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Posts with tag interest rate

Don't touch Bill Me later with a 10 foot gift wrapped pole!

by Josh Smith Oct 13th 2008 at 9:00AM

Filed under: Borrowing, Shopping, Simplification

account is still on the books Last night one of my colleagues shared that she thought many cash-strapped consumers may turn to a service such as Bill Me Later to get through the holiday season and wondered what I thought of the service. If you are thinking about using Bill Me Later or a similar service to buy gifts this year keep reading to get my opinion on these short term lenders.

One good reason not to use Bill Me Later is that it requires a credit check. This means, if you open an account your credit score will get dinged the same as if you opened a regular credit card. Given the current economic issues, protecting your credit score should be at the top of your list!


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Tags: Bill Me Later, Christmas, credit cards, credit score, interest rate, InterestRate, loans, minimum purchase, no payments for 90 days

Continue reading Don't touch Bill Me later with a 10 foot gift wrapped pole!

Floating credit card due dates can be costly!

by Josh Smith Aug 31st 2008 at 12:00PM

Filed under: Cards

CitibankEver since graduation we have had a credit card through Citibank which has unfortunately carried a balance. We've been good about paying more than the minimum and making our payments on time but this last month I missed the due date by roughly 2 hours since I was out of town. While you might view me as simply irresponsible for making a late payment; I, like many people will blame the Citi and their floating due date. Over the past few years our monthly due date has shifted from as early as the 16th to as late as the 23rd depending on the billing cycle.

I guess I shouldn't have been too surprised, the same thing happened to my back in 2007 when my due date floated a full week early. I had planned to cancel the card but never got around to it and just last week I got hit with a late fee and a HUGE increase in my interest rate for missing the due date thanks to it floating 2 days early. I have corresponded with Citi before about this issue to try and get them to pick a fixed day like I have on a different credit card but they stood strong in their inability to do this by stating, "We would like to inform you that the number of days in the month can vary." While I was pleasantly surprised to find out that not all months have the same number of days the problem wasn't solved. In fact any reasonable individual should be able to see that floating due dates serve no real purpose other than extracting extra late fees from consumers.

Thankfully as soon as I found out I sent a short email to Citi asking for my late fee to be refunded, which they quickly did. The bad news is that my interest rate will still stay jacked up which spurred me to initiate a balance transfer to another card. I hope you can learn from my story; always know your due date, always ask to have a late fee waived and always be on the lookout for lower rates. Thankfully unless your credit card company is moving your due date around as much as Easter these actions are easy to do and can save you a lot of money.


Tags: balance transfer, BalanceTransfer, citi card, citibank, due date, DueDate, floating, interest rate, InterestRate, late payment, LatePayment

New online bank with 3.75% APY but there's a catch

by Josh Smith Aug 26th 2008 at 11:00AM

Filed under: Banks, Saving

asteriskEarlier today I found out about a new entrant to the high yield online savings market on CNN which is offering a savings account with an interest rate of 3.75%. Dollar Savings Direct boasts that this new savings account has America's highest rate* a full quarter of a percent above its nearest competitor. While the new entrant is FDIC insured and not new to the banking industry the new high yield interest rate doesn't come without a catch.

Getting the 3.75% rate isn't difficult but unless you already have some savings built up you can't open an account at Dollar Savings Direct which requires a minimum of $1,000 to open an account. If you have less than $1,000 in the account at any given time, the interest rates drops to 1% APY, which is dismal, especially for an online savings account. I'm not a huge fan of the drop in interest rate but if you have trouble dipping into your savings for non-essentials it may be enough to keep your savings in the bank.

I'm a huge fan of online savings accounts, especially those which pay me well for building up my savings. I currently use HSBC where I was able to open an account with only a dollar and I am currently earning 3.5% APY on the emergency fund we have built up over the past year. The real benefit of a high yield savings account with no minimum deposit is that it isn't a huge challenge to open and combined with direct deposit is an excellent way to start an emergency fund. If it wasn't for HSBC's no minimum savings account I'm positive that our emergency fund would have been squandered on electronics and Taco Bell.

