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Discospawn posted:If I apply for a bunch of credit cards in a short period of time (4 in one month) and then utilize them all up to 80-90% of the credit limit, is there any risk of them being able to change their terms on me without any notice? So long as I make payments on time, I would assume they have to stick with the terms they gave me when I signed up, but I seem to remember reading that creditors can keep track of your credit and change stuff if they think you're suddenly a much higher risk. I understand the wisdom of such an action is questionable, but I'm just curious about the practicality of it. Per the credit card act of 2009, they can no longer use a "universal default clause" that allows them to increase your interest rate arbitrarily. They cannot increase your rate in the first 12 months. They can increase your rate after that, but only on new balances; they have to honor the rate they gave you when you created these balances. Is this a theoretical question, or something you are planning on doing? I didn't refresh in time, but yeah, incredibly stupid plan, and not just due to the interest rate spread not being high enough. Smart people don't invest with borrowed money, no matter how good the rate seems, and try to game the system with skimming a little bit from arbitrage. Zeta Taskforce fucked around with this message at 21:41 on Nov 3, 2013 |
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Nov 3, 2013 21:07
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I just re-did the math and I'd forgotten that real loans are amortized, so paying $1390 on $40k is actually equivalent to a %6.5 loan, which isn't anything special. So yeah, I guess this would've been one of those dumb things to do with credit.
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Nov 3, 2013 21:29
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Where could this ever go wrong? Beyond ethics, I would just say if you have the extra time and/or need to do this, you need a better career. It's also a pretty big risk.
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Nov 3, 2013 21:58
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Tbh my family has done similar but it was with multiple $10,000 limit credit cards at 0% APR that they put into CDs. Hey a few hundred bucks of free money, can't complain.
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Nov 3, 2013 22:07
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It used to be better when you didn't have to make any monthly payments. I believe that's not possible anymore.
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Nov 3, 2013 22:25
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Is it possible to roll over (in part or in whole) an HSA while you are still contributing to it via your employer?
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Nov 3, 2013 23:13
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baquerd posted:Is it possible to roll over (in part or in whole) an HSA while you are still contributing to it via your employer? Yes you can.
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Nov 3, 2013 23:47
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80k posted:Yes you can. Cool, so theoretically a person could have a really bad HSA with only high fee investments and just basically ignore it and do multiple rollovers a year to move all contributions to a different HSA custodian?
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Nov 4, 2013 00:19
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baquerd posted:Cool, so theoretically a person could have a really bad HSA with only high fee investments and just basically ignore it and do multiple rollovers a year to move all contributions to a different HSA custodian? Yea just check for transfer fees. The HSA is not tied to your employer in any way beyond being the only way to receive ongoing contributions, but the actual funds are yours and under your control.
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Nov 4, 2013 00:25
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I have an old HSA for a job I'm no longer at. It has lovely investment options and I didn't know until know you could roll it over. I no longer qualify for a HSA due to my new coverage, but can I still open an account at a different bank and transfer the money from my old HSA?
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Nov 4, 2013 00:37
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Xenoborg posted:I have an old HSA for a job I'm no longer at. It has lovely investment options and I didn't know until know you could roll it over. I no longer qualify for a HSA due to my new coverage, but can I still open an account at a different bank and transfer the money from my old HSA? Yes you can.
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Nov 4, 2013 00:38
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Xenoborg posted:I have an old HSA for a job I'm no longer at. It has lovely investment options and I didn't know until know you could roll it over. I no longer qualify for a HSA due to my new coverage, but can I still open an account at a different bank and transfer the money from my old HSA? I did this last week and... MrKatharsis posted:Holy cow, easy-peasy was right. I filled out more forms to adopt my cat.
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Nov 4, 2013 00:53
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I wish YNAB had an option to have a hand reach out, slap you, and say "NO." in a stern voice whenever I input a stupid purchase.
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Nov 4, 2013 15:38
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More HSA chat: I'm 23 and at my first job and it's currently time to sign up for benefits for next year. I want to start an HSA early so I can grow my money for as long as possible. I have pretty much no health conditions besides bad vision (which is covered by my vision insurance) so this is money that I most likely won't have to touch unless something radical happens. I can get an HSA through with my company through UnitedHealthcare and Optum Bank. Anyone have experience with these companies and whether or not I should stick with them or switch to someone better?
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Nov 4, 2013 16:41
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enthe0s posted:More HSA chat: Do you even have a choice of what HSA to use? Every employer I've ever had had just one.
