Dec 032015
 

WHAT IS A BANK STATEMENT?

If you have a bank account, then you will be mailed a report showing your bank accounts details. This is your bank statement. This statement simply shows all of the transactions in the account, and is usually sent once a month; meaning that it covers the last period up to the date the report was prepared.

A bank statement can vary from one bank to another but they usually contain basic parts that can help you understand its reading and interpretation.

  • Personal information. Here is where your complete name and permanent direction and address appears. You should ensure that it is properly written and that it is kept up to date.
  • Account information. Here the account type is displayed (either savings or checking), the account number, and also the statement period; usually of one month.
  • Statement summary. This part is where you find the status of your account, indicating the balance at the beginning of the period, total withdrawals, total fees, total deposits and finally the balance at the end of the statement period.
  • Transaction summary. This is a part that you will find the details of all your expenditures by date. Here you will observe the description (who /where the transaction happened), the transaction date, withdrawal and deposit.
  • Fees. This is the money that is deducted from your account balance either due to overdraft or miscellaneous bank fees

These are all of the things that your bank statement will feature, but how exactly do you understand all of this information?

Confirm the Statement Period

You can do this by looking at the top of your bank statement that you have been mailed to see which period (which particular month) it covers. This will be the period that all the transactions done are reflected on the statement.

Examine the Account Summary

This is where you find the summary of the total withdrawal and deposited amounts from the account balance for the period of that statement. This part also comprises of the account balance at the beginning of the period of the statement. At the end of the summary you will be able to see the outstanding balance of your account after all the credits and debits are summed up.

Reconcile your Account

Have this habit of checking your account statement to see if it is correct. To do this you need to carefully review your bank statement and make sure all the transactions match your records that you have been keeping. The review includes looking out for incorrect or transposed numbers as well as unauthorized transactions. When all the transactions match up with your record then the statement is correct. But if it fails, you should contact the bank so that corrections can be made. This is a great tip for avoiding overdraft fees.

Familiarize yourself with a list of common statement references and what they mean. You should be familiar with what credit (adding), debit (subtracting) and running balance is. Apart from these terms, there are other references that you need to familiarize yourself with like:

  • ATM- automated teller machine
  • BAC- automated credit
  • TFR- transfer
  • TLR-teller transaction
  • TEL- telephone banking
  • OTR- online banking transactions

Keep Records

After reconciling your bank statements, make sure you store them in a safe place, for they will help you when it comes to filing your tax returns. Apart from tax returns, you will need to show the statements to the lenders when looking for a mortgage.

In general, understanding your bank statement helps you to know how much you are worth at the moment and this will help you in planning the way forward.

Nov 302015
 

If you take the time to add up all your monthly banking fees at the end of year – I am sure you’ll find it shocking. While it is true that many Americans are paying less in banking fees this than they were in previous years, the number is still incredibly high for some people. This can easily lead to frustration and even anger. But – there is still some good news if you’re caught in the web of massive bank fees every month. There’s relief, right now, that you can begin taking advantage of today. Sit back, relax, and visualize your savings account moving on up.

 

4 Ways to avoid your bank’s monthly fees:

1) Use ATMs wisely

The most common fee, that is actually the most difficult in noticing the monthly accrual, are the ATM fees. If your bank charges you to use ATM’s that is not owned/operated by them, then make it a point to never use those ATM’s if it’s possible. If it’s not possible to access an ATM that’s owned/operated by your bank – then simply find a store or gas station nearby and get cash back from a debit purchase. Small actions like this could potentially save you hundreds of dollars per year if you’re a regular ATM user.

It also might be helpful to note that many banks offer a mobile app that is able to locate nearby ATM’s based on your current location.

2) Utilize Direct Deposit

If you work for an employer that can deposit your paychecks directly into your bank account using direct deposit – Do it! There’s more than one benefit to having direct deposit. The first is that you don’t have to physically take a payroll check anywhere to cash it or to deposit the money yourself. Second, most banks offer incentives (such as waiving certain fees) if you enroll in their direct deposit option. It’s a good thing all around.

