Tuesday November 10, 2009
The Federal Reserve just released the quarterly Senior Loan Officer Survey on Bank Lending Practices. The findings? Banks are still scared to lend money but there are glimmers of hope.
Consumers and businesses alike have a tough time getting money. We're not even asking for loans as much as we used to - either because we've given up or we don't want to take on the risks that come with more debt.
The results of this survey might be described as "slightly less bad" than previous ones. At least it's not as bad as it was one year ago.
Banks also expect to tighten lending standards on credit card debt with new legislation in the pipeline. Lawmakers want to make it more difficult for banks to change terms on credit card loans, so banks plan to do any tightening before the laws go into effect.
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Thursday November 5, 2009
529 college savings plans allow you to save for higher education, and you may qualify for some tax benefits.
Most parents invest in mutual funds, hoping they'll be able to earn enough (combined with their contributions) to create a healthy college fund. However, those accounts can also lose money.
For a government guarantee, you'll need FDIC insurance on your 529 savings. This is hard to find, but Virginia's 529 program recently added an FDIC insured option for conservative savers. You don't have to live in Virginia to use the program, but you should investigate your home state's program before using a different state's 529.
Before you get too excited, consider whether or not you need FDIC insurance on your 529 savings. You won't lose anything on insured deposits, but you'll only earn bank-like returns. This may or may not make sense, depending on your situation. A financial planner and tax advisor can help you understand how a 529 will impact your finances.
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Tuesday November 3, 2009
If you download bank transactions into any program or online service, you know that you have to use specific file types. What if your bank doesn't give you what you need?
Geeky Chick describes her struggle to convert CSV to QIF ("when your bank is too lazy or stingy to do it for you"). By using an Excel add-in, you can get your data into the right format.
With all the bank failures, mergers, and changes going on, you may find this information handy. Banks sometimes transition your account to a new system, and you may have to adapt. You can also use conversion tools to slice and dice data in ways that your software doesn't allow.
I have not used the product she mentions. Take precautions before downloading, installing, and working with sensitive banking information. Make backups of your existing data, and do some homework to make sure the software does not contain anything that will harm your computer or steal your information.
Thursday October 29, 2009
Banks with reward checking accounts are taking a closer look at customers to see if they're profitable. Bankdeals shares a recent example, where a bank asks customers to get with the "spirit" of the program.
Reward checking accounts can pay more than a savings account or CD. To qualify for the rate, you have to meet some requirements. Generally you have to use your debit card 10 or more times per month. If not, you earn little or no interest that month.
Banks earn money when you use your debit card for purchases. That money helps them pay the above-average rates found in reward checking accounts. If you only use the card for low dollar items, the bank earns very little - and they can't afford to pay those high rates.
Interchange fees, the fees banks collect when you use your card, have been under attack recently. They raise the cost of doing business for merchants, and provide nice revenue for the banks. Given the double-whammy of interchange fee attacks and customers working the system, we may see reward checking accounts get a lot less rewarding.
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