustaining procedures.
With additional text added to the document, any of the three types of power of attorney can be made durable. Durable means that the power of attorney will remain in effect, or go into effect, if you become mentally incompetent.
To whom do I give the power?
Choosing a person to serve as your agent for power of attorney shouldn’t be taken lightly. It’s an important decision. Whether you choose your parent, spouse, adult child, friend, business partner or attorney, trust is the key factor. Because this person will be acting on your behalf, it’s vital that you choose a trustworthy individual who will act in your best interests.
There are also other considerations, like location or proximity to you or how you’ve seen them handle their own finances and legal affairs. Are they organized and detail oriented? Could they manage or would they be willing to take on the additional responsibility?
Once you decide, be sure to have a conversation with your potential agent to discuss your wishes and the duties of the position, as well as the commitment you’re looking for. Once you’re both on the same page, you can rest easier knowing you’ve communicated your expectations.
Accurate records, regardless of trust
Because your agent is acting on your behalf, it is critical to keep accurate records of all the executed transactions and to provide you with updates. If for some reason you are unable to review them on a timely basis, be sure to assign the review to a third party.
Remember, you can revoke power of attorney at any time and for any reason. However, if you ever become weary of your agent’s trustworthiness or if a conflict of interest arises, you should terminate the agent’s authority immediately. Simply notify your agent and your financial institution in writing and ask for all copies of your power of attorney to be returned.