Financial Facts

For facts and advice about all things financial

Savings Calculator Tool

Dec 2

Posted by Financial Facts Admin in economy, Financial News, Tips and advice

Halifax has developed something really exciting useful that I thought I would share with everyone!

It’s a savings calculator, and what with Christmas just around the corner, it seems like the perfect time to start thinking about putting a bit of money away and saving for something.

click the “Add this calculator to your site” link (found in the bottom left corner) to embed the calculator onto your site for FREE!







Every year the Government allows people to save a certain amount tax efficiently in whats known as an ISA (Individual Savings Account).

Share
No Comments

Credit Card Stoozing: Learn How to Make Money From Credit Cards

Sep 15

Posted by Financial Facts Admin in Credit Card

Credit card stoozing, a.k.a. credit card arbitrage, is a simple process through which you can actually make money from credit cards and high interest bank accounts. Yep, you heard that right – with a bit of effort and some careful planning you can make money from your credit card. Here’s how!
Read the rest of this entry »

Share
No Comments

Finding the right savings account for your money

Sep 12

Posted by Financial Facts Admin in Financial Tips and Advice, Tips and advice

It can be a hard decision to choose from the many savings options on offer – especially with the nation in recovery from a recession.

The Bank of England cut its base rate in March 2009 to 0.5% – the lowest level on record, and has kept it there ever since, which has had a detrimental effect on the savings market.

Before the recession hit, many savings accounts were paying in excess of 6%, with higher returns paid out on longer term accounts such as fixed rate bonds.

However, in harder times we have been forced to put more thought into making our savings grow, while in most cases keeping risk at a minimum.

ISAs

The first avenue to explore for all UK savers is the Individual Savings Account (ISA). These accounts are like no other, in the way that they allow you to take home 100% of the interest accrued, unlike their savings account counterparts that require income tax to be paid on all earnings.

All UK residents are given the option to save/invest up to £10,680 per year into Cash and Stocks and Shares ISAs. Only half of this allowance can be deposited into a cash ISA, leaving the option to invest the other half into stocks and shares. Alternatively investors can use the full allowance on the stock market, allowing them to avoid the tax man when collecting any returns.

These accounts can be built up over the years to create a tax free haven, so it pays to leave your savings alone – if you withdraw any of your funds you cannot replace them. Savers have the option to move their ISA funds to other providers (if the provider accepts previous funds), but it is important to leave the new provider to transfer the funds.

It’s a good idea to stay on top of your ISA, as the best rates tend to come with introductory bonuses that expire after 12 months. Changing providers is easier than you might think, so it may be a good idea to move around once a year (unless you have fixed a term) to chase the top offers.

Fixed Rate Bonds

The best interest rates are generally offered on longer term accounts, as these require savers to cut off access to their funds in exchange for an improved return. While these account are seen as ‘low risk’, savers must be willing to gamble their interest – as the name fixed rate bonds suggests, the rate paid on your funds will remain the same until the bond expires.

If you locking in low and rates began to rise, you would be left behind earning a low rate of interest.

On the flip-side, this can also have its benefits, as if you are lucky enough to lock in on a rate when interest rates peak, you can enjoy the agreed rate despite other accounts cutting their rates.

It can pay to keep an eye on interest rates and not go for a term of several years when rates are low. It can sometimes be difficult to predict the direction of rates, so stay on top of your strategy. For example, many savers may have chosen against fixing their rate after the base bottomed out, but the fact is that they could have been earning half decent rates for the last 2 years.

Share
No Comments

4 Ways to Raise Your Credit Score While Still in College

Aug 16

Posted by Financial Facts Admin in Credit Card

It’s important to establish a solid payment history and credit score while you’re still a student. At that age, credit card issuers realize that you haven’t had enough time to develop your payment history, and are willing to cut you some slack. You’ll still need a co-signer if you don’t have an income, but the credit history you build on a joint credit card will still build your own score.
Many student credit cards require that you be, well, a student, and credit card companies don’t look kindly on a young adult fresh out of college who has no history to speak of. Therefore, it’s vital that you prepare yourself for life outside of college by establishing credit early.
1. Get a credit card, if you can handle it
If you can commit to being responsible, you can begin to build your credit history with a student credit card. This helps many aspects of your credit score: it establishes a payment history, which makes up the bulk of your score; it lengthens the average age of your accounts; and it increases your debt utilization ratio, which is the amount of debt you have compared to your credit limit. If you don’t have an income, you’re required to have someone co-sign for the card. Even if you have established credit, you can get better terms if you apply with someone who has a better score. Lenders are required to consider only the highest credit score of the people co-signing a loan.
2. Don’t apply for too many loans at once
Part of your credit score depends on the number of recent credit inquiries – how many lenders have asked about your history. If you apply for too many credit cards at once, you’ll look suspicious. Fair Isaac (the company that issues your score) makes allowances for “shopping behavior” when it comes to mortages and auto loans: they expect you to contact a number of lenders in a short period, so they count all inquiries for those loans in a 14 or 45-day period as only one inquiry.
However, they don’t make exemptions for credit cards or private student loans. Each inquiry, according to Fair Isaac, lowers your credit score about 5 points. This may not seem like much, but people with 6 or more recent inquiries are at a high risk of default, and so are more likely to face high interest rates or be denied outright. The best way to avoid this is to minimize your student loan and credit card applications, and to do all of your applications for auto loans in a short period of time. FinAid, the government financial aid website, recommends that you limit your private loan applications to just one bank, one non-bank lender and nonprofit state loan agencies.
3. Don’t close your accounts
If you already have a credit card and want to apply for another, don’t close your account on the first credit card even if you don’t plan to use it. A major factor in your credit score is the length of time your accounts have been open, as well as the number of accounts with no late payments. Having an extra credit card also helps your debt utilization ratio, since you can add that card’s limit to your total available credit. Make sure that the card has no annual fee to prevent bleeding money while you’re not paying attention.
4. Have the right kind of debt
Your debt utilization ratio, or the amount of debt you have compared to the maximum amount you can borrow, factors significantly into your credit score. If you max out your credit cards, you’re brushing up against the ceiling, and creditors may be unwilling to trust you with even more credit. Try to minimize your revolving credit card debt. Installment loans (such as student or auto loans) are a better kind of debt to have, since they’re establishing your payment history.
5. If you’re turned down, ask why
As part of the Dodd-Frank financial reform bill, if you’re turned down for a loan or are offered worse terms than usual, you’re entitled to know your credit score and the factors that negatively affected it. This is intended to prevent cases of mistaken identities, bring transparency to the mysterious FICO score, and prevent lenders from arbitrarily lumping applicants into the “bad credit” and charging high interest rates. If you’re turned down, you should understand why. You may be able to catch a slip-up, or you might get some valuable information on ways to raise your credit score.
Tim Chen is the CEO of NerdWallet, a credit card company dedicated to bringing you the best credit cards out there.

Share
No Comments