Credit Card Do’s and Don’ts

john j bowman jr accountant - credit card

Credit cards are like keys; they open doors to affordable mortgages, nice cars, low-interest loans, and ideal rental options. As useful as these thin plastic cards are, though, they aren’t without their dangers. When over- or thoughtlessly used, credit cards can cause consumers to spiral deep into debt, and ultimately have a negative impact on a person’s ability to borrow money. To (safely) get the most out of a credit card, you need to use them properly. Here are five do’s and don’ts to using credit cards.

 

Don’t Carry a Balance

 

Credit card companies charge high monthly interest rates. While paying the minimum balance may seem like a great idea, it won’t do much to bring down the balance. It’s important that credit card holders pay as much money as possible each month. Depending on the card’s interest rate, the average card owner will save anywhere from 10% to 29% a year in interest.

 

Use a Credit Card Instead of a Debit Card

 

Again, there is nothing wrong with using credit cards. The issue is the irresponsibility of credit card use. Credit cards and debit cards are not the same. Credit cards offer a greater level of fraud protection. In situations where fraud occurs, it’s easier to get a refund with a credit card.

 

Avoid Cash Advances

 

Cash advances may seem like a great idea. However, cash advances do not have a grace period. An automatic fee is added each time a person uses this card feature. Also, cash advances come with higher interest rates than the rest of the credit card balance.

 

Don’t Use All of the Available Credit

 

The amount spent on a card should not exceed 20% to 30% of the available credit limit. Using any more than this will affect the FICO score. Even if the balance is paid off in full, card issues do not like when borrowers reach their card’s credit limit.

 

Take Advantage of Balance Transfers

 

Credit cards with high annual percentage rate cost consumers a lot of money. One way to alleviate some of these costs is by taking advantage of balance transfers. Some cards allow consumers to transfer the balance without paying a fee. The advantage of transferring the balance to another card includes paying lower interest fees.

 

Credit cards are useful. When used correctly they are convenient financial tools. Using these cards irresponsibly can lead to financial issues that may last years. Hopefully, these tips will help consumers avoid the pitfalls of credit card usage.

Tips for Keeping Your Credit Score Healthy

John J Bowman Accountant - Credit Score

Using a credit card is deceptively dangerous. When the money you spend isn’t draining directly from your checking account, it’s easy to assume that you have more than you do – and to find yourself under a mounting pile of debt. Using a credit card irresponsibly can lead you into debt, poor credit, and financial troubles down the line.  Maintaining a healthy credit score is essential if you are interested in taking out loans or if you prefer having the ability to have a credit card in your name. There are a number of benefits to having a healthy credit score; a positive score makes securing an apartment, car, or even mortgage far easier than it would be otherwise. Follow these tips to keeping your credit score high regardless of how much income you earn or debt you carry.

 

Pay Your Credit Card Bills On Time

 

Whenever you make a purchase using your credit card it is imperative to pay your bill off in its entirety as soon as it arrives. Paying off your credit card in full each month is one of the quickest ways to build your credit without putting an overdue burden on yourself.

 

Maintain a Low Credit Card Balance

 

Keep a low credit card balance each month while always remaining self-aware of your current budget and expenses whenever you are making a purchase using your credit card. Maintaining a low credit card balance minimizes the risk of you being unable to pay your credit card balance in full once your bill arrives. The higher your credit card balance becomes, the more difficult it is likely to be to make full payments if you are on a set or limited income that does not fluctuate.

 

Use a Credit Report Monitoring Service

 

One of the best ways to protect your credit score and to keep it healthy at all times is to use a credit report monitoring service like Credit Karma. Credit report monitoring services provide you with a complete overview of your credit reports as well as your scores according to the top credit reporting agencies in the country. Using a credit report monitoring service is a way for you to ensure you are not missing any payments and that your credit score is exactly where you expect it to be before making any future financial decisions.

 

Taking the right steps to maintain a positive credit score is extremely useful when you want to improve the quality of your financial standing in the future. Whether you are currently in debt or building your credit score from the ground up, implementing the right tips along the way is essential to guarantee success.

Leasing Vs. Buying a Car: Which Wins?

