10 Things Most Americans Don’t Know About Credit Cards

10 Things Most Americans Don’t Know About Credit Cards

John Csiszar    Fri, May 12, 2023

Credit cards are so convenient that they are part of daily life for many Americans. Given that fact, it's perhaps surprising that there are so many common misconceptions about credit cards floating around.

Seeing as your credit score and how you manage your credit can affect so many areas of your life, from applying for a car loan or a home mortgage to qualifying for an apartment, it's important to know the facts about credit cards. Here's a look at 10 common misconceptions about credit cards and the truths behind each myth.

Your Credit Report Shows as Debt-Free If You Pay Your Balance in Full Every Month

Paying your entire credit card statement in full every month is a sound financial strategy. However, if you want to appear debt-free to lenders, you'll have to alter the timing of your payments.

Every month when you get a credit card statement, your creditor reports that balance to the credit reporting agencies. Even if you pay the balance in full after getting your statement, according to your credit report, you're still carrying that balance. To appear debt-free to your creditors, you'll need to pay off that balance in full before your statement closing date.

Applying For a Store-Branded Credit Card Won't Hurt Your Score

There's a common misconception that opening store-branded credit cards is not the same as opening a general credit card from an issuer like Chase Bank. Since these types of cards can typically only be used at the store where they're issued, many consumers mistakenly believe that they are "private issue" credit cards or somehow don't end up in the traditional credit reporting universe. The truth is that store credit cards are issued by banks as well, and they are reported to the credit agencies just like any other type of credit card.

Closing Unused Accounts Raises My Credit Score

From a financial planning standpoint, it's true that you shouldn't have more credit cards than you need. However, if you go about canceling your unused credit cards, you might end up paying a price when it comes to your credit score, in two ways. First, a big part of your credit score comes from your credit utilization or the percentage that you're using of your entire amount of available credit.

If you carry a balance on some cards and cancel your other ones, your credit utilization percentage will jump, thereby lowering your credit score. Second, the average age of your credit accounts is another factor affecting your credit score, although not as significantly as your credit utilization. If you close long-standing accounts and lower the average age of your credit lines, your credit score will take another hit.

You Must Carry a Balance To Improve Your Credit Score

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/common-misconceptions-credit-cards-230738822.html

9 Easy Banking Tips You Haven't Heard of Before

9 Easy Banking Tips You Haven't Heard of Before

Nina Derwin   Fri, May 12, 2023

Whether you are brand new to banking or you’ve had the same bank account for several decades, it’s never too early or too late to change up your banking strategy. Earning money is hard enough, and banking shouldn’t make it harder still to hold on to your dollars. Taking small steps and implementing these key tips can help you save money and avoid surprise surcharges and banking fees.

Make sure your accounts stay active.

It is not uncommon for banks to close your account if it goes untouched for a prolonged period of time. Banks may instead opt to charge you a fee for your dormant account.

Stay informed about banks besides your own.

Just because your bank offered great benefits when you opened your account doesn’t mean they are still the best in the game. Compare what other banks are offering to ensure you get the lowest fees and best APY for your savings.

Be proactive about closing accounts.

If you no longer wish to have a particular account, don’t just abandon it. Let your bank know so they can close the account and you can avoid paying low balance or dormant account fees.

Read the fine print before closing an account.

Some banks charge fees for closing an account too soon after opening it. Before closing your account, make sure to read the terms and conditions to ensure you aren’t hit with an additional charge.

Don't close an unused credit card.

To continue reading, please go to the original article here:

https://www.yahoo.com/lifestyle/9-easy-banking-tips-havent-175900766.html

These People Are Incapable Of Playing The Long Game

These People Are Incapable Of Playing The Long Game

Simon Black   May 10, 2023

On the afternoon of Sunday, June 7, 2020, a 36-year-old Chinese national named Wang Xin was at Los Angeles International Airport waiting to board Air China flight 988 back to his native Tianjin.  Things were tense in the US; Covid-19 was still raging, George Floyd protests were erupting all around the country, and Wang couldn’t wait to get home.

