10 Terrible Loans You Should Consider Only as a Last Resort

We've all been taught that most types of debt are bad news. But some loans are such egregiously awful financial instruments, we think they deserve special mention.

Below are 10 of the worst loan options available. They feature many things in common, such as exorbitant interest rates or enticements to make you spend and borrow more. These loans so bad, you should only consider them as an absolute last resort.

1. The Payday Loan. Payday lenders present themselves as a friendly, helpful, and practical solution to running out of money before the end of the month. You've seen the claims on storefronts, and you've probably heard the commercials by now: "Money as soon as tomorrow!"

What payday lenders really are, according to Sen. Elizabeth Warren, "a credit product that can impose substantial costs on imperfectly informed and imperfectly rational borrowers." Warren decried payday lenders or cash advance companies in a paper "Making Credit Safer," which noted that a typical $30 fee on a $200 loan amounted to a nearly 400 percent annual interest rate. These companies make 90% of their profit on customers who roll their loans over, paying again and again for the money they've borrowed.

The Consumer Federation of America is so concerned about the long-term debt cycle which frequently traps borrowers that it set up a site to warn potential consumers of the risks of payday loans. Or maybe the Confessions of a Former Payday Loan Junkie will convince you.

2. The Car Title Loan. Car title loans are a notoriously awful option. The deal is, you borrow money at a high-interest rate (typically 300 percent), and the loan is usually due in full in 30 days. As security, you sign over the title to a paid-for vehicle. That's a very bad idea, says the Consumer Federation of America.

"Car title lending risks repossession of major family asset," the organization warned in a paper that cited the forfeiture of thousands of vehicles in various states through these loans. The loan amount is generally a fraction of the car's market value.

3. The Tax Preparer Loan. Because of a regulatory crackdown, the big tax services have quit offering classic refund anticipation loans, where they would give you the money the IRS owes you weeks ahead of time in exchange for a hefty cut. But some of those same companies are now offering personal lines of credit with double-digit interest rates and a swarm of fees. Steer clear.

4. The Credit Card Cash Advance. Credit card cash advances seem appealing because you already have a relationship with your credit card, so there's no paperwork to fill out; they're instant, and there are no embarrassing face-to-face conversations involved. You've probably even gotten those "convenience checks" along with your credit card bill, or seen the logo of your credit card network on an automated teller machine.

Those perks come at a steep price: high fees and interest. The average fee is $10-$20, and the interest rate you'll pay ranges from 1 percent to 7 percent above your credit card rate. The only time you should even consider taking a cash advance is if your car breaks down out of town and the mechanic won't take a credit card. "It ought to be a last resort," David Jones, president of the Association of Independent Credit Card Counseling Agencies, told CreditCards.com.

5. The Casino Loan. Many casinos offer interest-free, fee-free lines of credit that can only be used to gamble. The only reason you should ever take advantage of such an offer is if you have the cash in your checking account and you prefer not to carry it. "Never borrow money while gambling. Chances are good that you'll lose it, making a bad situation even worse," advises part of the "Casino Gambling for Dummies" Cheat Sheet.

Like other lenders, casinos generally have the ability to put a lien on your home if you don't pay, setting the stage for a bad day at the tables to spin into a very bad year -- or even a terrible decade.

6. The Installment Loan. Similar to the payday loan, the installment loan gives the borrower a small amount of money -- often $1,000 -- on short notice at a high-interest rate. But unlike payday loans, which are often due in full in just a few weeks, installment loans can be stretched over six months or a year.

These loans have skirted some of the scrutiny regulators put on payday lenders, but have landed consumers in much the same trouble. Take Naya Burks of St. Louis, who ended up having $5,300 taken from her paychecks after she defaulted on a $1,000 installment loan from AmeriCash. Those payments did nothing to chip away at the loan balance, which instead grew week by week because of the 240 percent interest rate, eventually ballooning into a $40,000 debt.

