Benefits and Drawbacks of Short-Term Loans

Today’s post is a guest post from Pound2Day.

There comes a point in many people’s lives where money is tight and funds are short. Bank accounts are tapped.  Credit cards, for whatever reason, aren’t an option, and there isn’t a good place to turn.  Often, and hopefully it’s a one-time thing, people find that they need short-term influxes of cash. Short Term Loans are one option of getting access to money fast when needed.  Here are some of the benefits and drawbacks of short-term loans so you can make a more informed decision about your monetary needs and if this is an option you want to consider.

Benefits

An applicant can get money fast, often within a single day’s notice. If money must be raised (and I emphasize the word must) quickly, this can get you that money fast.

This is often an avenue for those with poor credit who need a short-term loan. Banks will charge those with poor credit huge fees and often refuse them outright because they’re seen as a high risk. With cash advance loans there’s practically no background check. Often, the only proof that you need is documentation of current employment.

There’s very little paperwork.   The application process, usually, only takes about 30 minutes for every person.

Drawbacks

These loans often have a much higher interest rate than you will pay elsewhere.  Fees must also be taken into consideration when weighing the overall cost.  Because of the increased costs, use of these should be the exception and not the rule.

While these can be convenient, these are often limited in the amount you can borrow.  This is actually good when you consider the interest rate, but if you need a higher amount to pay rent or a larger bill, a short term loan might only cover part of what is needed.

The terms vary, but these loans are meant to be paid back immediately or when the applicant gets his or her next paycheck, usually within a week. If a person fails to pay back the full amount within the agreed upon timeframe then it will result in huge penalty costs and can also adversely affect credit scores.

When the next paycheck does come, the money must be there to pay the loan back, and not spent or earmarked for other purposes.  Otherwise, this can send one on a downward spiral, and the cost could end up being double or triple the original amount, not to mention the potential for garnishment of wages. This could end up putting the person in a tighter spot than the previously were and should be avoided at all costs.

Consumers should also realize that short term loans have their benefits, but that they must understand the risk. If used responsibly, they can be a short-term solution. If not used with the right mix of forethought and understanding, they could end up doing more harm than good. Understand all of the facts and risks, and make sure you know how this will affect you beyond the point of getting the cash you need when deciding if a short term loan is right for you.

Avoid the Pitfalls of Overseas Travel and Save Money

This guest article comes from Odysseas Papadimitriou of CardHub.com, an online destination for the best credit card deals.

As you can perhaps tell from my name, I’m Greek. I grew up in Athens before coming to the States for college, and while I ended up putting down roots in the Washington, D.C. area, I go back to Greece a few times a year to visit family. As a result, I’m somewhat of a travel veteran, and over the course of my trips, I’ve picked up a few tips and tricks for how to save time and, perhaps most importantly, money when abroad.

The first thing you must make sure to do when traveling abroad is use a credit card whenever you make a purchase. I’m not saying this because I run a credit card comparison website. Rather, credit cards eliminate worries about finding the best exchange rate or exchanging the right amount of money so as to have enough for your trip but not so much that you have a lot of foreign currency left over afterwards. Credit cards also protect you against pickpockets because they’re easier to conceal than cash and have fraud protection that ensures you won’t lose your money, even if your card gets stolen. In short, using a credit card abroad will help limit the hassle and potential danger of spending overseas.

Still, there are a few steps you must take in order to maximize the benefit your credit card provides. Interestingly, much of this comes before you depart. First, you should call your credit card company to ask if your card has foreign transaction fees. While most credit cards charge fees for overseas spending that amount to about 2-3% of your purchase totals, you should be able to find a no foreign transaction fee credit card regardless of your credit standing. Some issuers, like Capital One, even offer secured credit cards with no foreign fees. So if you don’t have one already, open one before you leave.

Once you have such a card, inform your issuer of your travel plans so your account doesn’t get suspended due to suspicious use and ask for a phone number that you can call collect in case you run into trouble while abroad. That’s it for your pre-trip credit card checklist, but there are still a couple things you must do while overseas to avoid problems and high costs.

For instance, if you’re traveling in Europe, you should carry your passport with you wherever you go. Why? Well, European credit cards have a security feature called chip-and-pin technology that is far more advanced than the magnetic stripes used by American credit cards. Therefore, merchants are likely to ask for passport identification in order to accept your credit card.

