Shady Collection Agencies

There are a lot of businesses that serve useful purposes. Sometimes there are businesses that take advantage of our ignorance or fear. I recently received a call from Allied Interstate. I didn't recognize the company name so I got on the internet and looked them up. One of the first items that popped up was this article ,which was very enlightening. Allied Interstate is a collection agency with a shady reputation. There tactics and methods are very questionable and possibly illegal. I do have any accounts that are in collections, meaning that I don't have any accounts that I have neglected paying on for a extended period of time. Typically if you have an account overdue and you haven't recently moved you will get a written notification of accounts that are past due. I have not received any past due notices. Because I am certain that I don't have any accounts in collections I am not responding to Allied Interstate, but I will be checking my credit report soon to find out if there is anything on my report that I am unaware of. The reason I am not talking to Allied is their reputation for rude and obnoxious behavior. Do a google search on this company it gets real interesting.

Need A Loan

I am doing small business consulting and loan brokering now. Strictly in Michigan for the time being. I will start a series of articles on the loan process for small businesses.

Keep Business Dealings On The Straight and Narrow

Recently I have had the opportunity to consult a business that needed to refinance a loan. The loan was not very old and, of course, the question arises why refinance. The current lender was "calling in" the loan, of course, my next question was "why". Apparently the company had made a loan to the owner and the lender  felt that it was beyond the scope of the intention of the loan. There could be a violation of the loan agreement as well. When you are in receipt of money in the form of a loan there are some things you need to keep in mind. The lender has significant leverage. You have to abide by the agreement and expect repercussions if you don't. Also you can run into trouble if your financial situation and cause the lender to "call in" the loan. You would be given some time to acquire money to pay off the funds, but you may be up against a rock and a hard thing. The point to all this is, know what is in your loan agreement. Don't try to be to tricky or clever. If there is any question about proper use of funds, ask your lender. If you are having financial difficulties, call the lender and keep them informed. Keep everything on the up and up. It will help keep you out of trouble.

Mortgage Maze Made Clear

Understanding mortgages can be like learning a foreign language, but with help from an expert you can understand and benefit from it. Please visit this site and be enlightened.

http://www.homeloansbymike.blogspot.com

Safty Deposit Boxes

I think one of the best deals in banking is the Safety Deposit Box. For a relatively low annual fee you can put important papers or valuables in a box that requires you and a bank employee to be present to open the box. Generally these boxes are also in a vault so they are locked up twice. Bank locations are alarmed when the bank is closed. It would cost a fortune to install all the vaults and security equipment that comes along with a bank. At the current rate of residential break-ins keeping your most important possessions in a Safety Deposit Box is a wise choice. One of the draw backs of the boxes are their size. They come in a variety of sizes, but the largest I have seen is about the size of a file drawer. So you won't be able to put your snowmobile in one. Insurance papers, Trusts and jewelery are some common items. Be aware that you are not suppose to store cash or guns in these security boxes. You can't bring guns into a bank and the government doesn't want you to put cash in safety deposit boxes.

Read This Article On Two Fraudsters That Were Caught

Two fraudsters caught in Michigan.

The Budget That Ate New York City

It really isn't a budget that eats your income. It is the lack of a budget. I have found budgeting money one of the most difficult things to accomplish. Keeping on a budget requires keeping track of spending. Even with computers and software it is still a daunting task. Another obstacle is getting all the spenders on board with the process. These things alone would make many walk away from the process. I suggest that tackling this process is well worth the effort and in the long term will produce many benefits. Tracking is an essential part of budgeting. You have to know where your money is going to get your spending under control. When I worked out a budget for my household I found we were spending a large amount of our income on eating out. It was so much money that I did one of those "WHOA" things. My wife and I made a pact to cut back on our trips to the restaurant to two times a month. We typically go the same places so it wasn't necessary to put a dollar amount on that category. Simply going less was enough. You can do an inventory through your check register, bank statements or online banking site. Once you have completed a review of your spending habits you must devise a plan. What are the areas where you have the most control over spending? Buying music CD's, Video games or gadgets? How about services you use? Home Phones, cell phones and insurance to name a few. With a few changes you could save a significant amount of money and loosen up a tight budget. Once I used my 401k plan to force me into a budget. I increased my contributions to force me to save and made cuts in spending until I could afford to pay my bills. Sounds extreme, but it worked. Successful businesses keep track of their spending you should too.