7. The Private Student Loan. Student loans may be a fact of life for many scholars nowadays but think hard before turning to a private lender instead of federal programs. "While federal student loans offer options to avoid default through several loan modifications and alternative repayment programs, lenders and services of private student loans generally do not," the Consumer Financial Protection Bureau warned in its annual student loan report. Private student lenders may also prevent you from selectively paying off higher-rate loans first, complained the blog, Money Ning.

8. The Pawnshop Loan. If you live in a big city, you've probably passed pawn shops, which take jewelry, cameras, and other personal property as loan collateral, and keep the goods if the loan isn't paid in time. The New York City Department of Consumer Affairs warns that in addition to charging high-interest rates, these shops often charge service and storage fees, driving the true interest rate sky-high. Many people end up paying more than the market value of their property to the pawnbroker, but can't pay all they owe and end up losing the property, anyway.

9. The Overdraft Loan. Your bank may have encouraged you to opt-in to "overdraft protection," a program that allows you to write a check or withdraw funds from an ATM even if you have no money in your checking account. Tim Chen, CEO of NerdWallet, says you should never do this.

When your bank provides this "protection," it charges you a fee -- about $35 -- for that transaction and every other transaction on your account until the balance is above $0. In the end, you could end up paying even higher rates for that overdraft loan than you would be borrowing from a payday lender, Chen warns.

10. The Lotto Winner Loan. Most of us will never be in the position to be victimized by this kind of loan, but if you ever win the lottery, watch out. The public radio program This American Life explained that these lenders go after people who have won jackpots to be paid out gradually over the years. They buy the winnings for an upfront payment, often pressuring the winners to sign off on a sum that is just a fraction of their winnings. Fortunately, now that most states offer a lump sum option, these lenders are no longer prevalent.

Seven Hidden Benefits of Frugal Living

Frugal Living

In a world where rampant consumerism is the norm, choosing a frugal lifestyle can sometimes mean living as an outcast. Your friends may shake their heads when you opt-out of expensive restaurant dinners, and your neighbors might get a good laugh out of your penchant for amazing garage sale finds. Maybe your family members just don’t “get it,” and assume you’re being overly cheap, or worse, completely unreasonable.

But if you’ve been frugal long enough, you have probably realized that there are more benefits to your frugality than meet the eye. People may say you’re cheap. They might call you tight. They might even think you’re strange, but it’s only because they just don’t know what they’re missing out on.

Seven Hidden Benefits of Frugality

But just because people don’t understand it, that doesn’t mean frugality isn’t as amazing as we think it is. Here are seven hidden benefits of frugality that are hard for outsiders to appreciate:

Benefit #1: Frugality Can Be Good for the Environment

Even if you don’t care a lick about saving money, frugality comes with benefits that extend beyond your pocketbook and personal life. The truth is, frugality doesn’t just benefit “us;” it can benefit the planet we live on too. By making fewer purchases and consuming less, we can positively impact the environment in a number of ways.

According to the Environmental Protection Agency, Americans generated about 251 million tons of trash in 2012, with only about 87 million tons of that material making its way to the recycling bin. That means that, on average, each American created approximately 4.38 pounds of waste or trash per day – which is, quite frankly, rather alarming.

Although frugality can’t solve every environmental problem that modern society has created, it’s a start. The little things add up.

For starters, reusing and repurposing old items instead of throwing them away means less trash in landfills, dumps, and waterways. Meanwhile, families who buy used items instead of new ones will inevitably throw away a lot less product packaging over the course of a lifetime. Trading used items around also means less energy used for production, packaging, and shipping for every item you don’t buy. And buying a cheap, fuel-efficient used car (or ditching it altogether in favor of a bike or public transportation) helps reduce air pollution and greenhouse gases.

The bottom line: Being frugal means consuming fewer of the planet’s resources, and that’s always a good thing.

Benefit #2: Being Frugal Can Mean Less Stress

Imagine what it would be like to never worry about money again. What would it feel like to have a healthy nest egg in the bank, no debts, and a rock-solid plan for early retirement?

