Most taxpayers concentrate on ways to reduce their "taxable income". However, beginning with the Tax Reform Act of 1986, your "Adjusted Gross Income", or AGI, has become the most important number on your tax return.
Many tax credits and deductions are phased-out, or altogether eliminated, based on your AGI, or in some cases a "Modified" AGI (no gift from this MAGI), and several items of income are increased and some deductible losses are reduced as this number grows.
The Tax Reform Act of 1986 started the ball rolling by limiting the allowable rental loss deduction for taxpayers with an AGI in excess of $100,000 and phasing-out the amount of IRA contributions that could be deducted based on an AGI threshold. The Budget Reconciliation Act of 1990, the Taxpayer Relief Act of 1997 and the many tax Acts passed under George W all continued the trend of limiting credits and deductions based on AGI.
Items that are affected by your AGI (or MAGI) include:
* the taxable portion of interest on US Savings Bonds used to pay for education,
* losses from rental real estate activities with active participation,
* the taxable portion of Social Security and Railroad Retirement benefits,
* deductible traditional and spousal IRA contributions,
* the ability to contribute to a ROTH IRA, and to convert a traditional IRA to a ROTH,
* student loan interest,
* the deduction for tuition and fees,
* medical and dental expenses,
* charitable contributions,
* casualty and theft losses,
* job expenses and most other "miscellaneous" deductions,
* total Itemized Deductions,
* the deduction for personal exemptions,
* the dreaded Alternative Minimum Tax (AMT),
* the Credit for Child and Dependent Care Expenses,
* the Credit for the Elderly or Disabled,
* the HOPE and Lifetime Learning education credits,
* the Retirement Savings Contributions Credit,
* the Child Tax Credit,
* the Adoption Credit,
* the Earned Income Credit,
* Coverdell Education Savings Account contributions, and
* the safe harbor amount for quarterly estimated tax payments.
Each of the items listed above has a separate set of AGI thresholds. For some items, such as the education credits and the deductions for student loan interest and tuition and fees, the amount for joint filers is twice that for unmarried taxpayers; for some it is not. For the reduction of Itemized Deductions the threshold is the same whether you file as Single, Head of Household, Married Filing Joint or Qualifying Widow(er). In some cases married taxpayers filing separately are not allowed the deduction or credit at all; in others the threshold for separate filers is half that for joint filers.
While qualifying dividends, capital gain distributions and long-term capital gains are taxed separately at a lower rate, both for the regular tax and the AMT, these items of income are included in your AGI, as well as your Alternative Minimum Taxable Income (AMTI), and can reduce or eliminate the various deductions and credits affected by AGI, and cause you to become a victim of, or increase, the AMT.
Because of the way the taxable portion of Social Security and Railroad Retirement benefits is calculated, for every additional $1.00 of AGI you could be taxed on as much as $1.85. For a taxpayer in the 15% federal tax bracket who finds himself in this situation a $1,000 increase in AGI could increase the tax liability by $278.00 - almost 28%.
There are several moves you can make to reduce your AGI:
* Maximize "pre-tax" contributions to your 401(k), 403(b) or other pension or deferred compensation plans, including any "catch-up" contributions for participants age 50 or older.
* Maximize the amount of wages set aside in an employer-sponsored "pre-tax" medical expense or dependent care flexible spending account.
* Postpone the receipt of a year-end bonus until next year.
* Postpone billing clients until January, accelerate or prepay business expenses at year-end, and maximize contributions to a SEP, SIMPLE or Keogh plan if you are self-employed.
* Accelerate or prepay expenses at year-end if you own rental property.
* Sell investments at a loss to take advantage of the maximum $3,000 net capital loss deduction.
* Maximize deductible contributions to a traditional IRA, including catch-up contributions.
* Instead of deducting the total fee for tax preparation as a "miscellaneous" deduction on Schedule A, allocate a portion of the fee, if applicable, to Schedule C and/or Schedule E.
* Invest in tax-free municipal bonds or tax-deferred US Savings Bonds instead of bank CDs (remember that tax-exempt interest is included in the calculation of taxable Social Security and Railroad Retirement benefits).
Let us look at an example where reducing AGI by $1,000 could result in $913 less federal tax - a 91.3% tax savings!