Nigerian Scam.

Some people still live under rocks as this story about a county treasurer shows. If you get a email or letter from a dethroned prince from another country with lots of money to put in your care. Run the other way.

Systematic Savings

The United States has one of the lowest rates of saving money in the world. Our buy now pay later style of living has put many of us in the hole. Having a cash savings account that we can fall back on can be a huge benefit if our financial situation takes a turn for the worse. Many people feel that do not have the financial resources to start a savings account. Some people start a savings program then use the savings for a purchase of fun things instead of emergency items. One way to achieve a cash reserve is to systematically put money into a savings account set aside strictly for emergency purposes. Many banks and other financial institutions will allow as little as $25.00 a month transferred automatically into another account. The more ambitious you are the more money you could transfer. If you do $50.00 a month that is $600.00 a year. Some might think this isn't much, but if you can do this for a few years you could have a nice nest egg to fall back on in times of need. Having a saving plan is a sure step on the way to financial security. If you have to give up a few things to start this plan, do it. It will be worth it.

Is my check local?

One of the most confusing things in banking is how fast your deposits become available to use. Local vs Non-local checks is not as straight forward as you think. Local means that the bank that the check was written on is in the same Federal Reserve Zone as the bank receiving the check. So a local check could be from another state. At the bottom of your personal check is a set of nine numbers (not the account number). This number is unique to your bank, like a bank serial number. It is good to familiarize yourself with your banks number. Once you know that you can identify which checks are not in your Federal Reserve Zone and possible delays of funds availability. Here is a great link with some details on the numbering system.

Depositing To ATM's

ATM's (automatic teller machines) have become a major channel for banking. They truly are a marvel. They usually work and work correctly. You can put money in and take money out. You can transfer money between accounts and buy stamps. There is, however, a major difference in the way your transaction is processed. A deposit to an ATM is recorded in the computer system when you do it, but the actual processing of the deposit may not happen until the next day. Here is an example. You are coming home from work after you bank branch has closed. You have checks that need to be deposited. The ATM is right there so you fill out the envelope and push the appropriate buttons and stuff your envelope into the slot. Great! your deposit is done and you are on your way. Well, sort of. You see the deposit will not be taken from the ATM until the next day. Some times it is done by branch personnel and sometimes it is pickup up by another department or service provider. That means there is a delay in your deposit getting into your account. Branch personnel or the pick-up service will take that deposit and process it the next day. That means that any checks or debits that come through your account that night will not be covered. Additionally you have to take into consideration holds or check aging. If the bank holds all local deposits for 24hrs then that delays your deposit even more. Another consideration is the size of the deposit. Banks can delay the availability of deposits if they have reason to believe there is additional risk. I once had a person bring in a personal check written in three different color inks without a payee listed. Danger, danger, danger. I would not take the check. The moral to the story is whenever possible make your deposits with a teller. It is faster and more efficient. Here is a situation that you may find interesting. I once had a customer call and say that a deposit she had made in our ATM has not shown in her account. Of course I was sceptical. I have heard that story many times, but the customer seemed sincere and I wanted to make sure I did all I could to find her deposit. Each deposit that is made into an ATM is imprinted with information to identify the deposit. We verified that each deposit that was recorded by the ATM was accounted for. Nothing was missing according to the ATM records. We opened the machine and looked everywhere, pulled out the hoppers and dismantled the machine as much as possible. Nothing. We took one more look and I looked into the front of the machine and I could see a crumpled envelope. It was stuck under the conveyor that takes the deposit envelope and prints on it. The didn't let the machine take the envelope, but crammed it in the slot herself before the machine had a chance to take it.