A lot of people have achieved that exact feeling — and without working as CEOs, day traders, or plastic surgeons first. And many of those people will tell you that the key to their lifestyle is, and always has been, living below their means and investing the rest. Sounds easy, doesn’t it?

But there are other benefits to frugality beyond the financial security that will surely come with it. And one of those benefits just happens to be less stress in general.

Need proof? An annual study on stress and health from the American Psychological Association has revealed money issues as the top stressor for Americans every year since the study’s inception in 2007. This year’s survey, which polled 3,068 adults in August 2014, found that 72% of Americans felt stressed about money during the last 12 months. Meanwhile, the majority of Americans polled, 64%, reported that money is a somewhat or very significant source of stress on an ongoing basis.

Being frugal doesn’t necessarily mean never stressing out about money, but it can certainly help, especially if you can stick to a budget on last month’s income. Living below your means, saving a large percentage of your income, and not trying to keep up with the Joneses can help you sleep better at night as you cope with life’s inevitable ups and downs.

Benefit #3: Not Caring Can Be Good for the Soul

Speaking of “keeping up with the Joneses,” is there anything more exhausting? Maybe your neighbor’s new car has brought out your green-eyed monster, or perhaps it was your sister’s constant vacationing. Whatever it was, it was a huge waste of time and could have had a detrimental effect on your finances. We all know that “keeping up” with others is a lost cause and one that only stands between us and our own financial goals.

Frugal people already know this and quit caring about that stuff a long time ago. Why? Because they have learned that other people choose to spend their money differently, and that’s okay. Meanwhile, they have a laser-like focus on the things that really matter in their life and don’t let themselves get bogged down by what other people are doing with their money.

Most importantly, most frugal people realize that their frugality serves a purpose. Like Dave Ramsey famously said years ago, “If you will live like no one else, later you can live like no one else.”

Frugal people know that their frugality isn’t a sacrifice; it’s a means to an end. And not caring what others think frees them to follow their dreams without worrying about how it looks to everyone else.

Benefit #4: You Have More Time for Things That Matter

Let’s face it- being fashionable and hip is time-consuming. When you’re intent on always having the best, you have to spend time figuring out what that really means. You have to shop around. You have to read product reviews. You have to flip through consumer magazines to see what other people are wearing, doing, and using in order to get up-to-date on all of the hottest trends.

All of that takes time, and it’s time that frugal people would almost always spend doing something – anything – else. Because when you’re frugal, you generally only shop out of necessity or when something is important. When you’re watching your pennies, shopping is no longer a fun way to spend a Saturday.

Non-frugal people might balk at the idea that throwing money around at the mall isn’t fun, but the truth is, losing that burden is actually quite freeing. Since frugal people are trying to make the things they do have last longer, they don’t have to spend time shopping around for something new and can spend that time doing things that are more important – like spending quality time with family, cultivating a new hobby, or simply relaxing. Anything that feeds your passion, really.

The bottom line: Opting out of the consumer culture has a way of freeing up your calendar in a hurry. Once that happens, you can start spending your time how you want to spend it.

Benefit #5: Frugal Living Is Good for Humanity

Living in a rich country can give you a seriously distorted worldview. When you look around and see nothing but excess, it’s easy to forget that a large percentage of the Earth’s population goes without basic necessities like food and water.

When you begin to see things from that perspective, it fails to make sense why we should buy so much “stuff,” only to throw it away. And it’s not just about the “stuff” we buy and waste; let’s talk about food waste too. Recent research from the U.S. Department of Agriculture and Environmental Protection Agency shows that Americans throw away around 40% of the food that is meant to be consumed annually.

In a world where people are truly starving, that is a sad statistic. However, food wasted isn’t the only tragedy; think of how much energy it took to grow and produce that food, along with the plastic and other materials it took to package it, and the energy it took to transport it.

