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  • 3 Tips to Refinance a Mobile Home Loan

    There are only three reasons that a borrower should want to refinance a mobile home loan: to obtain a lower monthly payment, to obtain a shorter term on the loan, or to cash out or consolidate debt on the mobile home. A borrower should not simply base a refinancing decision on a lower interest rate alone, as it may not necessarily result in obtaining one of these three listed goals when all factors of the loan are considered. A borrower must choose the purpose of the refinance based on these three possible outcomes. Although rare, it is possible to achieve all three at once.

    Make Sure You Qualify for Refinancing

    Generally, beyond the typical good credit rating and income requirements, there are no special qualification standards for a personal property loan on a mobile home. However, personal property loans usually have a much higher interest rate than mortgages. Thus, a mortgage may be the better option. If the borrower decides to refinance his or her mobile home loan as a mortgage, there are three requirements to qualify beyond normal credit and income standards. First, the mobile home must be sitting on a permanent foundation that the Department of Housing and Urban Development deems qualified. Two, the mobile home owner must own the land that the home is on (with a few exceptions for leased land). And three, the mobile home has to be titled as real estate and not personal property.

    Refinancing May Not Make Sense if Selling Soon

    If a borrower plans to sell the mobile home soon, a refinancing may not be a good idea because the fees involved in refinancing may not outweigh the benefits of a refinancing in the short term. A mobile home loan professional can help borrowers calculate the net savings of a refinancing, even if the sale of the home is imminent.

  • Advantages and disadvantages to dealing with internet-only banks

    In recent years, large companies have set up internet-only banks as a means of diversifying into the financial sector and providing personal banking services. For a company, the greatest advantage of providing internet-only banking services compared to a traditional brick and mortar bank is that this type of bank has very low costs. These savings come as a result of the low overhead costs that are associated with electronic transactions. For example, internet-only banks can avoid paying bank tellers, renting the physical location of the bank branches and other overhead costs associated with running a regular bank.

    As a result of these low costs, internet-only banks are able to offer special deals such as higher interest rates on savings/checking accounts, unlimited free internet transactions and/or no-fee checking to their customers. These act as incentives and are typically unattainable at traditional banks. These benefits can be worth a substantial amount to a consumer when you realize that most traditional banks change fees every month for using checking accounts and pay little to no interest for savings/checking accounts.

    As nice as these benefits sound, there are some drawbacks that should be considered before you rush off to join an internet-only bank. Seeing as internet-only banks do not have branches where you can conduct transactions, it can be hard to deposit money into your account. Someone who has direct deposit can easily direct an employer to send a paycheck to the online bank account, but for those who do not have direct deposit or want to deposit extra cash into their accounts, having an internet-only bank could be an inconvenience.

    Another drawback to consider has to do with automatic teller machines (ATM) and the fact that most internet-only banks do not have their own machines. Typically, you will need to pay a fee of a couple of dollars in order to use another bank's ATM to withdraw cash. People who make frequent cash withdrawals with ATMs can incur large costs that may outweigh the costs of traditional bank transaction fees.

    Depending on the internet-only bank you choose, you may have two solutions. Some internet-only banks can accept non-electronic deposits (cash or check) through the mail, which results in a time delay before you can access your money and/or a possible safety issue of mail theft. Other internet-only banks have another solution in which you create two accounts - this allows you to deposit your cash or check at a brick and mortar bank and then transfer your money to an internet-only bank account. This way, money can easily be moved back and forth between both accounts. While this solution is a lot safer and faster than the first method, it is still fairly complicated.

    Overall, internet-only banking has some obvious benefits compared to traditional banks, but due to the inherent nature of internet-only banking, it may not be for everyone.

    For related reading, see Credit, Debit And Charge: Sizing Up The Cards In Your Wallet.

  • Are all mortgage backed securities (MBS) also collateralized debt obligations (CDO)?

    Mortgage-backed securities (MBS) and collateralized debt obligations (CDOs) are different concepts with frequent overlap between them. MBS are investments that are repackaged by small regional banks as a means of funding mortgages by reselling them as securities through investment markets. CDO investments are typically used to package many mortgages and other loan instruments together by risk level for investors. Many MBS are also CDOs. After a small bank funds a mortgage, the mortgage is then packaged as an investment with real estate backing the security as collateral.

    Collateralized debt obligations are often created from risky mortgages as a means of spreading risk across multiple products and borrowers. Groups of CDO investments, known as tranches, are sold in pieces to investors with the riskiest securities commanding higher rates of return for investors. The best pieces of tranches are typically funded first, as they have less risk. CDO instruments offer synthetic securities with a customized level of risk. As synthetic securities, CDO instruments have the characteristics of many different investment types. Synthetic investments are made by pooling together different types of assets and loans. This results in complex investments with custom characteristics. Many MBS assets are used, along with other types of debts, in the creation of CDO instruments.

    Some MBS are CDOs; in other words, as they are funded using the creation and exchange of synthetic financial instruments. Many financial professionals argue that the widespread use of high-risk synthetic investments contributed significantly to the worldwide recession experienced in 2007 and shortly after.

  • Are balance transfers worth it?

    When it comes to credit card debt, balance transfers are worth it if one measure is met: If the balance being transferred has an annual percentage rate (APR) that is lower than its current APR. This is interest rate that is charged on the balance. It doesn't make sense, for example to transfer a balance that has an APR of say 10% to a card where the balance will then have an APR of 12%. However, with that said, the fine print must be read.

    Transferring Based On Interest Rate

    Often, credit cards give offers to cardholders to transfer balances at 0% APR for a certain period of time. After that time is up, the balance has a predetermined APR applied to it. For example, a card with a 15% APR may allow balance transfers to maintain a 0% APR for 12 months, and then the normal 15% APR applies. This is a situation where transferring a balance to a higher APR card may still be ideal, as long as that balance transfer can be paid off before the higher APR kicks in. Even if a certain portion of the balance can be paid off before the higher rate kicks in, or in a reasonable amount of time after it kicks in, the transfer may still be worth it.

    As an example of this, assume that a cardholder has a $10,000 balance with a card that has a 10% APR. Another card has a 15% APR and offers 12 months of 0% interest on all balance transfers. If the cardholder is confident that a majority of the balance transfer can be paid off before the new 15% APR begins, then the transfer should be made. Assume that the credit cards compound the interest on an annual basis. To simplify the calculations, disregard monthly minimum payments. The goal here is to see how much interest is accumulated between the two options. Here is what happens after three years go by with the initial credit card:

    10% card ending balance year one = $10,000 + ($10,000 x 10%) = $11,000

    10% card ending balance year two = $11,000 + ($11,000 x 10%) = $12,100

    10% card ending balance year three = $12,100 + ($12,100 x 10%) = $13,310

    Total interest = $3,310

    Now, here is what happens with the second card:

    15% card ending balance year one = $10,000 + ($10,000 x 0%) = $10,000

    15% card ending balance year two = $10,000 + ($10,000 x 15%) = $11,500

    15% card ending balance year three = $11,500 + ($11,500 x 15%) = $13,225

    Total interest = $3,225

    Even with the transfer, after three years, slightly less interest is accrued. The ideal move is to pay off the balance during the 0% interest period, but a certain amount of wiggle room may exist when transferring balances. It is always a good idea to calculate the amount of interest that will accrue over a specific time period to see what the better option is. Keep in mind that sometimes credit cards charge fees to transfer balances, and this adds an element to the breakeven point calculation.

  • Are direct consolidation loans subsidized?

    When college students leave school, they can borrow a Direct Consolidation Loan to combine various federal student loans taken out while in school into one loan and make one low monthly payment. Direct Consolidation Loans are not subsidized, meaning the government does not pay the interest on the loan when the student is enrolled in school or when the loan is in deferment. The names Direct Consolidation Loan and Direct Subsidized Loan sound similar, but the loans are different.

    What Is a Direct Consolidation Loan?

    Students who take out loans for college do so annually, and each loan is separate. A student enrolled in college for four years, who borrowed annually, graduates with four separate loans with four separate interest rates. The student might make one payment for these loans to the same loan servicer, but such payments can be pricey.

    Consolidating all federal loans taken out while in school under a Direct Consolidation Loan results in a lower monthly payment and a lower interest rate. Borrowers may lose some benefits of the original loans when they consolidate, such as loan cancellation or special interest rates given at the time the original loans were taken out.

    What Is a Direct Subsidized Loan?

    Students borrow Direct Subsidized Loans based on their financial need as determined by information provided by the students, and their parents if they are still dependents, on the Free Application for Federal Student Aid (FAFSA). The loan pays for tuition per credit hour and any other school-related expenses such as housing, books and materials. Subsidized means the government pays the interest on these loans for the borrowers while they are enrolled in school at least half time, and during the six-month grace period after leaving school and deferment periods.

  • Are personal loans bad for your credit score?

    Taking out a personal loan is not bad for your credit score in and of itself. However, there are several factors that come with taking out a new loan that could affect your overall credit score.

    What Factors Into Your Credit Score

    To understand how taking out a personal loan affects your credit score, you must first understand how the score is calculated. Roughly 35% of your overall credit score is based on your payment history. Thirty percent of your score is based on the total amount of debt you owe. Ten percent of the score is based on the number of credit lines (which include credit cards) that you have opened recently.

    The last two factors are initially impacted by a new personal loan. Your total debt increases overall, and a new line of credit is opened. The credit agencies take note of this activity and could possibly lower your credit score based on the new loan. However, your overall credit history has more impact on your credit score than a single new loan. If you have a long history of managing debt and making timely payments, the effect on your credit score from a new loan is likely to be lessened.

    Keeping a New Personal Loan From Damaging Your Credit Score

    The easiest and best way to keep a personal loan from negatively affecting your credit score is to continue making payments on time and within the terms of the loan agreement. A personal loan that you pay off in a timely fashion can actually have a positive effect on your credit score; it demonstrates that you can handle debt responsibly.

  • Are Sallie Mae loans considered federal loans?

    SLM Corporation (SLM), more commonly known as Sallie Mae, is a public corporation and a private-sector lender, so its direct loans are not federal loans. Basically, federal student loans consist of funds that are provided by the U.S. government, while private student loans come from entities such as banks and other financial institutions. However, private entities often work as loan servicers for certain federal loans on behalf of the government. Sallie Mae once provided such a function for federal student loans, and via a spin-off, it continues to do so.

    What Is Sallie Mae?

    The public/private confusion lies deep in Sallie Mae's history. At its beginnings in 1972, Sallie Mae operated as the Student Loan Marketing Association – and it was a federally chartered, government-sponsored enterprise. Although that charter was terminated in 2004 and the company was privatized and incorporated, its “quasi-government status” image persisted, because it offered and serviced the William D. Ford Federal Direct Loan Program and Federal Family Education Loan Program (FFELP). The former is the program offering the government's familiar Stafford Loans and Perkins Loans; FFELP loans were education loans offered by private companies that were guaranteed by the U.S. government. Sallie Mae was the largest originator of these loans, which it and other banks would then often resell to investors to make additional revenues. 

