BFC Newbies Thread: 33% of the interest paid is tax delectable

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Tales Of Desire: Nov 5, 2009

Honestly, I just left Bank of America. They pulled it on me a couple of times, but what prompted me to leave was going in, depositing a check, and trying to get $200 out of my account at the same time. The teller gave me a story about a 7 day hold. Thing was, I had $500 already in the account for a couple of weeks - when I asked why my $200 couldn't come from that money, this caused so much confusion that it frightened me. I switched to a regional bank with a decent local branch and am very happy.

I know it's not much help, but the only way around your issue while you stay with Bank of America is probably to keep more of a cash reserve.

# ? Nov 1, 2010 21:35

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# ? May 23, 2024 09:46

Culinary Bears: Feb 1, 2007

I wasn't sure where to ask this, so if this isn't the right place please point me in the right direction!

My husband and I are in Canada. We want to do more with our money than just let it sit around in the bank, but we're not sure where to start. I'm still a student and won't be working for a while; he makes ~36k a year after tax. He doesn't have an IRA because the company doesn't match, and also because he is highly uncomfortable with the idea of not being able to access a large sum of money for decades without stiff penalties.

That aside, we have about 40k of savings that we wouldn't mind not touching for 5-10 years (allowing 15k on top of that for emergency funds and such). We could also add 5-10k per year on top of that without any trouble. No debt.

There aren't any specific goals involved here other than just making the most out of our money; so that maybe we'll have a nice chunk around to retire on, have a house built, do some crazy project, get cryopreserved, whatever. Kids are out of the question, so college funds don't matter (tuition isn't insane here anyway), and we don't particularly care about a house (especially if it's a prefab).

We're pretty frugal and are in no way struggling financially, which will only get better once I start my career down the line and/or if a certain side business pans out. So we're in no way desperate for fast money at any cost; but at the same time we have enough to tolerate a bit of risk.

Where would we get started? Any books/places/investments/techniques/I don't know appropriate for our situation? I've been looking into index funds, but have no idea how to actually get one; as all the nice services like Vanguard seem to be US only and most websites are similarly catered to a US audience.

# ? Nov 2, 2010 01:28

RaoulDuke12: Nov 9, 2004; The race is not to the swift, nor the battle to the strong, but to those who see it coming and jump aside.

Tales Of Desire posted:

Honestly, I just left Bank of America. They pulled it on me a couple of times, but what prompted me to leave was going in, depositing a check, and trying to get $200 out of my account at the same time. The teller gave me a story about a 7 day hold. Thing was, I had $500 already in the account for a couple of weeks - when I asked why my $200 couldn't come from that money, this caused so much confusion that it frightened me. I switched to a regional bank with a decent local branch and am very happy.

I know it's not much help, but the only way around your issue while you stay with Bank of America is probably to keep more of a cash reserve.

I was dreading that being the only solution. Unfortunately, living out in los angeles, you look like you're loaded when you drop a 3.5k check in the bank, but in reality, 3k of it goes into rent and basic living expenses. it's unreasonable to keep that much reserve on hand.

I would switch banks, but I travel all over the country and need a bank that's everywhere. Unfortunately, the bofa monster is the best choice it appears.

I was more wondering if they were even allowed to do that crap anymore. I thought that thing that was passed in February was designed to eliminate this sort of thing.

# ? Nov 2, 2010 01:35

big shtick energy: May 27, 2004

RaoulDuke12 posted:

I was dreading that being the only solution. Unfortunately, living out in los angeles, you look like you're loaded when you drop a 3.5k check in the bank, but in reality, 3k of it goes into rent and basic living expenses. it's unreasonable to keep that much reserve on hand.

I would switch banks, but I travel all over the country and need a bank that's everywhere. Unfortunately, the bofa monster is the best choice it appears.

I was more wondering if they were even allowed to do that crap anymore. I thought that thing that was passed in February was designed to eliminate this sort of thing.

Why is it unreasonable to keep that much in your bank account? Generally you should have an emergency fund that larger than that, and keeping it in your checking account vs. a high interest savings account isn't a huge difference in terms of dollars of interest per year.

# ? Nov 2, 2010 02:48

alreadybeen: Nov 24, 2009

I don't understand why anyone making a comfortable income doesn't just keep a small amount liquid in a checking account to handle any issues such as this?