Being frugal can’t solve pollution or hunger, but it does mean being less wasteful with our already scarce resources. And when you make a commitment to wasting less in general, you’re reducing your carbon footprint and freeing up resources for others who might desperately need them. It may not be much, but at least it’s something.

Benefit #6: Having the Ability to Give Generously

It’s been proven that frugality can make a positive impact on any family’s budget, but that benefit doesn’t have to be limited only to personal gain. Obviously, the more money you have and the less you spend overall, the more money you can set aside to give generously to charities or social service organizations you trust.

There is no hard data on how much frugal people give to charity vs. non-frugal folks, but a recent study shows that middle-class Americans are beginning to dig deeper when it comes to charitable giving. According to the Chronicle of Philanthropy, Americans give around 3% of their income to charity on average. However, Americans who earned less than $100,000 per year began giving slightly more from 2006 to 2012, even as their “real incomes” grew little due to inflation, rising health care costs, and other factors.

For those who want to give generously but have never been able to afford to, adopting a frugal lifestyle is one way to free up some money to give. And, as we all know, giving generously has a way of coming back to you.

Benefit #7: Retiring Early

As if all of the other benefits of frugality weren’t enough, the huge financial advantage that comes with a frugal lifestyle is enough to get many people on board.

Obviously, the more you save (and the earlier you start), the more money you’ll be able to stash away for retirement. And once that money starts growing, you might find that retirement could happen much sooner than you expected.

The way this works is simple. Compare two modern families whose parents both enter the workforce around the same time. Although incomes fluctuate over the years, let’s say that each couple brings in $60,000 annually over the next 20 years.

Couple A: If Couple A saves the standard 10% of their income in pre-tax retirement accounts and earns an average of 8% on their investments over those 20 years, they’ll wind up with around $274,571 after 20 years (not accounting for inflation).

Couple B: Let’s say Couple B saves 20% of their income in pre-tax retirement accounts and earns the same 8% over 20 years – they’ll have $549,143. And if they stash away 30%, they’ll have $823,715.

What’s more, Couple B has gotten used to living off just 80% of their income, so they’ll only need to withdraw $48,000 a year to meet their frugal living expenses. Meanwhile, Couple A has been living off 90% of their income and will need $54,000 a year to maintain their lifestyle. So Couple B will actually need less money to retire comfortably.

Lots of other factors come into play here, but you get the point. Those who can start early and save more of their income will likely reach the “magic retirement number” earlier than everyone else.

But the benefits don’t stop there; frugal families who always say “no” to debt will be even further ahead than the rest. Imagine being debt-free and having a boatload of money saved for retirement. That’s the reality for a lot of frugal people who have lived their entire lives by the principles espoused by this website and others like it.

Frugal Living: It Isn’t One-Size-Fits-All

The truth is, frugality has something for everyone. If you’re passionate about the environment, being frugal can help you feel like you’re doing your part. If you’re a humanist, a frugal lifestyle is an acceptable response to many of the problems we face. And if you’re simply in it for the money, that’s okay too. There are honestly dozens of reasons to live a frugal lifestyle, and all of them are valid.

So the next time someone balks at your frugal lifestyle, you can just ignore it. They may not “get it” now, but that doesn’t mean they won’t get it eventually. In the meantime, use your frugal lifestyle to set a positive example for those around you. And you never know- when the people you love to see all of the positive benefits that come with living on less, they might finally come around.

What is your favorite “hidden benefit” that comes with your frugal lifestyle? Do you find that people don’t understand why you live the way you do?

Source: http://www.thesimpledollar.com/frugal-living-seven-hidden-benefits/

The State of Savings In The United States

Savings

Bankrate came out with an updated study on the amount of money Americans are savings. The good news is that there are some Americans that are doing well with saving their money. The bad news is that way too many of us are still lacking in the money-saving department. How do you overcome this if you are in the non-saving category? I will walk you through some of my tricks that help me to save. Hopefully, you can use them to your advantage as well.