    That all ended with the Health Care and Education Reconciliation Act of 2010. This legislation ended the public-private partnership FFELP; from then on, all government or government-backed student financing would originate with the U.S. Department of Education, through the Federal Direct Loan Program. 

    This forced Sallie Mae to shift its business to private education loans (not insured or guaranteed by the government), transforming into just another private financial company – one derives the bulk of its revenues from the education-loan banking and management business.

    Enter Navient Corporation

    The loss of the government-backed student loan business prompted Sallie Mae to review its operations. In May 2013, it announced  it was separating into two distinct entities, both of which would be public. Sallie Mae itself had begun trading on Nasdaq as SLM in 2011; on May 1, 2014, it spun off Navient Corporation to shareholders.

    Navient bills itself as a provider of loan management, servicing, and asset recovery services. It started off with $148 billion in assets with FFELP loans accounting for $103 billion of this total, which it believes makes it the largest holder. It now plans to service its loan portfolio, work with other holders of FFELP loans, and pursue relationships with the Department of Education, universities, and related groups that need help with the servicing of student loans.  

    The other company (which includes the old Sallie Mae Bank, renamed SLM Bank) handles all the private loan origination and servicing businesses.  Although this second entity is starting out with a substantially smaller asset base (about 8% of the original company's total assets), it is expected to grow while the other company is expected to shrink in line with the dwindling of the FFELP, as loans get repaid, over the next 20 years. 

    The Bottom Line

    Sallie Mae offers a three-pronged approach to college students these days. First, it helps them to explore using scholarships and existing savings to fund education costs. It then helps them investigate government-backed loans, even though it doesn’t help originate them.  Finally, it then helps them bridge any remaining needs with the private education loans it offers. It also offers info on loan repayment programs, both federal and private. Currently, Sallie Mae estimates it services around 13 million customers. 

    While no longer allowed to originate federal student loans, Sallie Mae plans to survive in the private loan market. Navient, its former FFELP business, has a tougher future to grapple with, but will likely evolve as a general servicer of student loans. With any luck, the government will hire it for servicing, and firms like Sallie Mae will likely turn to it for help servicing their private loans.

  • Are student loans forgiven after death?

    There are four scenarios that may occur with student loans if the borrower dies:


    1. Federal student loan (with or without co-signer): the loan is forgiven and no one owes any money

    2. Federal PLUS loan: the loan is forgiven but the parents will owe taxes on the forgiven amount.

    3. Private student loan with no co-signer: the loan is not forgiven and the lender will attempt to collect the amount due from the estate of the student.

    4. Private student loan with co-signer: the loan is not forgiven and the co-signer owes the remaining balance.

    Federal student loans are forgiven when the borrower dies once proof of death is submitted. No money will be owed and the debt will not be passed on to anyone else. This is the only type of loan that can be entirely forgiven.

    If the type of federal loan is a PLUS loan that a parent borrower takes out on behalf of a student there may be a large tax liability. If a PLUS loan is forgiven because of a student death, the parents will receive a form 1099-C from the Internal Revenue Service which details the amount of the student loan forgiven. This amount is treated as taxable income at the parents' ordinary income tax rates.

    If the student loans are private student loans, such as those from Sallie Mae, Discover, Wells Fargo and others, the answer to this question becomes more complex. If the student dies, some lending organizations do allow the loans to be forgiven. Some private student loan lenders will go after the remaining balance due from the deceased student's estate, and usually they have high priority in line.

    If the student has a cosigner for the loan, things get even more complicated. Since cosigners are legally obligated to pay the debt if payments can't be made, upon the death of a student, the cosigner will owe the entire remaining balance. Also, the death of the student or the cosigner can automatically trigger a default on the loan, meaning that the entire balance of the loan is due immediately. Precisely because of this, it is highly recommended that student loan borrowers with cosigners purchase a life insurance policy that at least covers the projected balance of the student loan.


  • Are there any continuing education requirements after I pass the Series 7 examination?

    Yes, there are continuing education requirements after you pass the Series 7 exam. According to the Securities Industry/Regulatory Council on Continuing Education (CEC), there are two parts to the CE requirement: the regulatory element and the firm element.

    The Firm Element of Continuing Education

    The firm element (determined by the firm you work for) varies, as it is designed by the firm itself. It usually consists of an annual training program, tailored specifically to the employee and the skills and knowledge required for his or her job. These programs are created in accordance with minimum criteria and standards. Click here for more information regarding the firm element. For more specific information, contact your firm's registration department.

    The Regulatory Element

    The regulatory element is overseen by the CEC. Professionals are required to take computer-based training modules once they have been registered for two years. This training must be completed within a 120-day period. The professional will then have to complete the regulatory element once every three years. Note that the registration anniversary date is not the day you passed the Series 7 examination, it is the date you became registered with a self-regulatory organization (SRO). For more on the regulatory element, click here.

    (For related reading, see: Solving Mixed Options Problems on th Series 7.)

  • Are travel rewards credit cards worth it?

    A travel rewards credit card may be worth it, depending on how frequently you travel, whether you can afford to charge the amount required on the card to qualify for rewards and whether you can pay off the card balance on a monthly basis. Travel rewards cards typically benefit people who travel a lot, for work or recreation, and can afford to charge the high amounts on the credit card required to earn significant numbers of points or miles. You can also compare bonus incentives to determine whether travel rewards credit cards are worth it.

    Carrying vs. Paying Off the Monthly Balance

    The more money you charge on a travel rewards card, the more points or miles you get. If you are able to pay off your credit card balance monthly, the travel rewards you get might be worth it. Paying off your credit card ensures that you do not accrue the high interest and fees that only compound when you carry a balance to the next month.

    Some consumers isolate their spending to one credit card and pay it off as a monthly bill. Isolating spending racks up the amount needed to get significant points or miles. Travel rewards credit cards are also worth it for business owners, or employees who have company business credit cards issued in their names, who charge all expenses to a travel rewards credit card and have the business’ accounting department pay off the balance monthly.

    Limited Availability

    Say you get a travel rewards credit card and plan to use it all year in order to rack up points for your annual family vacation. While airlines and hotels no longer have “blackout dates,” they can, and do, limit availability for people wishing to cash in travel rewards. Peak days and seasons vary among travel brands, so a travel rewards card may not be worth it if you cannot use the rewards points or miles when you need them. Contrarily, a travel rewards card may be the best option for a person who travels frequently. People who fit this category fly and stay in hotels year-round and most likely can take advantage of slow travel days and seasons to get the most out of their rewards.

    Evaluating Bonuses

    Credit card issuers make travel rewards sound like they are free, but they really are not. The amount of money you pay to get them, especially rewards cards with initial bonus offers, can help you determine if the card is worth it. One rewards card might offer 40,000 points for spending $3,000 in 90 days, while another might offer the same amount of points for spending $1,000. The lower spending amount might sound like a better deal, but whether the card is worth it depends on how the card issuer and travel brand allow you to redeem the points.

  • Can a Best Buy credit card help you build credit?

    A Best Buy credit card can be used to help improve your credit score and credit history as long as you use the card responsibly. How you use the Best Buy card will ultimately determine how helpful it can be to your credit.

    Understanding Your Credit Score

    The Fair Isaac Corporation (FICO) credit score is calculated using five different categories of credit information. Most significantly, 35% of the credit score is based on payment history and another 30% is based on the amount owed on credit cards. Essentially, two-thirds of the overall credit score is based on how well you can pay off your credit card balance in full and on time. The remainder of the credit score calculation looks at information such as the length of your credit history and the frequency with which you open new lines of credit.

    How the Best Buy Credit Card Can Help

    If you use a Best Buy credit card but pay off the balance within the terms of the agreement, you will likely see an improvement in your credit score. Timely payments of any outstanding credit balances help you build a strong credit history and avoid paying any unnecessary interest and late fees.

    Best Buy offers free financing on certain purchases for terms of up to 24 months. This means that it charges no interest if you pay off the full balance of the purchase on time. Doing so will likely result in a higher credit score, as it demonstrates to lenders that you can use the card responsibly and have the means to pay for what you have borrowed. A higher credit score can lead to potentially lower interest rates on mortgages and other loans in the future.

  • Can a Walmart credit card help you build credit? (WMT)

    Through Synchrony Bank, Wal-Mart Stores, Inc. (NYSE: WMT) offers two credit cards: the Walmart MasterCard and the Walmart credit card. When used properly, both of these credit cards can help you build your credit history and credit score.

    By reviewing the terms and conditions of the Walmart MasterCard and Walmart credit card, you can verify that your account activity is reported to the three credit bureaus (Equifax, Experian and TransUnion). Data, such as your account balance and list of late payments, will appear on your credit history, which the credit bureaus use to calculate your credit score.

    5 Tips for Building Your Credit Score with a Walmart Credit Card

    Whether you're just beginning your credit history or looking to strengthen it, the single most important thing you can do to improve your credit is to make monthly payments on time. Accounting for 35% of your FICO credit score, payment history is the biggest component of any credit score. By paying on time, you improve your payment history and avoid late payment fees.

    If you miss a payment deadline, make that payment within 30 days. A missed payment isn't reported to any credit bureau unless it is made 30 days after the deadline. However, you'll still be responsible for applicable late payment fees (up to $35 with either Walmart card).

    Keep a low balance on your credit card by paying off the entire balance every month. The amount owed is the second-largest component (30%) of your FICO credit score. By keeping a low credit utilization ratio, you're contributing positively to your credit score. Most credit issuers like to see a credit utilization ratio below 35%.

    Don't close your credit card account. Your credit score improves as the length of your credit history grows. Even if you stop using your Walmart MasterCard or Walmart credit card, keep them open, especially if they're your first or only credit cards.

    By enrolling in electronic statements with your Walmart credit card, you can also enroll to receive a monthly FICO credit score to keep track of your progress. Watching your score go up will keep you motivated to keep on building your credit.

  • Can certificates of deposit (CDs) lose value?

    Certificate of deposit (CD) accounts held by consumers of average means are relatively low risk and do not lose value. This is because CD accounts are FDIC insured up to $250,000. However, early withdrawal from a CD account can result in getting less money than you invest, though these losses are not considered “losing value.” CDs provide account holders yields higher than average savings and checking accounts, which is why some consumers opt to open them.

    How Standard CDs Work

    Typically, a consumer can open a CD account with a minimum of $1,000. CD account terms can range from seven days to 10 years, depending on the amount of money deposited in the account. Banks allow a consumer to renew or close his CD account upon its maturity. Account holders usually can withdraw the interest earned on a CD at any time without penalty, but they pay penalty fees when they withdraw part or all of the principal before the maturity date.