3) Go for Online Banking

Most banks now offer online banking options – since this has become the norm for members of most banks, members who still prefer the traditional paper statements are charged a fee for it. This is an easy fee to rid yourself of. If you’re still with paper statements – perhaps you’re fearful of the online banking world. Not sure if you’ll like it or be able to learn the system? I can tell you in complete certainty that it’s not as bad as you think it is. It’s quite simple. Go talk to your banker – they will give you information and explain the process. Trust me, it’s a move you will not regret.

4) Please Waive These Fees

We’ve all been hit with a banking fee that we were unaware of. It happens more than it should. Banks want to make money but, they want to keep you happy too. Next time you go over your statements, look for one or two of these fees that you think shouldn’t be there. Next, call up your bank. Talk to a representative and explain to them your situation. Be kind, courteous, and respectful and you’ll find that most banks will waive fees for you a couple of times. Especially if you’ve been banking with them for a long time. Your long-term business is far more important than a few dollars. It’s worth a shot.

There are ways around these fees but, it takes resilience to test out the methods and to do the research. Don’t get discouraged – if things get bad and you’re having a tough time changing the outcome every month – maybe it’s time to find a new banking institution.

Oct 302015
 

Achieving and maintaining a good credit report is important for several reasons, including helping you get a good job and keep it. In addition, it will save you tons of cash in the future. It can even help you find a love interest (yes, studies show that having a good credit score is attractive to others because it shows responsibility). A credit score is not the only thing that you should keep clean in regards to your finances. There are some financial moves that will not show up on this report, but can cause you immediate and future financial harm. Below we have outlined 4 things that can cause you financial harm and how to avoid them.

Don’t make the minimum credit card payment.
If you are only ever making the minimum payment on your credit card and continue to use it, you are directly causing damage to your overall financial health. The ratio rate will increase if you only pay the minimum required amount and in turn your credit score will drop. If you must use a credit card, it is advised that you pay off the full balance as soon as possible.

Avoid cash advances.
No matter how tempting they might be, avoid cash advances if you can. Credit card companies make this enticing offer quite often and they count on people not reading the fine print. Basically, you can expect a fee ranging between three and five percent on the requested amount. This can be about $50 per $1,000. In addition, be prepared to pay a higher APR than standard charges. So, in the short and the long run, a cash advance will cost you more than you think and this financial move should be avoided at all costs.

Do not co-sign.
You may think that you are being supportive by signing your name to a loan of a friend or family member, but by co-signing on the dotted line, you have taken upon equal responsibility for repaying that loan. This loan that you signed out of the kindness of your heart will show up on your credit report as if you are primary applicant and not a co-signer.
Not thinking ahead.
Underestimating future financial needs is something that could get you into financial trouble. Healthcare expenses after retirement is a perfect example. Many people are living well into their 80s and 90s which is 25 years past standard retirement age. Those account for a lot of years to plan for your retirement. Ideally, it is encouraged that you stay active (both mentally and physically) for as long as possible. In fact, preventative exercise in your 50’s and 60’s is a great investment in your financial future. Also, once a person has retired, they should downsize their living expenses by at least 25%. Making a big purchase or taking a dream vacation shortly after retirement can be wonderful in the “here and now”, but it can have a negative effect on your financial future.

 

Keeping your finances in good health by making good decisions and side-stepping financial pitfalls are some of the best tips to keep in mind in order keep your finances harm-free.

Oct 292015
 

The use of prepaid debit cards is on the rise in the United States. In 2012, the Consumer Financial Protection Bureau reported that around $57 billion were put on reloadable debit cards. Some people question their need but the fact is, their use is on the rise and there is good reason.

Prepaid cards are easy to use. Rather than spend the time opening a checking account and sitting through the credit checking process, prepaid cards can be used by anyone as long as you are willing to put money on them. Some people cannot open checking accounts due to bad credit and may want an alternative. Prepaid cards offer the same benefits as their credit cousins issued by banks, but instead of having money in a checking account, it is all loaded on the prepaid card.