Saving 15% Of Your Income

The study found that middle-class earners were the best at saving 15% or more of their income. Here is a chart that breaks down the percentage of people in a given income range who save 15% or more of their income:

The findings shouldn’t be surprising, based on the numbers. First off, the difference in saving rates could simply be related to math. For example, if someone is that saving 10% of a $50,000 salary is saving $5,000 a year while someone saving 10% of their $125,000 salary is saving $12,500 a year. The wealthy can get away with saving a smaller percentage of their income simply because of the size of their income.

In addition to this, those earning a lot less will have a tougher time saving a larger percentage of their income. Most of their pay is going towards basic living expenses – housing, food, etc. While they still can save, saving 15% or more might be a stretch.

Saving Little Or Nothing

The scary part of the study is that 55% of 18-29-year-olds save 5% or less, including nothing for the long-term. While there are a variety of reasons for this, the overwhelming reason is probably due to the thought of retirement being in the distant future.

With new smartphones and our favorite band coming to town in the near-term, thinking about saving for an event or lifestyle that is 30-plus years away is going to take the backseat. I know the power of short-term gratification all too well. It’s what helped me to get into credit card debt at a younger age.

How To Start Saving Money Today

If you are someone who is not saving enough for retirement, or even saving in general, how do you get started? There are a few tricks I use and think they would benefit you as well.

Get A Detailed Picture Of Your Retirement: When most people see their retirement, they envision themselves no longer working. This is great, but for most of us, this isn’t exciting enough to make us want to forgo the smartphone so we can save for that future day of no longer working.

To overcome this, you need to get detailed. What exactly does retirement mean to you? Will you travel? Will you play golf? The more detailed you can be, the greater the excitement will be about retirement and the more likely you will be to start saving for it.

Understand Time: Look, I know 30 years seems like a lot of time, but time is your best friend when saving for the long-term. The more time you have, the less money you have to save. For example, imagine trying to move a boulder up a long gently sloping hill versus a short, steep hill.

For the gently sloping hill, you could probably just move the boulder yourself or even employ the help of a horse and a cart to get the boulder up the hill. But with the steep hill, you can’t move the boulder yourself and you will most likely need 5 or 6 horses to help you.

Saving for retirement is the same way. If you start now (assuming you are in your 20’s or 30’s), you can get away with saving $200 a month and still enjoy a comfortable retirement. But if you wait until you are in your 50’s, you are looking at saving a few thousand dollars a month. That’s a huge difference. Remember, time is your friend.

Automate Things: I love automating things because it works. I set something up once and I am done with it. In the future, the task still gets done, only I don’t have to do anything about it. When it comes to your finances, automating your savings is a no-brainer.

Set up a recurring monthly transfer to your savings account and you are set. There is even a service out there now that will do automatic transfers for you in small amounts repeatedly throughout the month.

Heck, you can even go with a robo-advisor and have your investing automated too! The more you can automate, the greater the odds are you will save money. This is why most companies now auto-enrol you into a 401k plan. It works.

Final Thoughts

At the end of the day, you have to save money. The tips above will help you save more money if you are struggling to save. While retirement may seem like a far way off, remember to use time as your ally and save now. The more you save now means the sooner you can take advantage of the detailed plans you have for your retirement.

10 Key Characteristics of Debt-Free People

Photo Credit: kalyan02

The other day a friend and I were discussing why some people manage to live their lives in complete control of their finances, while others are continually struggling to get out of debt — no matter how much money they make.

Financial freedom can be achieved by anybody, regardless of their income level. So what is it that separates the financially free from the financially inept? How come there are some families out there making ends meet with household incomes under $40,000 and no debt on the books — or at worst, a single mortgage payment — while others make millions per year and can’t keep their financial heads above water?