But he never made it. Before boarding his flight, Wang was approached by several men who flashed their badges and identified themselves as US federal agents. Wang was then taken into custody and questioned… and he eventually told the agents the truth.

Wang had already been in the US for 18 months at that point working within the University of California system to conduct cutting-edge genomics research. One of the published papers that he co-authored in late 2019, for example, focused on “TMEM131 family proteins in intracellular collagen assembly”.

Some of his work had even been funded by the National Institutes of Health.

But Wang confessed to federal agents that day that he was actually a People’s Liberation Army officer with the rank of Major, and that he had been ordered by his PLA superiors to “bring back information” about the University of California’s research, laboratory, personnel, and more.

This is all tantamount to industrial espionage. And Wang is far from alone.

At an event I attended this past weekend, I had the chance to spend a lot of time with a former CIA officer who spent more than 20 years working at the agency. As a former intelligence officer myself, he and I had a lot to talk about.

He reminisced about how one of his early assignments at the CIA was to track some Chinese intelligence operatives who were posing as university students in the United States… which is something he said is incredibly common.

Quite often Chinese intelligence operatives spend 6-8 years in school, completing PhDs in difficult “STEM” subjects like electrical engineering of advanced genomics.

But China doesn’t stop at just sending its operatives to American universities. They make sure their people subsequently get hired at prominent US companies, especially in industries like technology, energy, pharmaceuticals, etc.

Yet even then, as my CIA colleague explained, the spy’s value is minimal to the Chinese government. It takes another 15 to 20 years for them to work up the corporate ladder and have access to critical technological secrets.

Only then can the spy provide the Chinese Communist Party with highly prized secrets.

China is essentially willing to patiently invest DECADES of painstaking effort to achieve its intelligence objectives. And that’s pretty normal for the Chinese; their leadership tends to establish clear goals and long-term strategic visions that often look 30+ years into the future. A single decade is nothing for them.

Now, China’s authoritarian government obviously has a mountain of reprehensible flaws, and they have no intention of changing for the better. But one thing’s for sure: they know how to play the long game… and use it to their advantage.

Contrast this with the US government, which at present cannot even plan beyond the next few weeks.

Remember that the legal limit for the national debt was breached on January 19, 2023. And ever since then, the Treasury Department has had to resort to “extraordinary measures” in order to keep the government funded.

Now, it’s utterly pathetic that the federal government of the largest and supposedly ‘most prosperous’ economy in the world has to borrow trillions of dollars each year to make ends meet.

Consider that the Treasury Department collected a record $5 TRILLION in tax revenue last year; as recently as 2019, $5 trillion would have been more than enough to fund the entire government AND STILL run a budget surplus.

And yet, today, even $5 trillion is not enough money. So, the US government still needs to go deeper into debt in order to keep the lights on. Like I said, utterly pathetic.

But what’s worse is their inability to resolve this problem.

The guy who shakes hands with thin air insists that he will not negotiate a single penny of spending cuts in order to reach a compromise with Congress on raising the debt ceiling.

Obviously, it’s silly to think that the federal government shouldn’t cut spending. And it’s downright impossible to argue that there isn’t plenty of fat to trim.

Yet POTUS simply refuses to make a single cut, even though it’s precisely what the country needs.

And we can’t just chalk it up to the guy being senile and demented, either-- this is a criminal level of incompetence, because it is deliberate and reckless.

Maybe he’ll change his tune before it’s too late. But it’s not just the debt ceiling issue. Nor is this short-sightedness a problem that is unique to Joe Biden.

Both Congress and the White House, for example, understand that Social Security’s trust funds are set to run out of money in less than ten years. And yet both sides and both political parties have agreed to take Social Security ‘off the table’. No changes to the program. No discussions. No solutions.

There’s a looming deadline to fix Social Security… and yet they’re happy to just kick the can down the road… just as previous Congresses and administrations have done.

These people are incapable of thinking long-term and solving challenges that are 10+ years out. At the moment they can’t even compromise on the next month’s debt ceiling crisis.