Merchants are also likely to offer to convert the total cost of what you’re buying into American dollars so you can understand it better. While this might sound helpful, you should only sign checks and receipts that are expressed in the local currency because merchants typically charge high conversion rates in order to make a profit off this supposed service.

Ultimately, while a credit card is my preferred method of payment while overseas, I always end up needing cash as well. So, you should open a debit card with no foreign transaction fees in addition to a credit card without such fees. At the end of the day, when traveling aboard, you want to enjoy your trip, not worry about conversion rates, foreign currency and pickpockets. Your focus should be on seeing the sights and experiencing other cultures or accomplishing business objectives. So just remember this advice and you will be able to spend more confidently while also avoiding a surprise on your post-trip credit card statement.

Redecorating Your Home Without Breaking the Bank

This is a guest post by Mike Collins. Check out his blog at SavingMoneyToday.net and discover many more tips for saving money and dealing with debt.
Do you ever get sick of coming home and seeing the same old rooms day after day?  Wish you could redecorate your home but think you can’t afford it?

Well think again.  There are many easy ways to redecorate your home even if you’re on a tight budget.  Let’s brainstorm a few ideas…

It costs nothing to rearrange the furniture you already have.   Simply moving things around a little can create a whole new look and it won’t even cost you a dime.  And before you decide to ditch your old furniture altogether, try adding some slipcovers and throw pillows to make it look like something new.

Painting is another inexpensive way to update your home.  Most do it yourselfers can handle painting by themselves as long as the walls and ceilings are in good shape, and spackling and sanding can be mastered with a little practice.  Trust me, I’ve done a ton of painting over the last few years and it has saved me thousands of dollars that would have gone to a professional.

Try replacing your boring old lighting fixtures with something new.  Installing a new ceiling fan or chandelier will cost you several hundred dollars if you have an electrician do it.  Or if you’re handy and feel comfortable doing it yourself you’ll only have to pay the price of the new fixture.

If you’re feeling brave, a new floor will really give your place a new look.  It may take some elbow grease, but most do it yourselfers can install hard wood floors or vinyl tiles themselves.  When we bought our house the kitchen floor was an ugly white tile that was all scuffed and looked just rotten.  Every day my wife told me how much she hated it because no matter how much she scrubbed it always looked dirty.  So with my buddy’s help we put down new vinyl kitchen tile ourselves.  It took the better part of a day but it looks fantastic and we only had to pay for the materials.

Of course if that sounds like too much work for you, you can always start out with smaller projects.  Try installing new switch plates or changing the handles on your kitchen cabinets.  Hang new curtains in the window.  Pick up some new candles or a painting at a yard sale.  Even small changes such as these can have a huge impact.

9 Ways to Slash Your Spending Now

This is guest post written by Mindy Claribel.  Mindy runs MyCCFinder, an online coupons blog that updates at least 4-8 deals a day at your favorite retailers both online, as well as offline!
Everyone has monthly bills and unless you’re still living in your parent’s basement, I wanted to give you some killer tips that you can honestly implement today.  I’m going to take the basic bills that most people today use and what you can do in order to cut them in half.
#1 Your cable TV bill – Most of us today have a cable TV bill and if you’re paying more than $50 for your bill, you’re already paying way too much!  Simply call up your cable company and ask for a reduction.  If they refuse, tell them that you’re going to change services.  Call up competitors and see if they can match.  I know it’s a hassle, but it can be done.  You will find that most of the times they will give you a discount just for asking.
#2 Start using coupons for groceries – You grocery shop and I know you do.  Did you know that there are coupon related sites out there that will help you save on your grocery bill?   Websites such as CouponMom and AFullCup can both help you find printable coupons, as well as show you what coupons you can use on top of the sale price to save a ton of money.
#3 Use coupons on everything – Not only do you want to use coupons on groceries, you will also want to use them on everything else.  From shopping at a hardware store, to eating out at a restaurant, to getting your favorite shoes, you can get what you want and keep money in your pocket.
#4 Buy clothing at a cheap rate – You don’t have to go to the mall to get your favorite clothes.  Outlet stores, as well as thrift stores such as Goodwill and others can save you 80% easily when you want to buy clothing.  Yes, you can find a lot of name brands here!
#5 Analyze your health insurance – I switched over to a higher deductible health insurance account.  Since I’m self employed, I used to pay over $500 for my policy with a $250 deductible.  Today, I have a $3,000 deductible and I only pay $64 a month.  If you’re a healthy person, heavily consider this one.
#6 Look at other insurance – Your car, home, and other types of insurance should be checked up on annually.  See what kind of deals that you can get from other places.  If you can find it cheaper, see if your current insurer will match it.  Most places will give you a discount just for combining all of your insurance.  Check into this as well.
#7 Watch your utilities – It’s not too hard to save on your heating / electric bill.  Invest into a programmable thermostat and even set your temperature down to 62 or so at night when you’re sleeping.  By doing this, you can cut your bill back by at least 30%.
#8 Your phone bill – There’s no reason to pay $100 a month for a simple telephone.  If you do a lot of calling from your home, consider services like MagicJack that can save you $100s over the year.  If you don’t use your cell phone that often, you may want to consider a prepaid plan.
#9 Always compare prices – It sounds easy enough but no matter what you do, make it a habit to get at least 3 different responses.  Whether you want to get something painted, or maybe you want to buy a TV.  NEVER buy from the first place.
As you can see, it’s not really that hard to save.  It looks good on paper, but make a promise to implement it yourself.  By doing so, you can save 100s, if not 1000s per month!