The truth is, there is no single trait that determines who will successfully manage their personal finances and those who won’t. People of modest means who know how to properly manage their finances have some combination of multiple characteristics. Here are ten of the biggest:

1. They’re detail-oriented. People who are in a good financial position always pay close attention to their personal finances. They know how much they earn and they keep track of how much they spend and where every penny goes. Because they’ve got a good handle on the state of their personal finances, they are less likely to buy something they can’t afford.

2. They realize debt is a mortgage on their future. Debt is a form of indentured servitude where we end up sacrificing our future earnings in exchange for instant gratification. Financially savvy people understand that, in most cases, such a trade almost always ends up being a Faustian bargain.

3. They’re pragmatic. More often than not, folks who are debt-free are also practical people. As such, they understand the meaning of value. For example, they tend to look at cars as merely a means to get from point A to point B — so they’ll refuse to buy a Lexus when a Corolla will do. In the same vein, they won’t pay double for designer jeans that have the same lifespan as the no-name alternatives, and they’re open to buying store-brand groceries.

4. They’re self-reliant. Most people who work hard to maintain a life of financial freedom take pride in being self-reliant. They live within their means and save as much money as they can for rainy days and lean times.

5. They aren’t addicted to shopping. A lot of people get a high from spending money — whether they have it or not. And while such a high is not physically destructive like, say, a drug or alcohol addiction, an uncontrolled shopping habit is almost always financially calamitous.

6. They’re patient. Debt-free people don’t achieve that state because they’re impulsive shoppers, or looking for instant gratification. If the money for something isn’t available, then they save and wait.

7. They’re self-confident. Financially free people never let their self-worth be defined by their possessions. They understand that their status in life is more accurately conveyed by self-confidence, rather than dubiously deceptive displays of wealth.

8. They understand that credit cards are a double-edged sword. People who are in control of their personal finances aren’t afraid of credit cards. In fact, they embrace them. And while the financially savvy understand the incredible benefits that credit cards provide their owners, they also know that if they fail to pay them off in full at the end of each month, they will pay a heavy price. This knowledge fosters healthy respect that keeps their credit cards from being abused.

9. They believe in personal responsibility. Financially responsible people refuse to make excuses. They know it’s their responsibility to put aside funds for unexpected events such as a job loss or unforeseen accident — and if they don’t they’ve got no one to blame but themselves. Short of a catastrophic medical issue or natural disaster, they also understand that living within one’s means goes a long way towards ensuring their ability to control their own destiny.

10. They’re not materialistic. Yes, the pursuit of expensive toys and other possessions can make life more luxurious. But at what cost? Debt-free people understand this, which is why they tend to live simpler lives that focus on the joys of family, rather than the accumulation of material possessions.

This is by no means an exhaustive list. However, the more of these characteristics that a person possesses, the more likely they are to be financially free. How many apply to you?

The Dangers of Choosing Credit Over Cash

Cash or credit

Using cash may seem like a thing of the past these days. Credit cards have seemingly become the most common way to make purchases and while there are certainly advantages to using them, there are also some risks. Even if you choose to shop primarily with cards instead of a debit card or cash, it’s a good idea to make sure you understand the credit card lingo and be prepared to avoid some common credit card mistakes. Here are five dangers of using a credit card, and how to steer clear of the red zone.

1. Makes Overspending Easy

A credit card can make it easy to spend more than you can afford. You don’t have to have the cash on hand to make a purchase and you can get swept up on the impulse to buy something outside of your budget. Of course, this can lead to months (or even years) of accumulating interest and making large debt payments. You can end up paying for that item much longer than you even use/wear/enjoy it.

2. Potential Damage to Credit Score

If you use credit to spend above what you can afford and need to pay late or incompletely, you can damage your credit score and end up paying more in interest payments and late fees. (If you don’t know where you stand, you can get your credit scores for free from Credit.com, updated every 30 days.)

3. Fees & Interest

It’s ideal to pay off your credit card bill in full every month. Making only partial payments will mean you pay interest. Making the minimum payment will keep you from getting charged late fees but it won’t keep you from paying a lot of interest. Plus some credit cards, especially rewards cards, come with annual fees. It’s important to weigh the rewards you are earning against that annual fee.