    Brokered CDs

    Investors with a higher risk tolerance can buy CDs from deposit brokers. These types of CDs are also FDIC insured, but carry risks. Principally, licensing and certification are not required for deposit brokers, so investors should exercise due diligence and research anyone claiming to be a deposit broker before opening these types of CD accounts. Once an investor establishes a brokered CD account, he may face risk locking in a favorable interest rate or gaining access to his money once the CD matures.

  • Can creditors garnish my IRA?

    Depending on the state where you live, your IRA may be garnished by a number of creditors. Unlike 401(k) plans or other qualified retirement savings vehicles, individually established traditional or Roth IRAs are not covered under ERISA. While employer-sponsored retirement plans are 100% protected from creditors, individual IRA accounts are not granted the same protection.

    Federal Exemption

    Other than a partial exemption for bankruptcy, there are no federally mandated exemptions from IRA garnishment. Therefore, your retirement savings can be garnished to satisfy any federal debts. The most common federal debt that can be satisfied by the seizure of IRA funds is back taxes owed to the IRS.

    Bankruptcy Exemption

    There is some federal protection for your IRA if you declare bankruptcy. However, an unlimited protection encourages those in danger of bankruptcy to put all their money into an IRA to avoid paying creditors. To prevent this abuse, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 limits the IRA exemption to $1 million, which is still a tidy sum.

    State Exemptions

    States can choose to adhere to the federal exemption system or create their own, so specific exemptions for IRA garnishment can vary widely by state. Aside from the IRS or other federal creditors, states can restrict any and all creditor access to individual IRA funds. In some states, such as New York and New Jersey, IRAs are fully exempt from any nonfederal garnishment.

    In many other states, IRAs are exempt under certain conditions. One common requirement is the exemption only applies to funds deposited more than 120 days prior to bankruptcy declaration. Another exemption applies to the amount of your IRA deemed necessary to support you, your spouse and your dependents. Some states impose a cap on this amount, while others do not. In most states, there is also no protection for IRA funds if the account owner owes money in relation to a judgment pertaining to domestic relations debt.

    Domestic Relations Debts

    There are a number of domestic relations debts that may result in IRA garnishment depending on your state. Child support is one of the most common causes of permissible IRA seizure. In many states, including Kentucky, Colorado and Louisiana, IRA funds are provided no protection from court judgments in relation to overdue child support or maintenance.

    In other states, your IRA may also be garnished to satisfy other types of domestic relations judgments. In addition to child support arrears, Kentucky, Louisiana and Rhode Island also allow garnishment to fulfill alimony requirements. Wisconsin allows for the seizure of IRA funds to fulfill court orders related to marriage annulment or divorce.

    Early Withdrawal Penalty Exemption

    Any distributions taken from your IRA before you reach age 59 1/2 are usually subject to a 10% tax penalty. Unfortunately, this also applies to any amount withdrawn to satisfy creditors before you reach retirement age. However, if your IRA is garnished to satisfy a debt to the IRS, the penalty is waived.

  • Can Direct Consolidation Loans be deferred?

    Requests to defer loan payments on federally guaranteed direct consolidation loans are typically granted when those requests are supported by facts such as the debtor’s re-enrollment in school, unemployment, economic hardship or military service.

    A federal Direct Consolidation Loan, or DCL, allows the borrower to combine multiple federal education loans into one loan without paying any fees or loan origination costs. Once the consolidation is complete, the borrower has a single monthly payment on the new loan instead of multiple monthly payments on the separate loans. As is the case with other federal student loans, borrowers unable to make their loan payments have the option to defer those payments until their circumstances, including employment earnings, support repayment.

    Deferment Eligibility

    Deferral opportunities associated with continued education require the borrower to be enrolled at least half-time at an eligible school or to be in a full-time course of study in a graduate fellowship program. Those who are unemployed are eligible for deferral for a maximum of three years as long as they can show they are diligently seeking but unable to find full-time employment. Likewise, borrowers with low-income employment may qualify for economic hardship deferment for a maximum of three years. Borrowers are eligible for deferrals based on military service while serving on active duty during a war, other military operation, a national emergency or qualifying National Guard duty. Borrowers with disabilities who are in approved full-time rehabilitation programs are also eligible for loan payment deferrals.

    Deferment Effects

    Deferment temporarily relieves borrowers from the obligation of making payments. However, it does not relieve them of their ultimate obligation to repay the loan. Moreover, depending on the type of loan, the borrower may be responsible for paying the interest that accumulates during the deferment period, but that amount is added to the loan balance and must be paid in the future. Unlike defaulting on a student loan, taking advantage of deferment programs will not damage a borrower’s credit rating.

    Besides meeting the deferral qualifications, there are two important points to remember. First, a borrower is not eligible for deferment if he is already in default on a loan, which means borrowers must make all payments due until their deferment requests are approved. Second, most deferments are not automatic, and a borrower will likely need to submit a request to his loan servicer and, if seeking deferral for continuing his education, apply for deferment through his school.

  • Can FHA loans be used for condos?

    A borrower can obtain Federal Housing Administration (FHA) loans to finance the purchase of a condominium as long as the condo is on the list of FHA-approved condominium projects. Families and individuals with lower incomes have higher chances of obtaining FHA loans since the U.S. government provides insurance and reimburses a lender in case a borrower cannot meet his mortgage obligations.

    FHA Loan Program

    The FHA loan program was established in 1933 to assist low-income families in obtaining mortgages. Because many financial institutions typically have strict qualifying criteria for income and assets, many low-income families are unable to obtain mortgages. Banks are more willing to qualify low-income families for FHA loans since they are insured by the U.S. government. FHA loans typically have down payments as low as 3.5% of the house price and low closing costs, and are available for one- to four-unit properties. FHA loans also require borrowers to participate in a mortgage insurance premium program administered by the U.S. Department of Housing and Urban Development (HUD).

    FHA Loans for Condos

    FHA loans are typically available for both single-family and multifamily homes. However, individuals can purchase condos using FHA loans if a particular condo project is approved by HUD. The department maintains a database, which allows users to search for FHA-approved condominium buildings by location, name or status. The search results for the FHA-approved condos show the address for the condo complex, type of approval method, percentage of units with active FHA-insured loans and the approval status of a condominium.

  • Can Foreigners Open Savings Accounts in the US?

    A non-U.S. citizen can open a checking or savings account in the United States, but financial institutions reserve the right to deny his or her application to do so.

    Business Contract with Non-U.S. Citizen

    Private businesses in the U.S. have the right to contract with foreign individuals or groups; this right is explicitly stated in the Civil Rights Act of 1964. However, the terrorist attacks on Sept. 11, 2001, have made it much more difficult for foreign persons to open accounts or engage in monetary transactions in the U.S. or through American financial institutions.

    Due to regulations set forth in the USA Patriot Act, banks and credit unions must now follow strict guidelines to verify an individual's identity when establishing a new savings account. A foreign individual must have a U.S.-based local address to tie to the account.

    It is easier to guarantee acceptance with a U.S.-based multinational bank with foreign branches. This provides international applicants with the opportunity to build up a business relationship with the bank before applying to the bank stateside.

    Documentation and Identification

    Any would-be account-holder must provide a current photo identification card, such as a passport or a state-issued driver's license; in most instances, photocopies are not accepted. In addition to a photo ID, individuals opening a savings account are required to provide their Social Security number, birth date, current and past addresses, and employment information. For non-U.S. citizens, an American Social Security number is not necessary for checking or savings accounts, though the absence of one may require the applicant to jump through extra hoops.

    Foreign applicants do need two forms of personal ID; one of these must be a passport, which the bank will make a copy of for its records. Acceptable forms of secondary identification include a driver's license, a debit card, a work visa or a student ID. Depending on the work or study status of the applying party, the bank may require a copy of other documentation as well.

    If the foreign applicant is opening an account with a wire transfer, he needs proof of funds. This also applies to large cash deposits. If the applicant has a job or residence, he needs documentation to verify each of those as well.

    The majority of banks have a brief application that gathers all identifying information. After submitting an application for a savings account, applicants may be asked by the institution to review the terms and conditions of the account, which may list privacy policies, fees assessed on the account and minimum funding levels.

    The applicant is likely to be required to appear in-person at the branch. Heightened security after 2001 led to the near-elimination of online applications for foreign accounts, due to fear of terrorism-related money laundering.

    Minimum Funding

    Banks and credit unions differ in how much they require an individual to deposit to establish a savings account, but minimum funding ranges from $5 up to $50 for basic accounts. Savings account deposits can be made in cash or check, either in person at a branch location or via the mail. Once the minimum is fulfilled, a savings account is considered open and in good standing.


  • Can I Apply for an O-1 Visa If I Don't Get an H-1B?


    Individuals who are eligible for H-1B temporary worker visas, but failed to secure one could receive an O-1 visa instead. It all depends on whether the individual applying meets the more stringent requirements and can make a solid case for why they should be permitted to enter the country.

    What Is an O-1 Visa?

    The O-1 nonimmigrant visa is for individuals with "extraordinary ability or achievement" looking to work in the U.S. temporarily. The O-1A is for people with an extraordinary ability in the sciences, education, business, or athletics, and the O-1B is for those with an extraordinary ability in the arts or extraordinary achievement in the motion picture or television industry.

    Unlike the H-1B program, there is no limit on the number of O-1 visas issued every year, making it very attractive to those who were not able to obtain an H-1B because of the quota. London-based immigration attorney Orlando Ortega told The Atlantic that the "increase in the past decade in O-1 visas is likely a result of tech workers who didn’t get lucky in the annual H-1B lottery." 

    The Trump administration has also said it plans to curb the use of the H-1B visa program, putting the spotlight on alternatives. It's important to note that candidates need a U.S.-based agent or employer to petition for an O-1 visa on their behalf.  

    (See also: The H-1B Visa Issue Explained)

    How Is 'Extraordinary Ability' Determined?

    U.S. Citizenship and Immigration Services (USCIS) doesn't provide details on how it evaluates whether a candidate possesses "extraordinary ability," but it does provide a list of ways applicants can provide evidence of it.

    According to the USCIS website, those seeking an O-1A visa should be able to show they received a major, internationally-recognized award or evidence of at least three of the following:  

    • Receipt of nationally or internationally recognized prizes or awards for excellence in the field of endeavor
    • Membership in associations in the field for which classification is sought which require outstanding achievements, as judged by recognized national or international experts in the field
    • Published material in professional or major trade publications, newspapers or other major media about the beneficiary and the beneficiary’s work in the field for which classification is sought
    • Original scientific, scholarly, or business-related contributions of major significance in the field
    • Authorship of scholarly articles in professional journals or other major media in the field for which classification is sought
    • A high salary or other remuneration for services as evidenced by contracts or other reliable evidence
    • Participation on a panel, or individually, as a judge of the work of others in the same or in a field of specialization allied to that field for which classification is sought
    • Employment in a critical or essential capacity for organizations and establishments that have a distinguished reputation

    If you think you have a major, internationally-recognized award and don't need to meet other requirements, there's a good chance it doesn't make the cut since the USCIS uses the Nobel Prize (no less) as an example of what qualifies.

