Articles on Financial Matters:

The Future of Banking - Banking Online

Chances are your bank is a virtual place. Since the invention of the Internet you can see your balances anywhere, at any time. Most banks think globally and have acted this way by creating secure portals to manage their account holder’s information stored in their databases. This information stored usually shows account balances, previous transactions, current balances, interest paid and electronic scans of their checks. Anywhere you can get to a computer, your bank account is right in your hands, usually in real-time.

Online checking
Some banks even provide a service where you can pay your bills online vis-à-vis a checking account or saving account. You can setup creditors accounts, addresses and account numbers to be printed out on each check shipped. There are even some banks that will electronically send the check directly to their account for a nominal fee. Most electronic banking can be free depending on the minimum account requirements are met. Otherwise, electronic banking can cost up to $10 per month for the convenience to send money and manage your account via the web.
In our move towards a paperless society, banks have begun to stop shipping back cleared checks to their account holders. These cleared checks can be found on the Internet and printed out should they need access to these records. Some banks also will not ship their monthly statements as they too can be printed out on the web as well.

Interest bearing accounts
Some checking accounts, savings accounts and IRA’s can also be managed via the Internet. Account holders can move money between accounts and add money to their savings accounts electronically without ever visiting a teller or the local branch.

Convenience
One of the greatest conveniences is being able to reconcile your accounts with the popular personal finance software such as MS Money and Quicken. Banks have ways to create files that can be imported into these software products so that balancing the account is done for them with little intervention. The web makes it very handy should you forget to record items into your register and will do it all for you with a couple clicks of the mouse.

http://www.cashbazar.com

Jakob Jelling
29 Apr 2007

Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.

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What You Need To Know About Credit Cards?

What is a credit card?  A credit card is a card that allows you to borrow money to pay for things. There will be a limit to how much you can spend called your credit limit. At the end of each month you can either pay off the whole of the amount you owe or make a minimum repayment.  Other kinds of cards include: 

A cheque guarantee card, issued by your bank, that you can use to ensure that your cheque will be honoured up to a certain limit.  A charge card where you have to repay the full amount at the end of each month. 

A debit card, issued by your bank, where whatever you spend is immediately deducted from your bank account 

Do you need a credit card?  Using a credit card is a useful way of making purchases: 

A credit card means you don’t need to carry huge amounts of cash around and risk losing it.  A credit card means you can buy items over the internet.  A credit card means you can make purchases abroad without having to worry about local currency.  A credit card gives the opportunity to spread the cost of a large payment over several months.  A credit card is useful in an emergency, for example, an unexpected repair to your house or car. 

How do you choose a credit card?  The main two UK credit card issuers are Visa and Mastercard. These are accepted in most places and in 130 countries worldwide. Beware of less well known brands that may not be accepted everywhere.  Before you choose which credit card is the best for you, remember to read the terms and conditions carefully. Never sign up for a credit card without fully understanding what you are agreeing to.  Remember that all the plus factors will be prominently displayed in large print.  You may have to study the small print carefully to discover if there are any negative factors. 

What You Need To Consider:  APR (Annual Percentage Rate)  This is the rate of interest that you will pay on any outstanding balance.  Special Introductory Rates  You may be offered a low or 0% rate of interest for a limited time (Up to 6 months) when you sign up for a new card. A higher rate of interest may be charged for cash withdrawals.  Balance Transfer Rate  Card issuers may offer you a lower rate of interest if your swap your balance from another credit card to theirs.  Interest Free period  Remember to check when interest payments will begin. Will you pay interest from the day of the purchase? Or will you have a number of days interest free before you begin to pay? There is usually no interest free period for cash withdrawals. 

Cashback and Rewards  Some cards over points or rewards for every pound spent on the credit card. Make sure that these are appropriate for you. For example, there’s no use collecting airmiles if you never fly.  Minimum Repayment  Remember to check what the minimum monthly repayment will be. If you borrow £1000 on your credit card the monthly minimum repayment will probably be in the region of £25. But if you only pay this amount each month it will take a long time to pay off the balance and cost a lot in total when you include the interest payments. 

Annual Fees  This is the fee that the issuer will charge you every year for using their credit card. Not all credit cards have an annual fee, so remember to consider this when you are choosing which one is right for you. 

Late Payments.  There will be an extra charge, as well as the interest owed, if your payment is late. This charge may even be more than the amount you owe so be very careful to check what the charge is, and to ensure that all your payments are made on time. A good way of doing this is to set up a direct debit from your current account. 

Exceeding Your Limit.  You may also be charged a fee if you exceed your credit limit.  Will Your Application Be Accepted?  Whether or not your application is successful will depend on your credit rating. Your credit rating depends on your credit history (a record of your use of credit) and is based on the record of your ability to repay debt.  You can obtain a copy of your credit file by contacting a credit reference agency. There may be a small fee for this service. 

When your application has been accepted you will be given a credit limit. The credit limit will be fixed when you first apply for your card (although you can ask for it to be increased or decreased later) and the limit, including the amount you have left available to spend, will be shown on your monthly statement. 

Insurances and Protection.  What You Can Do:  Take good care of your credit card to ensure that it isn’t lost or stolen.  To prevent misuse of your card you must report any loss or theft of your card to the issuer immediately. Many issuers allow you to register all your cards with them so that in the event of you losing a purse, handbag or wallet they can all be cancelled with just one phone call.  You must keep all your receipts and also check your statement carefully and report any suspicious transactions, for example payments that you have no record of making. 

Credit card companies are now issuing cards with PIN (Personal identification numbers) which are known as Chip and PIN cards. Rather than signing your name you will be asked to enter your PIN onto a keypad. You must ensure that you keep this number secret.  What The Issuer Will Do  The issuer should insure you against loss, misuse or theft of your card.  The issuer may also insure your purchases for up to 100 days.  Your issuer may also provide protection against you being sold unsuitable or shoddy goods. 

Important Points To Remember:  Credit cards can be a very useful tool to help you to manage your finances.  Choose your card carefully, remembering to read and understand all the terms and conditions before you sign up.  Remember to set yourself a budget and decide how much you will pay off each month.  Check your statements carefully each month.  Look after your card to prevent it being lost or stolen. 

Phil Edwards
04 July 2007

Phil Edwards is a Business analyst in the city of London, freelance writer for several finance magazines and websites and co-owner of http://www.1st-uk-credit-cards.co.uk/ and http://www.1st-uk-bank-accounts.co.uk/.