Watching Your Plastic

    United States Attorney W. Walter Wilkins speaks to reporters outside the Clement F. Haynsworth Federal Building and U.S. Court House after Esther Reed pleaded guilty to identity theft in Greenville, S.C., Tuesday, August 19, 2008. Reed pleaded guilty Tuesday to stealing the identity of a missing South Carolina woman to attend an Ivy League school in what her lawyer called a bid to escape a painful past. (AP Photo/Patrick Collard)

    AP

    Defense attorneys Ann Marie Fitz, left, and Ryan Beasley, speak to reporters outside the Clement F. Haynsworth Federal Building and U.S. Court House after Esther Reed pleaded guilty to identity theft in Greenville, S.C., Tuesday, August 19, 2008. (AP Photo/Patrick Collard)

    AP

    This handout photo courtesy of the Boston Police Department shows suspect Clark Rockefeller. FBI agents on August 2, 2008 arrested a man accused of abducting his seven-year-old daughter, who was visiting from London, sparking a national manhunt and fevered speculation over the flamboyant fugitive's identity.The Federal Bureau of Investigation in Boston, where Clark Rockefeller allegedly abducted his daughter Reigh Storrow Boss from his ex-wife a week ago, said the fugitive was arrested in Baltimore, Maryland, and the girl freed. Rockefeller is now likely to face charges including kidnapping, assault, and possibly identity theft. However, police are no closer to resolving who the man they have in custody really is. He has reportedly used a number of aliases, including J.P. Clark Rockefeller, Clark Mill Rockefeller, as well as plain Michael Brown. Police at first thought he was about to flee to Bermuda or Peru on a yacht docked in Long Island, near New York. Some reports had him already in the Caribbean. AFP PHOTO/BOSTON POLICE DEPARTMENT/HANDOUT=RESTRICTED TO EDITORIAL USE =GETTY OUT= (Photo credit should read HO/AFP/Getty Images)

    AFP/Getty Images

    Homeland Security Secretary Michael Chertoff speaks during a news conference at U.S. Secret Service offices in San Jose, Calif., Tuesday, Aug. 5, 2008. The Department of Justice announced Tuesday that it had charged 11 people in connection with the hacking of nine major U.S. retailers and the theft and sale of more than 41 million credit and debit card numbers. It is believed to be the largest hacking and identity theft case ever prosecuted by the Department of Justice. The charges include conspiracy, computer intrusion, fraud and identity theft. The indictment returned Tuesday by a federal grand jury in Boston alleges that the people charged hacked into the wireless computer networks of retailers including TJX Cos., BJ's Wholesale Club, OfficeMax, Boston Market, Barnes & Noble, Sports Authority, Forever 21 and DSW. (AP Photo/Paul Sakuma)

    AP

    Homeland Security Secretary Michael Chertoff speaks during a news conference at U.S. Secret Service offices in San Jose, Calif., Tuesday, Aug. 5, 2008. The Department of Justice announced Tuesday that it had charged 11 people in connection with the hacking of nine major U.S. retailers and the theft and sale of more than 41 million credit and debit card numbers. It is believed to be the largest hacking and identity theft case ever prosecuted by the Department of Justice. The charges include conspiracy, computer intrusion, fraud and identity theft. The indictment returned Tuesday by a federal grand jury in Boston alleges that the people charged hacked into the wireless computer networks of retailers including TJX Cos., BJ's Wholesale Club, OfficeMax, Boston Market, Barnes & Noble, Sports Authority, Forever 21 and DSW. (AP Photo/Paul Sakuma)

    AP

    Homeland Security Secretary Michael Chertoff speaks during a news conference at U.S. Secret Service offices in San Jose, Calif., Tuesday, Aug. 5, 2008. The Department of Justice announced Tuesday that it had charged 11 people in connection with the hacking of nine major U.S. retailers and the theft and sale of more than 41 million credit and debit card numbers. It is believed to be the largest hacking and identity theft case ever prosecuted by the Department of Justice. The charges include conspiracy, computer intrusion, fraud and identity theft. The indictment returned Tuesday by a federal grand jury in Boston alleges that the people charged hacked into the wireless computer networks of retailers including TJX Cos., BJ's Wholesale Club, OfficeMax, Boston Market, Barnes & Noble, Sports Authority, Forever 21 and DSW. (AP Photo/Paul Sakuma)

    AP

    Secretary of Homeland Security Michael Chertoff leaves after a news conference in San Jose, California, August 5, 2008. U.S. authorities charged 11 people from five countries with stealing tens of millions of credit and debit card numbers from major retailers, including TJX Cos Inc, in one of the largest identity-theft schemes on record. REUTERS/Kimberly White (UNITED STATES)

    Reuters

    Secretary of Homeland Security Michael Chertoff attends a news conference in San Jose, California, August 5, 2008. U.S. authorities charged 11 people from five countries with stealing tens of millions of credit and debit card numbers from major retailers, including TJX Cos Inc, in one of the largest identity-theft schemes on record. REUTERS/Kimberly White (UNITED STATES)