    But not having sufficient evidence of accomplishments listed here doesn't mean yours is an impossible case. Immigration attorney Jane Orgel, who has handled many many O-1 cases for people who did not manage to obtain H-1B visas, told Investopedia, "I find that even if applicants do NOT strictly meet those requirements, they can get approved for the O-1 if their case has merit and is presented in the right way. I think the Service understands that it's difficult to always fit into those slots and I often use the 'comparable evidence' criterion to explain why the applicant may not have press, for instance, but nevertheless is deserving of the O-1 visa."

    Candidates must also be able to provide a written advisory opinion from a peer group (including labor organizations) or a person with expertise in their area of ability.

  • Can I make money advertising on my car, or is it a scam?

    Car owners can make extra money advertising companies on their cars, known as “wrapping,” but some solicitations to join such advertising companies are scams. Legitimate advertising companies pay sums that amount to a little extra income per month to drivers to wrap their cars with ads. Scams advertisers may send solicitations to car owners offering lots of money upfront, but people who respond to such solicitations usually never hear from the scammers again.

    How Scam Wrap Advertisers Work

    Scam car wrap advertising companies often launch links to websites strategically to help people searching for ways to make extra money find them in web searches. They also send mass solicitations by email. Such companies often agree to send applicants money orders when they sign up, which the applicants can cash, keep a portion of the money and send the balance back to the company. This amounts to a money order scam, says the Federal Trade Commission, because the money orders are fraudulent. People interested in advertising on their cars should avoid such offers.

    How Legitimate Advertisers Work

    Legitimate companies never charge drivers fees to wrap their vehicles with ads. Such companies have detailed applications, plus contact information — including their physical addresses — posted clearly on their websites. The qualifying standards to participate in such programs are spelled out clearly on the companies’ websites and on their applications; consumers can also contact the companies with questions before applying. They also tell applicants exactly how much they can expect to be paid to participate in the program. Legitimate car wrapping companies include Carvertise, Inc. and VehicleCommercial.com.

  • Can I use a prepaid credit card to pay bills or transfer money to other accounts?

    Prepaid credit cards may be used to both pay bills – either as a one-time transaction or recurring transaction – and transfer money to other cards of the same brand.

    Some prepaid credit card bill payments are made in the same manner as regular credit cards. Payments may be made on a utility's website, on the telephone with representatives of the utility, or by filling out a form included with a paper bill in the mail and returning it to the utility. There is usually no fee for transactions such as this.

    Other prepaid credit card bill payments may be made through the prepaid credit card issuer's website. The Western Union NetSpend Prepaid MasterCard, for example, maintains a site where cardholders may make bill payments. There may be a fee for bill payments made through a prepaid credit card issuer's website.

    Many prepaid credit cards offered by MasterCard and Visa allow for card-to-card transfers for cards of the same brand. For example, a MyVanilla Prepaid Visa Card allows cardholders to transfer funds to other MyVanilla Prepaid Visa Cards. Most prepaid cards do not allow transfers between cards of different brands or between prepaid cards and regular credit cards. Many prepaid credit cards, such as the MyVanilla Prepaid Visa Card, allow for free transfers.

    Cards such as the Western Union NetSpend Prepaid MasterCard allow users to send and receive Western Union money transfers using their cards. There is generally no fee for receiving Western Union money transfers. There are, however, fees for sending Western Union money transfers; these fees vary and are determined at the time the transfer is sent.

    Using a Prepaid Credit Card

    When a prepaid credit card is first obtained it is necessary to register the card, activate it and load funds onto it. Some cards come with preloaded amounts, so all that is required is to register and activate the card. Cards also need to be registered with a username and password to allow access to online account services that enable cardholders to make card-to-card transfers and online payments with retailers or utilities, as well as to view account balances, holds, transaction history and registration information. One of the benefits of a prepaid credit card is that it offers the consumer protection in the event the card is lost or stolen (cards that are not registered in the cardholder's name are difficult if not impossible to replace).

    Often, cardholders can add money to the card via the website as well.

    Online payment processors perform security checks to match customer information with the information registered on the card. By disallowing transactions in which customers can't correctly input matching information, facilitators have been able to dramatically reduce instances of stolen credit cards used for fraudulent purposes.

  • Can my IRA be garnished for child support?

    Though some states protect IRA savings from garnishment of any kind, most states lift this exemption in cases where the account owner owes child support.

    IRA Protections

    Unlike 401(k) plans or other qualified retirement savings accounts covered under the Employee Retirement Income Security Act of 1974 (ERISA), individually owned IRA accounts are not automatically protected from garnishment by creditors. If you are court-ordered to fulfill a debt, including the payment of overdue child support, your IRA counts as an asset that may be used to satisfy that debt. Though there are some situations in which your IRA may be exempt from garnishment, failure to pay child support is generally not among them.

    The degree to which IRAs are protected from garnishment is determined largely by state governments. The federal government does have its own system of exemptions, but states are allowed to choose between adhering to federal regulations or creating their own systems.

    Most states choose to develop their own systems of exemptions, meaning that the specific protections offered can vary greatly depending on your state of residence.

    Federal Exemptions

    Under federal law, there is no protection for IRA funds except in the case of bankruptcy. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005, provides protection for up to $1 million of your IRA savings if you declare bankruptcy.

    However, states have the final say in what bankruptcy regulations apply to their residents. This means that the BAPCPA $1 million exemption only applies if your state of residency allows you to choose between the state-specific exemption system and the federal exemption system. In some states, residents do not have a choice between state and federal exemptions.

    Aside from this partial bankruptcy exemption, IRAs can be garnished to fulfill any federal debt, including debts to the IRS for overdue taxes.

    State Exemptions

    Most states offer some form of limited protection for IRAs. In the event of bankruptcy, for example, many states exempt any IRA funds deposited more than 120 days prior to a bankruptcy filing. In Minnesota, only IRA funds in excess of $30,000 may be garnished to satisfy creditors. Your IRA funds may also be exempt from garnishment to the extent that they are necessary to support you and your dependents, though some states cap the maximum amount of IRA funds that can be considered 'necessary'.

    Though there are a number of possible exemptions protecting your IRA from creditors, many states lift these exemptions in the case of domestic relations judgments. Garnishment to satisfy child support obligations is the most common exception to these protections. In many states – including Kentucky, Colorado, Wisconsin and Louisiana – IRAs are offered no protection from collections related to overdue child support. Judgments relating to alimony, divorce, annulment or legal separation are also common exceptions to state exemption laws.

    Blanket Exemption

    Kansas, Connecticut, Illinois and New Jersey are a few of the states that offer blanket protection for IRA retirement savings. In these states, your IRA cannot be garnished for any reason, even if you owe overdue child support.

  • Can Netspend cards be used internationally?

    NetSpend cards are prepaid debit cards that allow cardholders to make purchases as they would using traditional debit or credit cards. NetSpend cards can be used internationally, and they are accepted at any location that accepts a debit Visa or MasterCard.

    Using Your NetSpend Debit Card Internationally

    NetSpend debit cards can be used at millions of locations worldwide. Prepaid debit cards are often a wise decision for international travel. If a prepaid debit card is stolen or comprised, the account owner can call customer service immediately to deactivate the card.

    However, NetSpend debit cards do not include the newer technology being added to most credit cards, such as the chip-and-signature feature. Most European credit card terminals have been converting to this technology to reduce theft and fraud. Also, there are no NetSpend reload locations outside the United States.

    NetSpend accounts offer several fee plans, with the most common being the pay-as-you-go plan. This charges the account holder $1 on every credit charge, $2 on every debit charge and $2.50 for domestic ATM withdrawals. NetSpend also offers a flat monthly fee option in lieu of the individual transaction fees.

    There are several additional fees involved with using the card internationally. When buying standard items or services overseas, the foreign transaction fee is 3.5% of the U.S. dollar amount of the purchase transaction. When withdrawing from an international ATM, there is a charge of $4.95 per withdrawal, in addition to the ATM's own transaction fee.

  • Can student loans be used to pay rent?

    Student loans can be used to pay for room and board, which includes on- and off-campus housing. So yes, students can use loans to pay monthly rent for apartments and other types of residences away from campus. The sooner a student knows she wants to live off campus, the sooner she is able to assess how much money she needs, so it is important to fill out the Federal Application for Free Student Aid (FAFSA) as early as possible in the prior academic year.

    Student Loans and Paying Rent

    College and university students should be aware that institutions of higher education pay tuition and fees first, especially when students receive no other financial aid such as Pell Grants or scholarships. Once these expenses are paid, the institution sends students any leftover loan money, usually by direct deposit to a bank account, which students can use for college-related living expenses including rent. Students should therefore understand that if they are planning to take a full course load and have no financial aid other than student loans, there may not be enough loan money left over to pay monthly rent for an entire semester or academic year. Planning ahead and ensuring enough financial aid is available to cover tuition, fees and rent is important.

    Handling Disbursement Delays

    College financial aid departments usually do not disburse leftover student loan money until after the start of the academic year, and landlords always want security deposits and monthly rent on time. Students seeking off-campus housing should make sure they have enough money to cover these costs, whether from family contributions or part-time employment, until they receive their student loan disbursement.

  • Can student loans garnish your bank account?

    Lenders can garnish your bank account to recover student loan debt and they can do it in different ways depending on whether your student loans are federal or private. Here is what may occur if you default on your student loans.

    Federal Student Loans

    In the case of federal student loans, it is important to realize that the government does not need a court order or judgment to garnish your wages. In other cases, creditors must first sue you in court and obtain a judgement to garnish your bank account. Creditors who own your federal student loans do not have to do this. They simply must send a letter to your home address, giving you a 30-day notice that your wages are being garnished. At that point, you can request a hearing in front of a judge to make your case. If your wages are garnished, the maximum that can be withheld is 15% of your disposable income, which is the amount of your net paycheck after taxes. Your employer withholds these funds and forwards them to the appropriate creditor. This process is typically a last resort process for those who deliberately refuse to pay their loans. There are always payment plans available to help those who are unable to pay.

    Private Student Loans

    In the case of private student loans, or those not offered by the federal government, the creditor does not have any special wage garnishing ability. The creditor must first sue you in court to obtain a judgment, and then submit a court order to your employer with the details of the garnishment. How much they are allowed to garnish depends on the state in which you live.

  • Can student loans hurt your credit?

    Student loans can hurt your credit score only if you default on them. Otherwise, student loans can actually help your credit score when you make your monthly payments on time. Limiting the money you borrow for higher education to an amount you can easily repay is the key to having student loans work in your favor.

    On-Time Payments

    Making the required payments on a modest student loan can benefit a new college graduate. Student loan servicing companies, which administer student loans once they enter repayment status, report payments to the credit bureaus: Equifax Inc. (EFX), TransUnion (TRU) and Experian PLC (EXPN.L). When you make consistent, on-time payments, lenders considering your loan applications can see from your FICO credit score that, even though you’re a new grad, you’re skilled at managing your money. When you make your student loan payments as required, the loan can help you qualify for your first apartment, an unsecured credit card with a favorable interest rate and even a job.