That said I travel extensively for business and Chase seems to be quite prevalent. They haven't done anything monumentally stupid with me yet that wasn't resolved by a phone call.

# ? Nov 2, 2010 03:05

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

RaoulDuke12 posted:

Unfortunately, living out in los angeles, you look like you're loaded when you drop a 3.5k check in the bank, but in reality, 3k of it goes into rent and basic living expenses. it's unreasonable to keep that much reserve on hand.

Get a smaller place, economize on groceries, cut your living expenses. I've lived in NYC and LA both and living expenses for two people were less than what you are spending on yourself. You're doing yourself a disservice by spending so much now - apart from the hassle of not having a decent emergency fund, you're probably training yourself into a higher standard of living that will cripple you if you ever have to take a pay cut (or heaven forbid, lose your job).

# ? Nov 2, 2010 03:22

RaoulDuke12: Nov 9, 2004; The race is not to the swift, nor the battle to the strong, but to those who see it coming and jump aside.

I'm living very meagerly as I pay down almost $11k in credit card debt. Guess I should've mentioned that. I'll be debt free in March '11, then I'll be able to save about $1200/month. My salary nearly doubled as of a few months ago, hence this being a more recent issue. I figured they were holding the checks because they were such a larger amount, but I figured after the first few, they would figure it out.

Edit: here's my budget as far as I remember offhand

Budget:

Rent $1100
Utilities $100
Car $220
car insurance $120
gas $200
food $200
credit cards $1200
student loan $140
health insurance $120

No cable, late model car, making all my own food. I spend maybe $200 extraneously a month. So like, shut up.

Edit 2: Actually, I realize that you would have surmised I made $7k/month based off of my previous posts, not 3.5k, in which case there really would be no excuse. My apologies.

RaoulDuke12 fucked around with this message at 04:07 on Nov 2, 2010

# ? Nov 2, 2010 03:36

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Haha, ok. Good on you for being aggressive in paying down your debt. Silly you for characterizing $1500+ in debt payments as "basic living expenses". Keep a little bit more of a buffer in your bank account (maybe just make minimum payments for a month and leave the rest as part of your emergency fund) or switch to a non-lovely bank (I know, options are limited - have you checked out any online banks?). Glad to hear your salary increased, though, and as long as you keep the same path you'll soon be debt free and swimming in your giant vault of coins :wotwot:

# ? Nov 2, 2010 16:54

I R SMART LIKE ROCK: Mar 10, 2003; I just want a hug.; Fun Shoe

What's the way to go with online savings accounts? I ING and HSBC are decent and this link from early in the thread suggests EverBank but I've no experience with any of them. Any adivce?

# ? Nov 2, 2010 21:05

|Ziggy|: Oct 2, 2004

I R SMART LIKE ROCK posted:

What's the way to go with online savings accounts? I ING and HSBC are decent and this link from early in the thread suggests EverBank but I've no experience with any of them. Any adivce?

Moanna always recommends SmartyPig. It has a 1.75% rate right now.

# ? Nov 2, 2010 21:26

RaoulDuke12: Nov 9, 2004; The race is not to the swift, nor the battle to the strong, but to those who see it coming and jump aside.

moana posted:

Haha, ok. Good on you for being aggressive in paying down your debt. Silly you for characterizing $1500+ in debt payments as "basic living expenses". Keep a little bit more of a buffer in your bank account (maybe just make minimum payments for a month and leave the rest as part of your emergency fund) or switch to a non-lovely bank (I know, options are limited - have you checked out any online banks?). Glad to hear your salary increased, though, and as long as you keep the same path you'll soon be debt free and swimming in your giant vault of coins

That's actually a fantastic idea that I hadn't even thought of. I'm so eager to get rid of the debt I didn't think about it. Good call, thank you!

# ? Nov 2, 2010 22:28

GOB Bluth: Apr 1, 2008

I want to start a business in 5 years. I am currently 21 years old.

I will be spending the next 5 years working full-time while I am in school for accounting part-time. My job is paying for school, I live at home (and plan to for 5 years, gently caress the haters) and don't really have many expenses. I paid off my car and other small debts so right now I'm sitting at no debt and only a few grand in savings (which will be going away soon due to a trip to Europe.)

