Holiday Savings

Dare to be different

Talk to your friends and family about giving gifts during the holiday season. Most likely someone else in your family is thinking the same thing as you. If you have a large family, consider doing a Secret Santa. If you have the time, make something special, but not too expensive, for your friends and family.

Make a list, check it twice

Write down gift ideas beside each person’s name. Do your research, look around for good ideas that will get you inspired. Gather together an idea of how much you want to spend on each person, and work hard to stay within that budget. This process is important because it also gives you an idea of how much you need to save for the holidays.

Scope out the sales

You won’t know if there’s a good deal on something unless you spend the time looking. Shopping around, instead of settling on the first place you find, could save you a lot of money. Take a friend, make a plan of attack, and go for it. Many stores offer incredible deals and savings the closer you get to the holiday.

Start saving now

Get a head start by putting money aside each month. Consider shaving off an extra $50 a paycheck by simply setting aside your coffee money for two weeks. Another way to help you save is to set aside a portion of your pay check and then set up a direct deposit to a prepaid debit card. Then make yourself only spend what you’ve saved automatically on the card. It will be difficult, but at least you won’t be racking up credit card debt or incurring expensive overdraft fees.

Give to charity

During the holiday season, remember there are many of less fortunate people that won’t be able to afford to buy gifts for their family. A great way to make the shopping experience disappear is to give to a charity. If you give above $200 you can deduct it from your taxes. Also, if you give to charity in lieu of a gift, try to make the experience tangible, like providing a picture or document that shows you gave to the charity in their name.

ChexSystems

A ChexSystems report can reveal items such as negative balances, account overdrafts (e.g. non-sufficient funds), and suspected fraudulent activity by the accountholder. This information is readily accessible to 80% of all commercial banks and credit unions in the United States that use ChexSystems prior to approving an application for a deposit account. Banking institutions have been very strict when reviewing applications of those who have outstanding negative items on their report – often resulting in the denial of an account application. Just one undesirable mark is enough for most banks to turn down a consumer with a bad banking history, which has led to a number of consumer complaints regarding the difficulty of a opening checking account.

In addition to the negative items in a report, an individual can find the status of their security alerts, security freezes, report inquiries, ordered checks, and any written checks that failed to be processed by retailers and businesses can show up on the ChexSystems file.

ChexSystems is regulated by the Fair Credit Reporting Act which enables consumers to obtain a free ChexSystems report annually. If anyone who finds that the items on their report was erroneous, they may request that ChexSystems investigate the matter in order to have any item on the report removed.

With regards to fixing negative items reported by a financial institution, a consumer must contact the reporting institution to repair the negative item. Even after fixing any discrepancies on a consumer report, ChexSystems will still keep all incidents on file for 5 years.

So just like with credit cards, do not violate the terms of the financial account because someone is watching and recording any type of bad behavior and irresponsible activity – a warning sign to banks that they do not want their business.

Using a Debt Negotiation Company

Many companies advertise debt arbitration or renegotiation services both online and offline. Typically they offer to cut your debts in half if you will repay them in less than four years. One common strategy is for the company to suggest ceasing to make payments to the creditor and instead make payments to a new account. Once this account reaches a certain amount they will approach the creditors to negotiate the debt settlement. Frequently this will take around six months, but it may take significantly longer.

Beware of Costly Debt Renegotiations

The National Foundation for Credit Counseling (NFCC) warns consumers that there are many potential pitfalls awaiting debtors who hope to relieve the pressures by turning to the services of debt renegotiation companies. If you cease to pay creditors while you deposit money in a new account set up by the debt negotiation company, the creditors continue to charge interest and penalties. The creditors are also going to continue to report each month your debt delinquency to the credit bureaus and this can reduce your credit score, which will make future borrowing that much more expensive and possibly prejudice future job prospects.

Additional costs of working with debt negotiation companies are in the fees charged. It is not uncommon for debt negotiation companies to ask for payment upfront before they start working on your behalf. They often base fees on the proportion of the debt that they manage to renegotiate or on the total debt. In the latter case the percentage charged may be as high as 35% and in the former case as high as 20%. Monthly administrative fees of around $50 are also usually charged.

