Thursday December 5, 2013
Square Cash allows you to send money more or less by sending an email.
To make a payment, you simply email your payee (with the dollar amount in the subject line) and include Square Cash in the "Cc:" field. Money comes from your checking account via your debit card, and the recipient sees the cash show up in their checking account in about two days. There's no need for usernames, apps, or bank routing numbers.
How does Square Cash pull this off? JonBWhite explains the logistics. It's easy enough to understand how the funds get pulled from your bank account - that happens every time you make a purchase. But what about adding the funds to the recipient's account? As JonBWhite notes:
"The genius of Square Cash is that someone realized you can process a refund without having an initial charge in the first place."
For better or worse, it's now even easier to send money. To learn more about the service, read our review of Square Cash.
Wednesday December 4, 2013
Pentagon Federal Credit Union is making waves by offering CDs that pay more than we've seen in a long time. When was the last time you saw a "3" to the left of the decimal when looking at CD rates?
The only catch is that you (understandably) have to use a long term CD to earn the best rate. PenFed's 5 and 7 year CDs pay 3.04% APY, while shorter-term CDs pay a bit less.
Is it worth it to lock your money up for so long? It depends, of course, on a lot of things. If you value safety, these NCUA insured CDs are fairly attractive. But if interest rates rise quickly and banks offer better rates in the near future, you might miss out. It's impossible to time things perfectly, so I always think it's a good idea to take good deals when you find them and they fit your needs, but do everything in moderation.
Ken Tumin at Deposit Accounts discusses the conundrum of using these long-term CDs, and notes that the 5 year CD is probably your best bet. You don't earn any more for locking your money up for an extra two years, and it would only work in your favor if rates stay stagnant for a long time. Hopefully that won't happen, but if you think it's likely you can always go with the 7 year CD. Deposit Accounts also provides a calculator that you can use to determine whether or not it's worth cashing out of a CD early and paying the penalty.
Wednesday November 27, 2013
There may come a time when money is so tight that you can't make your mortgage payments. What happens then? Are you evicted immediately, or do you have some time to get current and save your home?
Nothing happens quickly when it comes to mortgages - that includes the approval process as well as the foreclosure process. Foreclosure is expensive and time-consuming (when done properly, without rob0-signers), so you'll typically have a few months to get caught up on any missed payments and late fees. Of course, the best thing to do when you fall on hard times is to communicate with your lender. If you simply skip payments, they might not know that you intend to get caught up (and you might be able to get your loan modified or use a program that allows you to skip payments without damaging your credit).
Casey Bond at GoBankingRates.com explains that you'll generally have to miss 3 or 4 monthly payments before banks get serious about foreclosure. The first one is practically a freebie - banks know that mistakes happen and bills may slip your mind. If your payment arrives within 30 days of the due date, it might not ever appear on your credit reports. After that, you'll be on the road to foreclosure, and your credit scores may suffer - even if you get caught up quickly enough to prevent foreclosure.
Thursday November 21, 2013
Do you know how much you pay to borrow money? You probably know your interest rate, but what does that really mean - can you translate it into dollars and cents?
To best manage your finances, it's helpful to know how much you spend each month. That includes how much you spend on interest when you make payments on home and auto loans. You might not be able to to make drastic changes to those amounts (it's easier to just stop eating out or cancel the cable), but you can certainly get a good understanding of where your money goes.
It's also nice to evaluate loans before you get into them. Knowing how much you'll spend on interest can help you make an informed decision and compare loans that might otherwise be hard to compare. You might even decide not to borrow for something you don't need (once you see what it really costs).
So how do you get a handle on interest costs? Do some calculations. Don't worry, it's fairly easy if you let a computer do the heavy lifting for you. The pages below will help you see exactly what it costs to borrow, and exactly what happens each time you make a monthly payment: