Do You Really Need a Credit Card at the Age of 25?

need a credit cardA 25-year old is done with college and is probably into his first job. At the threshold of adulthood, he wants to fulfill several dreams in a short period of time. Most people believe that having a credit card is an important factor of becoming an adult. However, there are many individuals who think such cards are unnecessary. Just like investing is not necessary, having a card is also not a necessity. So then why would a 25-year old need one?

Here are five reasons why having a credit card at the age of 25 is beneficial.

1. Deposits are Not Necessary

Some merchants who accept debit card payments require the customers to also pay a higher deposit at the time of booking. In case a person is unable to execute the plans, the merchants are still able to earn some of their cash deposit amounts (because there fund is done after deducting a certain sum). These are similar to security deposits and may become inconvenient. A credit card eliminates all such difficulties for the users because merchants do not require deposits for such transactions.

2. Deferred Payment

When an individual uses a debit card to purchase any product or service, the money is immediately deducted from his bank account. On the other hand, a credit card purchase does not have to be paid until the next payment due date. For example, if a cardholder purchases something using his card on the 1st of a month and billing due date is 31st of the month; he enjoys an interest-free period of 30 days. Although this may not seem like much, being able to make purchases without the need to pay upfront cash may help users save a lot of money over a longer period of time.

3. Affordable Home Loan Interest Rates

Many people think that they may receive better discounts and close a home purchase faster if they pay in cash. However, if a person has used his credit card responsibly and made timely payments, this is reflected in his credit score given by a credit rating agency like Credit Information Bureau (India) Limited (CIBIL). A higher credit score is beneficial in reducing the interest cost on home loans and other types of borrowings. This makes it less expensive for people to buy their dream home. Furthermore, paying the mortgage installment with a card reduces the actual cash outflows and helps prevent financial difficulties.

4. Reward Points

Most card companies provide excellent reward-based credit cards for their customers. These issuers allow the cardholders to accumulate reward points on their spending. These are redeemable against several offers, such as travel deals, air miles, or purchasing some products and services. In addition to the reward points, users may enjoy cashback offers and benefit from signup bonuses that make credit cards more beneficial.

5. Develop Credit Score

A 25-year old may not have any credit history. However, he may need to avail of a loan in a couple of years to purchase a home or any other asset. This period may be used to develop a good credit score using a credit card. When an individual utilizes his card responsibly and has no delays in payments, it has a positive impact on his credit score. Having a strong credit score has several direct and indirect benefits, such as increased possibility of receiving approval on loans and lower interest rates.

People often find lots of information on how using a credit card may have severe outcomes, such as financial distress and debt traps. However, using a card wisely also has many benefits. However, before applying for a credit card, it is important to check credit card eligibility and understand the terms and conditions related to credit cards.

Quick Installment Loans Offer Options When Paying Off Debt vs Investing

debt vs investmentsWhen creating financial goals and setting a budget, most folks understandably have questions about personal finance topics such as cutting back on expenses, how to save, what investments are best and how to get out of debt. These subjects are important because very few individuals have an unlimited income stream, and most face competing demands for their paycheck.

Regular monthly bills, such as rent, utilities and groceries often take up a good portion of the budget. It’s also wise to not spend every penny that one earns, but, instead, to hold on to a portion of it in order to have the funds available to save, invest and pay off debt. With all of these competing demands and only limited money in a budget, it’s difficult to decide which goals are the most important.

This is especially true when it comes to planning how much money to spend and save and which personal financial goals should take priority: investing or paying off debt?

Why Investing for the Future is Important

There are many types of investments one can make, and they run the gamut from stocks, bonds, commodities and real estate to mutual funds, 401(k) plans, annuities and even notes held against corporate, private and public debts. Basically, anything whose ownership can be acquired, either in part or whole, and later sold if one so chooses, is an asset which might grow in value over time and in which others can invest.

Investments are attractive because they offer the potential for growth. This is why it is a wise financial move to set aside a portion of one’s money for investment. However, it’s difficult for most individuals to find room in their budget to be able to save up enough money to invest, especially if they happen to already have a lot of debt, since debt and other spending eat into cash flows.

The High Cost of Debt

According to information about household debt from the U.S. Census Bureau, nearly 69% of all American households had some form of debt in 2011, the last year for which comprehensive data is available from the agency. The median amount of debt that they hold is around $70,000. Debt is a significant issue for most Americans, as debt payments often consume a major portion of the budget.

In addition to holding individuals back from being able to invest, it can also prevent them from being able to save for other goals, such as college tuition, a down payment on a home and saving for retirement.

When Debt is a Good Thing

While debt can take up a large portion of many folks’ budgets, not all debt is necessarily bad. For example, most people are unable to buy a home unless they pay for it over time through a mortgage. Other times, loans can be a real benefit if they improve one’s cash flow, such as taking out quick installment loans in order to consolidate several smaller loans or credit card balances.