There are a few more factors that ought to be taken into consideration before deciding to work with a debt renegotiation company. First of all forgiven debt is liable to income tax since it can be classed as additional income. Secondly, resettled debt is recorded as such on your credit report; future potential lenders might think twice about lending to someone who was unable to repay the whole amount of their loan without resettlement.

The Recommended Approach

Because of the serious disadvantages of working through debt settlement companies, the NFCC concludes that the costs are likely to exceed the benefits. They recommend approaching banks and other creditors directly and ask to negotiate a settlement. The terms available to debtors making a direct approach can be just as good as those obtained through a company and the amount saved in fees and accrued interest charges, and possibly even legal proceedings, make this approach the best one to choose.

Nevertheless, if for other reasons someone prefers to work through a company they should first of all make inquires through the Better Business Bureau and their state Attorney General or Commissioner of Banking to make sure that it is a legitimate business with a good reputation. They should also make sure that everything is set out in writing, including an estimate of the costs involved. Any deposit accounts opened for a debt resettlement should be FDIC-insured.

The Top 5 Calculators

After testing some of our top rated banks’ mortgage calculators and tools, we found that most of them offered great service. However, there are a few out there that are definitely better than others, especially if you consider the presentation and how easy they are to use.

1. City Bank Texas – It is a simple tool but provides a great user experience, working seamlessly and smoothly to provide you with the information you need.  The sleekest features are that it automatically updates totals as you type, and there is very little load time before you are able to see your payments, interest, and estimated monthly payment once you enter your information.  See the calculator here.

City Bank Texas Mortgage Calculator

2. Mortgage.Com (Citi) - The calculators offered here are in depth and integrated, offering not just loan information but even and interactive map with estimated home value (like Zillow).  After entering your information, you are able to look at graphs and tables that show loads of information like the percentage of principle to interest that you will pay over the term of your loan.  What they lack in user interface these calculators make up for in the amount of information they provide.  See the calculator here.

Citi Mortgage Calculators

3. MetLife Home Loans – The MetLife calculator’s format allows you to adjust one field at a time and adjust the results accordingly.  It also allows you to enter information such as your monthly expenses and yearly income and takes this into account when making its calculations.  The display was crisp, and results were reported very quickly.  See the calculator here.

MetLife Mortgage Calculator

4. Bank Of The West - This set of calculators is similar to the Mortgage.com in that it offers a variety of tools tailored to specific questions you might have.  While it provides a great deal of information, including graphs and tables, the navigation can be confusing.  The expandable windows are a unique touch, but sometimes can be more slow than they are worth and slow and block your view to the information you want.  The non-overwriting input fields can also be annoying.  See the calculator here.

5. Union Bank – This downside of this calculator is that it requires that you enter a great deal of information before you are able to see results.  If you don’t mind spending the time to do this, however, it offer a highly detailed summary of your loan, including a detailed pay schedule.  While you are given the ability to recalculate, each result page is fairly complicated if you are new to loan lingo; fortunately, it offers a list of terms with definitions.  See the calculator here.

While many banks use a similar or even the same platform, there are some who have appeared to have benefited from developing their own unique functions that provide information others tools don’t.  Take a look through our picks and find the calculator that best matches your specific needs.

by CouchObjects

Why It Failed

When a bank fails, it is usually because it has become undercapitalized. There are many ways that undercapitalization is measured, and the exact measurement can vary by state, but if a bank looks as though it does not have enough money to cover the transactions that it processes, than regulators will generally issue a warning and conduct a further investigation. If a bank is found to consistently not have enough reserve funds to cover losses, such as those that were suffered in the mortgage loans this year, the regulators will shut the bank down.

What to Do: Look out for statements from your bank about warnings and pay close attention to the bank assets and other financials issued by the bank in its monthly shareholder letters.

What Happens Now

When a bank fails, it is usually announced by the FDIC on Friday afternoon, so that the bank has the weekend to do whatever it needs to do to smoothly transfer its accounts to the “assuming institution,” the bank that the FDIC has chosen to buy up the failed banks assets and deposits. If this is the case, then the depositor will not notice any changes (except for policy changes imposed by the new bank) and their branches will generally open up as normal under the new name the following week.