John and Jane Q. Taxpayer anticipate an AGI of $130,450 for 2005. They will be in the 25% tax bracket. John and Jane have three dependent children, two under age 17 and one who is a college freshman. They paid $5,000 in college tuition and their miscellaneous deductions are more than 2% of their AGI.
If J and J gave an additional $1,000 to charity before year-end they will save $250 in federal income tax. If, instead, they can reduce their AGI by $1,000 they will put an additional $913 in their pocket.
By reducing their AGI from $130,450 to $129,450 they will be able to deduct an additional $2,000 in tuition and fees as an "adjustment to income", which will further reduce their AGI. This brings their total AGI reduction to $3,000. As a result they will be able to deduct an additional $60 in miscellaneous deductions on Schedule A. The taxable income on their 2005 Form 1040 is reduced by a total of $3,060, which will translate to $763 less income tax.
The Child Tax Credit is phased-out by $50 for each $1,000, or part thereof, that a married couple's AGI exceeds $110,000. By reducing their AGI by $3,000 John and Jane will increase their Child Tax Credit by $150. The total tax savings is $913 - $763 in reduced tax liability and $150 in increased Child Tax Credit.
Robert Flach is a tax professional with 34 tax seasons of experience preparing 1040s for people in all walks of life. He writes THE WANDERING TAX PRO weblog (rdftaxpro.tripod.com/weblog), the NJ TAX PRACTICE BLOG (rdftaxpro.tripod.com/newjerseytaxpractitionernetwork [http://rdftaxpro.tripod.com/newjerseytaxpractitionernetwork]) and the tax planning and preparation website http://www.robertdflach.net, which provides a wealth of tax advice and information. He also writes and publishes THE FLACH REPORT, a quarterly tax newsletter. This article is expanded from a 2004 posting to THE WANDERING TAX PRO.
Article Source: http://EzineArticles.com/?expert=Robert_D._Flach
Article Source: http://EzineArticles.com/79661
Sunday, August 2, 2015
How To Get A Credit Card With No Credit History
Oddly enough, not only will bad credit work against you when applying for a loan or a credit card, but so will NO credit. Even though this doesn't seem fair, it's the way things work in the complicated world of consumer credit. Lenders are leery about opening accounts for people with no credit history, simply because they have nothing by which to judge your reliability.
If you can't build a credit history without credit, and you can't get credit without a credit history, what can you do? It's nearly impossible to rent a car, stay in a hotel, or shop online without a credit card.
Let's explore a few ways to work around this "Catch-22."
Getting Started in Credit
Although many of the major credit card companies won't give you a card without a credit history, some smaller ones will. Department stores are likely candidates. Gas station cards are also easier to get.
Also you can look for a credit card company that will review your overall financial situation, not just your credit history. Some lenders will look at your employment history, your housing situation, and how often you have moved. If all this meets their standards, they may approve your application.
Credit Unions
If you are a credit union member, or are eligible for membership, see what their card issuing terms are. They often have more relaxed conditions for members. You no longer have to work for a specific company to be eligible to join a credit union. So, it's well worth checking to find out if there's one in your area.
Student Credit Cards
If you are a student, then you'll be best off with a student credit card. Student credit cards can be a great way of building the credit history you will need after graduation. Many banks will issue college students a credit card, especially banks that are located in college or university cities and towns.
Secured Credit Cards
As a last resort, because of their high interest rates, secured credit cards are available. They are offered by lenders who will give you a line of credit either equal to, or slightly higher than, a cash deposit that you give them to hold. As your experience with the card grows, these lenders will often raise your limit without requiring you to increase your deposit. Eventually, you can use your experience with this lender to apply for cards that are not secured.
When you do manage to get a credit card, don't go on a spending spree -- you will regret it in the very near future. Use your card wisely, and above all be sure to make all payments on time. Your goal is to build a good credit history, not just get a single credit card. Soon you'll be complaining about all the credit cards being offered to you in the mail.
Ron King is a full-time researcher, writer, and web developer. Visit New-Credit-Card-Now [http://www.new-credit-card-now.com] to learn more about this fascinating subject.
Copyright 2005 Ron King. This article may be reprinted if the resource box is left intact.
Article Source: http://EzineArticles.com/?expert=Ron_King
Article Source: http://EzineArticles.com/79033
If you can't build a credit history without credit, and you can't get credit without a credit history, what can you do? It's nearly impossible to rent a car, stay in a hotel, or shop online without a credit card.