When used to consolidate debt, this type of loan can help individuals to reduce the amount of interest that they pay over time on expensive revolving debt. Once all of the debt has been combined through consolidation, it also decreases the number of minimum monthly payments that must be made to keep accounts current, which is especially helpful for people who have several small debts that may require $50 to $100 or more in minimum monthly payments.

In this way, a simple installment loan often helps individuals to be able to shake debt more quickly and free up a significant amount of their cash flow each month which they are then free to save, invest, or spend elsewhere in their budget.

Balancing the Need to Pay off Debt vs. Investing

Since many investments tend to grow in value over time, especially classes of assets that involve the payment of interest, it’s always a good idea to regularly commit even a very small portion of the budget to investment, even when there is significant debt. Deciding how much to save for investment, and how much to save to pay down debt will depend on the constraints of the individual’s budget.

There are a number of popular budgets, but many financial experts, including Senator Elizabeth Warren who is Special Adviser for the Consumer Financial Protection Bureau, recommend the 50-30-20 budget.

In this budget, payments to meet needs such as housing, transportation, and other expenses are limited to 50% of the budget. The other half of the budget is divided between spending on wants, such as entertainment and savings that are used to pay debt and invest.

Deciding how to divide 20% of the budget between debt repayment and investing is the tricky part. It’s a good idea to always be putting something towards investing, but when the amount of interest on the debt is significantly larger than the interest that one can earn on an investment, it’s better to pay down the high interest debt first, and then slowly increase the amount earmarked for investments.

It’s also important to note that one doesn’t have to spend 30% of their budget on one’s “wants.” By reducing discretionary spending, even in the short term, it’s possible to free up additional funds to pay down debt so that there is always more room in the budget for investing.

Rather than avoiding all debt, properly managing it, such as using an installment loan to consolidate debts made at higher interest rates, gives borrowers options and enables most individuals to be able to meet their needs, indulge their wants and have enough money in their budget to both repay debt and invest at the same time.

4 Ways to Prepare for Bear Market Investing

money market statusBear markets happen. You can’t avoid them, so you might as well prepare for them before they hit.

First things first: What exactly is a bear market? It’s when the stock market as a whole is off by 20 percent or more from its high point. If you look at stock market trends, you’ll see that this shows up about once three years.

Preparing for the Bear’s Rampage

When the bear starts his rampage, your initial reaction may be unsettling. It will probably look like tough times are on the horizon, and you start envisioning yourself losing all the gains you’ve made financially. But don’t let the bear fool you. There are ways to not only prepare, but also to succeed with bear market investing.

If you keep your wits about you and a cool head, the market’s troubling timespan be used to your advantage. Knowing that a bear market is inevitable, there are a few things you can do to prepare for it.

Accept that the Bear Is Going to Come Along

Downturns are going to happen, and there is nothing we can do to prevent it. Just like everything else in life, the stock market has ebbs and flows. If you want to get biblical about it, look at it this way: the market giveth and the market taketh away. These swings are just a normal part of the investing game. Take advantage of the downturns when they occur and you’ll come out ahead when the bear goes back to hibernating.

Cut the Leverage

In financial circles, the term “leverage” refers to money borrowed at any level. It could be money you borrowed from a bank to buy your home, or from a credit union to buy a car. You may even have borrowed money to get into some investments.

The problem is that leverage is just a fancy way of saying debt. And debt can rapidly grow into a massive burden during challenging economic days. When you get a hint that a bear market is rearing its ugly head, you’ll want to get rid of as much leverage as you can, from both your invested portfolios and your everyday life. Doing this shields you from some major financial problems that can arise when hard times hit.

Spread It Out

This simply means to make certain all your investments aren’t sitting in one stock or fund. Diversification should be the strategy that rules your portfolio. This will give you flexibility during a bear market. To keep your assets performing at an acceptable level while the market is down, spread your money out into cash, bonds, favorite commodities, varied real estate and stocks.

Keep It Fluid

If something in your portfolio is doing well, sell some of it. Purchase some of what is not doing so well. This is the basic tenet of the “buy low, sell high” strategy that is time tested. Even when the popular trend may be going in the opposite direction, don’t jump on the “buy it while it’s hot” train. This process of rebalancing your portfolio shields you from the bear market while allowing you to sell stocks at a profit and buy bonds while they’re low.

77 Features of Mobile Banking

money in mobileSmartphone usage is on the rise across India and this has revolutionized banking, as phone users can use several mobile banking apps that improve convenience and efficiency. Banking institutions adopt new technology and increase their product offerings to retain and expand their customer base.

Mobile banking services are experiencing rapid growth and innovation, with the aim to incorporate cutting-edge technology in financial services. Opting for these services gives users different benefits, such as convenience, time saving, and flexibility.

