Money and personal finance tips

Credit cards declined more frequently in 2017
Twelve percent or 26 million people had either a credit or debit card declined last year in the U.S., according to USA Today. Insufficient funds accounted for just 32 percent of these. The rest were for increasingly common fraud prevention issues. About 30 percent of credit users, along with 16 percent of debit users, reported having their cards declined due to a fraud protection program.

Using a card out of state or country can prompt a decline. Contact your bank before you travel.

Online transactions with debit cards are increasingly blocked if the credit card processor is out of country. If the transaction is essential, the consumer can usually clear the transaction with their bank first.

Can credit card companies lower your limit?
Credit card companies routinely offer limit increases to entice more spending among good customers but they are just as likely to decrease the limit when their creditworthiness suffers, according to The Simple Dollar. When a person applies for a credit card, the issuer must ask permission to check that person’s credit to make a decision. Many people might not realize, however, that The Fair Credit Reporting Act allows them to continue to monitor that credit into the future.

If a customer falls behind on the credit card payments or even has issues with other lenders that show up on a credit report, the bank may choose to mitigate the increased risk by lowering the amount of money the customer is allowed to borrow on credit. In addition to cutting your access to more credit, a reduced limit can have a further negative impact on your credit score by raising your credit utilization ratio if the balance stays the same.

Searching for the best car loan rate
Average interest rates on new car loans rose to 5.2 percent in February, and many consumers are not taking advantage of several ways to lower their rates and save money in the long run, according to USA Today. While the market rate had fallen to as low as 3.9 percent at the end of 2012, analysts are forecasting that rates are headed higher. Only 31.6 percent of those that leased or bought a new car in 2015 even tried lowering their rates through negotiation or searching for financing elsewhere.

Many buyers tend to focus solely on the monthly payment when shopping for a new car. They pay less attention to the interest rate and overall length of the loan. With this in mind, car dealers are likely to extend loan terms out as long as possible. The average loan is three months longer now than five years ago.

Rather than accepting whatever rates the car dealership offers, it pays for consumers to take time to shop around for a better rate elsewhere, as tough competition can lead to better deals, according to Greg McBride, the chief financial analyst at Bankrate.com. As an example, a $35,000 car loan with 7 percent APR will cost $3,800 more than a loan with 3 percent APR over five years. Different dealerships will have different networks of lenders that might offer better terms. Also, local credit unions, which have been moving into the auto loan market in recent years, can often provide excellent rates to members.

Sometimes the absolute best interest rate does not make the best deal. Special promotional rates of 1.9 percent or even zero percent often mean forgoing same-as-cash incentives on specific new cars. When adding that money to the total loan amount, the overall costs could end up being more substantial in the long run than those with a much higher interest rate.

Finding and eliminating money sinks
Budgets often fail because of costs that aren’t accounted for, called money sinks, that derail the budgeting process, according to The Simple Dollar. Creating a line item in the budget for something like rent or utility bills is straightforward as the amounts are stable from month to month, but it is much more challenging to capture spending on repeated small expenses, irregular bills, and nonessential bills.

One of the most difficult types of spending to track is those relatively small expenses that add up over the course of a month and, because of the low cost, are easy to justify at the time of purchase. An excellent example of this kind of spending is a daily coffee or soda, snacks, and even something like a newspaper or ebook download. With just four dollars worth of small purchases per day, there is suddenly a necessity for an extra $120 in the budget. Spending on these types of things isn’t necessarily bad, but it shows the relative ease with which people can blow a budget due to ‘unforeseen’ expenditures.

Irregular bills are those that don’t show up every month but rather once a year, quarter, or some other time frame. Examples of these bills are vehicle registrations, property taxes, or even things like home and auto maintenance. Rather than trying to absorb these expenses as they occur, a better strategy is to break them down into twelve monthly ‘payments’ and budget for them accordingly. This way, the money will be in the account when needed, and it won’t completely ruin the budget that month.

Finally, there are a lot of monthly bills that are merely wasteful. This could include unused subscriptions to magazines or online services. It is easy to forget about these recurring charges on a month-to-month basis, and they are easy to lose track of on a budget. A frequent audit of monthly expenses can reveal this wasteful spending so that you can cancel before the next payment is drafted.