Let's explore a few ways to work around this "Catch-22."
Getting Started in Credit
Although many of the major credit card companies won't give you a card without a credit history, some smaller ones will. Department stores are likely candidates. Gas station cards are also easier to get.
Also you can look for a credit card company that will review your overall financial situation, not just your credit history. Some lenders will look at your employment history, your housing situation, and how often you have moved. If all this meets their standards, they may approve your application.
Credit Unions
If you are a credit union member, or are eligible for membership, see what their card issuing terms are. They often have more relaxed conditions for members. You no longer have to work for a specific company to be eligible to join a credit union. So, it's well worth checking to find out if there's one in your area.
Student Credit Cards
If you are a student, then you'll be best off with a student credit card. Student credit cards can be a great way of building the credit history you will need after graduation. Many banks will issue college students a credit card, especially banks that are located in college or university cities and towns.
Secured Credit Cards
As a last resort, because of their high interest rates, secured credit cards are available. They are offered by lenders who will give you a line of credit either equal to, or slightly higher than, a cash deposit that you give them to hold. As your experience with the card grows, these lenders will often raise your limit without requiring you to increase your deposit. Eventually, you can use your experience with this lender to apply for cards that are not secured.
When you do manage to get a credit card, don't go on a spending spree -- you will regret it in the very near future. Use your card wisely, and above all be sure to make all payments on time. Your goal is to build a good credit history, not just get a single credit card. Soon you'll be complaining about all the credit cards being offered to you in the mail.
Ron King is a full-time researcher, writer, and web developer. Visit New-Credit-Card-Now [http://www.new-credit-card-now.com] to learn more about this fascinating subject.
Copyright 2005 Ron King. This article may be reprinted if the resource box is left intact.
Article Source: http://EzineArticles.com/?expert=Ron_King
Article Source: http://EzineArticles.com/79033
Distance Learning for Your MBA
In today's job market, a bachelor's degree often isn't enough to give you the edge over other job applicants. However, getting your MBA at a local college or university may be just too much for a full-time breadwinner with a home and family to care for. There are still ways to advance your education, though, and one of the most popular is getting your MBA through distance learning.
Distance learning via internet is a relatively recent phenomenon. Usually, a student will enroll in an online university and take the all of the classes online. Sounds like a great deal, right? There are many pitfalls for the distance learner.
Be sure to choose the right school. As with every other category of business, there are good and there are not so good distance learning programs. Don't waste your time and money on a school that is not accredited by a nationally recognized agency. Your diploma needs to be from an accredited university or school to help you advance, so do some homework up front and check the credentials of the school. They should be accredited by one of the nationally recognized agencies (New England, Middle States, North Central, Northwest, Western and Southern). These are the valid accreditation agencies.
Verify that the classes are all online. Don't enroll in a distance learning program across the country, only to realize later that you'll need to attend one or two sessions in the classroom.
Check out the technical capabilities of the classes. Are the classes available through technology that you can access, like websites, email or bulletin boards? Will you have to use complicated, proprietary software? Steer clear of programs that are not simple and easy to use. After all, isn't that why you want an online degree program. Just in case there are problems, make sure that technical help is available when you'll be working.
Look for programs with a proven track record. Even though the idea of internet learning is new, you should look for a program with a good success rate an satisfied graduates. Ask if you can email or talk to some of the graduates, or read recommendations. Ask about the school's completion rate.
Does the school offer adequate financing? If the school is accredited, they should be able to participate in the federal student loan programs and offer financing to distance learners.
Finally, investigate who is teaching the classes. Do they have experience in online teaching? Managing a virtual classroom is different that teaching the typical college course, so the teachers should be experienced in this type of learning.
Of course, distance learning is not for everyone. In order to succeed at this type of coursework, you will need to be self-motivated and dedicated to getting your MBA. You will need to be organized and disciplined. Procrastinators have a difficult time working at their own pace, because they can always finish an assignment "tomorrow". Of course, this can turn a 2-3 year program into 6-8 years.
Investigate online distance learning to pursue you MBA, but first, make sure that you are ready to commit to self-directed learning.