Prepaid cards don’t come with interest, like credit cards, and no overdraft fees like banks. There is no balance that can be accrued, no interest charges and it is impossible to withdraw or spend more money than what is loaded onto the card. This offers users a safe way to spend without causing any debt.

Users of prepaid debit cards can enjoy the same convenience of online shopping and bill paying that traditional debit card users have, but without as much risk. While they are as widely accepted as any bank card, none of your personal or banking data is linked to a prepaid card, so while you can use it just as one would use any debit card, there is no fear that your checking or savings account will be hacked and depleted because that information is not linked to your card.

Prepaid debit cards are a wonderful way to gift money to someone as well. Children as young as thirteen can be authorized to use these cards, making them a wonderful way to give money as a gift at Christmas, birthdays or even just for their allowance. They are simple to reload. Generally you can have it done online, over the phone, or at a store. This also makes it easy to get money to college aged kids to help pay for room, board, books and food. Most prepaid cards can be used internationally. If your friend or loved one is in another country you can simply reload the card and they can withdraw from an ATM or swipe at stores. This option is much cheaper than trying to wire money out of the country.

These cards are gaining so much in popularity that some employers now offer direct deposit to prepaid cards. Just like having your paycheck deposited directly into your checking account, your wages can be deposited directly onto your prepaid card so you don’t have to waste any time making the funds accessible. You can immediately pay bills and go shopping on payday.

There is clearly a great need and a want for prepaid cards today. A little research will help you decide what is right and best suited for your needs.

Oct 232015
 

No one wants their information hacked or stolen, especially when it comes to debit cards and credit cards, but each card works differently if your info is stolen and used in an illegal transaction. In most cases, when a debit card is used the customer must work to get their money paid back, but with a credit card it is the issuing company that must work to get their money paid back.

Facts About Fraud

Any personal card information that is stolen and potentially used to commit fraud is covered by two federal laws, which are designed to protect your rights. Debit cards fall under the EFTA or the Electronic Funds Transfer Act. Credit cards fall under the FCBA or the Fair Credit Billing Act. Each of these laws offer protections with some similarities, but understanding the differences between them is the key to knowing what happens in a case of card information misuse. The differences also make it clear why one type of plastic is safer than the other when making purchases online.

Debit Card Fraud

Under the EFTA, personal and potential liability for fraudulent debit card transactions is practically unlimited. Although you have a 60 day window to report a lost or stolen debit card, beyond that card holders still lose any money used or taken illegally. This includes money that may be linked via other accounts or is transferred between such account holdings. The 60 day window begins the day a debit card is reported lost or stolen, the same 60 day window begins the date of the statement when fraudulent transactions begin, if the debit card was not stolen. Card holder liability can range upwards of $500 and probably a lot more.

Credit Card Fraud

Under the FCBA, a credit card holder is held liable for a maximum of $50 in fraudulent transactions. If the credit card is reported lost or stolen before fraudulent transactions occur, the card holder liability is zero dollars. Some credit card companies promise customers zero liability for all fraudulent purchases, online orders or other transactions, as long as the card is reported lost or stolen. Very often, credit card issuers will catch the fraudulent activity before the card holder and notify them by telephone. Once they contact the card hold, verify the fraudulent activity and cancel the card, most customers never have to pay a penny.

Credit Cards vs. Debit Cards

Here are the facts:

With a credit card, when a fraudulent transaction happens there is no money lost on your end. All you need to do is contact the credit card fraud department, get your statement, file a claim and the incident will never impact your personal finances.

When a fraudulent transaction happens with a debit card, however, the money in your bank account is affected. Any and all fraudulent debit card transactions can tie up funding, causing even legitimate payments to get declined, checks to bounce or bank accounts to be overdrawn.

From a pure legal perspective, using credit cards provides greater personal protection against all types of fraudulent activity, but especially with online purchases whereas using debit cards is much less safe and also has the potential to impact other related accounts. When making the decision which type of card is best to fir you to use online, consider the facts as they are and try to choose wisely.

