Are You Getting The Best Bargain On Your Car Insurance Policy?
Choosing auto insurance is usually a tough undertaking. The key reason why it is so difficult is the fact that there are many agencies that are eager for your business and some of them could utilize shady methods to receive it and realizing the distinction between a good deal and a questionable offer isn’t generally simple. But since obtaining insurance coverage is such a crucial and important action to take, you must ask yourself if getting the cheapest insurance you can pay for would be the best idea.
Due to fierce competition in the insurance market, premiums have been falling, which is good news for those shopping for car insurance. You would be prudent though to bear in mind that the price is not the part of car insurance which is most important.
The prime motivation for comparing prices on car insurance though is to try and get lower car insurance in order to better afford the premiums. Following up with all of the companies and finding out what they have to offer can be a time costing experience to say the least. However there are a number of things you can do to improve your chances of success.
Look around.
Paying attention to the details in the plans is important as they can vary greatly between the different companies. You can ask for quotations from these companies so that you can compare them with regards to the prices and packages they offer. These days there are many web sites online that will allow you to compare prices of the big name insurance companies in one easy location without having to visit them.
Keep a good clean driving record.
If you can show that you are a good driver then insurance companies will consider you a low-risk candidate, and thus will have lower accompanying premium rates.
Another good way that you get a lower insurance premium is to make sure that your vehicle has the latest and greatest safety features. Some insurance companies will automatically lower premiums if they see anti-theft devices, automatic seatbelts and airbags.
Creative mathematics can also bring your car premiums down. Ask for higher deductibles on your car insurance policy. You can get as much as a 15 to 20 percent premium reduction by increasing the deductible on the plan. If this is a way that you choose to go, it is important that you have the money put aside for the deductible.
If you own a second hand car or an old model car, ask to reduce its coverage. If you are paying a premium for a car that is worth less that 10 times the premium amount you are paying, you are paying to much.
You can and should ask the company for more discounts. One such rate discount would include a low mileage discount. Some insurance companies will offer people that have taken a defensive driving course discounts with the proper documentation to prove it. There may also be discounts available for people that have taken an advanced driving test.
Certain professions also qualify people for discounts on their premium payments. Ask the different companies if the profession that you work in places you into one of those low risk categories. Many of the different companies have a list of professions that will group you in between low and high risk. If your profession happens to land in that low risk group, you can be rewarded with low risk premiums.
The Truth About Home Equity Loan Refinancing
Many folks are now considering Home Equity Loan refinancing as a way to help their financial stress caused by steep mortgage payments and high interest rates. Perhaps they want to use the proceeds for debt consolidation, vacations, purchasing a new car, home improvement and more.
What is your home equity? It’s simply the difference between how much your house is worth according to the latest appraisal and how much you still owe the bank. Your home equity increases over time as you pay down your mortgage and as the value of your home appreciates. The value of your home is based on a professional appraisal and takes into consideration the condition of your home, the neighborhood, the type of property, size, land evaluation, taxes other loans and services, and the current market value. Home equity loan refinancing will depend upon the increase in equity to determine how much money you can borrow.
Unsecured Debt Consolidation Loans when You Have Bad Credit
It’s not easy to get unsecured debt consolidation loans when you have bad credit. Lenders may try to inform you that you can’t get this type of loan because they think you’re too high a repayment risk. Bad credit is the problem. Lenders see your credit history and decide you’re a high risk. Since you failed to pay some debts on time in the past, why would they believe that you will pay them in the future? That’s why it’s harder to get unsecured debt consolidation loans with bad credit.
Free Personal Finance E-Book
We’ve decided to give away copies of our popular e-book, Solving the Money Puzzle: Personal Finance Made Simple, a $7.95 value. This limited-time offer may be withdrawn at any time, so don’t delay. Click here or on the image below for more information.
Carnival of Debt Reduction #64
Welcome to the Carnival of Debt Reduction for December 4, 2006. Thanks for stopping by. I’m very pleased to be hosting the Carnival for the first time here at Necessary Virtues Personal Finance.
In reading this week’s submissions I found many to like, and two that really stood out. They are hereby awarded the Necessary Virtues Order of Merit for outstanding contribution:
- Mark Shead’s outstanding piece on The Debt Mindset from Debt Consolidation. It begins provocatively:
“Many people just expect to be in debt. It is part of their world view…”
- The current installment of Erek Ostrowski’s invaluable series, Getting Out Of Debt (Part 2) from Verve Coaching. I look forward to the next article.
Here are all those that made the cut listed in mostly chronological order, with a little treat at the end. Enjoy!
Matt Hutter kicks it off with tips on How To Avoid Using Credit Cards and the benefits of purchasing with cash rather than plastic.
Next is a timely seasonal offering from Ririan with 20 Fabulous Tips To Holiday Spending that range from proper planning to debt avoidance to identity theft protection.