Jay Moncliff is the founder of [http://www.distancelearningreviews.info] a website specialized on Distance Learning [http://www.distancelearningreviews.info], resources and articles. This site provides updated information on Distance Learning. For more info visit his site:Distance Learning [http://www.distancelearningreviews.info]
Article Source: http://EzineArticles.com/?expert=Jay_Moncliff
Article Source: http://EzineArticles.com/78965
Distance learning via internet is a relatively recent phenomenon. Usually, a student will enroll in an online university and take the all of the classes online. Sounds like a great deal, right? There are many pitfalls for the distance learner.
Be sure to choose the right school. As with every other category of business, there are good and there are not so good distance learning programs. Don't waste your time and money on a school that is not accredited by a nationally recognized agency. Your diploma needs to be from an accredited university or school to help you advance, so do some homework up front and check the credentials of the school. They should be accredited by one of the nationally recognized agencies (New England, Middle States, North Central, Northwest, Western and Southern). These are the valid accreditation agencies.
Verify that the classes are all online. Don't enroll in a distance learning program across the country, only to realize later that you'll need to attend one or two sessions in the classroom.
Check out the technical capabilities of the classes. Are the classes available through technology that you can access, like websites, email or bulletin boards? Will you have to use complicated, proprietary software? Steer clear of programs that are not simple and easy to use. After all, isn't that why you want an online degree program. Just in case there are problems, make sure that technical help is available when you'll be working.
Look for programs with a proven track record. Even though the idea of internet learning is new, you should look for a program with a good success rate an satisfied graduates. Ask if you can email or talk to some of the graduates, or read recommendations. Ask about the school's completion rate.
Does the school offer adequate financing? If the school is accredited, they should be able to participate in the federal student loan programs and offer financing to distance learners.
Finally, investigate who is teaching the classes. Do they have experience in online teaching? Managing a virtual classroom is different that teaching the typical college course, so the teachers should be experienced in this type of learning.
Of course, distance learning is not for everyone. In order to succeed at this type of coursework, you will need to be self-motivated and dedicated to getting your MBA. You will need to be organized and disciplined. Procrastinators have a difficult time working at their own pace, because they can always finish an assignment "tomorrow". Of course, this can turn a 2-3 year program into 6-8 years.
Investigate online distance learning to pursue you MBA, but first, make sure that you are ready to commit to self-directed learning.
Jay Moncliff is the founder of [http://www.distancelearningreviews.info] a website specialized on Distance Learning [http://www.distancelearningreviews.info], resources and articles. This site provides updated information on Distance Learning. For more info visit his site:Distance Learning [http://www.distancelearningreviews.info]
Article Source: http://EzineArticles.com/?expert=Jay_Moncliff
Article Source: http://EzineArticles.com/78965
Credit Card Solution:an Essential Tool
A credit card is issued after approval from a provider (often a general bank, but sometimes from a captive bank created to issue a particular brand of credit card, such as American Express Centurion Bank), in which they will be able to make purchases from merchants. But inorder to process credit card transactions they need to have credit card processing solution. As well as convenient, accessible credit, the cards offer consumers an easy way to track expenses, which is necessary both for monitoring personal expenditures and the tracking of work-related expenses for taxation and reimbursement purposes. Credit card processing solutions has spread far and wide beyond their initial market of the wealthy businessman and are now ubiquitous amongst the middle classs of most Western countries
According to merchant-account-info-zone.com,ecommerce Credit Card Processing Accelerates the collection of funds. One of the most widely-used eft programs is direct deposit, in which payroll is deposited straight into an employee's bank account, although eft refers to any transfer of funds initiated through an electronic terminal, including credit card, atm, fed wire and point-of-sale pos transactions. In addition to these disclosures, you will receive two other types of important information for most transactions terminal receipts and periodic statements.
These accounts can be established through merchant service providers such as banks or via independent service organizations. Common ones include: making regular payments for an apartment, buying an automobile, paying for a student loan, paying an installment loan, holding a checking and/or a savings account, and making regular payments on utility bills.
For more information on credit card processing,please visit http://www.paynetsystems.com
Article Source: http://EzineArticles.com/?expert=Jack_Chevalier
Article Source: http://EzineArticles.com/78957
According to merchant-account-info-zone.com,ecommerce Credit Card Processing Accelerates the collection of funds. One of the most widely-used eft programs is direct deposit, in which payroll is deposited straight into an employee's bank account, although eft refers to any transfer of funds initiated through an electronic terminal, including credit card, atm, fed wire and point-of-sale pos transactions. In addition to these disclosures, you will receive two other types of important information for most transactions terminal receipts and periodic statements.
