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MEDIA CENTER

The Money Minute - July 2012 

In this Issue

 

 

 

Is a Prepaid Debit Card a Good Choice for You?

It’s a tough question and you need to get your facts straight before you make a decision to use a prepaid debit card. Before we dig into the pluses and minuses of a prepaid debit card, let’s first make sure that we all know what one is. Over the last few years, prepaid debit cards exploded onto the personal finance scene. Celebrities, banks, retail stores, colleges, and even banks are offering the convenient cards to consumers as an alternative to credit cards and traditional debit cards tied to checking accounts.

 

 Read the entire article.

 

Back to School Already?

It seems that the summer just started and here you are getting ready to send your kiddos back to school.  The stores have cleverly arranged their displays to entice your children to shop to their hearts’ content while the advertisers are making sure that they lure your children towards what are probably the most expensive products.  Companies are sending messages to your kids that, in order to be a “cool”, they have got have their product.  So as parents, how can you manage what they need with what they want, and do it all within your budget?

Read the entire article.

 

Midyear Financial Checkup

We all do it. At the beginning of every New Year we make our list of New Year’s resolutions. We vow to get in shape, make more time for ourselves, save more money…you get the picture. But often times, by February 1st all of our good intentions have fallen by the wayside and we are back to our old habits. Once again, we are waiting for our next paycheck, the next month, or January 1st to REALLY implement the changes we want to make in our lives.  Well folks, half the year is over. If you want to make some changes before December 31st, so you’re not looking back with regrets, the time is now.

 

To read the entire article click here.

 

Personal credit issues frustrating your small business dreams?

Apprisen wants to help you reach your dreams by giving you the information you need to be successful. Attend the free webinar on Understanding Credit Reports and Scores Wednesday, July 18th -- 12:00 Noon, EDT

In this free webinar, you will:

  • Better understand credit reports and scores
  • Find out how to access your credit report and score
  • Learn how to dispute and correct information on your credit report
  • Understand the factors that make up your credit score
  • Plan actions to improve your credit score

To register or find out more click here.

 

Do you know a recent graduate that is looking for a career providing financial counseling?

Apprisen has openings for financial counselors in Redmond WA, Toledo OH, Portland OR, and Indianapolis, IN.

Apprisen is a non-profit organization that helps people improve their financial well-being through counseling, community outreach and financial education.

To find out more about our employment opportunities click here.

 

Do You Regret Overspending?

Last month Apprisen’s online poll asked consumers to select their greatest financial regret.  The majority of respondents, forty-eight percent, indicated that habitually overspending was what they regretted most.  The National Foundation for Credit Counseling (NFCC) conducted the same poll on their website with similar results.

 Read the entire article.

 

Is a Prepaid Debit Card a Good Choice for You?

It’s a tough question and you need to get your facts straight before you make a decision to use a prepaid debit card. Before we dig into the pluses and minuses of a prepaid debit card, let’s first make sure that we all know what one is. Over the last few years, prepaid debit cards exploded onto the personal finance scene. Celebrities, banks, retail stores, colleges, and even banks are offering the convenient cards to consumers as an alternative to credit cards and traditional debit cards tied to checking accounts. The card service allows you to “load” a card with your own money and spend that money freely. Anyplace that accepts traditional credit cards such as Visa and Master Card will accept a prepaid debit card; at ATMs, online, in-store, and over the phone. No checking account or credit check is required. Simply order the card online, pick one up at your local retailer or many financial institutions are also offering them.

So, what is the catch? What should you know about pre-paid debit cards?

It’s all about the fees. Not all cards are created equal and each card comes with its own set of fees that you need to be aware of. Here is a partial list of fees that are commonly charged by prepaid debit card providers:

  • Activation Fee: The cost of activating the card so that you can load it with your money and begin to use the card.
  • Monthly Fee: The cost of simply having the activated card in your wallet.
  • Balance Inquiry Fee: The cost of asking for your balance at an ATM.
  • ATM Fee: The cost of withdrawing your money from an ATM.
  • Reloading Fee: The cost of loading the card with money.
  • Paper Statement Fee: The cost of obtaining a paper statement of your card activity.
  • Purchase Transaction Fee: The cost of actually using your prepaid debit card in either a PIN or signature transaction.
  • Customer Service Fee: The cost of calling your card’s customer service department.
  • Inactivity Fee: The cost of not using your card often enough.
  • Declined transaction Fee: The cost of having your transaction declined due to lack of funds in your card’s account.
  • Minimum Balance Fee: The cost of not maintaining a minimum balance in your card’s account.
  • Check Fee: The cost of having the card service provider issue a check on your behalf.

Not all of these fees are charged by all prepaid debit card providers and the amount of each fee can vary widely. For instance the monthly fee may range in cost from $1.50 to $15.00. Some fees may even be waived if you use the card often enough or load your card via direct deposit or in a store. The trick is to know which fees you are facing and to balance the cost of those fees against the cost of a traditional checking account. The total amount of the fees you will be charged will be determined by the card you choose and your own personal finance habits. You also need to know that not all of the fees are listed on the card’s packaging. You will need to visit the website of the card provider to get a more comprehensive list of the fees that you could be charged.

It’s not about building a credit history. Let’s be perfectly clear. Prepaid debit cards DO NOT affect your credit score in any way. This is because you are spending your own money. Your credit score is based upon your ability to manage money that you borrow. Some cards tell you that they report your activity to a credit bureau. However, that data is not used to generate your credit score.

What about controlling my spending? It is true that prepaid debit cards limit your spending to the amount of money that you have loaded onto the card? This in turn means that you are not charged overdraft fees due to over spending. However, opting out of overdraft protection at your bank would provide the same end result.