    Reuters

    Secretary of Homeland Security Michael Chertoff speaks at a news conference in San Jose, California, August 5, 2008. U.S. authorities charged 11 people from five countries with stealing tens of millions of credit and debit card numbers from major retailers, including TJX Cos Inc , in one of the largest identity-theft schemes on record. REUTERS/Kimberly White (UNITED STATES)

    Reuters

    Secretary of Homeland Security Michael Chertoff speaks at a news conference in San Jose, California, August 5, 2008. U.S. authorities charged 11 people from five countries with stealing tens of millions of credit and debit card numbers from major retailers, including TJX Cos Inc , in one of the largest identity-theft schemes on record. REUTERS/Kimberly White (UNITED STATES)

    Reuters


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Tags: 3.5, 3.75, APY, emergency fund, high yield, HighYield, interest rate, minimum balance, online banking, savings account

Guaranteed to lose spending power

by Tracy Coenen Jul 7th 2008 at 9:00AM

Filed under: Saving

With an unpredictable stock market, savers are looking for safe havens for their money. The issue of maintaining an account balance is particularly important to retirees, but as the Fed has cut the interest rate, yields on checking accounts, savings accounts, money markets, and certificates of deposit have suffered.

Banks are now using "guaranteed yields" to lure in customers, but even those aren't all that good with a few unusual exceptions. These "teaser rates" are usually only for a limited time, typically a year or less. Who knew that banks would offer a savings account rate of 3.5% and consider it a really good deal? A tiny number of banks are offering rates in the neighborhood of 4% or 5%, but those are typically very short term.

The special deals come with conditions. Often they require a minimum amount to be on deposit with the bank, or there is a maximum that a customer is able to deposit in one of the ultra-high interest accounts. If you use a product like a CD, your money is somewhat tied up for a while.

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Tags: certificate of deposit, CertificateOfDeposit, interest rate, InterestRate, money market, MoneyMarket, savings account, SavingsAccount

Continue reading Guaranteed to lose spending power

Consumer Complaints: Bank of America raising interest rate because they want to

by Tracy Coenen Jun 4th 2008 at 3:00PM

Filed under: Banks, Cards, Consumer Complaints

We've all heard the stories of credit card companies suddenly deciding to raise your interest rate. If you've made a late payment or gone over your limit, the credit card agreement allows them to immediately raise your rate. And there are other lesser-known reasons for raising your interest rate. Now it's become more common for credit card companies to have a clause in your agreement that allows them to raise your interest rate if your credit score decreases or if you have a late payment to a different credit card company.

One WalletPop reader wrote to me with this note about her increased interest rate:

I am writing because the Bank of America, where I have 5 or 6 different accounts, all in good standing, called me to tell me that my small business credit card finance rate was going to be increased to 23.99%. Not because I was ever late on a payment. Not because I went over my limit. Not even because I wasn't paying the minimum payment (I always pay more than the minimum payment). Nope. It was because I wasn't paying my balance down "fast enough".



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Tags: bank of america, BankOfAmerica, credit cards, CreditCards, interest rate, InterestRate

Continue reading Consumer Complaints: Bank of America raising interest rate because they want to

High yield savings accounts are still out there, if you're willing to play the game

by Tracy Coenen Mar 18th 2008 at 10:30AM

Filed under: Saving

As the Federal Reserve continues to cut interest rates, those who are traditional savers are suffering. Decent interest rates on savings accounts are going away fast. And the interest on money markets is dwindling too. Between money markets and savings accounts, you're lucky if you're getting 2.5% to 3.5% interest. After inflation, you could very well be looking at a negative return on your money.

But there are still some higher rate savings options out there, and they don't carry the risk of stocks or bonds with them. Community banks and credit unions are attracting customers with higher interest rates, some over 6%. The accounts are called reward checking accounts or maximum earnings accounts, and they're safe, normal bank accounts that generally have no monthly fees.

There's a little catch, however. In order to receive these higher interest rates, bank customers must jump through hoops. The banks and credit unions are requiring account holders to use online banking, bill pay services, direct deposit of paychecks, or a certain number of debit card purchases in order to qualify each month for the higher rate. Many of these activities bring the banks revenue, hence the reason for "encouraging" you to use those services.

If you use these services, don't be afraid to open an account at a bank offering the higher yield accounts. The deposits are federally insured, just as any other checking or savings account would be at a bank. And you might as well earn a little better rate on your money if the extra services aren't an inconvenience to you.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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Tags: interest rate, InterestRate, savings account, SavingsAccount

Spending down debt: The best way to pay depends on your goals

by Amey Stone Mar 13th 2008 at 10:30AM

Filed under: Cards, Debt

This is part of our series on strategies you can adopt to free yourself from burdensome debt.