Transitioning From Earning Frequent Flyer Miles To Cash Rebates

Mr Credit Card is going to guest post today. He is going to tell us about how he switched from earning frequent flier miles to earning cash rebates on his credit card once he stopped traveling. You can find out what he thinks are the best credit cards and best business credit cards on his site.

Recently, Money Beagle mentioned about switching from earning frequent flier miles to earning cash back when he stopped traveling. I myself had a similar experience. When I first entered the job market 16 years ago, my company provided me with a company business credit card. I racked up lots of frequent flier points. But 10 years later, I found myself traveling less and started questioning if I should still be racking up points for frequent flier miles. I eventually switched to earning cash rebates (though I am now switching back again). In this post, I am going to share how story about using frequent flier miles and how I chose the right card when I transitioned to earning cash rebates.

How I used rewards card – The corporate card that I was issued was the American Express Business Charge Card. As an employee, I was allowed to earn Membership Rewards points for myself when I charged any business expenses to myself. I traveled at least once every quarter internationally so I guess I did rack up quite a few reward points. Plus, I got to fly business class.

To earn even more points, I got myself a personal Amex card! I had to pay a fee (think it was about $10 back then to “connect” my membership reward points from both my personal and corporate card. But with this combination, I sure earned lots of points.

Rewards that I earned – Because Membership Rewards points do not expire, I could actually wait until I racked up quite a bit of points. I usually waited until I could redeem two international business class tickets for myself and Mrs Credit Card. And we did earn enough points to do this a few times through out a 10 year period.

Transition – But eventually, there came a time when my job description changed and I had to travel less. I still had the corporate card. And I still used my personal charge card from Amex. But I was accumulating points at a much lesser rate. Eventually, a new job came up that totally did not require any travel at all. That was when I realized that I had to stop accumulating frequent flier points and simply earn cash rebates.

But that required a total reorientation because for my whole life (until then anyway), I was using points for free airline tickets. But due to the fact that I no longer have business travels and my do not have much business expense anymore, it simply made sense to switch to cash back cards.

How I chose my cash back credit card – The first thing on my mind was what card to get. After much research, I concluded that most cards in the market were not worth getting because all they did not was pay a standard 1% rebate. They better cards paid more than 1% on some items. For example, I found out that some cards paid 5% on gasoline and supermarket expenses.

I also found out about things like spending requirements and tiers. Some cards required you to spend a certain amount every year before you could earn their best rebates. Some cap you on how much rebates you could earn a year. Different credit cards also paid you differently.

Amid the confusion, I did the following things

  • I mapped out and categorized my expenses
  • I worked out which card would earn me the most rebates
  • I also decided to go with just one card rather than get a few card (like some do) and nickel and dime their way to lots of rebates
  • I also set the criteria that I wanted my rebates to be automatically credited into my account since I am a very forgetful person

Ultimately, I ended up choosing the Amex Blue Cash and I’ve earned over 2% rebates every year on average. These days things have evolved and we have things such as credit card shopping portals and rotating categories where spending on certain items during certain periods earn you more rebates.

So that’s my journey – So that’s my journey from earning reward points to cash rebates. I think the lesson here is to get a credit card that suits your lifestyle and spending habits. Very often, folks are either lured into a “prestige card” that is costly and does not serve the purpose for the individual or they carry a card that pays no rewards, which is really leaving money on the table (IMO anyway).

Well, that’s my story and I hope it will inspire you to reexamine your credit card and see if it is the best fit for you.