    Defer but Don’t Default

    If you run into financial trouble along the way, contact your student loan servicer immediately and ask for deferment. Keep making loan payments until your loan servicer approves your deferment request to avoid any delinquencies on your credit report. Lenders typically consider deferment a responsible move because it frees up income to repay other loans.

    Defaulting means that the borrower cannot repay the student loan and has no interest in applying for deferment or seeking other repayment solutions. Defaulting on a student loan can make it difficult to get the loans needed to buy a home, a car or other big-ticket items.

  • Can the Best Buy credit card be used anywhere?

    The Best Buy credit card can only be used in Best Buy stores and when making purchases online through the Best Buy website. Outside of Best Buy, the card is not accepted, since it is not associated with any major financial card networks such as MasterCard, Visa, American Express or Discover. However, Best Buy offers the Best Buy MasterCard credit card that can be used anywhere MasterCard-branded cards are accepted.

    Best Buy Credit Card

    The Best Buy credit card is issued by Citibank, and it is designed to benefit customers who can use this card exclusively at Best Buy stores and its website. The main advantage of the card is that it offers 5% back in rewards to its regular cardholders and 6% back to Elite Plus members. In 2017, Best Buy offers special six-month financing for purchases in excess of $199; 12-month financing for purchases in excess of $399; 18-month financing for major appliance purchases totaling $599 or up; and 24-month financing on home theater purchases totaling $799 and up. During the promotional period for the special financing offer, Best Buy credit cardholders do not have to pay interest if they make their fixed monthly payments on time and pay off their balances at the end of the promotion period.

    Best Buy Credit Card Terms

    Besides its promotional financing, the Best Buy credit card charges its customers an interest rate that is equal to the prime rate plus 21.99%. The card also has a late payment penalty of up to $38. Citibank charges a minimum interest of $2. If you use the card outside Best Buy, the rewards are 2% back for dining out and grocery purchases and 1% back for so-called everyday purchases.

  • Can you pay off a Walmart credit card in store? (WMT)

    Wal-Mart Stores, Inc. (NYSE: WMT) allows multiple payment options for its credit cards, including in-store payments. The multinational retail company has a store card and a Discover card; both card balances can be paid at a retail location.

    Payment Options With Walmart Credit Cards

    Walmart allows its customers to pay credit card balances in a variety of ways. Payments can be made in any Walmart location at the customer service desk. If a consumer is also a Sam's Club member, he can make a payment at any Sam's Club location. Payments made in the store post to a consumer's credit card account within 48 hours. Walmart is unable to look up credit card information in the store, and a physical card is needed to make payment with this method.

    Another way is to pay a balance directly online using Walmart's portal. Consumers can sign into their Walmart credit card account to make a payment to their balances, which posts within two to three business days. Online payments cannot be set up as recurring and need to be done individually.

    E-payments can also be made to pay a Walmart credit card balance. These types of online payments can be set up directly with a consumer's financial institution, and as a recurring monthly payment. A valid checking account is needed.

    Consumers can pay credit card balances by phone. The service is free if an automated method is used and costs $10 if a representative helps over the phone. Consumers need a valid checking account with their routing number and account number ready to pay over the phone. A debit card can also be used.

  • Can you pay off your Best Buy credit card in store?

    All Best Buy credit cards can be paid off in the store using cash or a check. These credit cards have great benefits for consumers who regularly make purchases in Best Buy stores, online or through Best Buy affiliates. Cardholders can also pay their Best Buy credit card bills by check, over the phone, by mail and online through BestBuy.com.

    Types of Cards and Rewards

    Best Buy has two types of credit cards available. One can only be used through Best Buy and its affiliates. The other, a Best Buy Visa, can be used at any retailer that accepts Visa. Both cards offer Best Buy shoppers 5% cash back. The Best Buy Visa offers cardholders 2% cash back on groceries and at restaurants and 1% cash back on everything else. Occasionally, the card will offer additional cash back in categories that change throughout the year. Special financing offers do not earn cash-back rewards.

    Best Buy offers additional rewards to its Elite Plus customers. Cardholders can qualify to be Elite Plus members after spending $3,500 at Best Buy or an affiliated store in one calendar year. After earning the Elite Plus status, cardholders then earn 6% cash back on all Best Buy purchases.

    Other Features

    Both cards allow customers to create and manage their accounts online. By using the online feature, cardholders can update their personal information, view transaction activity and check their card balance. Visa offers consumers zero fraud liability in the event of a lost or stolen card. Any lost or stolen cards should be reported to the company as soon as possible.

  • Can you use a Walmart credit card anywhere? (WMT)

    Wal-Mart Stores, Inc. (NYSEARCA: WMT) offers two types of credit cards: the Walmart MasterCard and the Walmart credit card. While the Walmart MasterCard can be used at any retailer that accepts MasterCard, the Walmart credit card is only accepted at Walmart and Sam’s Club stores, including their associated gas stations and websites.

    The Walmart MasterCard Credit Card Details

    As of October 2015, the Walmart MasterCard has no annual fee. This card has an annual percentage rate (APR) of 22.9% for purchases and quick cash advances and 25.9% for cash advances. These APRs are subject to change. The minimum interest charge is $1.

    This card has a cash advance fee of either $5 or 3% of the amount of each cash advance, whichever is greater, and a foreign transaction fee of 3% for each transaction.

    If you have no previous late payments within a six-month period, you're charged a one-time late payment fee of $25. However, if you do have late payments within a six-month period, the late payment fee increases to $35.

    Walmart MasterCard Credit Card Benefits

    The Walmart MasterCard comes with $0 fraud liability protection against charges by unauthorized users and a free FICO score check when signing up for online statements.

    When using the card at any Walmart gas station, you can receive a 5-cent discount per gallon. When using the card anywhere else, you'll receive 1% cash back for any purchase. When accrued to at least $5, the cash back is awarded as a statement credit.

  • Can you use your Walmart credit card at Sam's Club?

    Consumers can use their Walmart credit cards to shop at Sam's Club and to make purchases at Sam's Club gas stations. However, they cannot use their Walmart credit cards when they shop online at SamsClub.com.

    Payments Accepted at Sam's Club

    In addition to the Walmart credit card, Sam's Club also accepts Sam's Club Credit, Walmart and Sam's club shopping/gift cards, cash or check, debit cards, American Express, MasterCard, Visa, Supplemental Nutrition Assistance Program (SNAP) benefits and Discover. Sam's Club credit cardholders may also use their cards in Walmart stores.

    Benefits of Walmart Credit

    There is no annual fee on Walmart credit cards. Cardholders have zero liability fraud protection and are eligible for special financing offers throughout the year. Walmart credit cardholders also receive free monthly FICO credit score reports. Walmart credit provides additional discounts on gas at Walmart gas stations, but it only provides discounts at Sam's Club gas stations that are open to the public.

    Sam's Club Membership Benefits

    Sam's Club members enjoy discounts on accounting and tax services. Members receive discounted auto pricing at over 10,000 dealerships around the country. Many additional benefits, from deals on travel, health insurance and vehicle maintenance are available with a Sam's Club membership. Sam's Club has a full list of its member benefits listed online; you can also visit any Sam's Club location and talk to customer service regarding membership benefits.

    Different levels of membership are available. The basic Sam's savings and Sam's business cards are available for $45 per year, as of 2017. The Sam's Plus membership is available for $100 per year and offers extended shopping hours (same for business) and $10 cash back for every $500 spent, up to $500 per year.

    For related reading, see "Can You Use a Walmart Credit Card Anywhere?"

  • Compound interest versus simple interest

    Interest is the cost of borrowing money, where the borrower pays a fee to the lender for using the latter's money. The interest, typically expressed as a percentage, can be either simple or compounded. Simple interest is based on the principal amount of a loan or deposit, while compound interest is based on the principal amount and the interest that accumulates on it in every period. Since simple interest is calculated only on the principal amount of a loan or deposit, it's easier to determine than compound interest.

    Simple Interest

    Simple interest is calculated using the following formula:

    Simple Interest = Principal amount (P) x Interest Rate (I) x Term of loan or deposit (N) in years.

    Generally, simple interest paid or received over a certain period is a fixed percentage of the principal amount that was borrowed or lent. For example, say a student obtains a simple-interest loan to pay one year of her college tuition, which costs $18,000, and the annual interest rate on her loan is 6%. She repays her loan over three years. The amount of simple interest she pays $3,240 ($18,000 x 0.06 x 3). The total amount she repays is $21,240 ($18,000 + $3,240).

    Real-Life Simple Interest Loans

    Two good examples of simple interest loans are auto loans and the interest owed on lines of credit such as credit cards.

    A person could take out a simple interest car loan, for example. If the car cost a total of $100, to finance it the buyer would need to take out a loan with a $100 principal, and the stipulation could be that the loan has an annual interest rate of 5% and must be paid back in one year. Therefore, the simple interest on the car loan can be calculated as follows:

    ($100) x (5%) x (1)  = $5

    Alternately, say an individual has a credit card with a $1,000 limit and a 20% APR. If, for example, he buys $1,000 worth of goods. He pays only the minimum the next month, $100. So the next month, with a $900 balance remaining, he would owe the following:

    ($900) x (20%) x (1)  = $180

    Compound Interest

    Conversely, compound interest accrues on the principal amount and the accumulated interest of previous periods; it includes interest on interest, in other words. It is calculated by multiplying the principal amount by the annual interest rate raised to the number of compound periods, and then minus the reduction in the principal for that year. Or as a formula:

    Compound Interest = Total amount of Principal and Interest in future less Principal amount at present

    To demonstrate, let's go back to our student in the first example: She's borrowing the same amount ($18,000) for college and repaying over the same three years, only this time it's a compound-interest loan. The amount of compound interest that would be paid is $18,000 x (1.06)3 - 1) = $3,438.29 – obviously, higher than the simple interest of $3,240.

    Examples of Simple and Compound Interest

    Let's run through a few examples to demonstrate the formulas for both type of interest.

    Example 1: Suppose you plunk $5,000 into a one-year certificate of deposit (CD) that pays simple interest at 3% per annum. The interest you earn after one year would be $150: $5,000 x 3% x 1.

    Example 2: Continuing with the above example, suppose your certificate of deposit is cashable at any time, with interest payable to you on a pro-rated basis. If you cash the CD after four months, how much would you earn in interest? You would earn $50: $5,000 x 3% x (4 ÷ 12).

    Example 3: Suppose Bob the Builder borrows $500,000 for three years from his rich uncle, who agrees to charge Bob simple interest at 5% annually. How much would Bob have to pay in interest charges every year, and what would his total interest charges be after three years? (Assume the principal amount remains the same throughout the three-year period, i.e., the full loan amount is repaid after three years.)