Overdraft Protection

We live in a fast paced world. Many times we end up our days counting the things we didn't get done. One of those things could be the accounting of our finances. So we choose taking Rudy to daycare and we will enter the check we just wrote for the dry cleaning later. Oh, we always remember later. We remember when we get the Overdraft Notice. The ideal situation is to write in each check and debit in as we do them, but we don't live in an ideal world. So there is Overdraft Protection. It comes in many forms. It could be an automatic transfer from a savings account, a special line of credit or a charge to your credit card. These could all have charges connected with them, but generally not as expensive as the Overdraft Charge without any protection. Overdraft Charges could be up to $36.00 per item. That can get very expensive. A line of credit could have a high rate on it, but 18% on $100 is only $19 if you carried the balance for an entire year. The bank will, of course, make you pay it back sooner than that. The overdraft from a savings account will, most likely, have a per transfer fee attached to it. The credit card will also have interest charges as well. Some banks will charge an annual fee for the privledge of having Overdraft Protection, but in the long run you will be better off having it available. I once had a customer that had an overdraft that was covered by overdraft protection. She claimed she had never signed up for it and wanted it cancelled, because she doesn't overdraft. She accepted the lower charge, though.

Read The Fine Print.

Have you ever opened a "Free Account" only to find out later that you have been charged? Always read the fine print. Many banks use promotional rates to bring in new customers, but there are strings attached. You get a good rate or a free account, but there are certain criteria that you must abide by. You may be required to open another companion account and keep a minimum balance. Direct deposit may be another. I remember opening Money Market accounts that had a fixed rate for 6 months, but required you to keep a minimum balance for 270 days. The rate, of course, returned to current market rates after the 6 months which was almost always lower and you paid a closing fee if you closed before the 270th day. So the great rate you received for the first 180 days is not so great once you average it out over the 270 days. There are other types of requirements as well. The list of things to look out for could include, direct deposit, additional accounts, regular usage, minimum or maximum balances and minimum time requirements. All this is acceptable if you are aware of it. Read the fine print on the flyers and ask lots of questions.

Fraud, Watch Out For Yourself!

One of my most frustrating jobs in banking was tracking down fraud. Fraudsters work night and day to find ways to steal money. It is inevitable that these criminals will have some success. The most aggravating for me was the fraud that the customers made possible by neglect. You have to be aware of your surroundings and keep track of your financial instruments. Here are some examples of neglect. "I was in the restaurant and put my purse on the floor and someone stole it. My credit and debit cards, checks and I.D. was in it". The experienced criminal would be using those items within minutes because he/she knows the accounts will be locked, stopped, closed or frozen within a short time. How about "I lost my debit card somewhere. I don't know where. I had it yesterday". I know that in this day and age people rushed and spread very thin. Many banks have a zero liability policy when it comes to fraud. So you will eventually get your money back in many cases,but it could be weeks depending on the complexity of the case. Most retailers don't check I.D. when accepting debit cards or credit cards. Debit cards can be used like a credit card and only require a signature. Let's face it cashiers are not handwriting experts and are not likely to dispute a customers signature. Remember false Identification abounds. I have seen people sign their credit card slips with fictitious names just to prove a point. No one ever questions the signature.

How do I calculate How Much Money I Will Earn?

Figuring how much money you will earn on your deposit accounts is easy. Well for me it is. When I worked in banking, though, most people asked me to do it for them. There are some fundamental pieces of info that you need to know. Almost all interest rates are calculated on and annual basis. You can relate it to miles per hour. Just like miles per hour annual percentage rates give you a speed at which your money is growing. Here is a good place to discuss Simple Interest vs Compound Interest. Here is an example of Simple Interest: Deposit $1000.00 for one year at 5%. Multiply .05 times 1000.00. You answer should be $50.00. So without compounding you would get $50.00 for the year. What about compounding that interest? One question you would want to ask is how often does the interest compound? Common compounding periods are monthly, semi-annually and annually. I have seen daily and weekly, but those are unusual. For this example we will use monthly compounding. In your first month you must go through the calclation we used earlier. $1000.00 times 5%, but wait isn't that annual Simple interest calculation. Correct, there are additional steps. We have to break down the amounts into smaller increments. We are compounding monthly, so we will divide the $50 dollars by 12 and get $4.1666666. We will round up to the nearest penny and make it $4.17. Now for the second month we will take that amount and add it to the $1000.00. Now we have $1004.17. We apply the same formula to that amount and do it for each month for 12 periods adding the interest earned to the last months total. There are two measurements that banks use for Annual Percentage Yield (APY) and Annual Percentage Rate (APR). APY represents what you should expect with compounding and APR would represent Simple Interest. Here is something to be aware of. Months have different numbers of days in them. You will notice that each month your interest will most likely be different. That makes an additional step you will have to do to get a more accurate number. What I tell people to do is break your interest down into dollars a day. Once you have done that you can figure any number of days for monthly, bi-monthly, 90 days etc. Let's try it for a 28 day month. $1000 X .05 = $50.00 then divide by 365 = .137 per day (13.7 cents) times 28 days = $3.836 . Now you can see that is lower than the original $4.17. That is because, in the first calculation we assumed every month had the same number of days. If you want to make your life simple you can get a inexpensive financial calculator that will do these calculations for you. Another peice of info that is important is that many banks will keep the interest earned in an account if you close it before the interest is paid. Make sure you understand this policy at your bank. Branch Managers usually have the authority to give you the partial month of interest. These are basic steps that you can use at any bank.