John J Bowman Jr Accountant - Buying v Leasing

It can be easier to take a car for granted when you’re young and learning to drive. After all, Mom and Dad already did the financial heavy lifting of purchasing, maintaining, insuring, and – in some cases – fueling the car. While these young drivers might need to spend a twenty now and again to cover extra gas costs, they don’t truly feel the pinch of automobile costs until the end of college rolls around and they realize that they can’t keep their parents’ SUV forever. Instead, they need to crunch their budgets to see if they can afford to own and keep a car without their parents’ help. In this blog post, I’ll discuss the relative merits of buying a car versus leasing one.

 

Leasing

 

Pros:

 

Leasing has its perks. Under a lease, drivers can take a new car home every two to three years while paying lower monthly fees than the average auto loan demands. Because the car is newer, it will have fewer mechanical problems and remain under warranty for the duration of a term. Leasing will thus cost you less in expensive maintenance than a comparatively priced older car might if you bought it outright. With a lease, you also don’t need to worry about offloading your car when you want a new one; you simply trade it in for a newer model at the term of your lease agreement expires.

 

Cons:

 

Leasing may not be for everyone, however. While a lease gives you possession of the car, it does not give you ownership. Lessees are not permitted to alter or damage the car in any way, even if the change is a simple paint job customization. Drivers must keep the cars in top condition and mind their mileage limits; otherwise, they might find themselves holding pricy wear and tear fees when they return the leased vehicle. In the end, signing a lease simply may not make financial sense. While the monthly bill for a lease is typically less than what a car loan would demand, leases often cost more in the long run when those monthly payments are added up – and backing out early isn’t usually an option. Leases tend to include penalties against early termination in the fine print.

 

Buying

 

Pros:

 

Who doesn’t want to own their car outright? Car ownership allows drivers the right to customize and drive their vehicles without needing to mind mileage limits or vehicle quality. By keeping the same car over a period of years, owners spread out the cost to be significantly less than the total bill of a lease.

 

Cons:

Car owners don’t have the baked-in perks of a lease. When a bought-and-sold car’s warranty runs out, the weight of maintenance costs falls squarely on the owner’s shoulders – and depending on the age of the car and the nature of the problem, these issues can become expensive. In the short term, car owners also face higher monthly bills for their car loans. If they decide to sell their car, the responsibility of finding a buyer and filing the proper paperwork is entirely their responsibility.

 

Conclusions

 

In the end, the decision comes down to the individual situation. What are the driver’s finances? Can they afford the monthly expense of a lease, but not the heftier burden of a car loan? Does their daily commute to work push their mileage count above what a lease would allow? All of these questions need to be asked and considered before a driver makes their final decision.

4 Ways to Make Money During Your Morning Commute

It’s normal to dread your morning commute as you spend time in traffic before arriving at the office for a long day of work. Although it may seem like a waste of time sitting on the bus or train, there are ways that you can earn extra money before arriving at the workplace. If you want to make cash during your commute, there are a few different methods to consider to occupy your time each morning.

Sell Items on eBay

Selling items on eBay.com or Amazon.com is an excellent way to supplement your income and enjoy a fun hobby. You can create a seller’s account and list items that are sitting in your attic or that you find at yard sales. Drop shipping is also available where you purchase items for lower prices on other websites and list them for a higher price. Drop shipping is convenient because you don’t have to worry about having the items in your possession and manually shipping everything.

Sell Your Handmade Goods

Whether you enjoy making knitted scarves or jewelry items, you can sell your handmade goods on Etsy.com without worrying about having to get a business license. Take high-quality photos of each product and write a thorough description that engages the reader to attract more customers.

Write

If you’re good with words, you can make extra cash by writing articles and selling them to clients online. Creating your own blog is also a great way to earn money by attracting traffic to your website when you write posts based on topics that you enjoy and are knowledgable about, which can include cooking or fashion. You can integrate SEO tools to increase your ranking on search engines and make it easier for people to find your blog online.

Take Surveys

According to lovemoney.com, many websites offer gift cards and cash to individuals who take surveys. The websites will also pay you to watch commercials and ads. Each activity that you perform will allow you to earn points, which can be redeemed for money over a period of time. You can use the money to save for an upcoming trip or use for Christmas gifts, which can allow more wiggle room in your budget for your daily expenses.