    Bob would have to pay $25,000 in interest charges every year ($500,000 x 5% x 1), or $75,000 ($25,000 x 3) in total interest charges after three years.

    Example 4: Continuing with the above example, Bob the Builder needs to borrow additional $500,000 for three years. But as his rich uncle is tapped out, he takes a loan from Acme Borrowing Corporation at an interest rate of 5% per annum compounded annually, with the full loan amount and interest payable after three years. What would be the total interest paid by Bob?

    Since compound interest is calculated on the principal and accumulated interest, here's how it adds up:

    After year one, interest payable = $25,000 ($500,000 (loan principal) x 5% x 1).

    After year two, interest payable = $26,250 ($525,000 (loan principal + year one interest) x 5% x 1).

    After year three, interest payable = $27,562.50 ($551,250 (loan principal + interest for year one & year two) x 5% x 1).

    Total interest payable after three years = $78,812.50 ($25,000 + $26,250 + $27,562.50).

    Of course, rather than calculating interest payable for each year separately, one could easily compute the total interest payable by using the compound interest formula, which you'll recall is:

    Compound Interest = Total amount of Principal and Interest in future, less Principal amount at present

    = [P (1 + i)n] – P

    = P [(1 + i)n – 1]

    P = Principal, while i = annual interest rate expressed in percentage terms, and n = number of compounding periods.

    Plugging the above numbers into the formula, we have P = $500,000, i = 0.05, and n = 3. Thus, compound interest = $500,000 [(1+0.05)3 - 1] = $500,000 [1.157625 - 1] = $78,812.50.

    However you calculate it, the point is that by being charged compound interest rather than simple interest, Bob has to pay an additional $3,812.50 ($78,812.50 - $75,000) in interest over the three-year period.

    The Bottom Line

    In real life situations, compound interest is is often a factor in business transactions, investments and financial products intended to extend for multiple periods or years. Simple interest is mainly used for easy calculations: those generally for a single period or less than a year, though they also apply to open-ended situations, such as credit card balances.

    To delve deeper into the amazing concept of compounding here, check out "Investing 101: The Concept of Compounding."

  • Cost of Living: Texas vs California?

    Texas and California are two of the largest states in the union, both in terms of population and geography. The cost of living can vary significantly between individual counties or cities within either state. That said, the average Californian faces higher costs of living than the average Texan.

    The Massachusetts Institute of Technology tracks living wage calculations for cities and states across the United States, defining a living wage as the "approximate income needed to meet a family's basic needs." MIT further defines basic needs as "food, clothing, housing, and medical care." According to its 2017 figures, an individual has to earn 23.8% more income to earn a living wage in California than in Texas.

    Measuring Cost of Living

    When economists or statisticians are measuring the cost of living for a given country or region, they are measuring the amount that consumers need to spend in order to reach a certain average standard lifestyle. Put another way, the cost of living measures how much food, shelter, clothing, health care, education and fuel can be bought with one unit of currency.

    Comparing Typical Expenses in Texas and California

    MIT compares the costs of six different typical expenses for each state: food, child care, medical, housing, transportation, and "other."

    In all areas, California was more expensive than Texas. The average single adult could expect to eat with $296 a month in California versus $249 in Texas, a more than 18% difference.

    It is 25% more expensive to raise one child in California than in Texas. The difference is 22% with two children and 26% with three children.

    On average, Texas also has less expensive medical care than California. Here, the difference is roughly 8%.

    Housing is the largest single expense category in MIT's calculation; it is also the area where Texans see the largest advantage. Housing costs are an impressive 54.7% higher in the Golden State than in the Lone Star State. The difference is more pronounced for bigger families, where normal housing expenses for two adults and two children are 61.7% higher for Californians.

    California does win out on transportation costs. The average adult in Texas spends 16.8% more on getting around than his Californian counterpart.

    Lumping expenses such as entertainment, dining out, pet care and other possible expenses together, the "other" category is another win for Texas; its average residents spend 14% less here.

    Problems with Cost of Living

    Cost of living averages do not address the quality of the goods or services available. It could very well be that shoes cost 25% more in one state than in another, yet they last 50% longer. Perhaps food prices are the same between two states, but on average the food in one state tastes better and is healthier to consume. Nevertheless, the data does suggest that it is relatively less expensive to live in Texas than in California.

    In fact, the Lone Star State is home to the two most-affordable burgs in America: McAllen and Harlingen, according to Kiplinger's "Cheapest U.S. Cities to Live In 2017" survey.

    No. 2, Harlingen, with its population of 65,774, has a median household income of $34,466 and a median home value of $80,660, based on 2017 U.S. Census data. McAllen, which edged out Harlingen for the No. 1 spot this year, is a bigger, wealthier town (population 140,269; median household income $44,254; median home value, $115,400. Yet its cost of living is 23.7% below the U.S. average. Harlingen's is 20.6% below.

    Both are located in southern Texas, where not only living is affordable, but food is as well. A recent study done by Kiplinger revealed that of a few hundred grocery stores that were analyzed by affordability and pricing, only a handful had cheaper goods than the stores in Harlingen.

    Both towns are also close to Mexico and, while located in a hot, dry state, both are within an hour's drive of the beach. McAllen hosts a 15-acre birding habitat, too.

  • Debit card versus credit card

    Debit cards and credit cards work in similar ways. Both carry the logo of a major credit card company, such as Visa or MasterCard, and can be swiped at retailers to purchase goods and services. The key difference between the two cards is where the money is drawn from when a purchase is made. When a consumer uses a debit card, the money comes directly from his checking account. When he uses a credit card, the purchase is charged to a line of credit for which he is billed later.

    Consider two customers who each purchase a television from a local electronics store at a price of $300. One uses a debit card, and the other uses a credit card. The debit card customer swipes his card, and his bank immediately places a $300 hold on his account, effectively earmarking that money for the television purchase and preventing him from spending it on something else. Over the next one to three days, the store sends the transaction details to the bank, which electronically transfers the funds to the store.

    The other customer uses a traditional credit card. When he swipes it, the credit card company automatically adds the purchase price to his card account's outstanding balance. He has until his next billing due date to reimburse the company, by paying some or all of the amount shown on his statement.

    With most credit card companies, the customer has 30 days to pay before interest is charged on the outstanding balance, though in some cases, interest starts accruing right away. Interest rates on credit cards are notoriously high (they are key way the credit card companies make money). Savvy consumers avoid paying it by settling their balance in full each month.

    The Debt Instrument Difference

    By definition, all credit cards are debt instruments. Whenever someone uses a credit card for a transaction, the card holder is essentially just borrowing money from a company, because the credit card user is still obligated to repay the credit card company.

    Debit cards, on the other hand, are not debt instruments because whenever someone uses a debit card to make a payment, that person is really just tapping into his or her bank account. With the exception of any related transaction costs, the debit user does not owe money to any external party: The purchase was made his or her own available funds.

    However, the distinction between debt and non-debt instruments becomes blurred if a debit card user decides to implement overdraft protection. In this case, whenever a person withdraws more money than what is available in his or her bank account, the bank will lend the person enough money to cover the transaction. The bank account-holder is then obligated to repay the account balance owed and any interest charges that apply to using the overdraft protection.

    Overdraft protection is designed to prevent embarrassing situations, such as bounced checks or declined debit transactions. However, this protection does not come cheaply; the interest rates charged by banks for using overdraft protection are as high, if not higher, than the ones associated with credit cards. Therefore, using a debit card with overdraft protection can result in debt-like consequences.

  • Dividend Reinvestment Plan - DRIP
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    What is a 'Dividend Reinvestment Plan - DRIP'

    A dividend reinvestment plan (DRIP) is a plan is offered by a corporation that allows investors to reinvest their cash dividends into additional shares or fractional shares of the underlying stock on the dividend payment date.

    Most DRIPs allow investors to buy shares commission-free and at a significant discount to the current share price, and do not allow reinvestments much lower than $10. This term is sometimes abbreviated as "DRP."

    Next Up

    BREAKING DOWN 'Dividend Reinvestment Plan - DRIP'

    DRIPs are offered by many companies to give shareholders the option of reinvesting the amount of a declared dividend by purchasing additional shares. Normally, when dividends are paid, they are received by shareholders as a check or a direct deposit into their bank account. Because shares purchased through a DRIP typically come from the company’s own reserve, they are not marketable through stock exchanges. Shares must be redeemed directly through the company.

    Although these dividends are not actually received by the shareholder, they still need to be reported as taxable income. If a company does not offer a DRIP, one can be set up through a brokerage firm, as many brokers allow dividend payments to be reinvested in the shares of any stock held in an investment account.

    Shareholder Advantages of DRIPs

    There are several advantages of purchasing shares through a DRIP. DRIPs offer shareholders a way to accumulate more shares without having to pay a commission. Many companies offer shares at a discount through their DRIP from 1 to 10% off the current share price. Between no commissions and a price discount, the cost basis for owning the shares can be significantly lower than if the shares were purchased on the open market.

    Long term, the biggest advantage is the effect of automatic reinvestment on the compounding of returns. When dividends are increased, shareholders receive an increasing amount on each share they own, which can also purchase a larger number of shares. Over time, this increases the total return potential of the investment. Because more shares can be purchased whenever the stock price decreases, the long-term potential for bigger gains is increased.

    Company Advantages

    Dividend-paying companies also benefit from DRIPs in a couple of ways. First, when shares are purchased from the company for a DRIP, it creates more capital for the company to use. Second, shareholders who participate in a DRIP are less likely to sell their shares when the stock market declines. One reason is the shares are not as liquid as shares purchased on the open market. Another reason is DRIP participants can more easily recognize the role their dividends play in the long-term growth of their investment.

  • Do balance transfers hurt your credit?

    Transferring a credit card balance can hurt your credit score in the short term, but the extent to which transferring balances hurts your credit score depends on the amount of the balance that you transfer and the new card’s credit limit. In the long term, however, you may see your credit scores go up if you transfer balances strategically to cards with large credit limits.

    Why Transfer Balances?

    Credit card companies entice consumers to transfer balances with attractive offers such as 0% interest for 12 months. Transferring balances means that a consumer moves debt from one credit card to the zero-interest card, which can lower the person’s credit card bill, but only temporarily if he or she fails to completely pay off the debt during the introductory interest-rate period. Transferring a balance does not cancel the interest and charges already added to the balance, but it does stop additional interest and charges from incurring.

    Taking advantage of a credit card’s introductory offer usually saves the cardholder some money. For example, a consumer with a credit card balance of $10,000 at 15% interest, planning to pay the card off in one year, might save around $831 by transferring a balance to a card with a zero-interest offer. However, such credit cards charge balance transfer fees of as much as 3% of the amount being transferred, which shaves off some of the amount saved in interest.