Preposition Yourself For Your Business Loan

My experience with small business loan applicants reflects a reactionary mind set. In an effort to minimize the impact of taxes on income the tax preparers find every deduction, write off and loss possible, and some that are not possible. The end result appears to be very desirable until you apply for a loan. The people who decide if you get approved (underwriters) will be looking at hard documentation. Personal Financial Statements, Tax Returns and Credit reports. If real property is involved their could be surveys, environmental studies and leases to name a few. Most problems occur with income on tax returns. Many companies do such a good job of reducing their revenues that they appear to be broke on paper. Any business and it's owners should consider prepositioning itself/themselves for a loan in advance. If you think you might need funding in the near or far future should try to look good on their tax returns and financial statements both Business and Personal. Many of us are long on ideas and short on money. Don't cut yourself short by hiding too much of your income. If you are in good financial condition and it shows in your financial condition you may want to consider a line of credit now. Don't wait until you get into a cash flow squeeze to apply. It's like life insurance. Do not wait until you are sick to apply it is too late then.

Read The Fee Schedule

One of the most useful, yet boring, bochures from a bank is the fee schedule. What you find in there is most all the quirky fees that you can be charged for. Reading this list of fees is truly enlightening. It begins to make you think about things you would want to avoid. I can relate from personal experience that statement copies are very expensive. You may have a good relationship with your bank and they will give you a copy of your statement in time of need. What bankers know is that people tend to be careless with their statements. Point in case is a customer I once dealt with that needed a copy of her statement. She claimed not to have received it. I told her the cost of the copy and the time it would take to get it. She finally confessed that it may be on a pile of mail that she had at home. My policy is to keep my statements as long as I keep my tax returns. In my case that would be seven years. I store the statements with the tax returns from the same year as the statements. Some fees may not be in the fee schedule, beware the missing fees. You must be aware of what you can be charged for. Get the Schedule. The bank is required to give you one. Sit down with your favorite beverage and READ IT!!! It could save you hundreds of dollars.

Automatic Payments

Many merchants want you to make your monthly payments via a process called ACH (automatic clearing house). You authorize the business from which you are purchasing a service or product to debit your checking or charge account automatically. How convenient. You don't have to remember to write the check and your payments are never late. There could be a catch, though. One catch is when you want to stop the payment. This usually occurs with services. Many times the automatic payment doesn't stop. You end up paying and paying. Trying to get satisfaction from the offending business may take an act of congress.You may have to go to your bank and fill out some forms to get your money back. That process could take up to six weeks, although, usually not. Banks are usually good about working with you if you have a legitamit complaint. If you have online banking with bill pay try setting up your bill pay to automatically send the payments. That way you maintain control of your automatic payments.

Do You Have A Spare Bank?

