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Archive for November 2010

Should you pay off credit cards with a home equity line of credit?

Published 12/1/10  (Modified 3/9/11)

Should you pay off credit cards with a home equity line of credit? By Joe Taylor Jr.

During the real estate boom of the early 2000s, paying off a credit card with help from a home equity loan seemed like a no-brainer. After all, housing prices in most parts of the country were skyrocketing. Why would you pay double-digit interest rates on a credit card when you could cut those finance charges in half or more?

In hindsight, all those refinance deals might not have been the best ideas. Where property values declined, some homeowners found themselves underwater on second mortgages and home equity lines of credit (HELOC). Now that banks have recapitalized and mortgage rates have dropped to all-time lows, home equity loans look attractive again.

Benefits of paying down high interest debt

With many credit card issuers changing their business strategies after the financial crisis of 2008, interest rates rose while credit limits dropped. Meanwhile, new federal regulations forced banks to increase monthly minimum payments on most unsecured credit card accounts. For some consumers, this double whammy wrecked monthly budgets and even caused a cascade of late payment and over-the-limit penalties.

If that scenario sounds familiar, a home equity loan could help you reboot your personal finance portfolio. Instead of surfing balance transfer credit cards and making multiple minimum payments, a mortgage refinance lets you pay just one or two lenders. Because the FICO score and other credit reporting tools review the percentage of

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How to Survive the Holidays without Wiping Out Your Savings Account

Published 11/19/10  (Modified 3/9/11)

By MoneyBlueBook

This is a guest post from Jesse Mecham, founder of You Need a Budget

It's almost that time of year again. I'm not talking about gingerbread houses, cocoa, and caroling; I'm talking about shopping, impulse-buying, digging ourselves into more credit card debt, and raiding our savings accounts.

We undoubtedly lose a bit of sanity, self-control, or both when it comes to holiday spending. For most Americans, the nature of the season already implies we'll part with our money quicker than Santa can shoot up a chimney. The key, however, is not to spend it out of desperation, impulse shopping, or simply because you don't have a plan.

Plan spending ahead of time

Your biggest safe-guard against excess or unplanned holiday spending is (are you ready for this?) making a plan.

This means you actually create a budget...and stick to it. Decide how much you're willing to spend and then decide what you're going to buy from there. The more items you decide on ahead of time, the better. This saves you from making a decision in the heat of the moment, surrounded by all those shiny, new things, and potentially can keep you from overshooting your budget.

This will take some sleuthing on your part, but the research will pay off and keep money in your pocket. Once your list is made up and in your hand, it'll be so much easier to avoid those impulse buys.

Work to build up your

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A 60 second guide to money transfers

Published 11/19/10  (Modified 3/9/11)

By Ana Gonzalez Ribiero

Nowadays, transferring money to friends and relatives is easy. Gone are the days when the only option we had was to mail a check that would take days for the recipient to receive it, and then more time for it to clear. That was ages ago!

Now you can pay your mortgage, electric and telephone bills online or send money instantly to an ailing family member or as a gift to a friend. Want to send money, but not sure which service to use? Here's an overview of some of the most popular types of money transfers that can help you pick the best one for you.


ACH stands for "Automated Check Handling" or "Automated Clearing House." It is an electronic transfer of money done with electronic checks, but instead of going directly from bank to bank as with a wire transfer (explained next), an ACH is processed through a clearing house. The clearing house handles

the bookkeeping, it credits and debits the involved banks and then sends out the requested payment. This entire process can take 1-2 business days.

Wire transfer

A wire transfer is much quicker than an ACH. This type of request authorizes your bank to transfer or "wire" funds to another bank. Wire transfers are usually done for large sums of money because there is a higher bank fee involved for this transaction, whereas ACH related fees are lower.

Through a wire transfer, you can send

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3 top lists of the 5 best online brokers

Published 11/18/10  (Modified 3/17/11)

3 top lists of the 5 best online brokers By Peter Andrew

Broker ages

I have an uncle who's a multimillionaire. And he's always talking about the latest call he's received from his broker. When I was a kid, I somehow pictured the person who called him as a thin, elderly gentleman with parchment-thin skin, wearing a morning coat and wing collar, like one of those plutocrats that they used to feature in 1930s Hollywood movies.

But I was wrong. Even when I was a little boy, brokerages employed thrusting young people who were as far away from the top hat stereotype as you could get. And you can get a lot further now. Because today there are two sorts of brokerages: those that provide proactive, personal service and advice to high net worth individuals such as my uncle, and those that offer do-it-yourself online trading environments that are open to everyone.

Discount brokers

Traditional brokers call up clients with hot tips and recommendations that supposedly provide investors with an inside track. But that comes at an eye-watering price, and it's not at all clear that their record of spotting likely winners is as good as they sometimes claim.

Discount brokers often have the same information online that their traditional counterparts offer, but it's up to you to dig it out, and act upon it. The good news is that their fees are a tiny fraction of those changed in the high-end part of the brokerage market. So now the question is:

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Are you investing in China yet?

Published 11/17/10  (Modified 3/9/11)

Are you investing in China yet? By Clark Schultz

The Chinese Revolution

If you are like me, when you think about China you almost get dizzy. It's hard to imagine over one billion people living in a country with a market for goods and services that is literally exploding as the country modernizes. By 2014 the International Monetary Fund estimates that over 10 percent of the world's GDP will be accounted for by China. Now that's an economic revolution.

You just can't help but wonder what kind of investment opportunities exist in China for individual investors like us?

Should you invest in China?

Before we discuss investment strategies, we should consider if it's unpatriotic to invest abroad. My answer is a simple no. First of all, if you invest in China and earn dividends or take profits, that money comes right back to the United States. Also, in the global economy countries rely on each other. We need the Chinese to keep buying our foreign debt and they need us to keep buying their goods.

China has a lot of long-term economic potential. This means that the earlier in your life you can start investing in China, the better off you may be. Even just a few dollars from your monthly paycheck could mean a big payoff at retirement if growth in China is as strong as projected. If you have an IRA account, investing in China may be even more advantageous due to the tax advantages and the power

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Student checking accounts don't all make the grade

Published 11/15/10  (Modified 3/17/11)

Student checking accounts don't all make the grade By Peter Andrew

Student checking accounts in ancient history

As a student, I had a novel approach to the management of my personal finances. Let's call it the Ostrich Strategy because it mainly involved burying my head in the sand. Each semester various bank statements and (I assumed) increasingly threatening letters arrived from my bank, and these were carefully filed--invariably unopened--in a box under my bed. Twice a year, they were ceremoniously transferred from the box, the envelopes still sealed, into the nearest trash can.

The Ostrich Strategy worked well for me for two main reasons. First, the bank manager was a friend of my parents, and knew that I (or they) would eventually make good on my overdraft. And, secondly, it all happened a long time ago, in those distant days before credit scoring took off.

Student checking accounts now

You may or may not envy me the cavalier approach I was able to take toward my student finances, but one thing's for sure. Today if you try doing what I did some decades ago

by mimicking the behavior of Struthio camelus, you're likely to mess up big time. A dodgy credit score can give you a worse hangover than a frat house party, and it's one that's going to last for years after you graduate.

The good news is not only that you're almost certainly more responsible than I used to be, but also that you

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