There is no doubt that the hardest part about getting out of debt is finding the extra cash to do it with. Most of our posts here on WalletPop deal with different shades of that perplexing question -- how to generate extra income, spend less money, find the cheapest credit cards -- all towards the goal of reducing your punishing levels of debt.

But there is another, not quite so hard question about getting out of debt that we've only scratched the surface of so far on WalletPop. That is, once you've unlocked that extra cash and are in a position to start actually getting out of debt, what is the best way to pay it off?

Simple answer: That depends on your goals. In this series we list common reasons people want to reduce their debt load and the best strategy for that goal.

The two main techniques for spending down debt, our blogger Lita Epstein has come up with are the 'Snowball Effect' and the 'Round Robin.' The snowball effect is best for people who are getting eaten alive by high interest charges on their credit card balances. The plan there is to simply pay off your high interest credit cards first.



Tags: credit cards, CreditCards, debt, interest rate, InterestRate, retirement, snowball effect, SnowballEffect, Spending down debt, SpendingDownDebt

Continue reading Spending down debt: The best way to pay depends on your goals

Interest rate cuts, but credit card rates still rising

by Tracy Coenen Mar 5th 2008 at 9:00AM

Filed under: Debt

Most credit cards with variable rates have their rates tied to the prime interest rate. That rate has been going down, but consumers are still seeing their credit card interest rates rising. How can that be?

For consumers with good credit, their credit card rates will usually fall as the prime interest rate falls. But those consumers whose credit is suffering will not see the same benefit. Particularly if they are behind on their debts or doing other things that negatively impact their credit scores, they will likely see an increase in credit card rates.

So if you've got a credit score of 700 or above, expect to see your interest rates on your credit cards go down. If your score is lower or you've been experiencing debt troubles, watch your rates carefully. They're likely to be on the rise, which could put you even deeper into trouble. You typically have the right to refuse the rate increase, but you'll have to pay off the account and close it. Play the credit card game wisely.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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Tags: credit card, credit score, CreditCard, CreditScore, interest rate, InterestRate

More interest rate cuts likely

by Tracy Coenen Feb 15th 2008 at 4:25PM

Filed under: Borrowing, Debt

Federal Reserve Chairman Ben Bernanke has suggested he's entertaining the thought of more interest rate cuts. He says that cuts are possible this year to help the housing downturn and problems in the credit market.

What does that mean for you? Well "interest rate cuts" don't directly affect consumers. When the Federal Reserve talks about a cut, they're talking about the rate at which banks lend money to one another overnight. All day long the banks are cashing checks and taking in deposits, and at the end of the day they have to settle up between themselves. At night, some banks are short on cash and some have extra. The Federal Reserve determines the rate at which they will loan money to each other overnight. That's what rate we're talking about.

But even though the "interest rate cut" doesn't affect consumers directly, it affects them indirectly.... and you can benefit! You will typically see consumer lending rates go down when "the rate" goes down. Most likely, those of you with a home equity line with a variable interest rate will see a drop in your rate. Those who are looking to refinance debt may likely see lower rates from banks and mortgage brokers. So if you're a borrower, you should be happy to see that your rates could go down a bit this year.

Now if you're a saver, a drop in the interest rate actually hurts you, because the rates on your savings account and money market will probably go down. Sorry. There are always winners and losers in the consumer finance game. Don't let it stop you from saving though. You may need those funds for a rainy day.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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Tags: federal reserve, FederalReserve, interest rate, InterestRate

Credit card fees: Vicious...and legal

by Tracy Coenen Jan 4th 2008 at 3:00PM

Filed under: Cards

We've talked a lot at WalletPop about the exorbitant fees charged by credit cards, and the restrictive and confusing agreements that come with your credit cards. Well it seems that the credit card companies are taking it even further by becoming more aggressive with interest rate hikes.

More people defaulting on their accounts means the banks have to make up that money somehow, and they've decided to do it with higher penalty interest rates. A penalty interest rate is generally charged when you are in some sort of default under your credit card agreement, most often by paying late.

Credit card companies are hiking rates as high as 30%, even if you only pay one day late. Consumer advocates say this is unfair and should be illegal. Others say that people should either carefully follow the terms of their credit card agreements (pay on time) or face the consequences.

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Tags: credit card, CreditCard, interest rate, InterestRate, penalty rate, PenaltyRate

Continue reading Credit card fees: Vicious...and legal

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