Quite simply they’re unwilling and/or unable to play the long game. And the country is worse off for it. The whole world is worse off for it.

This is why it makes so much sense to have a Plan B-- something which requires long-term thinking.

We just talked about Social Security and how they refuse to do anything about it. But we can easily think long-term and set up the right kind of structure, like a solo 401(k), which provides more flexibility to save money for retirement.

We can also acknowledge the risks of America’s obvious financial and social decline and think about long-term solutions.

One option is to establish legal residency in a foreign country you enjoy visiting, which, over a few years, can lead to a second passport for your entire family. This will give you more freedom and opportunity, and act like a sort of insurance policy if you ever need it.

It takes time to set up, of course. But this isn’t a problem for people who play the long game… and recognize that there’s no downside in being prepared for obvious risks.

To your freedom,  Simon Black, Founder   Sovereign Man

https://www.sovereignman.com/trends/these-people-are-incapable-of-playing-the-long-game-147382/

10 Small Changes To Stay On Track With Your Savings Goals

10 Small Changes To Stay On Track With Your Savings Goals

Cynthia Measom   Thu, May 11, 2023

According to Fidelity Investments' annual Financial Resolutions Study, the top financial resolution of respondents for 2022 was to save more money. But not every resolution makes it far past January. Less than halfway into the year, you can still take charge of your finances.

How much you save is a personal decision -- one only you can make. But if you're interested in getting -- or staying -- on track with your savings goals, the time to start is now.

The good news is that these are small financial shifts you can make, designed not to overwhelm. After all, baby steps still equal progress.

Set Some Purchasing Rules

When it comes to shopping, if you don't have a plan, you can quickly find yourself spending more than you should. And all that unplanned spending can quickly add up and cause you to lose track of your financial goals. As an alternative, set some purchasing rules that apply every single time you want to make a purchase. Here are some ideas from Scott Nelson, financial services expert and CEO of MoneyNerd Ltd:

Wait a week and see if you still want it.

Every time you buy something, you have to sell something.

Check charity shops first.

Make your own if you can.

Borrow from someone else.

Wait until it goes on sale.

Start With Small Savings Goals

While you might not think that putting a little money aside in your savings each month will make a difference, it can.

Remove the Emotion From Saving

Nothing makes saving less appealing for some people than thinking about having to save.

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/10-small-changes-stay-track-200029740.html

Does Paying in Cash Help You Save Money?

Does Paying in Cash Help You Save Money?

Sam DiSalvo   Wed, May 10, 2023

In a primarily cashless society, you probably rarely have cash on you. Now even cash-run events of the past like flea markets and Girl Scout cookie sales have Square readers to take credit cards. Paying with cards is certainly convenient, but is it costing us more?

 “Ten years ago, I would have said absolutely. Today, as more spending becomes digital, there are fewer and fewer ways to save money with cash. Having said that, there still is a place and time for cash,” said Derek Sall, founder of Life and My Finances. Here are the pros and cons of paying with cash, and the areas where you can still save when you do.

Pro: You Can Sometimes Get a Discount for Paying in Cash

In some business models, workers will cut you a deal if you pay them in cash. “Need a photographer? A carpet installer? Need a new roof? There’s often a steep discount — like 10%-25% — if you offer to pay them in cash,” Sall said. Many businesses do this to avoid the fees they have to pay on processing credit card transactions. This fee can be anywhere from 1.95% to 2.5% of every transaction, so business owners prefer to avoid that if possible. If you carry cash, you’ll save a lot when you encounter these types of situations, and the vendor will appreciate it, too.

Pro: Psychologically, Using Cash Might Help You Save

There might not be an exact dollar amount you’re guaranteed to save, but studies have shown that paying with credit cards is considered a less “painful” transaction, according to Megan Kelly, financial advisor and communications director at GoodCheddar.

“According to some experts, the psychology behind paying with options other than cash is connected to the idea that dematerialized money can be linked to reward and regret emotions which influences spending behavior. As such, the sensory stimuli associated with paying with cash are diminished when using apps, credit cards and other payment alternatives,” Kelly said. This means that paying with cash often means more to people because they can feel it disappear, whereas that’s not felt as profoundly when you swipe with a card.

