Credit Card Tips For The New Year

It's a new year, so don't fall victim to the same old habits that lead to tarnished credit and mounting credit card debt. Instead, change your ways of doing business with creditors. Here are some helpful tips to decrease your credit woes in 2008.



First, keep only the credit cards you really need. If you already have credit cards or plan to apply for new ones, be sure to read the fine print on the agreement. Credit card companies will slip details into the agreement that aren't easily noticed. Read every word, and call customer service if something seems too vague.



Once you start using your cards, keep an eye on your interest rates. You might be paying a punitive rate if you've made late payments, or an inflated interest rate if you have cash advances from your credit card. Be clear about which types of charges incur interest rates above your base rate. And if you see that your interest rate has gone up without explanation, call your card company to ask why. They are usually very helpful in explaining charges, and will negotiate better terms with you if you stick to your guns (and possibly threaten to take your business to one of their competitors).



You can also ask the card company if they will let you opt out of the higher interest rate, but this means that you can only pay off the balance of your card at the previous rate, not make new charges.



It should go without saying, but do pay your bills on time. Earlier is even better. Some cards start racking up late fees if you're even one day late with the payment - ouch. Those fees are on the rise, too. It's best to pay credit card bills as soon as you get them.



Don't neglect your other bills, either.



You don't want bruises on your credit score because you didn't pay your bills on time. Reports of default on your credit report can cause your credit card rates to rise. To be safe, check to see if you can set up automatic online payments for your bills. This will ensure that your payments are made in full, on time, every month. (Just be aware that fees sometimes apply for this method of payment.)



And if you're a good customer who makes timely payment, don't forget to call your credit card company to request better terms.



Consider how much delinquent debt there is in America right now, thanks to the sub-prime mortgage crisis. Creditors are reporting record defaults. Your credit card issuer should value good customers. Let them know that you value good service. Competition is stiff in the credit card world, and they will want to keep your business. As long as your demands are reasonable, the card companies should agree.



If 2007 took a toll on your finances, you're not alone. But with a fresh perspective and a few new habits, you can shine up your credit in the new year.

Simple Tips On Refinance Mortgage Loan

Comparing lenders would certainly help you find the best deal on refinancing, but those numbers can get pretty confusing, especially when you are to investigate rates, fees, and points. Remember though that just because a mortgage company has the lowest rates, it doesn't necessarily mean that it offers the best deal for you.



Many financing companies will post their rates online. Lower interest on an ARM or fixed-rate mortgage can be tempting, but have a look at the fine print.



What points or fees are usually required for the rate? Mortgage lenders lure consumers with low initial numbers, only to have high closing costs. A better number to look at is the APR.



The federal law requires the annual percentage rate, or the APR, to be disclosed to consumers before signing any contract. The APR would include the interest rate of the mortgage and closing costs and this will give you an accurate idea of the total cost of the refinance mortgage loan.



Just as your original mortgage had closing costs, so will your refinanced mortgage. Standard fees include origination fees, appraisal costs, and closing fees, while points may also be required to secure a low rate. By looking at the APR, you can determine which lenders are offering the best fees in relation to their rates.



When researching for a mortgage, do ask about penalty fees because early payment or late payment fees can get really pricey.



So there are some instances that you can waive part of these fees, such as an early payment, by paying a point at closing.



The lowest rate refinance mortgage loan may not always be the best deal and it will clearly depend on your situation. For example, paying points for low rates will not save you money if you plan to move in a couple of years later.



Before refinancing, decide on how long you plan to keep the mortgage. Then, compare the costs of mortgages for how long you will have them, even if you take out a 30 year mortgage that you plan to have for only a couple of years.



Mortgage calculators can always help with the math.



So to find the best option regarding your refinance mortgage loan, request quotes for refinancing your mortgages together and separately. Try to look at different lenders to ensure you are getting the most competitive deal. Doing research and analyzing lenders will surely help you get the best refinancing deal for your situation.

What about Taxes and Your Second Mortgage?

For the average consumer who has managed to acquire credit card

debt, automobile loans, and various other small debts, is the

second mortgage loan an answer for the consolidation of debt and

a tax reduction? Quite often the answer to this question is yes.

Second mortgages that have traditionally been used in areas of

home improvement, funding college educations or business

startups are now being considered as a means to eliminate or

consolidate high-interest credit card debt and create a tax

deduction at the same time.



For the average consumer, using second mortgage loan money to

pay off credit card debt or to consolidate individual personal

loans does not eliminate the possibility of a tax reduction;

especially if that average consumer does not already own a

second home. The only problem here seems to be that we're

replacing credit card debt for second mortgage debt; what do we

then do with the credit card we've paid off? The smart consumer

cuts them up.



How does a second mortgage affect your tax liability at the end

of the year? A lot of that will depend on your income levels,

your medical expense, and your other interest deductions.



Mortgage interest expense is deductible on the Schedule A

"Itemized Deductions" form of your individual or personal tax

return. The Schedule A, however is not a straight tax reduction

tool. Tax reductions, or deductions, carried forward from the

Schedule A are a percentage of your AGI, or your adjusted gross

income. Your adjusted gross income is based upon your income

less certain expenses and deductions from Schedule Cs, Schedule

Es etc. etc. Can you now see where this might be a little

complicated?



Let's throw something else into the mix: if you're an investor,

especially in the real estate market, your mortgage interest may

not be deductible, period.



Mortgage interest on your first home

and on your second home is a tax-deductible interest; if

however, you happen to be an investor in the real estate market

the ability to make it clear distinction between first and

second homes versus investment property becomes much harder to

prove. Is the home a second home with deductible mortgage

interest expense, or is it an investment? Of course, for

investors interest expense on a loan for investment purposes is

fully tax deductible; no percentages to work with at all.



Now let's ask another question, if you decide to take out a

second mortgage could you better invest your money? What a

401(k), an IRA, or an MSA be a better benefit when it comes tax

time versus leading the money in your home as equity? This has

been a question long debated by financial analysts, tax

attorneys, and fairly tax proficient homeowners. How does the

equity better serve the homeowner? As a savings account, which

is really what the equity in your home turns out be, or as an

investment tool that can be used to increase your retirement

savings? There are other factors to be considered here: such as

penalties for early withdrawal, risk ratio versus profitability

ratios, and which programs reduce tax on a one-to-one ratio?

Unless you already have some general knowledge of the tax

system, it can be more expensive to determine tax savings than

you would actually save.



As you can see there are many, many ways to affect your tax

liability, your tax deductions, or affect a tax reduction; the

correct answers are highly dependent upon the individual

situation and the individual objectives. The only way to

accurately determine the better benefit is to sit down with a

financial advisor, your tax information, and evaluate your

long-term objectives.



Does the average consumer ever take the time to accomplish this?

As a general rule the answer is no. Most consumers never take

the time to look past next month.



Over the course of a stressful

and busy work week retirement planning, tax deductions, and

income producing benefits never cross the consumer's mind. For

those individuals who truly anticipate and receive benefit from

tax planning in relation to their mortgage interest, there are

many more individuals who never even contemplate that there

might be a savings. Maybe, we should just skip this question.