5 Things to Consider Before Cosigning for a Friends Payday Loan

If you have good to excellent credit you are likely in a stable financial spot. However, you can easily ruin your credit score, as well as take a substantial hit to your bank account if you decide to co-sign a payday loan for a family member or close friend. In fact, a study done by the Federal Trade Commission indicated that 75% of co-signers ended up paying for the entire loan, this statistic is even worse for payday loans. On top of this, it is worthy to note that lenders will go after the person with the strongest credit first if a payday loan goes into default, which will directly affect your good credit score. For this reason following the general rule of “never cosign” is a good idea. However, it is understandable that it is difficult to say no to a family member or friend who is asking you to cosign a payday loan, and so here are five things to consider before you do so.

Knowledge is Key

It is crucial that you fully understand the weight of cosigning a payday loan. You are just as responsible for the loan repayment, and all activity on the loan will be directly reflected on your credit score. Due to this, it is key that you treat cosigning as a business deal, and sit down with your loved one to discuss all of the repercussions of not repaying the loan on time.

You Determine All of the Rules

Due to the fact you are the one with the strong credit score, you are also the one with the most to lose from cosigning a payday loan. This means that you have to dictate the rules to suit your needs.

Discuss it Fully

Before you agree to cosign a payday loan it is critical that you sit down with the co-signee and have an open and honest conversation. The bottom line is that you don’t want to regret signing on the dotted line at the end of the day, and so it is important to ensure that the co-signee understands that they are the ones who are gaining from having you as a cosigner, and that you are taking on a huge responsibility by agreeing to it. Even if you feel you can fully trust the individual you are cosigning a payday loan for, if they are in a bad financial situation then they might not be able to pay back the loan no matter how much they want to be able to. This would result in you having to deal with the full responsibility of repaying it.

Be Wary of the Negative Aspects

Once you have cosigned a payday loan there is rarely an opportunity to go back. Due to this, it is important to understand all of the negative affects of cosigning. For example, what will you do if you lose your job and are still held responsible for the payday loan? Also keep in mind that if your co-signee even makes a late payment you may be held responsible for paying the late penalties and fees that accumulate.

Create a Good Exit Strategy

If you decide to go through with cosigning a payday loan then it is crucial that you understand what the process is for removing yourself from the loan, and if it is even a possibility. There are some payday lenders that will allow you to remove yourself as a cosigner after the fact, however it is usually a very lengthy and complicated process, and will only be allowable if the co-signee has kept up with his or her payments.

Top 4 Mistakes to Avoid when Applying for a Personal Loan

The reason why people take out a personal loan depends greatly on their personal circumstances. Some people take one out because of necessity and some out of choice. Whatever the reason for why you’re looking to obtain a personal loan, there are a few things that you should always avoid. If you make these mistakes while applying for a personal loan it can result in your struggle to make repayments on times, creating too much debt for you to handle and paying much more than you really need to. Here are the top four mistakes that you should avoid when looking into obtaining a personal loan.

Running to the First Personal Loan That is Offered

Just like any purchase of an expensive or large item, it is crucial that you spend time browsing the personal loan market and doing research on the loan that is most suited to your financial needs. If you find that you are rushing into an application process without looking into what other personal loans are being offered, then it is very likely that you won’t receive the most competitive rates or best terms that are available to you. Even if you are given an offer that looks too good to pass up, it is important that you do not immediately sign any contracts. Walk away with the needed information and look through it with an expert. You could find that there are hidden clauses or terms that will make the loan not as great as you thought it was originally.

Not Asking Questions

If you find yourself with questions once you have gone through the process of researching and finding the best personal loan for your situation, whether that be a payday loan or bank loan, it is vital that you are not afraid to ask a representative of the bank, lender or company you are looking in to. It’s crucial that you feel you have a grasp on all aspects of what is being agreed upon before you apply for the personal loan. The representative at any establishment will be more than happy to answer any questions that you have.