Pro: No Interest Charges or Annual Fees

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/does-paying-cash-help-save-130043495.html

5 Ways How You Value Money Affects Your Finances

5 Ways How You Value Money Affects Your Finances

Lee Huffman  Sun, September 4, 2022

Investors value money differently based on their experiences, goals and beliefs. This process is known as mental accounting, and it often affects how we budget and spend our money. Mental accounting can also affect our investment decisions, leading us to make choices that make it harder to meet our goals. Learn more about mental accounting, including how it applies to finance and whether or not you should use it to make decisions.

For more help with financial planning, consider working with a financial advisor.

Mental Accounting Definition

Mental accounting describes how two similar people choose to spend their income based on how each person values money differently. In many ways, these criteria are subjective, and investors weigh each of the categories differently, which complicates the topic even further.

Sometimes, mental accounting is detrimental and can make it harder for investors to reach their financial goals. This can happen when people view money decisions in relative terms instead of absolute terms.

Behavioral economists study the concept of mental accounting and how it affects our financial decisions ranging from daily spending to long-term investing. The concept was defined by famed economist Robert H. Thaler.

How to Use Mental Accounting in Financial Planning

In mental accounting, people treat money differently based on where it came from and how it is supposed to be used instead of treating every dollar the same. With investing and budgeting, people can treat their money differently in many ways. Here are a few examples:

Tax Refunds

Although a tax refund is getting a portion of the money withheld from your paycheck, many people view it as found money. They don’t always respect the time and effort it took to earn that money and, instead, feel that they can splurge when they get a refund. The money, which amounts to an interest-free loan to the government, may be used to fund a vacation, buy a big-screen TV or fund another purchase that they normally wouldn’t make.

If this happens to you, adjust your withholding rates to reduce your tax refund. This will give you extra money in every paycheck. Or consider using the money to build your emergency fund or contribute to this year’s Roth IRA.

Inheritance

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/5-ways-value-money-affects-130001846.html

How I Got Rich Without an Inheritance

How I Got Rich Without an Inheritance

Jacob Wade   Mon, May 8, 2023

Have you ever dreamed of becoming rich?

While it can seem like an impossible task, becoming a millionaire isn’t just a dream, but a reality for everyday Americans, even without an inheritance. And while having a rich uncle is nice, learning what it takes to build a high net worth is much more valuable.

Nate Nead, Principal at Invest.net, shares with us five tips on how to grow your net worth from nothing to millionaire status before you retire. And while some things in this list might feel like common sense, Nate has actually walked the walk to show that these tips work. Here’s how to get rich without an inheritance.

Start a Business

Starting a business is challenging, but it is one of the few ways to earn money that has unlimited income potential. If you want to build real wealth, a business can help you get there quicker than other paths.

“As someone with more than ten years of experience in the business world, I can tell you with confidence that starting and running your own successful business is one of the most reliable ways to build wealth,” says Nead. “With my company bringing in seven figures annually, it’s given me ample opportunities to explore investments such as stocks, cryptocurrency, and real estate.”

Building a business from scratch takes quite a bit of time and effort, but it can be worth it in the long run.

Invest in Stocks (and Diversify)

Once you have locked in a career or built a business that brings in ample income, you need to put any extra funds you have to work. One of the best (and easiest) ways to do this is to invest in the stock market.

Investing in low-cost index funds can help you access the entire market in a single fund, and can grow your money over the long-term. But to speed up the process, taking time to research individual stocks can also result in larger gains.

“When it comes to investing in stocks” says Nead, “I’ve been very meticulous about researching different companies carefully while spreading out my portfolio strategically so as not to expose myself too much to risks.”

Investing in individual stocks can lead to larger gains, but as Nead mentions, you need to be careful to diversify your portfolio into multiple investments and asset classes to lower your overall risk.

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/got-rich-without-inheritance-183006813.html

How Much Money Can I Give Away Without ‘Incurring a Tax Issue With the IRS?'