    FICO’s Response

    Consumers transferring balances to new credit cards should consider their credit-utilization ratio as part of the decision-making process. FICO determines credit scores by assessing the credit utilization ratio. The ratio compares consumers’ total available credit to the amount they owe in order to determine their credit scores. Here is how credit-utilization works when it comes to credit-card balance transfers.

    Example: A person with $10,000 in available credit on Credit Card #1 has $3,000 in charges on the card. On this card, he has used up about 33% of the available credit; FICO considers 30% utilization to be ideal. Say the person gets a 0% interest offer on balance transfers on Credit Card #2, and that card has a limit of $12,000. Moving his $3,000 balance to the new card frees up Credit Card #1 completely and only eats up 25% of Credit Card #2, thus dropping his credit utilization to below 30%. Therefore, while his credit score might decrease temporarily because of the inquiry made as part of the application for Credit Card #2, overall, his credit score will most likely increase.

    Debt Refinance Alternative

    Credit card users wanting to transfer balances with minimal effect on their credit scores might consider personal bank loans. FICO calculates credit scores based on revolving credit, so a bank loan does not figure into the credit utilization ratio. Consumers should be aware, however, that banks almost never offer zero-interest personal loans, but the interest rate offered is usually lower than credit card interest rates.

  • Do certificates of deposit help build credit?

    A certificate of deposit (CD) is a financial product that is similar to a typical savings account, and is offered by banks, credit unions and other financial institutions. The Federal Deposit Insurance Corp. (FDIC) and the National Credit Union Association (NCUA) are organizations that insure CDs, making these types of investments practically risk free. Unlike normal savings accounts, CDs have a fixed term of usually one, three, six or 12 months, though some may have up to a 10-year term. Also, CDs typically have a fixed rate of interest attached to them.

    Using a CD to Build Credit

    Since CDs are fixed-term deposits an investor gives to a bank for a fixed rate of return, an investor can use CDs to build or strengthen his credit history. Minimum investments for CDs are usually $1,000. The institution issuing the CD typically allows the investor to borrow up to 95% of the investment's value shortly after opening the account, to be used as collateral in case of default.

    Banks or credit unions generally, but not always, report this type of loan to the credit bureaus as a secured installment loan. Thus, it is wise to confirm with the institution that the reporting is occurring. Making punctual payments on this loan increases a person's credit score over time, and the process can be repeated indefinitely. CDs are completely secured, such that the institution involved rarely refuses to make this type of loan, and for this reason they are an excellent option for someone trying to build or repair a poor credit score.

  • Do checking accounts have beneficiaries?

    Banks do not require checking account holders to name beneficiaries to the accounts. If a person wants to name a beneficiary of his checking account in the event of his death, he lets the bank know the person’s name. The bank then converts the checking account into a payable-on-death (POD) account. Due to increasing interest, some banks offer their customers POD accounts as part of their standard offerings.

    Setting Up a POD Account

    To convert a checking account into a POD account, choose a beneficiary and notify the bank of your wishes. The bank fills out the appropriate paperwork so your account's funds will pass directly to the beneficiary after your death. You may wish to convert your checking account to a POD account if you want someone specific to receive the account's funds.


    Under normal circumstances, the money in a bank account becomes part of a person’s estate when he dies. However, POD accounts bypass the estate and probate process. To claim the money, the beneficiary simply has to show up at the bank, prove his identify and produce a certified copy of the account holder’s death certificate.

    Other Claims on the Money

    Married checking-account-turned-POD-account holders in community property states should be aware that their spouses automatically get half the money they contributed during the marriage, even if another beneficiary is named. Spouses in non-community property states have a right to dispute the distribution of the funds in court.

  • Do FHA Loans Have Prepayment Penalties?

    Unlike subprime mortgages issued by some conventional commercial lenders, Federal Housing Administration (FHA) loans do not have prepayment penalties. Rules governing FHA loans state that these type of mortgages cannot contain any unnecessary fees, such as a due-on-sale clause or prepayment penalty, that may cause a financial hardship to borrowers.

    How Mortgage Interest Is Calculated in Case of Prepayment

    For all FHA loans closed before Jan. 21, 2015, while you are not required to pay extra fees when paying your FHA loan early, you are still responsible for the full interest as of the next installment due date. For example, assume the monthly payment due date of your FHA loan is on the fifth of every month. If you made your monthly payment by the first of the month, you are still liable for the interest until the fifth. Even if you paid the full balance of your mortgage, you are still responsible for the interest until the payment due date.

    This post-payment interest charge was not a prepayment penalty, but many homeowners felt it was; in 2012, holders of FHA loans paid an estimated $449 million in post-payment interest charges. To reduce the burden on homeowners, the FHA revised its policies to eliminate post-payment interest charges for FHA loans closed on or after Jan. 21, 2015. Under these new policies, lenders of qualifying FHA loans must calculate monthly interest using the actual unpaid mortgage balance as of the date the prepayment is received. Issuers of FHA loans can only charge interest through the date the mortgage is paid.

  • Do I have to complete all exams within a certain period of time to receive the CFA charter?

    According to the CFA Institute, a candidate can take as much time as necessary to complete all three levels of the chartered financial analyst (CFA) program.

    For example, if you passed the June 2017 CFA Level I examination, you could take the CFA Level II examination in June 2020 (rather than June 2018) and the CFA Level III examination in June 2023.

    Remember, successful completion of all three CFA examinations is only one of several requirements needed to obtain your CFA designation. You also need to:

    • Hold a bachelor's degree
    • Have four years of experience in the investment industry
    • Become a member of the CFA Institute
    • Follow the CFA Institute Code of Ethics and Standards of Professional Conduct

    (For related reading, see: A Key Look at CFA Job Opportunities.)

  • Do I still owe debt collectors for a debt that's past the statute of limitations for my state?

    Learn what a statute of limitations on debt actually limits; that is, what activity or action can no longer justify legal proceedings in court. In all cases, a statute of limitations on debt only refers to the ability of creditors to bring a debtor to court for violating the terms of the credit agreement; the statute does not limit the ability of the creditor to attempt to collect on the debt nor does it remove your obligation as a debtor to repay the balance of your account.

    Be very careful what you say to creditors once the statute of limitations governing your debt has expired. Depending on your state and the type of debt, even acknowledging that you owe the debt may be grounds for reviving the time period for legal action against you. In fact, under some circumstances, you may end up unintentionally extending the statute of limitations on a not-yet-expired debt that you owe.

    Not all debts have a statute of limitations. If you are uncertain about whether your debt has a time-barred collection horizon, check your state's website. Under the Fair Debt Collections Practices Act, or FDCPA, the creditor is legally required to inform you of any statute of limitations.

    Another tricky function of statutes of limitations is that they do not all start when the debt is first owed. Some statutes may start their "clock" as soon as the first payment is made, while some debts restart after every payment, and others do not start until a payment is missed.

    If you are contacted about a debt that is past the statute of limitations, check your credit report. You should be able to see if the debt is being represented accurately and, if not, this could constitute a violation of the Fair Credit Reporting Act (FCRA) on the part of your creditor. It is not always legal for debts past their statute to be reported.

    The only ways to remove your credit balance is to either repay in full, arrange with the creditor to have the debt cancelled, enter into a debt settlement program or have the debt discharged in bankruptcy. Once the statute of limitations expires, however, the creditor cannot use the power of the U.S. court system to make you pay. Your rights under the FDCPA are still in good standing, meaning you have legal recourse should your creditor use abusive or deceptive collection practices.

    It is illegal for a creditor to try to force repayment by suggesting it can take legal action against you if the statute of limitations governing the debt has expired. However, not paying a debt likely has a negative effect on your credit score, regardless of any statute of limitations.

  • Do inquiries for preapproved offers affect my credit score?

    Inquiries for a preapproved offer do not affect a credit score unless a person follows through with the actual application. Even though someone is preapproved, he or she must fill out the application that accompanies the preapproval. A preapproval basically means that the lender thinks the person has a good chance at being approved, but it is not a guarantee.

    There are two types of inquiries: hard inquiries and soft inquiries. A soft inquiry is what lenders use to preapprove a consumer for a line of credit. Soft inquiries also happen when a current lender pulls a credit report for an account review or when a debt collector checks a credit report for recent activity. A hard inquiry is what is used when someone applies for a credit card or loan. When the consumer fills out the application that accompanies a preapproval, sometimes the lender uses the soft inquiry that was previously pulled, and sometimes the lender pulls a brand new report with a hard inquiry.

    Soft inquiries are seen only by the consumer and do not accompany requests for a credit report. They do not affect credit scores, and other lenders cannot see them. Hard inquiries can affect a consumer's credit score if there are many. Even though the impact of hard inquiries on a credit score is very low, other lenders can see them and sometimes deny a credit application because the consumer has too many other recent inquiries. These hard inquiries fall off a credit report after two years.

  • Do minimum wage laws make labor a fixed or variable cost?

    Labor is a semi-variable cost. Semi-variable costs have elements of variable costs and fixed costs. Variable costs vary with increases or decreases in production. Fixed costs remain the same whether production increases or decreases. Wages paid to workers for their regular hours are a fixed cost. Any extra time they spend on the job is a variable cost.

    In a factory that makes dresses, the variable costs are the fabric and the labor used to make the dresses. Assuming the company employs 10 laborers, and the minimum wage in the state of operation is $8, the company has a fixed cost of $80 per hour in the form of salaries. If it takes six hours for a laborer to make a dress with eight yards of fabric, then two laborers would make two dresses in 12 hours and use 16 yards of fabric. An increase in the number of dresses (production) means there must have been an increase in the number of laborers and the size of fabric used.

    If the company in the above example requires all its workers to work six hours per day, the fixed cost for the company, if it pays minimum wage to each worker, per day is $48. If the size of fabric required to make a dress is eight yards, then the company has a fixed cost of 80 yards per day for each worker. If a worker works for more than six hours per day, the extra amount paid to the worker is a variable cost because the worker is free to determine how many extra hours to spend working. The worker may also want to work extra time on a specific day but is free to choose whether to work on a different day.

  • Do mortgage escrow accounts earn interest?

    A bank is not required to pay interest on any escrow accounts (also mortgage impound accounts) it holds for its customers. There are some exceptions of course, but the U.S. Department of Housing and Urban Development (HUD) does not require interest to be paid.

    There have been two attempts to pass legislation in 1992 and 1993 regarding the payment of interest on escrow bank accounts. Both of these proposals were declined and there have not been any further attempts to change the escrow system since.

    The states that do require interest payments on escrow accounts are: Alaska, California, Connecticut, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Oregon, Rhode Island, Utah, Vermont and Wisconsin. There are legal exceptions that may preclude a bank from paying interest.

    Many of these states require that any interest earned through an escrow account be paid to the customer. This does not make escrow bank accounts an acceptable alternative to standard savings accounts for several key reasons. First, the HUD caps the total excess deposit amount at one sixth of the total minimum amount to be deposited and paid out over the year. This limitation severely restricts any compounding customers might typically enjoy in a regular certificate of deposit (CD) or savings account.