Agreeing to Repayment Terms That are Irresponsible

Agreeing on exact terms with a lender can be quite tricky. It is important that you negotiate for terms that are not only achievable, but also do not leave you in a financial position where you are constantly struggling. The goal of most personal loans are to give you a better quality of life and aid in easing the strain of difficult financial times or strife. Keep this in mind when applying for a loan, as you should never find yourself in a position where you obtained a personal loan to help a financial situation, but then found yourself locked into a personal loan that you are not able to afford. In the majority of cases you will be able to offer that is given to you.

Taking Out too Big of a Personal Loan

There should be no circumstance where you get too greedy and take out too big of loan. Keep in mind that the bigger the loan, the more interest you will end up having to repay. Never think of a personal loan as free money as it is just the opposite. To avoid this mistake it is a good idea to figure out exactly the amount of money you need in order to achieve what you wanted from taking out the personal loan in the first place. Before taking out any loan you should always consider the long term affects of taking out the loan. The first question to ask yourself should always be if you could afford to repay the loan as agreed.

How to Avoid Annoying Annual Credit Card Fees

When it comes to saving money on your credit card spending, one of the best ways to do so is to reduce or even eliminate credit card fees all together. The fact is that many Americans are subject to extensive credit card bills because they are paying fees that they could easily avoid. In fact, you could avoid credit card fees entirely if you choose the right types of credit cards and practice smart credit card use.

Avoid Annual Credit Card Fees

Unfortunately for consumers, there are more credit card companies then ever before that charges their customers an annual fee. Despite this, there are still an abundance of annual free credit card issuers that are available to consumers. Before you choose a credit card that comes with an annual fee, it’s a good idea to look into your free options first to see if one fits your financial situation. You should only accept credit card offers with annual fees if you have no other options.

Avoid Foreign Transaction Fees

This type of credit card fee tends to be very controversial. Credit card companies exchange currencies using interbank exchange rates. However, these charges are placed on any sort of transaction that is made outside of the United States, even if U.S. dollars are used. The problem is that the majority of credit card issuers tack on a foreign transaction fee that can range from 3 to 5% to this charge. Luckily you can easily avoid these foreign transaction fees by choosing a credit card that does not charge this type of fee. There are a growing number of companies that do not charge this fee including Discover and Capital One.

Avoid Late Fees

In the majority of cases when you own a credit card you must be responsible for making your payments in a timely fashion in order to avoid any sort of late fee. To avoid ever making a late payment by accident, it is a good idea to set up an automatic payment plan. This will ensure that your credit card bill doesn’t go unpaid simply because you forgot to make a payment. On top of this, by paying your credit card bill electronically the risk of a check getting lost in the mail no longer exists. It is true that there are some credit cards that do not have any late payment fees, however be aware that just because there are no late payment fees on a card does not mean that it is an excuse to pay your credit card bill late.

Avoid Cash Advance Fees

The majority of credit cards come with a cash advance fee. This fee is usually 3% of a minimum of $10. On top of cash advance fees, many credit cards will also come with a higher APR on any type of cash withdrawal. In order to avoid paying cash advance fees, it is quite simple—don’t use credit cards for cash advances. In order to avoid the temptation of withdrawing cash from your credit card it’s a smart move to avoid setting up a PIN code on your card so that it is impossible to do so.

Avoid Balance Transfer Fees

Most cards that come with a 0% APR financing on cash advances do come with a balance transfer fee that can be as high as 5%. To avoid this fee when you have to finance a purchase using a credit card then it is a good idea to utilize a 0% offer on any items that you purchase before you purchase them and avoid using a balance transfer after the fact.

5 Financial Moves to Try This Month

As the year comes to a close it is not too late to start getting your finances in order so that you can start off 2014 in a good place. In order to do this here are five financial moves to give you a kick-start into the New Year.

Purchase a Smaller Home 

During the housing bubble of 2004 and 2005 it was not uncommon to hear people who purchased a house way beyond their means because their real estate agent convinced them that their income allowed them to purchase a more expensive home. At that time many people went ahead and purchased a home at the highest bracket that they were able to afford, while only a small percentage held back and decided to purchase a home that was more within their means. If you are looking to purchase a home in the new year then a very savvy financial move would be to purchase a smaller less expensive home even if you think you can afford a more expensive one.