It pays to plan ahead. Banks report events to various reporting agencies. When you bounce checks it is reporting the an agency that other banks subscribe to. If you get in a dispute with a bank about fees and charges don't think you can just walk away without dealing with the issue. For example your bank will report NSF (non sufficient funds) and OD (overdraft) charges to an agency like ChexSystems. Banks will also report an account being close with a negative balance. That means that any bank that is a member of ChexSystems will know what happened and may not open an account for you. If you cannot reconcile with your bank then you have at least two alternatives. Go to a non-CheckSystem bank or already have an account opened at another bank. Then you can simply switch banks. What I am suggesting here is to open two accounts at the same time. Don't wait until you have a problem and then open the account. The reporting agencies will do a follow up on new accounts and negative activity will be reported to the new bank even after the account has been opened. I am not saying you can just give your bank the shaft and go to your other bank. What I am saying is this will give you time to work out your differences, if possible, and still be able to operate. Remember that debits you owe and do not pay could be reported on your credit report and turned over to a collection agency. You want to avoid that if possible.

Protect Your Credit Score!

What's your credit score? I have asked that to many people and few people have the answer. I used to ask how is your credit and most of the time the answer would be "good", followed by "I did have a couple of problems, but they are all cleared up now". Guess what? Those "problems" still show up on your credit history. I am not going into what a credit report is or who the reporters are, but for now just know they exist. Credit reports contain a record of past and current financial conduct. If you failed to pay a bill it will, most likely, show on your credit report. If you pay late, that will show. If you apply for a loan and a credit report is pulled it will show on your credit report. All of those things, including the amount of debt, tax leins , accounts that have gone into collections and bankruptcy will be included on the report. The point is your financial conduct is being tracked. You can't walk away from creditors or other bills owing. It will follow you for many years. I once had a customer that had disputed a payment to a retailer for just under $10.00. The retailer was wrong, but it wasn't fixed. It was on his credit report and he was declined a loan. Your are allowed one free credit report a year at annualcreditreports.com website. If you already have a low credit score you need to take action to boost it up. Start paying on time, pay old debts (get a letter from the debtor stating it is paid) stop applying for credit. You have to work at it. I would not advise a credit repair agency unless they can prove they have a working model of a time machine. They can fix incorrect entries, but so can you. They can't make correct entries go away that is "history" and they can't change that.

Check 21

In 2004 a process of clearing checks was instituted that allowed businesses, including banks, to change your paper check into an electronic transaction. This means that businesses can collect money from you much faster than they did in the past. Once a company gets your check they can scan the check with a special scanner. The check is then converted into an electronic format and sent to your bank. The paper check can be destroyed and an electronic version forwarded to the bank. The days of writing a check and racing to the bank to make a deposit are, for the most part, over. We had all better figure out a way to keep more cash in our accounts.

You Can't Beat The Check Back To The Bank

BUT I MADE THE DEPOSIT THE SAME DAY THE CHECK CAME IN!!!
I don't know how many times I have heard that phrase. The problem is that your check, if it is not taken right into the branch, will clear through your account before your deposit. Checks that come through the Federal Reserve system arrive at your bank during the night. Yes banks have departments that work through the night processing transactions. Your deposit on the other hand, unless it is delivered electronically, will probably not be available until the next morning or later depending on what fed zone the check came from and the $ize of the check. Larger checks can have delayed availability. I will cover different ways checks clear and fed zones in a different blog. The point to all this is this, if you write a check and the money is not in your account you are taking a chance of getting a hefty fee for each check that bounces. Another process that you must watch out for is "Converted Items". Companies that recieve your checks now have the right to turn them into an electronic transaction. That means they come back a lot faster and you could get caught with your balances down if you were counting on a few extra days before the check gets back to your bank. More on all this later.

It's all down to you,

When I was in banking and I had a customer that had bounced checks my first question would always be "Have you balanced your checkbook?". Many times the answer was "no". Unfortunately that is becoming an all to familiar response. You are expected to balance your checkbook. If you want your banker to be on your side that is the first step. Why? Checking accounts are in constant change. Money goes out. Money comes in. Fees are deducted. Balancing is a way to put all the movement of money into one place and see where you are. I have had some half hearted attemps like checking balances on ATM machines or Online Banking. That is a step in the right direction, but what about that check you wrote yesterday? How about the automatic payment you forgot about. They haven't come in yet, so they aren't reflected in that balance. If you spend that money without considering your outstanding debits you are asking for trouble. This is why balancing is so important. Those outstanding debits that are floating around out there are taken into consideration and gives you the proper picture of you finances. The fee for bouncing a check can be significant. Don't give your money away needlessly.