Tips for Saving Money While Traveling Abroad

Traveling abroad is an ideal way to become more culturally sensitive and aware. At any stage of life, traveling abroad allows you to gain skills and experience that can benefit you professionally. The only downside to traveling abroad is that it may prove to be quite expensive. Here are some tips to help you save money while traveling abroad:
Credit Card

The first tip is to make sure that you have a credit card that is going to be able to be used in a foreign country. You are going to need to do some research before you do any traveling internationally since some credit cards offer better benefits than others. Be sure to look at the fine print to see if you will be charged a foreign currency transaction fee.

Contact the credit card company

Next, make sure that you inform the credit card company with all of the dates that you are going to be traveling abroad. This is going to need to be done at least a week before you travel. There is a high chance the credit card company will assume the international purchases are fraudulent and will freeze the account if they are unaware of your travel plans.

Travelers’ check

An often neglected tip is obtaining a travelers’ check. These can offer you a bit more of security if your credit card cannot be used in the foreign country or if your credit card is stolen.

Local Currency

Save some money by exchanging your cash into the local currency as soon as your arrive instead of doing it at the airport. Most airports  have a lo of different fees that they are going to charge you.

References

The final tip to saving money when you travel abroad is to make sure that you have created a reference list of the credit card companies. This should include all of their phone numbers.

Stay tuned for more personal finance tips.
Safe travels!

4 Valentine’s Day Gifts That Won’t Break Your Budget

Valentine’s Day is right around the corner! With all the dinner, card, and gift options available, it is quite possible to blow your budget if you aren’t properly prepared. Whether you’re on a strict budget or tired of wasting money on gifts that will be forgotten about months later, here are some meaningful gifts that will give you the most bang for your buck:

Wine Anyone?
What better way to enjoy some alone time together than having a wine tasting date night. The best part is most wineries and breweries offer discounted tickets or free (yes, FREE) wine tasting events all year long. Check out your local wineries and breweries and see what they have to offer.

Pro tip: It may be difficult to get tickets for Valentine’s day, so try surprising your loved one with a surprise date on or before the holiday.

Home-cooked Meal
Valentine’s Day is one of the most difficult holidays to make dinner reservations for. Many restaurants increase the price menu items and may require you make a reservation weeks, months, or even a year in advance. Skip a crowded restaurant and make your significant other a home-cooked meal.

The two of you can make the night even more memorable by choosing a meal neither one of you have made before and cook the Valentine’s Day meal together.

Get Crafty
Fancy greeting cards are all the rage on Valentine’s Day, but do you really need an overpriced piece of paper to express your love? No. Why not try stopping by your local craft store, gather some supplies, and create a personal card that will touch your loved one’s heart.

Sweet tooth Solutions
A wise man once said, “life is like a box of chocolates -you never know what you’re gonna get”. While this remains true, a box of chocolate is another overpriced item during the Valentine’s Day holiday season. Opt for purchasing the necessary items from your local supermarket and bake a batch of homemade cookies or your significant others favorite dessert.

3 New Year’s Resolution Ideas to Save You Money

Maybe 2017 was not the best year for you financially. Luckily, you can stop looking at the past and look towards a better financial future in 2018. With the new year brings new goals, and you can make one of those goals focusing on your personal finance or money management.

Invest

A wise way to handle your money would be to invest. As you may have seen recently, Bitcoin has seen a huge rise in their stocks. Although it can be risky, sometimes the investment is worth it in the long run.

Create and Stick to a Budget

Another tip that can really help you with money management is saving your money by formulating a budget. Proper money management is an extremely important finance characteristic to have. Not only is it good to know how to save money for obvious reasons, but it can also be a saving grace for you in case of an emergency.

Impulse buying can be very dangerous. It can lead to you being in insurmountable debt and regretting days if not hours later. Preparing a budget can assist you with saving a great deal of extra cash while steadily maturing in your spending habits.

Save Money By Breaking Bad Habits

A great way to kill two birds with one stone is to save money by breaking bad habits. Create a jar that you will have to place money in each time you perform an action you are trying to quit. Anytime you have an urge to swear, break your diet, or have an urge to smoke a cigarette, put a certain amount of money into your jar. This will help you break free of your bad habits while simultaneously improving your financial situation.

Personal money management and financial woes are something everyone wishes they could live life without, but everybody at one point or another has to conquer. Make sure 2018 is a financially freeing year by trying these New Year’s resolution ideas and see which one works best for you!

