Business and Finance

Archive for September, 2011

Observers in the lending industry have estimated that there may be at least 50 million Americans who are not able to qualify for credit. These consumers are usually young, often members of the minority groups and unbanked…and they are faced with the long-standing dilemma of credit: how can I build my credit record if no one will give me any credit at all?

One of the answers offered by credit card companies is a variety of prepaid credit cards, designed for use by specific segments in the market. The prepaid credit cards are meant for that significant portion of the population that cannot meet the qualification criteria for regular credit cards, or who qualified before but have since lost their credit due to repeated defaults and other reasons.

Advantages of Prepaid Credit Cards For those who do not have enough credit history or have had it blemished, prepaid credit cards are an effective way to build or slowly rebuild credit. That may not happen immediately, but it is something to work on over time. The banks that issue prepaid credit cards are also prepared to extend normal credit the moment you are able to show that you have become a worthy credit risk.

For the moment, you may have to make do with prepaid credit cards. You can use prepaid credit cards as you would any other regular credit card to purchase airline tickets, reserve hotel rooms, or order items online.

Prepaid Credit Card for Students There is a special prepaid Visa credit card for students, which offers a lot of convenience not only for the students but also for their parents. These reloadable prepaid credit cards offer parents several options on how to reload. Parents can add money to reloadable prepaid credit cards by depositing money, by arranging an automatic transfer of funds from their account (a deposit account or their own credit card account), or by online transfer. Using the prepaid Visa credit card is no different from giving the regular allowance to their child, only they do so by electronic means and there is no more cash that changes hands.

The big advantage of the prepaid Visa credit card is that the student is limited to spend only as much money as there is in the card. The parent is thus able to control to some extent the spending behavior of their child. They can use the prepaid credit card anywhere that the credit card brand is accepted.

Prepaid Credit Cards as Gift Certificates Some prepaid credit cards function like gift certificates. You buy the prepaid credit card for a certain amount, and your recipient can purchase items with it at any of the brick-and-mortar stores or online merchants, and also for mail order items, that accept the particular credit card brand. Your recipient can use the prepaid credit card only up to the amount of money that you loaded on it. This particular version of prepaid credit cards is non-reloadable.

Like any gift certificate, recipients of prepaid credit cards can buy whatever it is they want at any time they want. Unlike a gift certificate that, when it gets lost is lost forever to the recipient, prepaid credit cards may be replaced if it gets lost or is stolen.

Prepaid Credit Cards for Travel There is a prepaid credit card designed for travel. These reloadable prepaid credit cards can be purchased in lieu of travelers’ checks or cash. In a way, it combines the best features of a credit card and a traveler’s check because of its convenience and security features. Should you lose the prepaid credit card while you are on travel, you can easily obtain an emergency replacement, both for the prepaid credit card and some cash.

Prepaid credit cards for travel are accepted all over the world, and also allow you to obtain currency from ATM machines. When you need to reload and you are already traveling you can arrange for the reload by phone or online. Apart from the fact that it is a prepaid credit card, you can use it exactly like a regular credit card. That also means you enjoy other benefits just like a regular card — reimbursements for lost luggage of up to $1,000 per cardholder if your luggage is lost; zero liability if your prepaid credit card is used fraudulently after you lose it or have it stolen from you; purchase security up to $500 per claim for any items you buy with prepaid credit cards, which subsequently gets stolen or damaged for certain reasons.

Generally, you can purchase prepaid credit cards of all the major credit card brands at their participating retailers. You don’t have to worry about not having acceptable credit because prepaid credit cards are made available without need of a credit report or a bank account. The only qualifications you need to have are that you have reached 18 years of age and that you must be able to present a valid identification issued by government.

Disadvantages of Prepaid Credit Cards There are a few things about prepaid credit cards that may not be as convenient as the regular credit cards. For one thing, you load only so much money onto it. You will need to keep track of the balance on the prepaid credit card because not all of the merchant terminals where you use the card may be able to help you determine it. However, there are procedures that tell you how to determine your balance, and you will these detailed on the back of the prepaid credit card and in the instructions accompanying it.

