Data Facts Blog


Finding the RIGHT Credit Card for YOU!

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Looking for a credit card? If so, you’ll need to shop around. Do some research to compare costs, features and drawbacks before settling on a single card.

 

Annual fee: Some cards charge an annual fee – anywhere between $15 and $50 – while others may not. Check to see which ones do and if their annual fee still makes smart financial sense to you.

Grace period: Most credit cards offer a 25-day time period for you to pay off your total balance without paying a finance charge. The grace period runs from the date printed on the bill, not the date you receive it or the date you make a purchase.

APR/interest rate: The APR or interest rate is the percentage of interest you’re charged on the balance you carry on the card and cash advances. It can either be fixed or variable.   A fixed rate APR is usually higher, but you’ll know what to expect for the year. A variable rate is typically lower, based on an interest rate that swings up and down.

Introductory rate: Some cards offer a super-low introductory rate that will later switch to a higher fixed or variable rate. Make sure you know how long the introductory rate lasts and what the new rate will be. The introductory rate is often terminated if you send a late payment.

Finance charge: This is the actual dollar amount you’ll pay when you carry a balance. It includes interest costs and any other transaction fees. It’s helpful to know how this number is calculated. The average daily balance method is the most common. It adds the amount of debt on your account for each day during the billing period and averages it

Other fees: These include fees for paying late, charging over your limit, and getting a cash advance. Make sure you read the cardholder agreement, which discloses these charges.

Other Rewards and Benefits:  Many cards now offer added benefits, like rebates, discounts and/or frequent flyer miles. With these cards, find out how many dollars equal a free ticket, etc and if you will actually use these types of rebates.

Payback Time:  If you plan to pay your credit card bill in full each month, look for a card with no annual fee & a generous grace period. If you think you’ll carry a balance, then the important thing is a card with a low interest rate.

Be a smart consumer and shop before you buy.

 

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Strategies to Help You Erase Debt in 2014

Posted in Uncategorized by datafactssolutions on March 28, 2014

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If you are like most you started the year off with a list of “Resolutions”.  You probably started the year by saying to yourself “This will be the year I finally erase all my debt.”  But now that spring is already here, how have you done with sticking with your financial resolutions?  With almost 88% of all New Year’s Resolutions failing, sticking to your budget may be harder than you think.  The reason?  Our brain is wired to do the same thing year in, and year out, therefore making it very hard to actually change the behaviors that got you into debt. 

Here are some Tips to help you understand your debt behaviors, as well as tools to help you combat the temptations of spending.

We all tend to overestimate our own willpower and self-control when we set resolutions.  We REALLY believe that for whatever reason THIS YEAR will be the year “I stick to it”.  Planning to be virtuous is easy and it feels achievable. Actually avoiding temptations is much more difficult.

  • Be realistic with your reaction to temptations.
  • Give yourself room to re-adjust the budget if the original plan isnt feasable.

 

Our brains discount future consequences for ourselves when we want instant gratification. How many times have you eaten a calorie laden meal right before you started your big diet?  That is because our brain is saying “go ahead, eat the cake…those calories are for that person starting a diet tomorrow”, it almost makes  you feel like that is a different person, therefore not recognizing the consequences for yourself right then and there.

  • Take the decision-making out of your own hands.
  • Set up your paycheck so a portion automatically goes into savings without you ever seeing it and being tempted to spend it instead of save it.
  • Keep credit cards at home—this completely eliminates those impulse buys

 

Credit card spending doesn’t feel as “REAL” as spending cash. When we pay with cash, we feel the pain of losing the money immediately, but paying with a credit card delays the sense of pain until the bill comes. And because we pay our credit card bills electronically, there is a further sense of unreality to the amount of money you owe. The further you get away from cash transactions, whether that is in the initial point of purchase or in the bill paying, the less likely you are to feel the pain and urgency of your debt.