If the FDIC is not able to find a buyer, then it will have to dip into its Deposit Insurance Fund (DIF) in order to pay back the deposits of the failed banks customers. Although this has not been the case with most of the banks failed this year, if this does happen the FDIC will make payouts “as soon as possible” after the failure announcement.

What to Do: When you bank fails, see if the FDIC was able to sell the assets to another bank. If you don’t mind being a customer of the new bank, do nothing; your deposits will be transferred automatically. If the FDIC does not find a buyer, then it will contact you by mail about the failure, and the steps it is taking to insure your account. The FDIC will never send unsolicited emails to consumers, so be careful if you see an email from the FDIC, as it may be a phishing scam.

The End of Your Bank Is Not The End of The World

It is important to realize that even if your bank does fail, this isn’t the end of the world. While it could cause some minor annoyances as the banks shuffle their employees and switch over to a new system, deposits at FDIC insured institutions still protect all of your deposits, and usually the bank simply opens up under a different name the next day. However, if you want to be able to choose your new bank for yourself rather than just become a customer of whatever new bank the FDIC decides to enter into a deal with for the failed banks assets, than having advance knowledge can give you the time to shop around and make the switch before you bank fails and the decision is made for you.

Here are the 8 programs that in our opinion offer the best tax filing services:

Turbo Tax
Rated: 4.5/5

This is one of the better know tax return programs out there, and offers a whole line of products from the Basic ($24.95) to the Business ($109.95) models. Each offers 5 free federal e-files and unlimited federal returns. Turbo Tax also guarantees that you will get the biggest refund you can get with them, or your money back, and will automatically collect your tax information for you and fill it out in the appropriate places in your tax return form. The feature that makes Turbo Tax our winner, however, is that you only pay when printing or filing the return, meaning you can test the product as much as you’d like before having to enter your billing information.

Prices Starts at: $24.95 and up

H&R Block TaxCut
Rated: 4.2/5

H&R Block also offers a full line of tax return software, available both online and for download. It is also free for online federal e-files, and offers a free audit protection guarantee. However, due to the fact that it is such a large company with many other aspects of its business, it is not as easy to quickly get answers to your questions from H&R Block as it is with some of the other programs offered.

Prices Starts at: $29.95 and up

TaxACT
Rated: 4/5

TaxACT’s prices are much lower than other tax software we reviewed ($17.95 for the Online Ultimate Bundle and only $39.95 for the Business Edition), but they also offered fewer products. In addition to free federal e-files, which was offered by the other programs, TaxACT also offered free state tax returns.

Prices Starts at: $12.95 and up

CompleteTax
Rated: 3.4/5

This program had a competitive rate for its Basic kit, at $14.95. Like the others, it offers free federal e-file, but only offers an online version, with no option for download or an in-the-box order. One nice feature is the chat service, that provides instant advice for users, but unfortunately, can only be accessed for a fee.

Prices Starts at: $9.95 and up

TaxSlayer
Rated: 3/5

TaxSlayer only seems to offer one product, and its website isn’t the easiest to navigate, only really providing information on the product after you start your return. That being said, it does seem to be a solid inexpensive program, and offers some great online help features such as a Help Center and a Videos section that provides instructions for the first time tax filer.

Prices Starts at: $9.95 and up

TaxBrain 1040
Rated: 2.2/5

This program emphasized that it was geared towards building you a custom tax package that suited your exact tax preparation needs, by requiring you to fill out a questionnaire before you start your return. While we aren’t sure if people will want to fill out more forms while doing their taxes, especially when they are purchasing a program designed to make it easier for them to file returns, this software offers high-quality, low-cost products and free online chat for users with questions.

Prices Starts at: $14.95 and up

OLT Online Taxes
MBT Rating: 2/5

OLT offers a pretty bare bones tax software program, with one base price for each return, which could be good for someone who just wants to do one part of their return with an online program. Otherwise, the fee can add up to more than other programs, and with less features.