Oct 232015
 

Credit card fraud happens a lot more than you may imagine. Every day, there is someone whose credit card is compromised and thousands of dollars are lost. This is why you must prevent it from happening, but in order to do so, it helps to know how.

Use Phone Based Payment Services
You do not have to use your credit card all the time. Smartphone-based payment services like Android Pay and Apple Pay make it easier, safer and convenient to pay for your goods and other services. These services use tokenization technology which is good for keeping your information safe. Furthermore, the phone itself has its own security features making this option even more secure. The beauty with this system is that the cashier also has to confirm your picture or fingerprint before a transaction can be completed. Furthermore, the thief will also need to have your phone’s password as well.

Get a Credit Card with EMV Technology
The EMV chip technology is a relatively new form of credit and debit card technology that is steadily gaining popularity in the US. Although these cards do not eliminate all forms of credit card fraud, they are free from some forms of theft associated with the old magnetic stripe variants. Their enhanced security features are made possible by the tokenization technique that they utilize. Basically, tokenization means that every transaction is unique, and the card’s unique information changes after each use.

Merchants no longer see the account number but a token generated from the transaction and it is not possible to link the token to the card that was used. This is very different from what traditional magnetic stripe cards do. With those cards, the card information is shared under every transaction making susceptible to counterfeit fraud. However, it is pertinent to understand that the extra security features only come into play if you swipe the card in an EMV terminal.

Invest in a Smart Card
Just like the EMV credit cards, smart cards are the latest technology. These cards allow you to pool all your other cards into one smart card. When you need to buy something, you swipe the card on a small battery operated computer and choose the specific card to make payments with. The system then locks the card after each use and you will need a password to re-enable it for the next purchase. Even if you lose the card, you will not have to worry about it being used since the thief must have your password.

Protect Your PIN or Password
PINs are used almost everywhere today. Unfortunately, many people make this information readily available by writing their passwords and PINs on a piece of paper in their wallets. This means that if you lose the wallet, and it has your credit cards then someone can easily make a transaction without your consent.

Protecting yourself from credit card theft should always be a priority whether you use your cards regularly or not. Where possible, pay in cash and never use your card on terminals that look suspicious. By remaining vigilant, you can prevent credit card fraud.

Oct 222015
 

It is important to protect yourself from identity theft and fraud. You can use fraud alerts and a credit freeze to protect your financial information, but there are some differences between these two things that a consumer should understand. Both of these alerts can help prevent your identity and help protect your credit from thieves but they work in different ways.

Fraud Alert
This is when a warning is placed on your credit report to let lenders know they need to contact you to verify your identity before approving a new account. If someone is trying to open an account using your name, the lender will call you with this information. This can be hard if you are trying to get approved for a loan as it may take extra paperwork. The alert usually stays on your credit report for 90 days. To put an alert on your account all you have to do is contact a major credit reporting agency and ask them to place a fraud alert on your file. You can request this alert from Experian, Equifax, or TransUnion credit reporting agencies. The reporting agencies have to notify each other of this alert. If you have lost your identification or a place where you do business had a data breach your credit information can be at risk. The alert will keep another person from opening an account with your identity. You can rest easy knowing your finances are protected.

Credit Freeze
A credit freeze can be used as a security measure. The freezer will prevent lenders from viewing your credit report without your approval. Lenders need to see your credit history before approving you for an account so this will hold up the process. If you are looking to open a new account you may attach a pin number to your credit report that is needed before running a credit check. In order to set up a freeze, you need to contact each one of the credit reporting agencies. You may have to pay a small fee to set up this freeze. The freeze on your credit report will not be taken off until you ask to have it removed. You should put a credit freeze on your report if you think your social security number was stolen. If you had a credit card stolen you can also put a freeze on your credit report as well. You may be able to get a new credit card, but you are not able to change your social security number however. If you have already been a victim of identity theft you may want to freeze your credit report to prevent any additional problems.

Both fraud alerts and credit freezing can make it harder for your identity to be stolen. Criminals will not be able to open new accounts using your name or personal information. These credit alerts will also help prevent you from becoming the victim of identity theft if someone were to get your information.