From Andy at Money Walks comes 5 Reasons why people are in debt, including a wake-up call for university students to graduate debt-free.
Andy Boyd offers us a refreshingly honest and direct look at his personal finances and his plans for getting out of debt in My Credit Card Debt Repayment Plan. This is a valuable contribution in that it’s all practice and no theory.
Next we have a great series of tips from Joe Caterisano on How to save money. He points out that small changes in our behavior can reap large benefits.
From Free Money Finance comes How to Pay Off a Boatload of Debt Quickly, a helpful, concise summary of an article originally published on MSN MoneyCentral.
Mark Shead contributes a very thought-provoking piece on The Debt Mindset. He points out how much our lives are influenced by our past experiences and our present associations. Highly recommended, particularly for anyone who has struggled to change their behavior in relation to money and debt.
From Waller we have a wonderfully passionate and practical article on Reducing Debt With A Snowball. If you’ve been making minimum payments on your credit cards, you have to read this!
Erek Ostrowski continues a valuable series with Getting Out Of Debt (Part 2). This installment is all about making detailed plans to achieve specific goals that contribute to your overall goal. The most important part? Follow your plan!
Trent tells us that debt has driven him to some pretty desperate measures in the past, including surviving for a month on only $10 worth of food. He gives us twenty tips on how it can be done in Nourishment on a Desperate Income.
From Steve Faber we have Debt Elimination Scams to Avoid – You’ll Just Pay Twice, which gives details of two scams that prey on desperate debtors.
The next article is really a call for discussion from Ben, who asks What was the World Like Before Credit Cards?. You can post your answers on his blog.
Jim clarifies a distinction that many find mysterious in Student Loan Deferment vs. Forbearance. If you have a student loan, make sure you know the difference.
From the Prince of Thrift we hear that the worst of the worst get the Lemon Award for Bad Banking, and the finalists are… Lemon Award Finalists Named on CreditCard.org’s Website.
Next Sagar Satapathy presents a comprehensive set of 101 Financial Tips you Never Learned in High School (but should have). Be sure to read all the way to tip 101!
Joe Caterisano returns with What is a FICO score?, offering a concise guide to the factors that comprise your FICO score.
Henry of Binary Dollar continues his personal chronicle with The Race to $0: December 2006 Net Worth (+$3,284). He continues to retire his student loan while adding substantially to his retirement savings.
No Credit Needed contributes this Sure-fire Debt Reduction Process. It’s simple and it actually works. You just have to be willing to follow it.
And to round off this week’s offerings, we have a humorous Ode To Prosperity from Madeleine Begun Kane.
Next week’s host, on December 11, is Blunt Money. Thanks for visiting, and happy holidays to all!
Top 7 Reasons You Need a Budget
1. A budget is a roadmap. It is a useful tool and guide. It tells you whether you are headed in the direction you want to be headed in financially. It helps you to move from spending on a whim to saving and financial planning. If you don’t have a roadmap for reaching your goals and desires, then you can’t even measure your progress and you are unlikely to succeed. Would you ever find a major corporation that operates without a budget? No. Neither should your family.
2. A budget empowers you to take control of your money instead of letting your money control you.
3. A budget can improve your marriage. The number one cause of marital strife is money. Your budget is a neutral tool to help you and your spouse communicate rationally about money. It can help to give you a common purpose and to minimize arguments about money.
4. A budget helps you prepare for emergencies. The top causes of bankruptcy are sudden unanticipated expenses or job loss. When you have an emergency fund, you are much more likely to get through a situation that would otherwise sink your financial ship.
5. A budget makes money available so that you can use it on the things that really matter to you rather than impulse purchases.
6. A budget can help get out of debt or stay out of debt.
7. A budget gives you peace of mind. You won’t lie awake at night due to worry about your finances.
Your Success Is All in Your Mind
by Steve Diamond
What is success?
The dictionary defines success as “the achievement of something desired, planned, or attempted.”
So you must decide for yourself what success is, depending on what you seek in your life, your relationships and your career. If you’re an athlete, success can mean obtaining that gold medal. If you identify yourself as a parent, success can mean raising children with good moral values. For a doctor, success can mean relieving pain or saving a life. To many of us success means a job promotion or acquiring wealth. It depends on your perspective and how you perceive yourself and your life.
You are the only one who can judge your success. If you try to achieve success according to someone else’s standards or society’s standards, you will never be satisfied that you have achieved it.
Yet even when we know that we define our own success, we often seem to fail. We feel dissatisfied, empty, tense. Our minds are not at rest, not peaceful, not harmonious. Our thoughts are full of “if onlys.” You know what they’re like: “If only I had more money, I would be happy.” “If only I could lose 20 pounds, my life would be perfect.”