Is the money loaded onto a prepaid debit card protected? The answer is maybe. Currently, there are no regulations governing prepaid debit cards. If your card is lost or stolen, any protection provided by the card issuer is strictly voluntary and can vary between one card provider and another. Be sure to understand the protection policies that come with your card.

Do prepaid debit cards protect your identity? Yes, they do. Your personal information is not connected in any way to a prepaid debit card. If the card information is stolen, your personal information is safe from harm. Some people obtain prepaid debit cards for the sole purpose of making online purchases.

What is the bottom line? When is a prepaid debit card the right solution?
Prepaid debit cards are a good solution for those who cannot obtain a traditional checking debit card through a bank or credit union. In most cases, the fees you will be charged with a checking account will be lower than the fees charged by a prepaid debit card provider. However, if you regularly overdraw your checking account and are being charged excessive overdraft fees, having a prepaid debit card might be a good way for you to correct your bad habits and rein in those checking costs.

Be careful, do your research and make an honest assessment of your personal finance habits. If you think a prepaid debit card is the way you need to go, then make sure you find one that will suit your spending habits and will result in the least amount of fees possible.

 

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Back to School Already?

It seems that the summer just started and here you are getting ready to send your kiddos back to school.  The stores have cleverly arranged their displays to entice your children to shop to their hearts’ content while the advertisers are making sure that they lure your children towards what are probably the most expensive products.  Companies are sending messages to your kids that, in order to be a “cool”, they have got have their product.  So as parents, how can you manage what they need with what they want, and do it all within your budget? 

First, go through the list of the items that your child “must have” that you were sent from the school.  Are there items on the list that you have left over from last year and that you can still use?  Do you really need all of the items listed in the quantities that are suggested? Prioritize the list by the supplies you must buy now and things that possibly could wait until later.  Often times, there are items on the list that the teacher wants for the use of the whole classroom, like Kleenex or baby wipes.  If money is tight, you might speak with them and offer to send your contribution at a later date.

Next, you must decide how much you can afford to spend.  Once you have that dollar amount in mind, let your child decide how they are going to divide it up.  By doing this, you are giving them the control to make the decision on what to buy while staying within your budget.  This is something that every adult has to deal with and by teaching your children this lesson at a young age; you are better preparing them for the real world.  They will learn how to prioritize what is important to them.  Maybe they would be happy with using the same backpack from last year because they really want the more expensive notebook.  Or, maybe they’ll decide to reuse much of what they had from last year and put that money in savings.  That’s okay too.  Give them many opportunities to practice this skill; shopping for clothes, at the grocery store, entertainment. By doing this, you are helping them become a more confident consumer, which could only lead to a more financially fit adult.              
    

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Do You Regret Overspending?

Last month Apprisen’s online poll asked consumers to select their greatest financial regret.  The majority of respondents, forty-eight percent, indicated that habitually overspending was what they regretted most.  The National Foundation for Credit Counseling (NFCC) conducted the same poll on their website with similar results.  

Overspending far outweighed other financial concerns such as inadequately saving (twenty-one percent), insufficiently preparing for retirement (fifteen percent), not having bought a house (eight percent), or, conversely, having bought a house (six percent).

Most people have financial regrets, but it is important to not dwell on past mistakes. Instead, look forward and take action by constructing a plan that recognizes the realities of the situation, repairs financial damage, and moves in a positive direction toward financial security.

Apprisen offers the following 10 tips for turning financial regrets into financial wins:

  • Set financial goals – Both short and long-term goals provide a financial framework and create a vision that keeps spending on track.  Put the goals in writing and display them in a prominent place.  Have sound reasons for establishing each goal, and when necessary, sound reasons for abandoning them.
  • Create a budget – A budget is the cornerstone that a sound financial future is built upon.  Without it, danger signals are missed and spending can easily spiral out of control.  Get started by utilizing the financial worksheet on our website. 
  • Become a track star – At least once every six months, track your spending by writing down every cent spent for 30 days.  This exercise will reveal any leaks and provide an opportunity to adjust spending to best meet your objectives. 
  • Be financially organized - Create a cash-flow calendar, writing down all sources of income on the anticipated pay date.  Next, record which bills are to be paid out of each check.  If there is not enough money to satisfy all obligations during one period, call the creditor and request a due date change. 
  • Don’t wait to automate – Setting up automatic bill-paying provides protection against skipping a payment or paying late, both of which can result in a dinged credit report, a potentially lower credit score, and a late fee. 
  • Review your credit report – A credit report is a reflection of a person’s financial track record, and is the basis of the credit score, making it a must-read, particularly for those rebuilding credit.  Consumers are allowed one free credit report every 12 months from each of the three bureaus.  To access this free report, go to www.AnnualCreditReport.com.  
  • Build a high credit score – A high credit score equals a lower interest rate on loans and credit cards.  For a higher score, put an emphasis on paying bills on time, not utilizing more than 30 percent of available credit, creating a mix of credit lines, not applying for more credit than is necessary, and responsibly managing credit over time. 
  • Realize that life happens – Life is filled with the unexpected. Unplanned expenses always occur at the worst time, wrecking the best of budgets.  Guard against this by creating a financial safety net.  Even small amounts of money consistently deposited into a rainy day savings account can create enough of a cushion to make it through most short-term emergencies.
  • Know that tomorrow will come - Even if retirement is a long way off, that’s no reason to ignore planning for it.  Knowing that time is money’s best friend, provides the smart young investor a very long window of opportunity to turn a small sum of money into a fortune.
  • Become a financial adult – This may involve making hard choices, changing attitudes, behaviors, and lifestyle, but it is unlikely that financial decisions made on auto-pilot will result in a smooth landing.  Be financially mature by understanding the nuts and bolts of personal finance, and acting on that knowledge.  

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