Prices Starts at: $7.95 and up

Express Tax Refund
Rated: 1.8/5

This tax service may appear to have a low basic price, but for the amount of features you get with it, it could be worth it for you to spend the extra for a different program. There are also a lot f hidden fees, that are tacked on to the price as you go. This can be very annoying if you are halfway through a tax filing and then are forced to pay more for a certain feature or start over.

Prices Starts at: $29.95 and up

Find Tax Return Software That’s Right for You

While there are a variety of other programs out there, these 8 seemed to offer the most features and the most streamlined process, for the least amount of money. Of course, depending on your preferences, different programs may offer more specific features to your needs, so make sure you understand the features offered by each before you make a choice. One thing is fr certain, is any of these programs will make your life easier come tax time. Best of luck, and enjoy your rebate!

An Overview of Overdraft Protection

To help us manage our “mistakes”, banks no longer bounce checks these days but cover it themselves and then charge a fee for that. This is basically what overdraft protection is all about. It is also called bounce protection or courtesy overdraft. The overdraft fee usually ranges from $30 to $39.

The idea of banks offering overdraft protection service to spare their customers from the hassle, embarrassment, and additional charges from having a bounced check is all good, but the problem is that many of these banks have automatically and quietly signed up clients for this service even without their knowledge. Overdraft protection can be quite useful when you did just forget to make a transfer from your savings to your checking, but if you are unaware that such a facility even existed, you might just be racking up enormous fees because of it.

The same fees hold over if you overdraw on your account using your debit card or making ATM withdrawals, so that the transactions would go through anyway. With the kind of fees banks are charging, wouldn’t you rather prefer to be denied a cup of coffee or two at Starbucks?

How Overdraft Fees are Computed

Say for instance you have $200 in your checking account and write out five checks for $140, $65, $25, $20 and $10, all in all totaling to $250. If all five checks came in the same day and you missed putting in that needed $50 deposit, the bank could easily honor the five smaller checks and charge you about $35 as overdraft fee for the $140 check that lacked funds.

But the way banks work these days is that they process checks from the largest amount down to the least. So in this case they’ll honor the $140 check and charge you another $140 ($35 x 4) for them to fund the smaller amounts, since the next amount ($65) wouldn’t be covered by the remaining balance anymore.

Overdraft Protection through an Overdraft Line of Credit

There’s another way of protecting yourself both from bouncing checks and from sky-high fees — an overdraft line of credit. It is a form of loan attached to your checking account. Every time your account runs out of funds and a debit is made from it, the bank temporarily funds it like an instant loan. Instead of having to pay a flat fee for every instance of overdraft, you will only need to pay interest for the amount you borrow.

So in the scenario given above, you won’t need to pay for $140 in charges plus the $50 overdrawn from your account, but only the $50 plus interest. The interest rate can be extremely high, but if it is paid off quickly, the cost would still be substantially less than the per check flat fee. Even if you never incur overdraft however, most banks still charge an annual fee for an overdraft line of credit.

Like with any other type of loan, overdraft lines of credit have limits. The limit one can get would depend on the bank’s policies and the credit quality of the applicant. The money you can “borrow” could be anywhere from $100 to $1,000, or even more.

Is Overdraft Protection Really Your Best Option?

Whether you sign up for it or have the bank cover you automatically, overdraft protection is a good safety net that can catch you during those occasional times when you make errors in calculations or simply forget to make a deposit or transfer to your checking account.

But when you make the mistake all too often, perhaps what you really need is not overdraft protection service but a lesson on better finance management. Keep in mind that the best way to reduce overdraft protection costs is to avoid overdrafts in the first place.

SenChrisDodd

Bank Also Want to Avoid Foreclosure

There are steps that can be taken to forestall foreclosures and, contrary to the popular image, banks are as interested in avoiding foreclosures as homeowners. It is not necessarily a case of bankers being reluctant to seize your home, though certainly some of them will be more sympathetic than others, but rather the fact that it does not make economic sense for banks to acquire property they are going to have difficulty selling off in a market characterized by falling house values. Banks are reluctant real estate dealers, because their prime objective is to recover their loans, and whenever alternative arrangements can be made to satisfy their needs they are often willing to make adjustments.