How Much Money Can I Give Away Without ‘Incurring a Tax Issue With the IRS?'

Ask an Advisor: I Want to Give Money to My Son and Daughter-in-Law. How Much Money Can I Give Away Without ‘Incurring a Tax Issue With the IRS?'

Michele Cagan, CPA   Tue, May 9, 2023

How much money can I give to my son and daughter-in-law without incurring a tax issue with the IRS?-Irwin

For 2023, you can give your son and daughter-in-law each $17,000 without having to deal with the IRS. But even if you give more, you won't have to pay any taxes right now. In fact, unless you surpass the lifetime limit, currently around $12 million, you won't have to pay any gift taxes.

An experienced financial advisor can help you navigate those rules, so you can continue to give gifts to the people you love without having to worry about gift taxes.

What Is Gift Tax?

The gift tax is a federal tax that may be imposed when you give someone property or money, and they don't give you something of equal value in return. The IRS sets limits on how much you can give other people each year and over your lifetime. If you give more, you could end up owing taxes, but not until you cross the lifetime limit.

Gift tax rates are steep, starting at 18% and topping out at 40%. The person giving the gift pays the tax. (A financial advisor may be able to help you navigate the tax consequences of your gifting strategy.)

Gift Limits and Lifetime Exemptions

The annual gift limit usually changes every year. For 2023, the limit is $17,000. That means you can give anyone up to $17,000 without having to deal with the gift tax.

There's no limit on how many people can receive your gift. So you could hand out $17,000 to 10 people and not trigger any annual gift tax issues. You can also give the same person up-to-the-limit gifts every year with no tax implications.

If any gift exceeds the annual limit, you'll file a gift tax return on IRS Form 709. This is purely an informational return with no tax due until you cross the lifetime limit of $12,092,000 (for 2023). Only the excess portion of the gift starts to whittle down that lifetime exemption. For example, if you gave your niece $20,000 in 2023, you would file a gift tax return and deduct $3,000 of that from the lifetime exemption.

What Counts as a Gift?

Any time you give someone money or property, and they don't return something of equal (or close to equal) value, that counts as a gift. For example, if you give your sister your old car when you get a new one, that's a gift. Other examples include contributing $20,000 to your grandchild's 529 plan or treating your best friend to an all-expenses-paid vacation.

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/ask-advisor-want-money-son-165240845.html

The Mindset Of Millionaires — How Their Views Can Lead To Financial Success

The Mindset Of Millionaires — How Their Views Can Lead To Financial Success

Jeannine Mancini   Mon, May 8, 2023

After more than 26 years of interviewing some of the world’s wealthiest individuals, self-made millionaire and author Steve Siebold compiled his findings into the widely acclaimed book “How Rich People Think.” By exploring the mental attitudes and strategies of successful individuals, Siebold’s book has helped countless readers unlock their own potential for financial success.

Studies reveal how rich people’s mindset differs from those who are not wealthy and how this contributes to their financial success.

One such study conducted by researchers at Brigham Young University in 2019 found that wealthy people tend to have a more positive and optimistic view of the world, while those who are less wealthy tend to have a more negative and pessimistic view.

For world-class thinkers, creating massive value for others is the key to becoming rich. They also believe that starting a business is the fastest way to make money, while the average person sees it as too risky. Siebold contends that having a job is no safer than owning a business, and those who work for themselves have the power to proactively seek out business and increase revenue at will.

Another belief of the wealthy is that the ability to amass wealth has more to do with street smarts and savvy than the ability to memorize information and excel on exams. They also believe that building wealth takes a team effort, while the average person sees it as an individual effort. Who you surround yourself with has more of an effect on your net worth than you may think.

The wealthy see making money as simple, but not necessarily easy. Money flows from ideas and problem-solving, which are skills that can be learned and developed. They also believe that creative thinking is the highest-paid skill in the world.

Studies have shown that wealthy people tend to have a different mindset when it comes to investing, with a long-term view and a focus on creating diversified portfolios that generate consistent returns over time.