Mobile banking applications have several interesting features that allow users to view information, perform transactions, and enjoy other value added services. Some of the features include:

Viewing

  • Bank account overview and transaction history
  • Track term deposits
  • Scheduled payments
  • Statement request
  • Credit card statement
  • Demat account overview
  • Investment details

Transaction

  • Fund transfer through NEFT, RTGS, One-time transfer without adding beneficiary or message money
  • IMPS money transfer
  • Payments for mobile bills, utility services, direct-to- home recharge, and credit card
  • Service requests for debit card, credit card, or cheque books
  • Bookings for flights, hotels, and other services

Applications

  • In My Kotak you can customize and personalize your home screen
  • Modify different settings for your account

Benefits of Mobile Banking

  • Convenient – Users do not have to visit bank branches, travel agents, or utility-service providers. You can do more than just transfer funds, with some mobile banking apps even allowing you to recharge your mobile or DTH connection, make flight and hotel bookings, and lots more, all through your smartphone.
  • Flexibility – Mobile banking in India has grown so rapidly, increasing versatility, allowing users to perform a wide variety of transactions that were previously unheard of. The message money feature, in Kotak Bank’s mobile banking app, even allows you to send funds to friends, relatives, and associates through a messaging service!
  • Safe – Almost every transaction done through your mobile phone requires authentication. Moreover, the bank will usually send you an SMS whenever a transaction happens in your account. Any mobile banking apps require 2-level authentication to prevent mobile fraud. Users need the login password (MPIN) and the activation code for authentication.

Almost every private and public sector bank in India provides mobile banking services to customers, but the services offered by some banking apps are exemplary. The app from Kotak Mahindra Bank is notable in this regard. Some of the innovations give users the ability to customize settings, setup transactions and view information. This adds several benefits to the user experience.

Settings

Certain mobile banking apps allow users to even customize their banking settings. This means that users can:

  • Add or delete multiple customer relationship numbers
  • Personalize the Home Screen

Transactions

Banking transactions are redefined with mobile banking, as they are no longer restricted to fund transfers or payments. Users can perform the following actions:

  • Money transfer – Through RTGS and NEFT
  • IMPS fund transfers – generating one-time password for IMPS2M
  • Customer can view/modify the MMID
  • Bill payments – utility services, mobile or DTH services, redemption requests, balance transfer, purchase, cancel request
  • Service requests – request add-on card, auto debit for credit card payments, report lost or damaged cards
  • mStore – Book flights, buses and hotels

View

Users can also track their financial activities, not just in terms of transfers executed via the app. You can access and update information related to the following:

  • Activity – bank account, Demat account, investments, and credit card
  • You can also create or modify your profile, if you’re the primary CRN, go to Settings> Mange Profile and change the CRN, the same goes for modifying one. This is only applicable if you’re the primary CRN.
  • Financial History – Credit card summary, bank account summary, My investments, bill pay, mobile recharge, JIFI

Technological innovations are driving rapid growth across all sectors and banks are taking the lead by offering new and improved services to customers. The scope of mobile banking is only likely to grow in the coming years.

You Can’t Afford Not To Pay These Vital Business Costs!

business capitalAll kinds of costs come with running a business. Of course, a lot of your budget should go on your primary operations. Many companies choose to invest money in things like marketing, great equipment, and a large workforce. But while these costs are helpful, some expenses are absolutely essential. Here are some of the costs you must pay to keep your business running smoothly.

Workplace Upkeep

Whether you operate out of an industrial building or rented office space, you’ll likely have to pay monthly costs. While the main cost of the building is a big concern, there are also other costs associated with the upkeep.

Naturally, you’ll also have to pay for utilities like water and electricity. You may also need building maintenance work from time to time. Some workplace problems can cause you and your employees illness. Make sure everything is well-maintained to avoid health and legal problems.

Sometimes rented office space covers a lot of the upkeep themselves. By renting out a small office unit in a business building, you won’t have to worry about handling building maintenance costs. This can save a lot of money.

Taxes

All companies must file business income taxes each fiscal year. Failing to do this can result in penalties and fines for your business. If you fail to pay the full amount back, you’ll have to pay extra interest on the rest. Therefore, it’s essential you plan for this cost in advance and handle it on time.

What you pay and the forms you fill out can vary depending on what type of business you’re running. It can get confusing trying to handle it all on your own. Most companies enlist the help of an IRS lawyer to make sure their taxes are handled professionally.

If you can’t pay your taxes on time, you can sometimes get a short extension. The good news is you can get all kinds of deductions from your business tax. Things like office supplies, premises, and work-related travel can often be taken off your tax bill. This can make the costs much easier to handle, so keep receipts for anything you might be able to deduct.

Payroll

You’ll need to pay your employees what you’ve agreed to on time, every time. Terms are often set out in employee contracts about how your employees will be paid and when. Some businesses choose to pay workers weekly, some monthly. Either way, make sure employees get their money.

Paying employees late can severely reduce their motivation to work. Not only that but if you fail to fulfill payment agreements with employees you could find yourself in legal trouble. If your payroll is becoming a crippling cost, you may need to look into downsizing. However, not paying employees is never a suitable option.

Internet Connection

The internet is essential for many business operations nowadays. Make sure you pay for internet connection with the best uptime- this is the most important factor for company internet.

It’s also a good idea to use I.T. services to handle any computer or internet problems around your business. Computing problems can affect your business’s productivity, so it’s important to pay to keep it running well.