3 Ways to Rid Yourself of Student Loan Debt in 2018

Student loan debt affects a huge part of the population. In fact, the overall student loan total in America skyrocketed to over $1.3 trillion in 2017. Fortunately, 2018 yields some promising tools and processes that can help citizens rid themselves of it. Here are three personal finance tips for getting rid of student loan debt:

Choose the Right Occupation

One way to get student loan debt forgiveness is to work for a government entity or a nonprofit organization. Doing so will allow you to become eligible for a forgiveness program after 5-10 years as an employee. Public school teachers who work in low-income neighborhoods are eligible for student loan forgiveness, as well. Therefore, you may want to consider putting in an application in those fields.

Choose a Repayment Plan The Works for You

Another personal finance tip for you is to sign up for a reasonable repayment plan. If you have low income or limited income, you can sign up for for a plan that’s income based or income contingent. Doing so will ease the burden for you as you pay down the debt. Eventually, you’ll make it to financial freedom.

To sign up for the special repayment plans, you just have to visit the website and complete an application. You may have to mail or upload some information so that the debtor can assess your income situation. Once they do that, they will let you know if you qualify for a specialized repayment plan.

Pick up a Second Job

Finally, you could always pick up a second job to pay down your student loans. Many retail stores hire at an accelerated pace during the holiday season. If you have some time to spare, you can put in a few hours every day and use everything that you earn toward those loans.

You deserve to have financial freedom, and you can get it if you handle your loans intelligently. Try these methods and watch your student loans decline in the blink of an eye.

Tips for Purchasing Your First Car

Congratulations! You’ve finally got your license and you are ready to hit the open road! The only thing stopping is figuring out exactly how to save enough money to purchase an affordable vehicle. Whether you are looking into buying a new car or a used car, here a few things you might want to consider:

Timeline

How soon would you like to purchase your new vehicle? It is important you figure out a timeline such that you can save the proper amount of money and you have the opportunity to get all of your other finances in order. Make sure your timeline is realistic and falls in line with your income and other expenses.

Car payment plan

You need to figure how much you are comfortable spending in car payments each month. While creating this budget, bear in mind that you will need to be able to simultaneously save  enough money for car insurance and car maintenance. Maintenance can include but is not limited to tire rotation, oil change, car batteries, etc.

How much do you need to put down?

Take advantage of all the internet has to offer and use available tools to help you figure out how much you need to put down. Take the time to test different down payment amounts and terms to see which scenario can best fit in your budget.

Save!

Now that you have figured out when you want the car, how much you can afford and how much you need to put down, you need to start saving! Eliminate anything from your budget that you don’t need to spend money for and allocate that money towards your “new car fund”.  This may not be as easy as it seems but it will definitely be worth it once you’ve reached your goal and are behind the wheel of your new car.

Christmas Budgeting Tips

Christmas is right around the corner! This means lots of holiday cheer, family, and gifts. Lots of gifts. This sounds great but if you’re not properly prepared you will end up blowing the budget you worked so hard to maintain throughout the year. Here are a few tips to help you get through the holidays without increasing your debt.

Create a Christmas Budget

Keep it simple by doing these two things:.

  • Write down how much money you can save between now and Christmas day
  • Figure out how much of that money you are willing to spend on Christmas gifts.

Make a list and check it twice

Write down a complete list of all the people you want to buy gifts for. This list should include family, friends, co-workers, neighbors, your favorite service providers (mailman, delivery boy, teachers, paperboy, etc), and anyone else you feel is deserving of a gift from you.

Once you’ve completed your list, look it over and remove anyone that you are unsure about. After that, separate the list into 3 groups:

Christmas cards – Everyone in this group will be receiving a thoughtful Christmas card instead of a gift.

Handcrafted gift – Everyone in this group will receive a unique handcrafted gift. These gifts to not have to be extremely detailed or time consuming. In fact, they can be as simple as a baked good like cookies or a cake,  handmade ornament or a personalized coffee mug.

Paid gift – This is the group that directly affects your budget. Everyone is this group will receive a gift purchased with the money you have saved.  Place the amount of money you are willing to spend for person on this list. For example, you may want to spend $100 on a joint gift for your parents, $50 on a gift for your sibling, and $25 on a gift for your co-worker.  Just be sure not to overspend on after you set each amount.

Now, what are you waiting for? Follow these tips and start your Christmas shopping today!

Happy Holidays!