    Due to this fact, customers who manage their personal finances closely might actually benefit by investing the money they pay into an escrow bank account in other investment vehicles. For those whose credit and loans are highly leveraged already, it might be easiest to make smaller monthly payments rather than one large annual payment. Since mortgage escrows are designed to protect lenders from tax defaults, the bank ultimately makes the final decision on whether or not it will require a borrower to establish an escrow banking account.

  • Do Pharmacies Take CareCredit?

    CareCredit’s health, wellness and personal care credit card is now accepted for prescriptions and general merchandise purchases in all of Rite Aid’s nearly 4,600 stores in the United States. While CareCredit is accepted at over 175,000 health care providers nationwide, the company is still working on expanding its network of pharmacies that accept the CareCredit card.


    The CareCredit card is administered by Synchrony Bank, and it specifically targets people who spend a significant amount of money on health care, such as dental services, and cosmetic and dermatology procedures. The card is also suitable for people who incur expenses on veterinary services associated with treatment of their pets. CareCredit cannot be used outside of its network of health care providers that signed up to accept the card as a means of payment. CareCredit does not expire as long as a cardholder is in good standing.

    CareCredit Financing Terms

    Unlike other credit cards, CareCredit offers better financing terms on health care spending. For health care purchases in excess of $200, consumers can take advantage of a promotional period of 6, 12, 18 or 24 months. During this period, no interest is assessed as long as cardholders pay off their outstanding balances in equal fixed-payment amounts.

    For financing terms greater than 24 months, CareCredit charges a 14% annual percentage rate (APR) on outstanding balances. For purchases in excess of $1,000, CareCredit has 24-, 36- and 48-month financing terms, while purchases in excess of $2,500 can qualify for the 60-month offer. CareCredit works with its cardholders in case they cannot meet their payment due dates by offering choices that fit cardholders' financial needs.

  • Does CareCredit cover prescriptions?

    In the United States, the health care sector is one of the fastest growing and costliest industries. The demand placed on workers in the industry continues to grow, as do costs to consumers. With a substantial number of individuals in the country unable to afford health insurance and thus unable to obtain crucial care and procedures to improve and sustain their health, CareCredit is becoming a popular option. CareCredit allows a patient to make a series of payments to a medical provider over time. It is not intended to be an overall medical credit card.

    As a rule, pharmacies will not accept the card to pay for prescriptions or other minor medical supplies. In some instances, a veterinarian who also sells prescriptions may accept CareCredit, but this is not customary. Pet owners should check with their veterinarians to see if they can use CareCredit cards to purchase such prescriptions.

    What CareCredit Is and Where It Can Be Used

    CareCredit is a special form of credit card that was designed to be used for beauty, wellness and health care needs. This card allows an individual to make monthly payments to cover the full costs of many treatments and procedures that health care professionals perform. CareCredit provides special financing offers that typically cannot be obtained through traditional credit cards when paying for health-related treatments and procedures.

    CareCredit offers shorter-term financing options, between six and 24 months, and it does not charge interest on purchases over $200 when minimum monthly payments are made. It offers longer-term health care financing for periods in excess of 24 months and up to 60 months with an attached 14.9% annual percentage rate (APR) until the balance is paid in full.

    Across the U.S., CareCredit is accepted at more than 170,000 providers. Uses include LASIK and other vision care procedures, cosmetic and dermatological procedures, dental care and veterinary care. In many cases, providers have applications for CareCredit, but applications are also available online.

  • Does Netspend report to credit bureaus?

    NetSpend does not report to credit bureaus in any capacity. NetSpend is a prepaid debit card program that allows cardholders to pre-fund their accounts with debit card capabilities. A NetSpend card is often safer and more convenient than carrying cash, but it still allows the cardholder to make in-person and online purchases.

    NetSpend's Account Opening Requirements

    NetSpend does not require a Social Security number to open an account. When enrolling on NetSpend's website, a person must provide his name, address and email address. The following screen then requires the creation of a username, password and security question. Once these two processes are complete, the cardholder receives a card in seven to 10 business days, and he can fund the account at any time.

    The lack of a requirement to enter a Social Security number makes a NetSpend different from a credit card or a traditional debit card. Both credit cards and traditional debit cards require applicants to provide a Social Security number and date of birth. Credit card providers run credit checks prior to approval, often determining the amount of credit they can provide. This information is directly reportable to the credit bureaus, regardless if they approve the card or not.

    Credit reporting bureaus maintain credit reports specifically through Social Security numbers. If NetSpend never requires cardholders to supply this information, it cannot forward any information to the credit bureaus.

    Since NetSpend accounts are prepaid by the cardholder's own funds, a reportable offense would be rare. The only scenario that might cause issues is if a cardholder enrolls in the overdraft protection service. If the cardholder creates a sufficiently large negative balance and does not repay within the designated period, NetSpend has the right to submit his information for collections. There is no mention of reporting to any credit bureau or agency under any circumstance in NetSpend's cardholder agreement as of 2015.

  • Does the Walmart credit card have an annual fee?

    The Walmart credit card does not charge annual fees to its cardholders. It does, however, have other fees associated with late payments, and it charges interest on balances that are not paid on a timely basis. From time to time, Walmart offers special financing terms on its credit card and pays a specific incentive amount after cardholders open a card.

    Walmart Credit Card

    The Walmart credit card is administered by Synchrony Bank and provides $0 liability protection, a 5 cent per gallon discount at participating U.S. Walmart gas stations, a free FICO report every month and no annual fee. Additionally, for purchases made in stores, the card provides special financing terms. Depending on the amount spent, cardholders do not have to pay interest on the balance as long as the balance due is paid off in fixed monthly amounts during the promotional period. The higher the amount spent in a store, the longer the promotional period is.

    The Walmart credit card does not allow taking cash advances and conducting transactions in foreign currencies. If a cardholder makes a late payment, he is charged up to $35 of a late payment penalty. If a cardholder paid his total minimum payment due on time in each of the previous six billing cycles, the late payment fee is reduced to $25. Synchrony Bank uses a daily rate to calculate interest on the balance of the Walmart credit card each day. The annual percentage rate (APR) for purchases is the prime rate plus 19.65%. Walmart credit card members can pay their balances by mail, online, or at any Walmart or Sam's Club store.

  • Does Walmart take international credit cards?

    Foreign visitors to Walmart locations in the United States can use their credit cards issued by banks outside of the U.S. Walmart accepts international credit cards, including American Express, Discover, MasterCard and Visa. Some Walmart stores may accept international credit cards issued by JCB and UnionPay (only those with the "UnionPay" logo on the front of the card and card numbers starting with "62") as well.

    Tips for Using Your International Credit Card at Walmart Stores

    To be sure what credit cards are accepted at the Walmart store that you're visiting, consult the "We gladly accept" sign located at the store's entrance.

    The international financial institution that issued your credit card may require advance notification that you're traveling to authorize transactions abroad. Call the customer service line on the back of your card and notify the representative about your travel plans to prevent any problems.

    The chip-and-pin cards are very new in the U.S. Their current iteration, as of October 2015, is closer to "chip-and-sign" cards. Some Walmart pay terminals may ask you to provide a signature instead of your card's PIN.

    If you run into any issues when processing your card's chip, payment terminals at Walmart are still equipped with magnetic stripe readers. If you card has a magnetic stripe, you can use it as a backup plan for payment.

    Tips for Using Your International Credit Card on Walmart's Website

    When using your international credit card to shop on Walmart.com, remember that Walmart's site only delivers orders to the 50 states, APO/FPO military addresses and U.S. territories.

    Most credit and debit cards issued by banks outside of the U.S. are accepted forms of payment for purchases made on Walmart.com. To ensure that your transaction goes through, Walmart recommends that you enter your full billing international address in the Billing Address line and your international phone number without the 001 or 011 prefix in the Billing Phone Number line. If your transaction is declined, your order is canceled and you'll receive a notification to the email addressed that you used to attempt your purchase.

  • Fixed and variable rate loans: Which is better?

    A variable interest rate loan is a loan in which the interest rate charged on the outstanding balance varies as market interest rates change. As a result, your payments will vary as well (as long as your payments are blended with principal and interest).

    Fixed interest rate loans are loans in which the interest rate charged on the loan will remain fixed for that loan's entire term, no matter what market interest rates do. This will result in your payments being the same over the entire term. Whether a fixed-rate loan is better for you will depend on the interest rate environment when the loan is taken out and on the duration of the loan.

    When a loan is fixed for its entire term, it remains at the then-prevailing market interest rate, plus or minus a spread that is unique to the borrower. Generally speaking, if interest rates are relatively low, but are about to increase, then it will be better to lock in your loan at that fixed rate. Depending on the terms of your agreement, your interest rate on the new loan will stay the same, even if interest rates climb to higher levels. On the other hand, if interest rates are on the decline, then it would be better to have a variable rate loan. As interest rates fall, so will the interest rate on your loan.

    Fixed Interest Rate or Variable Rate Loan?

    This discussion is simplistic, but the explanation will not change in a more complicated situation. It is important to note that studies have found that over time, the borrower is likely to pay less interest overall with a variable rate loan versus a fixed rate loan. However, the borrower must consider the amortization period of a loan. The longer the amortization period of a loan, the greater the impact a change in interest rates will have on your payments.

    Therefore, adjustable-rate mortgages (ARM) are beneficial for a borrower in a decreasing interest rate environment, but when interest rates rise, then mortgage payments will rise sharply. Use a tool like Investopedia's mortgage calculator to estimate how your total mortgage payments can differ depending on which mortgage type you choose.

    To learn more about adjustable rate mortgages and the impact that fluctuations in interest rates will have, read "Choose Your Monthly Mortgage Payments" and "Mortgages: Fixed-Rate Versus Adjustable-Rate."

  • For which kind of jobs is having Magna Cum Laude most important?

    Having a magna cum laude degree is most important for jobs in the fields of finance, management consulting and engineering. These jobs are well-paying at the entry level and quite competitive, with more than 100 applicants for each spot. Using grades is an easy way for employers to narrow the field.

    High grades reflect a candidate's work ethic, discipline and intelligence. These attributes are necessary to do good work in any field. In fields that require graduate degrees, including law and medicine, having a magna cum laude degree is quite important in gaining admission to top institutions.

    Students from the best graduate schools tend to get the best job opportunities. For most graduate schools, admission is based on undergraduate grades and standardized test scores. For all of the jobs mentioned, grades only matter for the first or second job. After that, experience and accomplishments play a much larger role, as well as references from past supervisors and colleagues.

    Essentially, a magna cum laude degree signals to employers and graduate schools that the candidate is capable of working hard and competently. Of course, this does not guarantee success in the workplace, as there is little correlation between career success and academic success.

    Career success ends up being more about being able to work well with others, forming meaningful relationships and creating value. These characteristics are different from the drivers of academic designations. However, a magna cum laude degree is an asset that can help a candidate get a foot in the door.