What’s the difficulty? Are we setting unrealistic goals? Maybe, but that’s not really the problem. Are we not trying hard enough? Usually that’s not a factor either. What is it? Us! We are our own worst enemy. “We have met the enemy and he is us,” as Walt Kelly, creator of Pogo, famously wrote.
How do we sabotage our success, undermine our goals, subvert our desires? Through the largely unconscious programming of our minds. That’s the whole answer in a nutshell. It’s our thoughts, the thoughts we allow to parade through our heads and invade our subconscious. When we can learn to change our thoughts, then our success is assured.
Your mind didn’t come with an instruction manual. You were given a lot of instruction by your parents, your teachers, your friends, by books, movies, TV. But did any of it tell you how to control your thoughts? Did it tell you how to program your mind?
You do have the power to change your life if you want to. You do have the power to achieve the goals you set for yourself. But you won’t succeed if you don’t learn to control your mind first.
The seat of power in your life is your unconscious mind, the mind that works 24/7 on whatever program you have set for it. You set these programs by empowering your thoughts with vision, expectation, belief and desire. Before anything that you wish for can happen, you must envision it clearly, desire it, believe deeply that it will happen, and expect confidently that it will happen.
The unconscious mind will act based on your ability to program it. You constantly send your unconscious information and messages, whether you think so or not, but many of the messages tend to be negative (“if only”). When you think “if only” you tell your unconscious that you are not a success, that you are in a state of lack and limitation.
So be very careful of your thoughts, beliefs and actions. If you worry about not having enough money, you are programming your mind for lack. If you worry that you can’t accomplish your goals, you are programming your mind for failure. If you believe you haven’t the opportunities you need to get ahead, you are programming yourself not to recognize them when they appear.
Why? The unconscious mind is constantly working on the information that you have sent, and negative information yields negative reality. As the computer geeks say, “Garbage in, garbage out.”
You can have success; you can change your life. But you must change your mind first.
Payday Loans – Avoid Them!
Payday loans, also called “cash advance loans,” are small, short-term loans that carry very high interest rate. Some companies have even begun to advertise them as loans to help you repair your credit, but this is very misleading. They suggest that these loans can help you pay off your bills and so establish good credit, but if you cannot afford to pay your payday loans on time, you have to “roll-over†or extend the loan – often at huge expense and interest. Many people get into a payday loans cycle, whereby much of their monthly paycheck goes towards paying off their ever-growing payday loans.
It seems as if the storefronts offering these dangerous loans have sprung up overnight on many street corners. They’re also advertising on TV, billboards and elsewhere. They make it so easy to get that extra few hundred dollars to tide you over when money is tight.
Don’t fall for the pitch. If you can’t afford to pay all your bills one month, you are much better off trying to arrange an alternate payment schedule with your creditors instead of risking your credit rating with a cash advance loan. Payday loans may be fine in a true emergency, but the payday loans cycle gets very unaffordable very fast and can ruin your credit rating.
Privacy Matters
Many of our readers will be interested in the services offered at Privacy Matters. Their full package gives you everything you need to protect yourself from Identity Theft, including automatic fraud alerts and identity theft insurance.
They also include unlimited free access to your credit score and credit reports, just as an extra bonus. Their trial offer of 30 days for $1.00 is hard to beat. Try it for yourself and continue if you see the value.
Do you know what’s on your Credit Report?
Evaluating Credit Card Offers
Essential Terms You Must Understand
By Steve Diamond
Credit card offers, they’re everywhere! They appear in your mailbox. They pop up while you’re surfing the Internet. They’re in slick brochures next to the cash register or gas pump. They’re in full-page ads in the Sunday papers.
If you need a new credit card, how do you choose? You should evaluate each offer carefully, and to do that you must understand these essential terms.
Annual Percentage Rate (APR):
The interest rate charged on your account balance. (But see “Balance Calculation Methods,” because the rules for computing interest from your balance and your APR can vary.) Your statement will usually show the APR and a monthly and/or daily rate based on the APR that’s actually used to calculate your monthly interest. There may be several APRs applicable to different portions of your balance, for example an introductory rate, a regular purchase rate, and a regular cash advance rate.
A fixed APR is set by the credit card company, which can generally change it with as little as 15 days advance notice, especially if you run afoul of any of the “gotchas” in the terms. These “gotchas” are often very consumer-unfriendly. For example, many companies these days reserve the right to raise your rate if you’ve been late on a payment to another, unrelated company.
A variable APR is tied to some widely used economic index, such as the Prime Rate. It may be stated as “prime + x%, currently y%,” for example “prime + 7%, currently 13.5%.” This means that when the Prime Rate is 6.5%, your APR is 13.5%. When the Prime Rate goes up or down, so does your APR. But beware, because some of the same “gotchas” apply to variable APRs as to fixed APRs. Read the fine print. It may state that if you’re late with one payment, your APR will no longer be variable but will rise to an exorbitant fixed rate, usually over 20%.