4. The temptation to Chase Rewards

That leads us to another danger — chasing rewards. Some credit cards offer things like cash back, points or travel rewards. This can be a great tool to earn money for purchases you would be making anyway. But if you aren’t able to pay off your credit card balance each month, you will almost certainly end up spending more on interest than you earn in rewards. It’s important not to get swept up in chasing rewards and spending more than you can repay when the bill comes.

5. Your Cash Flow Can Be Harder to Track

When you strictly run on credit cards to make most purchases, it can be challenging to calculate how much you are spending. You may get a bill at the end of the month for much more than you expected, particularly if you have been “keeping track” in your head. However, identity theft experts suggest checking accounts online regularly — the balance shouldn’t really be a surprise. A bigger-than-expected bill could also create leaks in your budget and hold you back from reaching financial goals. Paying for things only with cash can be easier because when your wallet is empty, there’s nothing left to spend.

If used properly, credit cards can be a great financial tool. But it’s important you are keeping a close eye on your budget, buying only what you can afford, paying your bills on time and earning rewards wisely.

Why Do Credit Cards Expire?

Expiration Date

On the list of questions, you may never have thought to ask, is this question: Why does a credit card have an expiration date? There are a few reasons why.

FRAUD PROTECTION

Even before the days of data breaches and EMV cards, there was credit card fraud. Thieves would get their hands on your card number and go on a shopping spree. Credit card companies came up with a low-tech way to help make stealing your card more difficult: adding a second number, the expiration date.

Eventually, that proved to be not quite enough: Fraudsters could get both numbers from the receipt you got for paying with a card. Later, a third, three- or four-digit security number was added, which was printed on the front or back of the actual card and never appeared on the receipt. All the same, changing the expiration date makes it more difficult for thieves to validate and use your card.

ELIGIBILITY CHECK

Just because you qualified three years ago doesn’t mean you qualify now. If the card has an expiration date, it gives the card issuer an opportunity to reevaluate your eligibility (and terms). Don’t expect a credit check unless the issuer asks, but approaching the expiration date is a time when paying your bills promptly each month works in your favor.

PHYSICAL CONDITION OF THE CARD

Do you have a card in your wallet that’s looking a little shopworn? How about one that you have to swipe multiple times before it works? If you use your cards often, they will wear out and the last thing the card issuer wants is for you to have a non-functioning card. The expiration assures that you get a shiny, new card before it wears out.

BRANDING

Along with making sure your card is working, the issuer may want to update the look of the card. No company wants its branding from yesteryear on the card forever. The expiration date helps to guard against having a card that looks like you (or your dad) once used it to rent a movie from Blockbuster – on a VHS Tape.

REMINDER THAT YOU HAVE IT

Maybe you’ve sworn off that particular credit card. You cut it up or stuffed it in the back of your dresser in case you absolutely needed it. That was two years ago and you’ve all but forgotten it was there. Credit card issuers are no strangers to human behavior. They know that putting a shiny, new card in front of you may entice you to make a few binge purchases you wouldn’t have otherwise.

(Hint: If you swore off using your credit cards, don't rush to go shopping now.)

THE BOTTOM LINE

Card issuers have a method to their madness. First and most important, they want to cut down on fraud as much as possible. After that, it’s about getting you to spend as much money as they can. They know that if you charge up the card, you’re not likely to pay it off without paying at least a little interest.

Don’t fall for it. There’s nothing wrong with credit cards if you’re the type of person who can pay the full balance each month. If you’re not, it’s best to keep the cards in the dresser most of the time.

Don't cancel them, however: Giving up a card will raise your credit utilization ratio because you will instantly have access to a lower amount of credit. And if you've had a card a long time and have been responsible, you will lose part of your good credit history. If you don't want to use the card, put it away except for necessary purchases that you pay off promptly. For more information, see What Happens When Your Credit Card Expires and How Your Credit Card Can Improve Your Credit Score.