Avoiding having to go through the stresses of the foreclosure process is an achievement in itself, but there are also clear financial advantages to the borrower in preventing damage to their credit status which could adversely affect their chances of getting a mortgage in future.

The Foreclosure Process

While there are certainly many more people today who have personal knowledge of the foreclosure process, or know someone else in this difficult situation, many more people only know about foreclosures through reading the news, so a brief word of introduction is in order. If you take out a mortgage to buy a home, or borrow against home equity, you sign a contact with the bank to pay off the loan according to a set schedule, with your home serving as collateral against the loan. Failing to make the scheduled repayments breaks the terms of the contract and lays you open to whatever actions the law allows your creditor (the bank or mortgage company) to take.

How the scenario is likely to unfold varies from state to state and according to the specific terms of the mortgage contract. Sometimes the lender turns to the courts to obtain a judgment against the delinquent borrower for the whole amount of the loan. The court makes its investigations and if they determine the borrower is in default they issue a judgment in favor of the lender to allow them to recover the amount owed including the costs of the foreclosure process. If this route is followed your home might end up offered for sale in a public foreclosure auction.

An alternative foreclosure path proceeds outside the judicial framework. The lender issues a “Notice of Default” that gives the borrower a certain time to resolve their debt. Failing this resolution, a “Notice of Sale” is issued and a public auction held. Once the sale is completed only a short period passes before the dreaded eviction procedures commence.

Forestalling a Foreclosure

The fact that both the bank and the householder are interested in avoiding foreclosure creates a basis for consideration of alternatives:

Renegotiation

It is usually well worthwhile trying to renegotiate payments terms with the bank as soon as you get into difficulty with the current payments schedule, but you must be sure that you have the means to keep to the new arrangement. You might be able to persuade the bank to reduce the amount due each month or even suspend mortgage repayments for a certain period, or perhaps agreement can be reached to reduce the payments by changing the loan to a fixed-term loan or extending its period.

Taking into consideration the complexities of mortgage contract laws and the differences between states, it pays to first seek expert advice. A good and economical place to start is the Department of Housing and Urban Development (HUD). House owners who meet certain criteria might also qualify for special loan modification or refinance assistance under the President’s new Homeowner Affordability and Stability Plan.

Short Sale

If there is no possibility of renegotiating the mortgage, selling your house yourself is still preferable to waiting for the bank to execute a foreclosure. From the lender’s perspective if they estimate that they are going to have difficulty recovering the full value of the mortgage it makes sense to try and recover as much of their investment as possible as well as avoiding the additional costs involved in foreclosure. Thus the lender may agree to allow you to conduct the house sale and they will accept a lower amount than the sum you owe. As well as avoiding the unpleasant foreclosure proceedings, this method allows you to save your credit ratings.

While this approach has its advantages to the borrower, a few points must be taken into consideration. Sometimes the bank is going to ask for a promissory note to cover the difference between the amount raised in the house sale and the sum owed on the mortgage. In addition, any portion of the debt forgiven is considered taxable income and this can translate into an increased tax burden.

Deed In Lieu of Foreclosure

Another option for satisfy the creditor is to voluntarily sign over to them the deeds of the property through a legal arrangement known as a “deed in lieu of foreclosure.” Sometimes the mortgage lender agrees to offer the delinquent lender a small stipend in return for their speedy departure from the house and its orderly transfer into their control.

Last Minute Options

If all the possibilities of averting a foreclosure have been exhausted and the procedure has started, a few exit options still remain open. Even when the public auction is announced the lender can still try and find funds to cover their debt and stop the auction proceeding. In some states the debtors have an additional period of grace after their house has been sold where they have the right to buy back their home from the successful bidder.

MyBankTracker Introduces User Surveys

In addition, we are using this opportunity to premiere our Survey tool, which helps us gather data to better serve you with information targeted at your banking needs.  Please take a few seconds to answer the questions concerning online banking and give us some insight into the preferences of our users.