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Nov 4, 2013 17:01
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enthe0s posted:More HSA chat: Hey, I have coverage and a HSA through them and they are so-so. Optimum has three account types that have different interest rates, monthly fees, amounts at which those fees are waved and investment minimums. Accounts types and fees are here. The funds are mixed as well. They really only have one index but it is the Vanguard S&P 500 Index. I am using the eSaver with 5500 in cash and everything else after in the S&P 500. No fees charged and enough cash on hand to cover an emergency up to my out of pocket max.
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Nov 4, 2013 17:10
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canyoneer posted:Do you even have a choice of what HSA to use? Every employer I've ever had had just one. It's my only choice, but from a few posts up it sounded like I could rollover the money somewhere else so I was wondering if I should do that after the initial setup. Sorry if I was unclear. SmuglyDismissed posted:Hey, I have coverage and a HSA through them and they are so-so. Optimum has three account types that have different interest rates, monthly fees, amounts at which those fees are waved and investment minimums. Accounts types and fees are here. I will probably do something similar then since I want maximum growth and can handle the ups and downs of the market. Another question: Does the money my company contributes count towards the maximum amount I can contribute each year? Or is it like a 401k where I can actually contribute $17500 and still get my company match on top of that?
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Nov 4, 2013 17:21
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Posted this in the Canadian thread too, but it's applicable here: I have six months of expenses holed up, but keeping it completely liquid is only getting me 1% interest. Is it a bad idea to keep one month completely liquid and invest the other five in low-to-moderate risk portfolios to try and get a little more? My ultimate plan would be if life went sideways, live on the one month money while I withdraw the other five.
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Nov 4, 2013 17:49
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It is a bad idea in that it runs counter to the whole point of the emergency fund. Keep in mind that the six-month fund isn't just to literally cover six months of your expenses - it is also to provide you with a large lump sum in case you have some expensive problem rear it's ugly head. What would you do if you ran into a problem and it needed more than one month of funding? Your other five months are tied up, and even if it will only take you a little while to liberate it, that's counter to the point of having the fund. In addition, you don't want to have your emergency fund in a moderate-risk place, or a low-risk place. You want it in an as close to no-risk place as you can find. Putting it at risk means that you don't actually have six months of expenses saved - you have whatever your current investments are worth, providing you can liquidate them. What if you have an emergency while your investments are tanking? You won't have the option to wait for them to rebound, so now you're not just taking a painful loss, you're holding less money than you needed to have.
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Nov 4, 2013 18:03
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Your emergency fund is supposed to earn a rate of return like airbags are supposed to make your car go faster.
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Nov 4, 2013 18:10
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reflex posted:Posted this in the Canadian thread too, but it's applicable here: I have six months of expenses holed up, but keeping it completely liquid is only getting me 1% interest. Is it a bad idea to keep one month completely liquid and invest the other five in low-to-moderate risk portfolios to try and get a little more? My ultimate plan would be if life went sideways, live on the one month money while I withdraw the other five. Don't think of an emergency fund as an investment, think of it as an insurance policy. It's cool that if you decide that you are in a stable place in life and you want to cut it back to 3 months, and invest the rest in a way that has more upside potential. Like Ashcans said.
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Nov 4, 2013 18:10
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FrozenVent posted:Your emergency fund is supposed to earn a rate of return like airbags are supposed to make your car go faster. This should be in the OP.
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Nov 4, 2013 21:36
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canyoneer posted:Do you even have a choice of what HSA to use? Every employer I've ever had had just one. But it's literally just changing the routing and account numbers in their payroll software. I can't imagine HR taking issue with it. Usually, they try to lock people into one HSA because that makes it easier for people to sign up for the HSA plan. Multiple studies have shown that auto-enroll makes people substantially more likely to save through payroll deduction.
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Nov 5, 2013 00:50
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I want to buy a house in the near-ish future (ideally spring 2014). I have only lived in the US for two years, so my credit history is young, and I am trying to build up my credit score. I applied for pre-approval a month ago, and was told I needed to improve my score. At the time, I had pretty heavy credit card utilization from a cross-country move which was negatively effecting my score, I have now paid this off and taken out a third credit card. Hopefully this will help matters. I am also looking at buying a new car, and have been approved for a loan at a good rate through my credit union. I have read conflicting advice about the effect of a car loan on your credit history. On the one hand, I have heard that having a car loan, and paying it on time, is good for your credit score because it shows you are good at paying back loans. On the other hand, I have heard that getting a car loan -- and hence increasing your credit utilization -- can tank your credit score. My question is: PURELY from a point of view of effect on credit score, should I buy the car now (2-3 months before I hope to get mortgage pre-approval), or wait until after I have a house? (I know that there are other things to take into consideration, including the fact that by not buying the car until after the house I can save more money towards either down-payment or buying the car outright/on a smaller loan. And I am considering these things. At present, the effect on credit score is the main "unknown" in my calculations.)