The process of reloading your prepaid credit card may be a little inconvenient to some. If you’re using cash, you would have to visit the participating outlet where you bought your reloadable prepaid credit cards. The more convenient way will be reloading online.

There are also the charges. Prepaid credit cards impose an application fee, the amount of which varies with the issuer, and there is also a service charge that you have to pay monthly. You also have to pay for transaction fees, charges when you transfer funds to top up the balance, when you replace your prepaid credit card, and many other fees. To be sure about the fees, you should read closely the fine print on the prepaid credit card account.

Prospects of Prepaid Credit Cards Prepaid credit cards do not provide credit; it is your money that you’re using. You are asked to pay other charges, so it is not for free. You are paying for the convenience and security of carrying plastic instead of large amounts of cash. People with bad credit will be able to act as if they had a regular credit card and enjoy the convenience of one.

Issuers of prepaid credit cards realize that it is a good way to monitor the credit behavior of the cardholder. A prepaid credit card would be a source of information that indicates to the credit bureaus and issuing lenders about how you as the individual cardholder use the card to pay your bills such as utilities. If these consumer data could be formatted in such a way as to provide the basis for a statistical model on probable future behavior in spending, then this could become the foundation for building a credit history.

You would benefit, because by using prepaid credit cards you are rebuilding your credit. The prepaid credit card issuers would benefit, too, because they would be making previously unproven customers bankable. More people could then qualify for regular credit, and that would mean tremendous incremental revenue for the lenders.

Owning a business that runs itself is one of many ways for easy income, that’s why you see commercial ventures being put up everywhere. Statically speaking, the likeliness of you failing is greater than the odds of you succeeding. But nevertheless, many bold individuals take the risk and still manage to make it big anyway. Their purpose for forming such is to make money of course, but what if I told you that putting up a business is one way of repairing your bad credit history? Surprised maybe, but you’d most definitely agree that using such a method would be in some way “unique”.

Troubled by countless debt problems can be ironically solved by getting a bad credit commercial loan. By availing of such a service, you’ll actually be able to alleviate the financial fix you got yourself into, by pooling the bad credit commercial loan you pulled out into a venture of your choice. Regardless of the trade you engage yourself in, this type of service will be made available. Big, medium, or small, they’ll be there to cater for all, just as long as you prove to be credible. For whatever business you plan to put up, you’re going to have to provide your creditors with a detailed plan of your project, which can be critical when deciding whether or not they grant you the requested amount.

Bad credit commercial loans, just like the rest of its kind, can come in two types, the first being secured bad credit commercial loans. Here you’ll be putting up collateral to avail of such. Now, you do face the risk of losing that particular asset that you’ve placed as insurance of repayment (for occurring a little too much default payments), but the risk you take is well compensated. With this type, you’ll be looking at a lower interest rate slapped on the money you’ve borrowed, flexible terms, and a longer payback period. Another “minus” such a service comes with is the time that approval takes, which can take awhile.

The second type that you may avail is the unsecured bad credit commercial loan. This variation of the service doesn’t need you to place collateral. What that means for you is this: you don’t take any risk whatsoever, but your creditors do. But that also means the people you’ve borrowed from will have to compensate themselves for the risk they’re dealing with here, therefore will be left with no choice but to do the following: raise the interest on the cash you’ve borrowed, NOT grant you very flexible loans, and give you a shorter period. But another advantage it does come with is the time it takes for approval, since there’s no need to assess any collateral.

Here’s a little tip I’m sure you’d love to know: the rates, terms, and processing time for approval is much better when it comes to online bad credit commercial loans. Due to the many competitors on the web, they try to attract as many people as possible to patronize them by giving better rates and terms. Doing it online also means that you get approved a lot faster, as I’ve said earlier. When you’ve got everything in place, and if the venture you’ve invested in does good, it won’t be long before your pathetic credit score improves – not to mention the amounts of cash you’ll be earning along the way.

