Tag Archives: Interest Rates

5 Steps to Getting Your Car Paid Off Early

Paying off your car loan early will save you hundreds of dollars in interest charges, eliminate a monthly expense, and increase your credit score as your rate of debt to income goes down. Plus, you’ll get a real sense of accomplishment knowing that your car is completely yours, free and clear. 1. First do your homework Review your loan paperwork before you start. Most car loans are simple interest loans. That is, the interest accrues during the life of the loan, so paying it off early will save you a lot of money. In a precomputed interest loan, on the … Continue reading →

Interest Rates

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I have been overhearing some concerning conversations out there – people who are waiting for the interest rates to keep falling. Let us address this misconception about interest rates with a little background. The Fed cuts interest rates by two main factors. The first are the rates charged to the banks when the bank borrows money from the Fed or other banks. The second affects the prime rate – which many unsecured loans are based on. Still, both of these rates don’t necessarily trickle down into the two places people most use debt – mortgage rates and credit card rates. … Continue reading →

Trimming Interest Rates

Boy does everyone get excited when the Federal Reserve starts to trim the short-term interest rates. In our debt ridden society, it is no surprise this news feels like money in the pocket to many. Still, there is a negative side most don’t immediately think of. When interest rates drop, it affects both the borrowing and the saving rates. Therefore, while your debt may get cheaper, your ability to increase your savings will get harder. Finding a savings account that will pay you more than 2.5 percent currently is difficult. At 2.5 percent, it is impossible to get ahead as … Continue reading →

Big Week for Money

If you have been following the news, you will note that there have been many big changes to the economy this week. There are many signs that our country is heading for a recession and the government is trying to balance. These sorts of actions are very interesting as we head into the next election. They also affect our own pocketbooks. After months of gradual decline, the stock market had a large drop this week. Since October, the S&P has dropped 16%, the Dow dropped 15% and the Nasdaq is down 20%. All three of these indicators are not good … Continue reading →

Are Your Credit Cards getting a Workout?

Instead of giving credit cards a workout, try putting them on a diet if you want to save money over the long term. This time of year, it’s tempting to break out the plastic. I have sworn off plastic myself, but I know many people that can’t help getting a little carried away during the holidays. It’s easy to do! There are some other things to keep in mind about credit cards too. For one thing, you can sign up to pay your bill online with many different cards. This is a great option if you happen to be running … Continue reading →

Federal Reserve Board’s Rate Cut

If you caught the headlines today, you already know that the Fed made a big decision this week to cut the discount rate. What you may not know, is exactly what this means. The discount rate is the interest rate the Federal Reserve Bank charges to individual private banks when they take a loan from the Fed. Normally this interest rate is only evaluated during regularly scheduled meetings. This week the Fed stepped out of the norm to adjust the rate between meetings. This is not a typical process, and the last time it occurred was September 17, 2001 shortly … Continue reading →

Paying Off Loans

If you have debt and are looking to start paying it off, then you need to evaluate where to put your money first. For those with a couple of loans, this process may only require a piece of notebook paper. But for most of us with a variety of loans and debts, create a spreadsheet to compare the variances between them. These differences will help you decide which loans need to be paid off first. Start by lining up all your sources of debt. Common types include: *Mortgage *Home Equity Loans *Lines of Credit *Credit Cards *Student Loans *Automotive Loans … Continue reading →

Understanding Interest Rates

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After many conversations with friends and family, I realized that a basic understanding of how interest rates work for borrowing and investing was missing from the general population. Many families are faced with the decision as to where to put their money, after they have paid all their basic expenses. Should they place it in a savings account or pay off their credit cards? This consistent discussion actually led me to write an article on this same subject for the Dollar Stretcher. The main struggle appears to come from understanding the overall affect of the interest rate. The Prime Rate … Continue reading →

Be Careful When Transfering Credit Card Balances

If you are considering transferring you credit card balance to new zero percent interest card, you need to approach this move with caution. You need to be very careful of the steps that you take as you do this, or you may end up costing yourself more money in the long run. There are many different variables you need to consider before you transfer the balance over. The first thing you should consider is if the card charges a balance transfer fee. This fee is usually around two percent of your balance, but it may be higher than that. You … Continue reading →