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Nov 5, 2013 18:08
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lumbergill posted:I want to buy a house in the near-ish future (ideally spring 2014). I have only lived in the US for two years, so my credit history is young, and I am trying to build up my credit score. I applied for pre-approval a month ago, and was told I needed to improve my score. At the time, I had pretty heavy credit card utilization from a cross-country move which was negatively effecting my score, I have now paid this off and taken out a third credit card. Hopefully this will help matters. The thing that will improve your credit the most is to pay down your cards, and it sounds like you already did that. After that, the second best thing you can do is to stop applying for stuff. A car loan is not revolving debt so it won't hit your credit in the same way a maxed out credit card would, but it will still be a new tradeline, it will still be something that makes the average age of your accounts younger, it will look like you are on a borrowing spree. If you need a car, and you probably don't "need" a brand new one, then I guess you can buy one, but don't be one of those people who pretend that you are doing something responsible by taking out tens of thousands of dollars in new debt on a rapidly depreciating asset, because I promise you that you are not. Finally, you didn't ask it, but would also advise patience. You just moved to a new place, you will not disadvantage yourself by taking some time to research neighborhoods and getting to know the area.
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Nov 5, 2013 19:55
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I just finished a course on home-buying offered by my city. One of the things they told us was that big purchases right before you start the process are a bad idea and are more likely to hurt you than anything else because lenders like to see a nice period of calm and stability in your history so they can evaluate how you're doing. If you had gotten an auto loan a year ago, then they'd see that you were paying it fine and it would be no issue (possibly a plus, I don't know). But one you just got a month ago? They can't see whether that was a huge mistake and you're going to do delinquent on it immediately, so it's just extra risk for them to worry about. I don't know where you are, but you might want to look to see if your city/county/state has any sort of counseling service for new homebuyers. My city offers something like two hours of free financial counseling to people who take a homebuying course where you can talk to a neutral adviser about your finances and how best to structure them for home ownership. It's someone who doesn't have interest in selling you a loan or a product.
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Nov 5, 2013 20:14
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This is not a hard and fast rule but if someone is at a point where they need to borrow money to buy a car they should probably question whether or not they have the cash reserves needed to buy a property. It can definitely be situationally dependent (especially if they are in the process of selling a house at the same time and are just illiquid for a brief period) but it's not a great sign that they will be able to handle the high level of risk inherent in buying a house.
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Nov 5, 2013 20:56
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With 1-2% auto loans there's very little reason to be paying cash.
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Nov 5, 2013 21:10
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Just because you borrow money to buy a car doesn't necessarily mean that you "need" to borrow the money. Loans and financing are a tool that can be used intelligently, and paying all cash up front isn't always the best decision especially when interest rates are incredibly low. I'd actually go so far to say that paying all-cash with rates as low as they are is the wrong decision. Don't get me wrong, in general many people borrow when they shouldn't, buy new when they shouldn't and/or can't really afford it, and make bad cash flow and budgeting decisions. I do agree though that if you couldn't theoretically afford to pay cash you probably can't afford the car and shouldn't buy it, even if you do finance. For example, if I'm trying to save up a big pile of cash for a house downpayment and maintenance fund in a couple of years (let's say 100k), I'm not going to go write a 25k check on a car when I could finance it at 2% or less with, say, 5-10k down. As long as my budget is sound and my monthly cash flow stays significantly positive then it is not necessarily a bad decision. I keep most of my capital in reserve and I'm still continuing to save toward my overall goal. This is of course ignoring two factors: is buying a brand new car the right decision vs. maintaining existing car or buying used (maybe, maybe not - that's a different discussion), and whether doing so less than a year before applying for a mortgage is a good decision (probably not).