These accounts can be established through merchant service providers such as banks or via independent service organizations. Common ones include: making regular payments for an apartment, buying an automobile, paying for a student loan, paying an installment loan, holding a checking and/or a savings account, and making regular payments on utility bills.
For more information on credit card processing,please visit http://www.paynetsystems.com
Article Source: http://EzineArticles.com/?expert=Jack_Chevalier
Article Source: http://EzineArticles.com/78957
What Financial Services Do Credit Unions Offer?
If you're looking for financial services, you may want to consider checking out what your credit union has to offer. Many credit unions today offer more than just a checking and savings account, they've expanded into upgraded financial services tailored to meet many needs.
Credit unions are cooperative banking and financial companies. They are usually non-profit and cater to a particular group of people that work or live in the same place, for example. Credit unions are owned by the accountholders, who also participate in the management and direction of the company.
Today, credit unions offer more than just checking and savings accounts, although these low-cost basic accounts are the reason most people join. Most credit union savings accounts pay slightly more than their counterparts at for-profit banking institutions. Credit union checking accounts usually carry less restrictive requirements and lower fees than those at banks.
Credit unions have expanded into the realm of financial services as well. Most offer loans for a variety of needs, including personal loans, automobile loans and mortgage loans. Interest rates are usually a bit lower than those at other commercial lenders, and sometimes their qualification requirements are easier to meet. Before shopping for a automobile, boat, motorcycle or home improvements, you may want to consider talking to your credit union. Shopping with a pre-approved, lower rate loan from your credit union increases your bargaining power and your buying power. Many credit unions can also write student loans and signature loans.
In addition to loans, many credit unions offer additional financial services. These include dividend bearing checking accounts, which usually carry no fees and pay better interest than most bank's savings accounts, and higher rate certificates of deposit. Most now offer low or no-fee access to automated teller machines and debit cards that can be used almost anywhere. Credit cards are also available at most credit unions, with discounted fees and more reasonable interest rates making them more attractive than national offerings.
Other financial services that you can expect to find at your credit union include stock brokerage services, mutual funds and personal financial planning. Some are even offering individual retirement accounts and insurance coverage. Of course, choosing someone to help with your financial planning is an important decision, but consider the helpful folks at the credit union when you are investigating your options. You may find that not only are their fees lower, but they offer many of the same types of products as other financial planners.
Credit unions offer many financial services today, and there is one out there for almost anyone. Check your local phone directory or online and you'll most likely find one that you'll qualify for. Since today's credit unions are federally insured up to $100,000 by the National Credit Union Administration, your deposits are safe. When you start looking for financial services, consider your credit union as well. You'll be surprised at what they have to offer today.
Jay Moncliff is the founder of [http://www.officialfinancialservices.com] a website specialized on Finance [http://www.officialfinancialservices.com], resources and articles. This site provides updated information on Finance. For more info visit his site: Finance [http://www.officialfinancialservices.com]
Article Source: http://EzineArticles.com/?expert=Jay_Moncliff
Article Source: http://EzineArticles.com/79018
Credit unions are cooperative banking and financial companies. They are usually non-profit and cater to a particular group of people that work or live in the same place, for example. Credit unions are owned by the accountholders, who also participate in the management and direction of the company.
Today, credit unions offer more than just checking and savings accounts, although these low-cost basic accounts are the reason most people join. Most credit union savings accounts pay slightly more than their counterparts at for-profit banking institutions. Credit union checking accounts usually carry less restrictive requirements and lower fees than those at banks.
Credit unions have expanded into the realm of financial services as well. Most offer loans for a variety of needs, including personal loans, automobile loans and mortgage loans. Interest rates are usually a bit lower than those at other commercial lenders, and sometimes their qualification requirements are easier to meet. Before shopping for a automobile, boat, motorcycle or home improvements, you may want to consider talking to your credit union. Shopping with a pre-approved, lower rate loan from your credit union increases your bargaining power and your buying power. Many credit unions can also write student loans and signature loans.
In addition to loans, many credit unions offer additional financial services. These include dividend bearing checking accounts, which usually carry no fees and pay better interest than most bank's savings accounts, and higher rate certificates of deposit. Most now offer low or no-fee access to automated teller machines and debit cards that can be used almost anywhere. Credit cards are also available at most credit unions, with discounted fees and more reasonable interest rates making them more attractive than national offerings.