The penalty APR is the rate to which your APR will immediately be raised when you violate any of the “gotchas” in the terms. This rate is usually at least 50% higher than the regular APR. Again, be sure to read the fine print to see what situations will trigger the penalty APR. You’ll often see these: failure to pay this or any other account on time, exceeding your credit limit on this or any other account, excessive credit balances on your accounts in aggregate.
Balance Calculation Methods:
These are important to understand, because your APR is only part of the story when it comes to calculating the interest you’ll be charged each month. The other part is how the balance is calculated to which the APR is applied. In any case the balance is multiplied by the daily or monthly interest rate. But the balance calculation is not as straightforward as you might think.
1. Two-Cycle Balance. This is the worst method from a consumer’s point of view because it can lead to the highest interest calculations. Unfortunately, it’s also becoming the most widely used method. To calculate the balance, add together the average daily balances for the current billing period (sometimes even including new charges) and the previous period. Here’s why this is so unfriendly to you. Say you have run a balance for a few months and finally pay it from $200 down to zero at the end of May. You think it’s safe to use the card in June for a new $100 purchase, and if you pay the $100 by the end of the June grace period, you won’t owe any interest on it. But you’re wrong. Since your average daily balance in May was not zero (say it was $120), and since you used the card in June, your interest will be calculated on May’s average balance again, so even if you pay the whole June purchase in June, you will still owe additional interest. In other words, you must wait two months, allow the account to cycle once with a zero balance, before it’s safe to use it again — “safe” in the sense that you won’t incur extra interest if you pay the balance in full by the end of the grace period.
2. Average Daily Balance. This was once the most common calculation method and is still popular. Add the daily balance for each day in the billing cycle, then divide by the number of days in the cycle. Depending on the terms, this may or may not include new charges.
3. Adjusted Balance. This is the best method from a consumer’s point of view, but it’s rapidly going the way of the dodo. Take the balance at the beginning of the billing cycle, then subtract any payments or other credits recorded during the cycle. Do not include new charges during the cycle. For example, if your beginning balance was $1200, and you paid $400 during the cycle, the balance to which your monthly rate will be applied is $800, regardless of any new charges.
Balance Transfer:
This means that you’re charging card X to pay off (all or part of) the balance on card Y. So the balance is, in effect, transferred from card Y to card X. Why would you want to do this? Usually to take advantage of an introductory low interest rate when applying for a new card. Look closely at the terms. Sometimes these introductory rates last only a few months. The best ones are for the life of the balance. You will often have to pay a transaction fee equal to 3% of the balance transferred. Sometimes these fees are capped at $75 or so. Be sure to see whether or not the transaction fee exceeds what you’ll save in interest. If so, don’t do it. Sometimes the credit card company will agree to waive the fee, especially on a new account. Don’t be afraid to ask.
Cash Advance:
A cash loan charged immediately to your credit card account. Usually there is no grace period for paying off a cash advance, which means you’ll be charged interest starting from the day of the loan, even if you pay it in full by the end of the billing cycle. Also this type of charge may have a higher APR than purchases or balance transfers. Check your terms. Note that some kinds of transactions, like buying casino chips or lottery tickets, may be treated as cash advances. This can also apply to writing a purchase check to your own bank account. Be sure to read the fine print.
Credit Limit:
The upper limit on your account balance. Exceeding it may result in penalties. Be very careful if your balance is close to the limit (“maxed out”), because you can exceed it without charging anything new if you fail to pay enough. Remember that just because the company has approved you for a certain limit doesn’t mean you can afford to take on that much debt.
Disclosure Chart:
An important portion of the Terms and Conditions statement. It’s a little bit like the Nutrition Statement on a food package because the law dictates what has to be listed here. If you can’t stand to read all the fine print, be sure that you read this part.
1. fixed APR or APRs after any introductory rate(s) have expired
2. rule(s) for calculating variable APR(s) if applicable
3. grace period
4. annual fee if applicable
5. minimum per-cycle finance charge
6. additional fees if applicable, such as cash advance fees
7. balance calculation method
8. late payment and delinquency fees
9. over limit fees
Grace Period:
The time, calculated from the account cycle date, during which you can pay the balance in full without having any interest charged. This usually applies only to purchases, and only if you’ve paid the previous month’s balance in full and on time. (Sometimes even that’s not enough. See “Two-Cycle Balance” calculation method for an additional “gotcha.”)
Pre-Approved:
This can be very misleading. It doesn’t mean the company is guaranteeing to issue you the card in the offer. It just means they chose you to receive this offer based on some general screening of your credit report. They always reserve the right to deny or alter the offer based on a more detailed examination of your records.