A New Way to Bank

Online banking has blown up over the last few years, and with it, the number of banks that operate strictly as online institutions. Rather than bother with constructing brick and mortar branches that each require their own staff and maintenance, banks are following the trends of consumers who do almost all of their banking online and benefiting from the reduced overhead costs that come with traditional banking methods.

Can You Put a Price on Service?

However, for some people, rates aren’t everything. While it is nice to get an extra 0.5% APY on your CD, who much does it take to make you willing to give up the ability to walk into a bank and talk with a customer service representative at your local branch?

It turns out that it might not be much.  According to numbers released in 2005 by Forbes and the American Customer Satisfaction Index, customer satisfaction is closely related to the amount of internet banking options customers have.

Customer Satisfaction and Online Banking

Forbes 2005 (PDF)

As you can see, customer satisfaction is overall higher with online banks; for some reason people prefer to do their banking online. Will this trend, coupled with the fact that online banks are generally able to offer higher rates, spell the end of brick and mortar banking as we know it?

Get into the conversation by answering our online banking survey:

Everybody seems to hate overdraft fees. Over the last few months, we have seen thousands of consumer complaints about this “service,” in which banks offer you the ability to withdraw more money than is available in your account, for a fee.  Many of these complaints revolve around the fact that this option is automatically added to your account, and so people aren’t aware that this is happening until they get their monthly statement and are stuck with extra charges.  In order to rectify this, some banks now offer customers the ability to “opt-out” of overdraft coverage for their accounts.

Nessims

Changes in Overdraft Policies

Heeding the complaints of their customers, the larger U.S. banks have recently made some changes to their overdraft fee policies (see “Chase and Bank of America Offer Relief from Overdraft Fees” and “Wells Fargo Jumps on the Overdraft Elimination Bandwagon.”) But so far, Bank of America, US Bank and BB&T are the only banks to openly offer their customers the option of completely eliminating overdraft fees from their account.  Chase hopes by early 2010 to offer new customers the ability to only receive overdraft coverage if they “opt-in” when opening a new account, but so far do not offer customers the ability to get rid of overdraft coverage.

How to Opt-Out

It may be possible to opt-out of overdraft coverage at any bank, but most banks do not make the process easy.  Though the exact process of opting out of the service is not yet a simple one at any bank, US Bank and Bank of America have made it clear to both their customers and employees that the service is now completely optional, which makes the process much smoother.

US Bank – so far you are only able to opt out of overdraft services at your local US Bank branch; telephone banking and online banking representatives will not be able to do it for you. However, when opening an account or talking to you teller about an existing account, simply mention that you would like to decline overdraft coverage services and the next time you try to spend more than is in your account, your card will simply be denied.

Bank of America – although you cannot yet opt out of overdraft protection online, Bank of America does allow you to opt out of the service over the phone; simply call the banks customer service line at 1-800-622-8731, and follow the instructions to talk to a customer service representative. Tell them that you would like to opt out of overdraft coverage, and after verifying your account information they will take it off your account.  You can also do this at your local Bank of America branch. (Starting July 2010, new customers will be given the option of overdraft coverage when opening an account.)

BB&T – BB&T also lets current customers opt-out of the overdraft service over the phone. Call 1-800-226-5228, and tell the customer service representative that you no longer want overdraft coverage on your account. You can also do this at a local BB&T branch.

Its that easy! Just a few simple steps, and your overdraft nightmares are over. Now of course this doesn’t mean that you can just go swiping your debit card with reckless abandon; even without overdraft coverage, attempting to take out more money than you have in your account can cost you an non-sufficient fund (NSF) fee, more commonly known as the “bounced check fee,” which can be just as expensive as overdraft. The bank has the right to charge you this fee even if they don’t approve the transaction that overdrew your account, so you may get the double whammy of not having the money go through and being charged for it.

Most of all, make sure you are assertive when trying to opt out. Banks make a lot of money off of overdraft charges, and so do not make it easy for you to get rid of the service. But it is an optional service, and even though US Bank and Bank of America are the only banks that officially offer the option to get rid of the service, if you are willing to spend some time talking to customer service, you can most likely get your bank to get rid of overdraft coverage on your account as well, even if it requires some extensive paperwork signing.