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Nov 5, 2013 21:26
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Thank you, that is exactly what I needed to hear. My main reasoning behind financing a car rather than buying outright was the (apparently misplaced) idea that it would build up credit, I am OK with waiting until I have enough saved up to buy outright without eating into house deposit savings. Or finance after buying a house (because as Harry -- edit, and Guinness, who replied while I was typing -- says, interest rates can be super low). I maybe over-simplified my position in my post by saying "I want to buy a house in the near-ish future". I am not committed to buying a house at all costs, but I want to be in a position to buy a house IF the right combination of house/budget/location comes up. I didn't know there was such a thing as homebuying courses, but a quick google search says there are some in my area. That sounds like it's definitely a good idea.
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Nov 5, 2013 21:36
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lumbergill posted:edit, and Guinness, who replied while I was typing -- says, interest rates can be super low) Be careful about borrowing money just because you can do it cheap. Especially cars. Cheap financing on new cars is a huge loss leader for manufacturers. Every company does this, where when they provide the 0% or the 1.9%, that is the concession they throw in for people paying full sticker price for their new car. If you do the math and you borrow $20,000 at 5% over 5 years, or $20,000 at 0% over 5 years, the payment is less different than people expect. ($377 vs $333) This is a mediocre rate vs the best possible one, and its still only a dollar and some pennies different per day. I don't care what you do, it's not a moral issue, but buying it outright would leave you broke and you won't finance it at 5% because it's not a good deal, but you do at 1% or 2%, you are a fool. I would argue that having an asset that goes down in value that is a large part of your financial world is inherently bad. You are not some financial genius who is taking advantage of nearly free money while you use yours in a more productive manner. Instead you justified spending tens of thousands of dollars on something you can't afford, something that loses hundreds of dollars a month in value, because you think you are saving $30/mo on interest.
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Nov 6, 2013 05:51
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Edit: nvm already an answered topic
balancedbias fucked around with this message at 02:13 on Nov 7, 2013 |
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Nov 7, 2013 02:11
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My 54 year old mother just inherited about $65,000 and is trying to figure out where to invest about $40,000 for 5 years, but I have no idea what to tell her to do with it. Should she max out her Roth IRA and then her 401k (which her employer doesn't match contributions to)? Should she just buy bonds? Apologies if this is a stupid or undetailed question, I don't know anything about investing money because I don't have any.
Prancing Shoes fucked around with this message at 03:30 on Nov 7, 2013 |
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Nov 7, 2013 03:10
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Colour posted:My 54 year old mother just inherited about $65,000 and is trying to figure out where to invest about $40,000 for 5 years, but I have no idea what to tell her to do with it. Should she max out her Roth IRA and then her 401k (which her employer doesn't match contributions to)? Should she just buy bonds? Apologies if this is a stupid or undetailed question, I don't know anything about investing money because I don't have any. You can ask in the long term savings thread, but I would also clarify when she will actually need this money. Is she retiring in 5 years? Or does she forsee needing all of it in 5 years? These are not the same thing. If its the former, she will still need an acceptable rate of return seeing how she might live another 30 or 40 years, and that won't be bonds. http://forums.somethingawful.com/showthread.php?threadid=2892928
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Nov 7, 2013 16:45
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I recently graduated and started working a Big Girl Job, so for the first time in 3 years my husband and I are doing more than scraping by. Our fixed expenses are pretty good for the high cost area that we live in (New York City ouch), but we're unsure how to prioritize our 'extra' income now that we've paid off our credit cards. Both of our jobs are very stable, and I will be getting a small raise bringing our income to 5,000/mo in the next couple of weeks. In two months I can qualify to work abundant overtime shifts, but I don't want to count on money I don't have yet. We are mid-20's, and in 3-4 years we're thinking about kids. This is terrifying and expensive from what I understand. Income: 4,800 Approximate expenses, no loan payments: 2,360 (This is a little bare bones for our area and we'd like to have about $200 more 'fun' in it in the future) Student loans: Hers- 5,000 @ 3.4% (Thank you, Senator Claiborne Pell) His- 30,000 @ 6.2% (Not gaining interest for 2 more years) Emergency fund: 800 Approximate up-front move cost: 5,000 (1st month's rent, security deposit, broker fee, mover) Wants: -We would like to move to a different apartment in the same price range soon, which would be about $5,000 up front and it would probably take a while for our security deposit from our current place to be returned. -We would like to open Roth IRAs and start contributing. (My employer offers a 403b, no matching. As a union employee, I can receive a pension if I stay in the union for >5 years, and a full one after 20 years, but I'm looking to move into management so I will probably not get much of the benefit from this) -At some point we would like to buy a place to live in. Considering the real estate prices if we remain in the area, this is a ways down the road. Should we bolster up our emergency fund more before saving for the move? We don't actually own much that can catastrophically break (public transportation, apartment building) and our insurance is good. Also, should we just keep throwing money at the student loans before saving up for kids/apartment purchase? It's tough finding that line between super frugal and over-expanding our lifestyle, especially while surrounded by so many rich, rich people and fun things we haven't gotten to do for a while.