Anyway, I will realistically be able to put at a minimum $1,200 a month towards my savings. This will likely increase yearly because of yearly raises and possibility of promotions, etc. My plan is to use what I have saved up after 5 years to move out and start a business. What is the best way to invest my money for this purpose? I hope to have enough for start-up expenses and about a year of living expenses saved up.

In addition to the $1,200 a month I am saving, I am also putting 10% of my pre-tax income into my 401(k) so the money I plan to invest in my business won't be all that I have.

# ? Nov 3, 2010 18:44

ray_finkle: Aug 31, 2001; Laces out, Dan!

I currently have 3 credit cards I've amassed over the years due to being dumb/not thinking about in the future what I should do with them.

two of them are not being used for anything and just sit there with no balance:

1) CIBC Visa Infinite - The only credit card I use for purchases because it gets me Aeroplan points I can use on Star Alliance airlines.

2) BMO Mosaik Mastercard - Signed up for this when I used to use Westjet more regularly and wanted Air Miles. I currently only ever use this in stores where they only accept Mastercard, not Visa

3) TD Rewards Visa - 1% cash back. This was my credit card before I decided I wanted Aeroplan points. This card currently does not get used for anything and sits at home in a drawer in my desk.

My quesion involves cancelling cards. I've always been told it's a bad idea to cancel a credit card cause it dents your credit. Is this actually true? I really want to cancel the TD Rewards Visa because it's useless and I don't use it. Should I also cancel the BMO card? I think i've used it twice in the past 12 months. Thanks for the help.

# ? Nov 4, 2010 00:53

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Cancelling cards is bad for your credit since it lowers the total amount of credit you have. If the one card you use has a limit of $20k and the other two are small limits, cancelling them shouldn't matter all too much. However, if they are all $1k limit for example, cancelling the two cards would wipe out 66% of your available credit, which would be a bit hit.

3 cards is not bad at all, I would just keep them in a drawer and forget about them.

# ? Nov 4, 2010 01:01

ray_finkle: Aug 31, 2001; Laces out, Dan!

moana posted:

Cancelling cards is bad for your credit since it lowers the total amount of credit you have. If the one card you use has a limit of $20k and the other two are small limits, cancelling them shouldn't matter all too much. However, if they are all $1k limit for example, cancelling the two cards would wipe out 66% of your available credit, which would be a bit hit.

3 cards is not bad at all, I would just keep them in a drawer and forget about them.

Ok, Thanks! Into a drawer you go...

# ? Nov 4, 2010 01:04

SiGmA_X: May 3, 2004; SiGmA_X

ray_finkle posted:

Ok, Thanks! Into a drawer you go...

Kind of extreme, but I read about people freezing their cards in a bag/cup/whatever of water in the freezer. If the NEED the card, its there, but otherwise its hard to get to. That or cut it up, being you shouldn't NEED the card when you have an emergency fund.

# ? Nov 4, 2010 05:21

I like turtles: Aug 6, 2009

SiGmA_X posted:

Kind of extreme, but I read about people freezing their cards in a bag/cup/whatever of water in the freezer. If the NEED the card, its there, but otherwise its hard to get to. That or cut it up, being you shouldn't NEED the card when you have an emergency fund.

Unless you have a dirty habit of memorizing your card information accidentally :ohdear:

# ? Nov 4, 2010 05:41

SiGmA_X: May 3, 2004; SiGmA_X

I like turtles posted:

Unless you have a dirty habit of memorizing your card information accidentally

I recommend self control. It can be hard, can't it!

# ? Nov 4, 2010 08:36

4 Day Weekend: Jan 16, 2009

Not sure if this is the right place to ask; but I'm in Australia and I've got a decent amount of cash (~$40k) and my dad is telling me to change it into USD, since the exchange will inevitably go down. Just wondering if it's a good idea, or I'd be better off investing it some other way?

# ? Nov 4, 2010 14:35

SUBFRIES: Apr 10, 2008

SiGmA_X posted:

Kind of extreme, but I read about people freezing their cards in a bag/cup/whatever of water in the freezer. If the NEED the card, its there, but otherwise its hard to get to. That or cut it up, being you shouldn't NEED the card when you have an emergency fund.

Not that extreme, I did it not too long ago. If anything, it made me mindful of whether I "really" needed to buy whatever impulse purchase I wanted, and eventually I forgot about it.

# ? Nov 4, 2010 16:19

Michaelos: Oct 11, 2004; Upgraded to platinum to donate money to Lowtax.

4 Day Weekend posted:

Not sure if this is the right place to ask; but I'm in Australia and I've got a decent amount of cash (~$40k) and my dad is telling me to change it into USD, since the exchange will inevitably go down. Just wondering if it's a good idea, or I'd be better off investing it some other way?

It's important to note that those two ideas are not exclusive. Even if it's a good idea there are other good ideas and you want to be diversified.

Another key factor is to take into account the time horizon when you will need that money. You can afford to be riskier with money that you are not going to need for 40 years then you are with money that you might need next year to buy a house. But even if you don't need that money for 40 years, I still wouldn't put it all in one thing.

For a rough comparison, I'm 26, I have about ~$40k USD in my retirement accounts and it's in 15 different things at the moment.

# ? Nov 4, 2010 20:53

4 Day Weekend: Jan 16, 2009

Michaelos posted:

It's important to note that those two ideas are not exclusive. Even if it's a good idea there are other good ideas and you want to be diversified.

Alright, thanks for that. I don't need the money now, and probably won't for the next few years. I guess I'll look into other things.

# ? Nov 5, 2010 06:13

Elotana: Dec 12, 2003; and i'm putting it all on the goddamn expense account

I'm looking for a new bank since my current one (BBVA Compass) is doing stupid poo poo like arbitrarily returning bill payments and forgetting to timely ship replacement ATM cards. Their lobby closest to my apartment has absurdly short hours and their low Weiss rating makes me a little skittish if the economy tanks again. How should I choose a new bank?

I started at a law firm two months ago and as a single guy in Houston who doesn't mind a college-level lifestyle I can sock quite a bit of money away (some napkin math says I can shoot for $2500 in savings every month after living expenses and loan payments). I'd prefer a local or regional bank with a high-interest money market account, but I have no idea how to go about comparing those, or where I'd find online reviews, or what. For instance, my office neighbor recommended Sterling Bank, but I know nothing about them. What info should I be looking for and where can I find it?

# ? Nov 5, 2010 18:47

SiGmA_X: May 3, 2004; SiGmA_X

Elotana posted:

I'm looking for a new bank since my current one (BBVA Compass) is doing stupid poo poo like arbitrarily returning bill payments and forgetting to timely ship replacement ATM cards. Their lobby closest to my apartment has absurdly short hours and their low Weiss rating makes me a little skittish if the economy tanks again. How should I choose a new bank?

I started at a law firm two months ago and as a single guy in Houston who doesn't mind a college-level lifestyle I can sock quite a bit of money away (some napkin math says I can shoot for $2500 in savings every month after living expenses and loan payments). I'd prefer a local or regional bank with a high-interest money market account, but I have no idea how to go about comparing those, or where I'd find online reviews, or what. For instance, my office neighbor recommended Sterling Bank, but I know nothing about them. What info should I be looking for and where can I find it?

I can't help you with a detailed recommendation for bank selection. I chose my credit union based off of their customer service and coworkers/friends experiences with them. I have to say, I am far happier with my small CU than I was with WaMu, Wells Fargo, or US Bank.

For savings, check out Smartypig (1.75%) and ING Direct (1.1%). ING has low-interest checking also, but its really low (0.49% IIRC). I've been using ING for 6yrs and am very happy with them. SmartyPig comes highly recommended from this thread, and from what I read about them when I made an account this week, it should work out pretty well. They have a few oddities about transferring money, but it should be manageable.

# ? Nov 5, 2010 21:04

Chernori: Jan 3, 2010

Goddamn posted:

I wasn't sure where to ask this, so if this isn't the right place please point me in the right direction!

My husband and I are in Canada. We want to do more with our money than just let it sit around in the bank, but we're not sure where to start. I'm still a student and won't be working for a while; he makes ~36k a year after tax. He doesn't have an IRA because the company doesn't match, and also because he is highly uncomfortable with the idea of not being able to access a large sum of money for decades without stiff penalties.