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/mindset-millionaires-views-lead-financial-200354874.html 

4 Alternatives To Checking Accounts

4 Alternatives To Checking Accounts

GoBankingRates.com

A traditional checking account is the workhorse of the personal finance world.

According to a new GOBankingRates survey of 1,000 adults, more than nine out of 10 people have one, making them more popular than savings accounts — the No. 2 most common type — by nearly 20 percentage points.  People use checking accounts to receive direct deposits, make debit card purchases, transfer funds and, of course, write checks.

But the old-school, utilitarian checking account is long overdue for a makeover — and plenty of alternatives are vying to become your home base for personal money management.

Here’s a look at the most promising options. Plus, check out GOBankingRates’ best online checking accounts.

Ditch Your Old-Fashioned Checking Account for a Neobank

Many people have abandoned brick-and-mortar institutions for online banks, which typically have superior technology, better rates and fewer fees.

But there’s another digital-only option that could satisfy your checking needs and then some.

“Another alternative to traditional banks is neobanks, which operate exclusively online, typically through an app,” said Laura Adams, MBA, personal finance expert with Finder.com.

If you don’t know the term, you’re safely in the majority. Just a tiny sliver of the study’s respondents — 0.3% — keep their cash in one.

Even so, the concept is familiar to anyone who keeps their money in a digital bank.

Neobanks exist purely online with no branches or other physical infrastructure and they’re known for offering better rates and a more seamless technological experience than brick-and-mortar banks, which pass their enormous overhead costs onto their customers.

But that could just as accurately describe Ally Bank, which doesn’t qualify as a neobank.

So, What’s the Difference Between Neobanks and Online Banks?

To continue reading, please go to the original article here:

https://www.gobankingrates.com/banking/checking-account/best-places-to-keep-money-that-are-not-a-checking-account/?utm_term=related_link_5&utm_campaign=1224767&utm_source=yahoo.com&utm_content=7&utm_medium=rss

How To Transfer Money From Savings Into a High-Yield Savings Account

How To Transfer Money From Savings Into a High-Yield Savings Account

GoBankingRates.com

Young beautiful woman dressed in stylish outfit transferring money using online banking service on laptop computer connected to wifi.

Switching banks is a chore that requires you to update your information for all direct deposits, automatic payments, subscriptions and recurring transfers to linked accounts. You’ll be getting a new debit card, account number and routing number, and you’ll have to download and navigate a new and unfamiliar app.

That’s a headache — but for the first time in years, the juice might be worth the squeeze.

More From Your Money: Choose a high-interest saving, checking, CD, or investing account from our list of top banks to start saving today.

Despite aggressive Fed rate hikes, the national average savings rate is still just 0.33% — but you can earn 10 times that or more by transferring your money to a high-yield savings account.

Look to Small Banks for Big Yields

When the Fed began raising its benchmark rate to tame inflation, some banks followed its lead and paid their depositors higher yields after years of paltry returns — but others did not.

Each institution sets its own rates, but according to the New York Times, one clear trend has emerged. Big corporate banks with a national or global presence have not raised their savings yields in any meaningful way despite the Fed’s action because they didn’t have to. The giants are flush with cash and simply don’t need to pay more to incentivize deposits. The little guys, however, aren’t so fortunate.

If your savings are languishing in a big bank, you’re probably earning somewhere between 0.01%-0.23%, which is their way of telling you they don’t care if you stay or go. On the other hand, smaller institutions and online banks want your business so badly that they’re willing to pay 3%, 4%, or — in at least one case — 5% to earn it.

It’s time to recognize their efforts.

Steel Yourself for the Switch

Changing banks can be a stressful situation even if you’re making a lateral move. But if you’re switching from a big corporate bank to a small institution — especially an online bank, where many of the best rates are hiding — you’ll have to prepare yourself for an entirely new banking experience.

Things to consider include:

To continue reading, please go to the original article here:

https://www.gobankingrates.com/banking/savings-account/how-to-transfer-money-from-savings-into-high-yield/?utm_term=related_link_4&utm_campaign=1224767&utm_source=yahoo.com&utm_content=6&utm_medium=rss