What Should You Do Immediately After An Earthquake – from an Insurance Perspective

Five Things to Do

1. Make sure your family and pets are safe. Find a place to live. Most insurance policies provide reimbursement for hotels and rental homes. You do not have to rough it. You are entitled to stay in a location with similar quality as your covered home. In order to ensure that you are fully compensated for your “additional living expenses” and “loss of use”, you will need to keep all receipts for meals, lodging, and purchases to replace damaged items from the time you left your home after the quake until it is fully repaired and you are able to move back in.

If you have a policy issued through the California Earthquake Agency, the Additional Living Expense coverage will probably not cover your living expenses during the repair process. You may want to contact FEMA for additional assistance.

2. Notify your insurance agent and/or insurance carrier that you have sustained damage to your home. If it is only minor, you may want to think and reconsider as your deductible may cover the damage that was caused. If you have suffered damage you believe is covered by your earthquake, business and/or homeowner’s insurance policy, you need to inform them that you plan on filing a claim. Coverage for some earthquake related losses might be available under certain sections of your homeowners or business policy.”

3. If you don’t like what your insurance adjuster is saying or if they tell you that the damage does not exceed your policies’ deductible, you should get an independent opinion. It may be time for you to call in a Public Insurance Adjuster, licensed structural engineer or a contractor who has had experience rebuilding earthquake and fire damaged homes.

“The adjuster sent by your insurance company to inspect your home after a quake may not know how to look for and identify earthquake damage,” warns UnitedPolicyHolders.org, a non-profit organization that fights for the rights of insurance consumers and educates individuals and businesses on how to get fair treatment. “Do not blindly trust your adjuster, especially if he or she tells you no benefits are owed because the damage did not exceed your deductible. Some companies reward adjusters for paying out as little as possible on claims. Your home is simply too valuable for you to rely on one person’s opinion, especially if that person is not a licensed structural engineer or an experienced contractor.”

4. You should do this BEFORE you have a disaster but most people don’t look carefully until after something bad happens. You need to take a close look at the “declarations” page.

That is the page that states your name, address, policy number, categories of coverage, dollar limits, endorsements, lender, etc.). Check the date to ensure that you are working from the most current, up-to-date copy because that will state exactly what your coverages are. The “Endorsements” (extras) will be listed and review the ones that apply to your policy. Every endorsement has a code number that matches text in the policy. (See Declarations Guide below)

Amy Bach of UnitedPolicyHolders, warns, “If you are confused, do not rely solely on your insurance company or THEIR adjuster for answers. Consult with professionals who specialize in advising or representing insurance consumers.”

5. Do not sign anything unless you are sure that you are being adequately compensated for your losses. Don’t provide a sworn statement or final “Proof of Loss” document to your insurer until you are positive that you understand your rights, your insurance policy coverage and endorsements, and the FULL extent of your claim and what it will take to make you whole again.

Don’t sign anything without proper legal advice first. Be especially aware of “releases or waivers of any kind. Carefully read all documents carefully, including both sides of all checks, to make sure they don’t contain “final” or “release” language.

Insurers have the right to take your recorded or sworn statement regarding your claim, and you must cooperate, provided their request is reasonable. However, giving such a statement without legal representation, or prematurely signing a final proof of loss may hurt your ability to fully recover the policy benefits you need to repair your home properly.

Insurance company adjusters often try to rush you into a fast settlement to save money and close your file. He or she may also claim that your home damage pre-existed the quake. Don’t be pressured. Take your time and get professional help if you need it.

Documenting a major loss to ensure a full, fair recovery requires work and lots of research. Before you can really know the true amount of your insurance claim, you must get estimates from reputable contractors, and be able to inventory all your lost or damaged possessions. This takes time. If your home is showing severe cracks, you may have foundation damage. A licensed structural engineer should fully inspect and tell you the scope of necessary repairs. Discuss repair options with a reputable contractor before settling your claim.

UnitedPolicyHolders Guide to What to Look for on the Declarations Page:

1. Your policy has categories of coverage and dollar limits for each one. The main categories are “Dwelling”, “Contents”, “Loss of Use,” (sometimes called “Additional Living Expenses”), and “Other (or ‘Appurtenant’) Structures” etc.