Other financial services that you can expect to find at your credit union include stock brokerage services, mutual funds and personal financial planning. Some are even offering individual retirement accounts and insurance coverage. Of course, choosing someone to help with your financial planning is an important decision, but consider the helpful folks at the credit union when you are investigating your options. You may find that not only are their fees lower, but they offer many of the same types of products as other financial planners.
Credit unions offer many financial services today, and there is one out there for almost anyone. Check your local phone directory or online and you'll most likely find one that you'll qualify for. Since today's credit unions are federally insured up to $100,000 by the National Credit Union Administration, your deposits are safe. When you start looking for financial services, consider your credit union as well. You'll be surprised at what they have to offer today.
Jay Moncliff is the founder of [http://www.officialfinancialservices.com] a website specialized on Finance [http://www.officialfinancialservices.com], resources and articles. This site provides updated information on Finance. For more info visit his site: Finance [http://www.officialfinancialservices.com]
Article Source: http://EzineArticles.com/?expert=Jay_Moncliff
Article Source: http://EzineArticles.com/79018
The Worst Cash-Flow Strategy Ever!
Want to achieve a chronic state of personal economic turmoil? Here's how to do it!
Live above your means.
Perhaps you're already doing it but don't know just how serious your negative cash-flow is.
If this is your situation, don't despair. You are not alone! It's estimated that 40 percent
of American families annually spend more than they earn. About 60 percent of active credit
card accounts are not paid off monthly. Average credit card debt among people who have at
least one card is $9,205--triple what is was in 1990. Yet 9 out of 10 Americans claim credit
card debt has never been a source of worry! What's going on here?
Running our households at "full credit capacity" is the American way of living. A Maxim of
conventional wisdom for consumers is: living on credit is fashionable; indulging oneself is
fashionable- saving money isn't.
Personal debt is one of those things we all like to forget about. As long as we can keep
making the monthly credit card payments, we seem to think we'll be OK. And yet our future
earnings are being eaten away at an accelerated rate, and there's no end in sight. It isn't
just household debt or personal debt that's at stake here, either. The same addiction to debt
exists at the national level, of course, where the ballooning national debt still receives
almost no attention (even though interest on the national debt now accounts for somewhere
around 17% of all government spending).
Consumer credit has hit an all-time high as a percentage of household income. Put another
way, we've never been so indebted. We owe on credit cards, personal loans, and home
mortgages. And personal bankruptcies are skyrocketing to the point where nearly 1.5 million
Americans filed for bankruptcy in 2004.
By all sane reasoning, these are alarming numbers. And eventually there are consequences.
You're going to have to pay of the debt load sooner or later. And for many people, that
debt just keeps snowballing. You're paying debt on top of debt, right? And those student
loans are due, too, and you barely have enough cash to pay the rent and the car loan.
Sound familiar, I know, I've been there, too.
To make matters worse, we're all told that we have to keep spending to help the struggling
economy. It's misguided, of course, since increasing personal debt across the board does
nothing to help the economy in the long term. It's a simple fallacy that spending--any
spending at all--is "good" for the economy. In fact only useful spending is good for the
economy. Spending on meaningful education, say, or investing in new technology or equipment
that can be used to create new prosperity--now, that's "good" spending.
Finally, we have predatory lenders playing their part in all this. Banks are cashing in on
the now-popular theme that you can erase your credit card debt by refinancing your home.
That's great until you realize you're back in hock with the credit card companies a year
later, and now you have increased long-term mortgage debt. The real problem is that people
just spend way too much. They buy a lot of things they don't need, and they keep buying day
after day, year after year, regardless of their ability to pay it.
Eventually, this collective national bill is going to come due.
We can't keep spending forever, not as individuals, not as a country. And the price for the
bail-out is going to be steep. U.S. currency valuation will continue to fall on the global
market. Personal financial misery will continue to rise. It's as inevitable as gravity.
Article Source: http://EzineArticles.com/?expert=Stephen_Tiebout
Article Source: http://EzineArticles.com/78475
Live above your means.
Perhaps you're already doing it but don't know just how serious your negative cash-flow is.
If this is your situation, don't despair. You are not alone! It's estimated that 40 percent
of American families annually spend more than they earn. About 60 percent of active credit
card accounts are not paid off monthly. Average credit card debt among people who have at
least one card is $9,205--triple what is was in 1990. Yet 9 out of 10 Americans claim credit
card debt has never been a source of worry! What's going on here?
Running our households at "full credit capacity" is the American way of living. A Maxim of
conventional wisdom for consumers is: living on credit is fashionable; indulging oneself is
fashionable- saving money isn't.
Personal debt is one of those things we all like to forget about. As long as we can keep
making the monthly credit card payments, we seem to think we'll be OK. And yet our future
earnings are being eaten away at an accelerated rate, and there's no end in sight. It isn't
just household debt or personal debt that's at stake here, either. The same addiction to debt
exists at the national level, of course, where the ballooning national debt still receives
almost no attention (even though interest on the national debt now accounts for somewhere
around 17% of all government spending).
Consumer credit has hit an all-time high as a percentage of household income. Put another
way, we've never been so indebted. We owe on credit cards, personal loans, and home
mortgages. And personal bankruptcies are skyrocketing to the point where nearly 1.5 million
Americans filed for bankruptcy in 2004.
By all sane reasoning, these are alarming numbers. And eventually there are consequences.
You're going to have to pay of the debt load sooner or later. And for many people, that
debt just keeps snowballing. You're paying debt on top of debt, right? And those student
loans are due, too, and you barely have enough cash to pay the rent and the car loan.
Sound familiar, I know, I've been there, too.
To make matters worse, we're all told that we have to keep spending to help the struggling
economy. It's misguided, of course, since increasing personal debt across the board does
nothing to help the economy in the long term. It's a simple fallacy that spending--any
spending at all--is "good" for the economy. In fact only useful spending is good for the
economy. Spending on meaningful education, say, or investing in new technology or equipment
that can be used to create new prosperity--now, that's "good" spending.
Finally, we have predatory lenders playing their part in all this. Banks are cashing in on
the now-popular theme that you can erase your credit card debt by refinancing your home.
That's great until you realize you're back in hock with the credit card companies a year
later, and now you have increased long-term mortgage debt. The real problem is that people
just spend way too much. They buy a lot of things they don't need, and they keep buying day
after day, year after year, regardless of their ability to pay it.
Eventually, this collective national bill is going to come due.
We can't keep spending forever, not as individuals, not as a country. And the price for the
bail-out is going to be steep. U.S. currency valuation will continue to fall on the global
market. Personal financial misery will continue to rise. It's as inevitable as gravity.
Article Source: http://EzineArticles.com/?expert=Stephen_Tiebout
Article Source: http://EzineArticles.com/78475
Student Credit Cards Pros and Cons
Most people agree that learning to manage one’s personal finances at an early age is imperative. I certainly did not have much guidance in this area when I was studying and between seeing my friends and cramming for exams it did not rate as a high priority! Financial independence is something most human beings strive for yet very little is taught on this subject at schools and universities alike. It is a shame that such critical life skills are rarely addressed in our youth unless our parents are particularly diligent in this area, as many of us have to learn our lessons the hard way.
Whilst at university I observed many of my friends struggling with student credit card repayments. These guys had fallen into the easy trap of spending money they didn’t really have and leaving the worrying for a rainy day. Well guess what? When it rained it poured! One particular friend of mine was spending a lot more on his credit card than he was able to earn each week. I’m sure it was nice buying all those girls those drinks but was it worth the headache of insurmountable credit card interest repayments? This friend still pays to this day for his mistakes as his credit history will not qualify him for anymore credit of any kind. This is quite sad because credit actually can be beneficial to those who manage it appropriately. In fact it could be argued that every human being will need or at least benefit from some type of credit in his or her lifetime. You may know that it is very rare for investors to use their own money in business, instead they leverage the bank’s money to gain profit for themselves before paying the bank back. This an acquired skill and a whole other topic.
So, the question is; should students have their own student credit cards? Despite my rather bleak introduction to this article I would say absolutely yes. I say yes because as I said there are many benefits of having some credit. Also, learning how to manage credit from an early age will set you up to avoid some serious financial headaches in the future. Remember my friend? Trust me, you don’t want to end up like him.
Student credit cards are readily available these days. All major banks will actually have a range of credit cards specifically suited to the needs of the student. Often this might mean reduced rates, student focused benefits, etc. Applying is made very simple by websites like [http://www.uscreditcardguide.com] where you are able to review the best offers from different banks and also apply online for fast and easy approval. Just remember to have your personal financial information on hand so you can fill out the forms correctly.