  • Start paying with cash instead of credit
  • Disperse your monthly “allowance” into envelopes of cash.  As long as you have money in the “shoe envelope” you can buy shoes.  If it’s empty, you got to wait until next month—even if they are on sale! 

These strategies will help you change your behavior habits, by giving yourself  time to actually think about your spending habits.  By understanding WHY you spend, you can begin to develop the discipline necessary to pay off your debt.

 

5 Tax Deduction Tips for Homeowners

Posted in Data Facts,Data Facts blog,finances,Mortgage,Mortgage loan by datafactssolutions on March 13, 2014
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April 15th is just over a month away, and many of us that have yet to file taxes are spending the next few weeks thinking about the various deductions we qualify for before we file.   For tax year 2013, the standard deduction is $6,100 for single Americans and $12,200 for those married and filing jointly.  That means unless you can claim more than those amounts, there’s usually no reason to itemize.

One of the most common ways to get over the threshold, however, is to own a house and unlock the many deductions that come with homeownership.

But it’s not as simply as simply mailing a mortgage bill to the IRS and reaping the rewards. There are a bunch of very specific deductions that require specific paperwork.

Here are 5 important tax tips to look for if you’re a homeowner:

Mortgage Interest

Claiming mortgage interest is the biggie, and one of the most common deductions among taxpayers.  Currently the cap on mortgage debt we can deduct for tax purposes is 1.1 million.  This includes multiple loans, so those with a primary residence in Tennessee, but own a vacation home in Florida, they can claim interest on both, as long as the total is under the cap.

Be careful of claiming a mortgage interest deduction on home equity loans that haven’t been used to improve the property.  If you refinanced your loan and decided, ‘Hey, why don’t we take another $50,000 out in equity,’ but then you don’t use that money to, say, build a pool, that’s not fully deductible.  You must use the money to improve the house, or you aren’t allowed a deduction.

Mortgage Insurance and Taxes

In addition to mortgage interest, private mortgage insurance is also deductible.

Don’t mistake private mortgage insurance, or PMI, for homeowner’s insurance that protects against a fire or other loss. PMI comes into play with lower-income homeowners who often can’t afford a big down payment, and instead pay a small monthly fee as insurance against default.

If you make a private mortgage insurance payment, in most cases this is deductible.

Also worth noting is that local and state property taxes can also be itemized on federal tax returns. Particularly for lower-income Americans, there may be special property tax benefits available based on your community.

 

Going Green

Unless Congress extends existing tax credits for residential energy efficiency, 2013 is your last chance to claim up to $500 in green energy credits.

You can still get credit for, Insulation, energy efficient windows and doors, high efficiency air conditioner and heaters.  Still, the cap is small at just $500, and it’s not applicable if you claimed it previously since the credit was passed in 2011.

A separate and more substantial credit is available for solar energy installations, so long as they are on your primary residence and not a rental property.

The credit is for 30% of the cost, including installation, wiring, and set up.

 

Selling Your Home Unlocks Tax Breaks

Of course, for homeowners who have taken advantage of a resurgent housing market by selling their homes altogether, there are also tax implications.

If you sold a home in the past year, costs including title insurance, advertising and real estate broker fees can also be claimed on your return.

You can also claim certain repairs to reduce your capital gains on the sale, presuming they were made within 90 days of the sale and clearly for the intent of marketing the property.

And after the sale? If you had to find a new home because of a new job that is located more than 50 miles away from your old home, you may be able to deduct your reasonable moving expenses, too.

 

Casualty Losses

Especially given the very harsh winter weather we’ve seen recently, it’s important to note that when disaster strikes you are able to claim a tax break for any significant losses.

You have to have a loss more than 10% of your income.  If you make $50,000, you have to pay $5,000 out-of-pocket before you are eligible for any deduction.  And for the record, that’s an out-of-pocket loss. You won’t get a deduction for losses that were covered by your insurer and that you were compensated for.