2. The dollar limits stated on your Declarations page may be lower than your true limits. Annual inflation factors, “endorsements”, and other additions contained in the policy increase your limits. Typical additions are 5% of your dwelling limit for debris removal and landscaping. Typical endorsements are Extended Replacement Cost coverage and Building Code/Ordinance coverage. Do the math to re-calculate your limits in all applicable categories.

3. The policy language may not provide the coverage you requested at the time you purchased it, and you may find you are under insured. In this situation, you may need professional help from a policyholder attorney or the Department of Insurance to determine whether an agent/broker or the carrier is legally responsible to solve this problem.

There are laws and regulations that protect you as an insurance consumer. Those laws are set forth in the California Insurance Code at section 790.03(h), the California Code of Regulations at Title 10, Chapter 5, and judicial decisions.

Take Your Time – Don’t Be Rushed

Even though you are in a hurry to get everything settled and to get your family back into your home, you need to take your time and do it right. Once you sign the final documents, you will have no recourse. Most people who sign quickly lose out on money that they could have got if they had waited. If you hurry, you will not be able to adequately remember all the possessions that you had purchased and are now destroyed. This is especially true of the little things- special tools and implements, the gifts, decorations and special items that only get used several times a year – on holidays or vacations. A rushed settlement only benefits the insurance company and its agents – not you.

Check out this Quality Claims Management online article with maps to find out if your home is in a danger zone – check for landslide, liquefaction and earthquake fault zones. http://www.qualityclaims.com/homeowner.aspx?sect=_quakeinsurance

by Ronald Reitz, President of Quality Claims Management

FHA home loans, which are insured by the Federal Housing Administration (FHA), are great financing options for any homeowner who wants to purchase a house or refinance his or her current mortgage. These loans have low interest rates and usually only require down payments of 3.5 percent! FHA loan requirements are simple, so current and potential homeowners are more likely to qualify for these loans than other types of loans.

FHA 203k Rehabilitation Mortgage Insurance Program

The FHA has a specific loan program to help homeowners who want to make improvements or repairs on their home, but do not have the funds to do so. These loans are called FHA 203k loans and can be used for either a purchase or a refinance. There are two types of loans in this program, one loan is for repairs that cost less than $30,000 and the other loan is for repairs that cost more than $30,000.

A streamline FHA 203k option is also available to homeowners who are interested in doing non-structural repairs or improvements. This loan requires less documentation and can be less costly. It allows a homeowner to finance up to an additional $35,000 into his or her mortgage in order to make improvements to the home. An FHA home inspector or appraiser can identify home repairs that need to be made.

How the Loan Can Be Used

Although there are some restrictions on what the loan can be used for, there are plenty of renovations and home repairs that the loan does cover. In general, these include modernization, eliminating safety or health hazards, making a home more accessible for individuals with disabilities, or making a home more energy efficient. More specifically, the loan can be used for roofing, plumbing, flooring, painting, minor remodeling and more.

Loan Requirements

There are certain requirements with this type of financing. Homeowners must spend at least $5000 on their home repairs in order to be eligible. Homeowners must get cost estimates from a licensed and insured contractor(s) before signing the sales contract. The total cost of the mortgage, including the repairs, must remain within the FHA loan limits for the county in which the home is located.

This loan cannot be used to flip houses, and the homeowner must use the loan on the home in which he or she lives. The work being done on the house must begin within 30 days of the loan closing. All work must be completed within six months to comply with the loan requirements.

If a homeowner wants to make repairs to his or her home and needs additional financing, this type of financing could be the best option. Many of the same eligibility standards used for standard FHA home loans apply to the FHA 203k loan. Most lenders will require that the borrower have a credit score of at least 620 to be eligible. To qualify for the loan, certain energy efficiency standards, as well as certain structural standards, must be met.

This loan could be great solution for homeowners who want a better way to finance home repairs and improvements without depleting their savings.