Save the Right Way for Retirement

It is a good financial move to not tie up too much of your savings in a tax-free retirement account such as a 401(k). This is because when a financial emergency hits, you will be able to deal with it if you are more liquid then a 401(k) allows. Tying up too much money in a savings account that is restrictive such as a college or retirement savings accounts means that you will not have as much flexibility to invest in current important things such as paying bills.

Do Not Make Stocks Your Main Financial Strategy

The most financially successful people do not use the market as a way to gain their income and success; instead they use it as a tool. This means that while investing in a stock or two may be a sound part of a much larger financial strategy, you should not depend on it.

Focus on Perpetual Income Streams

You should be focused on how to create and build up your perpetual income stream or streams. This type of income should provide you with a steady and consistent pay out of cash over time. For example a doctor may decide to purchase a medical office that will generate him or her rent or an author may make an income off of a book. You should think of perpetual income streams as the holy grail of your finances. It is highly recommended that you avoid the very traditional investments in order to generate more income. One example of a traditional investment is annuities, which are extremely expensive and once they are purchased you are not able to change your mind.

Figure Out Your Cash Flow 

When you are attempting to get on top of your finances, you may be tempted to begin tracking and analyzing all of your expenses from your soy latte at Starbucks to the gas you put in your car. However, many financial analysts believe that doing these calculations are extremely meaningless. Instead of wasting your time you should instead focus on the costs that cannot be changed by cutting back. These include debt payments and mortgages. As long as you are generating enough income to cover these types of long term expenses that you can’t easily cut back on, then you will feel more secure in your finances. On top of this, it is recommended that if you are spending any amount of money that isn’t a necessity and isn’t making you happy, you should work to eliminate it.

Tips for Unloading Unwanted Daily Deals

Daily deals are a way for companies to compete with one another by offering their products and services at a great discount. However, sometimes these deals are unusable. If you purchased a daily deal that you don’t have time to use and you don’t want it to go to waste, you can unload it unto someone else for a profit and make a pretty penny by doing so.

Selling Daily Deals

According to one study done at Rice University, every two out of ten daily deals go unredeemed once the promotion period is up. On top this, it is estimated that about 30% of annual deals that were sold last year end up unused. As over $5 billion of annual deals were sold last year, this is a huge amount.

Unloading Daily Deals

There are many sites such as DealsGoRound and MyCabbage, which are great marketplaces that allow you to unload your unwanted daily deals by selling them to other people who have a use for them. Many sites even offer a mobile app that will allow you to share, organize and redeem all of your daily deals. This makes it much easier to sell all of the deals that you do not want. There are other sites such as CoupFlip that actually purchase unwanted deals from you that you obtained from sites such as Living Social and Groupon in order to resell them.

Using a Website to Unload Daily Deals

Using a website in order to sell your daily deals allows you to immediately unload them instead of listing your deals and hoping for the best. You are able to go on and take less than a minute to upload and sell all of the daily deals that you want to get rid of. These sites use varying algorithms to determine the purchase price of the daily deals they buy from you. This is usually based on the amount sold, the expiration date of the deal, and the review of the company that initially gave away the deal. These websites will usually give you a fair price. This is especially true if your daily deal has a while until its expiration date and it is a pretty popular deal to start off with. You may even get up to 70% on your deal.

Shop For Deals As Well

Of course these types of websites don’t make any profit unless they are able to resell the daily deals that are sold to them. Due to this, they often offer great prices on deals for entertainment, spas, clothing, and even vacations. It is also a good place to look for any last-minute discounts on restaurants. Most daily deals that are sold on these sites will be 10% less than what they sold for at the original location, and so you could potentially save a huge amount of money by browsing around for deals on these sites.

Unloading Unwanted Gift Cards

If you were given a gift card that you have no use for then you may want to consider turning that plastic into some cold hard cash. There are many sites on the Internet that will buy cards from you and resell them. You could potentially gain up to 60% of the cards value simply by selling it on one of these sites, which is a much better deal then letting the card go to waste in your wallet. There are many websites out there that will buy your unwanted gift cards such as CardCash, Plastic Jungle and Gift Card Granny. All of these sites make it extremely easy to unload your unwanted gift cards.