There are a few reasons I believe it is important for students to have their own credit cards. Firstly I recommend every student have an ‘advisor’. An advisor can be a professional, a parent or family member, or friend with skills in this area. Most college campuses will offer free financial advice to its students as well. An advisor can help you with budgets, understanding interest rates and help you understand your unique situation. It is important to understand your earning capacity and know whether it will allow for credit card repayments.
It is very beneficial to anyone to establish a credit history which banks use to assess further loan and credit applications. If you wish to own your own home you will have to go through this one day and the longer you can show have adequately maintained a credit card and its payments the better chances you will have.
Financial emergencies, which all of us can relate to, will also come up and a credit card can really make things easier to manage these little crises. Often a low limit of $500 to $1000 is all you need to cover some unexpected expense. It is a great feeling knowing you can handle these situations without having to phone home or borrow from a friend.
Simply using credit cards to pay for things and then transferring money from your savings account to cover the costs on your credit card is a good way of earning benefits from your credit card supplier. These benefits will range from frequent flyer points to shopping credits. Check some really cool student cards including the extremely popular MTV Card.
Damien Cheney writes on general financial issues affecting society today and offers advice on planning and managing finacial affairs. He assists the owners of [http://www.uscreditcardguide.com] in reviewing credit card deals and offering this information online.
Article Source: http://EzineArticles.com/?expert=Damien_Cheney
Article Source: http://EzineArticles.com/77878
Whilst at university I observed many of my friends struggling with student credit card repayments. These guys had fallen into the easy trap of spending money they didn’t really have and leaving the worrying for a rainy day. Well guess what? When it rained it poured! One particular friend of mine was spending a lot more on his credit card than he was able to earn each week. I’m sure it was nice buying all those girls those drinks but was it worth the headache of insurmountable credit card interest repayments? This friend still pays to this day for his mistakes as his credit history will not qualify him for anymore credit of any kind. This is quite sad because credit actually can be beneficial to those who manage it appropriately. In fact it could be argued that every human being will need or at least benefit from some type of credit in his or her lifetime. You may know that it is very rare for investors to use their own money in business, instead they leverage the bank’s money to gain profit for themselves before paying the bank back. This an acquired skill and a whole other topic.
So, the question is; should students have their own student credit cards? Despite my rather bleak introduction to this article I would say absolutely yes. I say yes because as I said there are many benefits of having some credit. Also, learning how to manage credit from an early age will set you up to avoid some serious financial headaches in the future. Remember my friend? Trust me, you don’t want to end up like him.
Student credit cards are readily available these days. All major banks will actually have a range of credit cards specifically suited to the needs of the student. Often this might mean reduced rates, student focused benefits, etc. Applying is made very simple by websites like [http://www.uscreditcardguide.com] where you are able to review the best offers from different banks and also apply online for fast and easy approval. Just remember to have your personal financial information on hand so you can fill out the forms correctly.
There are a few reasons I believe it is important for students to have their own credit cards. Firstly I recommend every student have an ‘advisor’. An advisor can be a professional, a parent or family member, or friend with skills in this area. Most college campuses will offer free financial advice to its students as well. An advisor can help you with budgets, understanding interest rates and help you understand your unique situation. It is important to understand your earning capacity and know whether it will allow for credit card repayments.
It is very beneficial to anyone to establish a credit history which banks use to assess further loan and credit applications. If you wish to own your own home you will have to go through this one day and the longer you can show have adequately maintained a credit card and its payments the better chances you will have.
Financial emergencies, which all of us can relate to, will also come up and a credit card can really make things easier to manage these little crises. Often a low limit of $500 to $1000 is all you need to cover some unexpected expense. It is a great feeling knowing you can handle these situations without having to phone home or borrow from a friend.
Simply using credit cards to pay for things and then transferring money from your savings account to cover the costs on your credit card is a good way of earning benefits from your credit card supplier. These benefits will range from frequent flyer points to shopping credits. Check some really cool student cards including the extremely popular MTV Card.
Damien Cheney writes on general financial issues affecting society today and offers advice on planning and managing finacial affairs. He assists the owners of [http://www.uscreditcardguide.com] in reviewing credit card deals and offering this information online.
Article Source: http://EzineArticles.com/?expert=Damien_Cheney
Article Source: http://EzineArticles.com/77878
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