6 Signs You Might Lose Your Job

Unemployed

One of the unfortunate realities of today’s workplace is that we’re usually not given an advanced warning about an upcoming job loss. Many employers would have us tool along thinking everything is fine, right up until the day we’re asked to leave. But even if there is no formal notification that your job is in jeopardy, there several ways to know if it is.

Here are several strong clues…

1) You’ve Just Had a Bad Review

You can virtually assume that you are on probation if you have just had a bad performance review. Even if your employer doesn’t tell you as much, you will most likely be gone if you don’t begin showing measurable improvement soon. But a bad review can be an even bigger marker if you’re pretty certain that it isn’t true. Some employers will use a bad review as an unofficial warning, or as an attempt to push an employee out the door.

Do your best to improve your performance after a bad review, but it’s also a good time to start considering other options. You can never be entirely certain that it’s really about your performance, or maybe about something much bigger.

2) An Important Function (or Two) Has Just Been Taken Away From You

Everyone has one, two, maybe three, critical functions that substantially define their job, and justifies their existence on the payroll. If one of these functions has been taken away from you – without your consent – there is a better than even chance that you are being demoted, even if your title and pay aren’t degraded.

It’s generally a sign that either your employer has lost confidence in your ability to perform that function, or they think that someone else can do a better job. Unless the removal of the function has been accomplished to free you up for a more important function, it’s probably best to assume the worst.

3) You’re Company Has Been Bought Out

If your company has been bought out by a larger organization, there is an excellent chance that you – and many of your coworkers – will lose your jobs. It may not happen immediately, but there’s an exceptional chance that the axe is being sharpened.

Most companies involved in mergers will dedicate a lot of ink, emails, and stage presentations to assuring all staff that their jobs are safe. But don’t bet on it. One of the major reasons why businesses merge is to take advantage of economies of scale. That is, they will merge operations and eliminate excess staff from one or both entities.

If your company has been bought out, make sure that your radar is up, and that you’re now approaching your job as though you are a rookie who has to prove himself all over again.

4) You’re Increasingly “Out-of-the-Loop”

If you have recently noticed that there are a lot of closed-door meetings and private conversations going on in your department that don’t involve you, you may be a short-timer. This is particularly true if you have previously been part of the loop in most information exchanges.

All employees are excluded from a certain amount of information, but if you find that it is more common than not, something is getting ready to happen that you won’t be informed of – until it’s too late.

Sometimes information exclusion can affect an entire department. That probably means something negative is coming down the pike, and layoffs are a distinct possibility.

5) You’ve Been Re-assigned to a Job You Didn’t Ask For

Employers sometimes reassign employees in the hope that they will “take the hint” and leave the company. This is especially true if you have been with your employer for several years. The employer may be trying to engineer the voluntary resignation, rather than being put in the position of having to fire a long-term player, who may have the respect of her coworkers.

On the other hand, if you approve of the change – even though you didn’t request it – it may be an opportunity to thrive in a different capacity. If that’s the case, sit down and discuss the situation with your superiors, making it clear that you’re perfectly happy with the new position and harbor no ill feelings over the transition.

6) You’re Employer Is Losing Money – A Lot of It

These days, employers won’t sit much longer than two or three quarters in red ink before throwing the layoffs switch. If your employer is losing money, particularly a lot of it, you should never ignore this. This is especially true if the company becomes obsessed with cutting expenses, even little ones. I’ve seen companies go from cutting back on the coffee service to large-scale layoffs in less than six months.

This doesn’t mean that you should panic and prepare to jump ship at the first sign that the company is losing money. But it does mean that you should be aware that the situation has changed, perhaps radically, and you may need to have your parachute in good working order.

None of these events means categorically that your job is in jeopardy. But if any is particularly severe, or you see a combination of several, it will be time to prepare yourself and your finances for whatever may happen.

Source: http://moneysmartlife.com/signs-you-might-lose-your-job/