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Nov 7, 2013 21:20
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Is there any reason to NOT take advantage of my bank's credit card debt transfer promotion? Promotion is to move the debt from my other bank's CC to a new card and then pay it down interest-free for a year, after which the APR becomes something between 11% and 17%, depending on my credit score. I've just been really nervous about changing the status quo (which sucks - $4600 balance at 14% APR, mostly from health insurance and necessities from when I spent a long while un/underemployed) because my income is either lovely or variable and my savings are nil. I've just felt that I can't really afford to up the payments/do anything about it because I need as much cash as I can on hand (basically paycheck to paycheck at this point), and I'm really good at avoiding things that stress me out.  The one upside is that this is my only debt.However, things are looking up financially - got a raise at my part time job at a startup and will be moving to full time in the (hopefully) near future, freelance has been going well, and I've finally found my stride in Amazon self-publishing and will be receiving a couple fat royalty checks at the end of this month and next month (high three figures and four figures, on top of my part time plus freelance income). So, if I do get bumped to full time and continue making good royalty money, it should be no problem to pay off the balance within the no-interest year. I read the OP and skimmed a few pages but didn't see this question recently, so hopefully this isn't too redundant. So yeah, seems like a pretty good deal that's straightforward and doesn't seem to have any catch other than potentially putting me at a slightly higher APR than what I have currently (but on a balance minus a year's worth of payments), and that would be moot if I'm able to pay off the balance within a year. Basically, any reason not to take advantage of it?
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Nov 8, 2013 01:44
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Authentic You posted:Is there any reason to NOT take advantage of my bank's credit card debt transfer promotion? Promotion is to move the debt from my other bank's CC to a new card and then pay it down interest-free for a year, after which the APR becomes something between 11% and 17%, depending on my credit score. I've just been really nervous about changing the status quo (which sucks - $4600 balance at 14% APR, mostly from health insurance and necessities from when I spent a long while un/underemployed) because my income is either lovely or variable and my savings are nil. I've just felt that I can't really afford to up the payments/do anything about it because I need as much cash as I can on hand (basically paycheck to paycheck at this point), and I'm really good at avoiding things that stress me out. If you're thinking about balance transfering make sure you do the following: 1. Have a workable plan (budget) which you absolutely know you will follow. This is a trap some people fall into since they transfer these balances over, end up barely paying back anything or even putting additional balance on the card, etc. 2. Shop for the best rates. When I was paying off my debt, I transferred to the Chase Slate card which had 18 months 0% financing + $0 transfer fees. There're other cards with similar (or better plans) so shop around. 3. Ensure that whatever balance you place on this transfer, you are able to pay off. This is an addendum to #1. Make sure you do #1. I was able to pay $9000 down to $0 over 8 months by strictly following #1.
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Nov 8, 2013 02:15
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Also double-check for any onetime transfer fees on top of the APR, I've seen those get pretty well buried in the fine print before.
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Nov 8, 2013 03:18
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BadSamaritan posted:Income: 4,800 I'd try to save up at least one month's expenses before doing anything else, more than that if at all possible. Frankly, after that I'd be working on that big student loan. It's not generating interest now so the sooner you start paying it off the less you're going to be paying for it overall. Be better to wipe it out and keep what could be several thousand dollars in interest payments for yourself.
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Nov 8, 2013 14:33
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100 HOGS AGREE posted:Do you have that five grand for the move now or is that just a savings goal you know you need to hit before you can move? Because 800 dollars is not an emergency fund, especially at your income. Thanks for the advice. We don't have the 5 grand now, it's a savings goal we would need to hit to feel comfortable going ahead with the move. We just paid off about 3 grand on cards (ugh, glad that's done with), but I guess we should up the emergency fund before moving on to other plans. I'm thinking to raise that to about 3,500, open up an IRA, then raise moving money. Then we'll try to pay off my small loan over a couple of months before going after most of his bigger loan before it comes due. Then larger savings goals, I guess.
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Nov 8, 2013 17:48
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