That aside, we have about 40k of savings that we wouldn't mind not touching for 5-10 years (allowing 15k on top of that for emergency funds and such). We could also add 5-10k per year on top of that without any trouble. No debt.

There aren't any specific goals involved here other than just making the most out of our money; so that maybe we'll have a nice chunk around to retire on, have a house built, do some crazy project, get cryopreserved, whatever. Kids are out of the question, so college funds don't matter (tuition isn't insane here anyway), and we don't particularly care about a house (especially if it's a prefab).

We're pretty frugal and are in no way struggling financially, which will only get better once I start my career down the line and/or if a certain side business pans out. So we're in no way desperate for fast money at any cost; but at the same time we have enough to tolerate a bit of risk.

Where would we get started? Any books/places/investments/techniques/I don't know appropriate for our situation? I've been looking into index funds, but have no idea how to actually get one; as all the nice services like Vanguard seem to be US only and most websites are similarly catered to a US audience.

Hello fellow Canagoon! Here's a wall of text for what you need to know about investing in Canada (as far as I know, please do your own research and check with professionals!):

TAXES!
To start off, let's talk about taxes. Part of every dollar you make goes to the government to run the country. Usually this is done automatically by your employer. At tax time, you figure out if you paid too much tax or too little tax.

Canada has a progressive tax structure, which works like this: your income is divided up into brackets and the dollars in each bracket pay a different percentage to the government. Imagine you have a series of cups which represent the brackets and a jug of juice, which represents your income. You fill up the cups one at a time. When you're done, each cup has a different amount of juice removed (the first cups have very little taken, while the later cups might have up to 40% taken out). What's left is yours, also known as your after-tax income.

This matters because investments that do well count as income when you sell them or get interest, so you have to pay tax on them as well. Basically, you have to think about tax when you invest -- that's why people talk about 401ks and IRAs all the time. So let's talk about investing in Canada.

~~IRAs!~~ RRSPs and TFSAs!
Investments go into accounts, which I'll refer to as holding accounts from now on (to differentiate them from individual places to put money, like bank accounts and savings accounts). Holding accounts are like baskets where you can put investments -- you can put stocks, bonds, GICs, even regular savings accounts inside a holding account. There are two major types of investment holding accounts that you should know about : RRSPs and TFSAs. If something's not in a holding account, it's unregistered.

Unregistered:
This is the simplest status for investments, because it doesn't have any special rules about what you can do with it. It's what most stuff is by default. For example, your chequeing account would be unregistered, because you can take out or put in as much money as you want without affecting anything else. If something's not in a basket, it's unregistered. You already paid tax on the money, so the government doesn't care what you do with it at this point.
Why is it good? You can do whatever you want with it.
What's the catch? You get taxed on any profits.
How much can I put in? As much as you want.

TFSA:
These accounts are pretty new and really useful for someone in your position. Any investment (which could be anything from a savings account to stocks) in a TFSA holding account won't be taxed when you sell it or generates interest. This makes TFSA accounts pretty much great for everybody. The only catch with TFSAs is that you can only put in a certain amount of money and that if you take money out, you can't put it back until January of the next year. You almost certainly want to max out your TFSAs.
Why is it good? No tax on profits! You can take money out any time.
What's the catch? If you take money out, you have to wait until January to put the money back in.
How much can I put in? $5000/year.

RRSP:
RRSPs can hold almost anything, just like TFSAs. RRSPs affect your taxes in a special way. Any money you put in an RRSP is deducted from your income. So if you made $30,000 and put $10,000 into your RRSP, the government would tax you like you only made $20,000 which could mean you get a whole bunch of money back when you file your taxes. It's not exactly free money though -- you're actually just delaying the taxes you pay. When you take the money out when you're older, the money is added to your income and you pay taxes on it then.

Even though you pay tax later, it's usually still worth using your RRSP. If you add money when you're making a lot and take it out when you're not making as much (say when you've retired), you pay less tax per dollar (say 20% instead of 30%). Also, you can invest the extra money you get at tax time, letting you grow your money before paying tax on it. Most importantly, your investments can grow without being taxed every year, so you'll end up with a lot more. RRSPs have one serious caveat to them: any money you take out cannot be readded later on, unlike a TFSA.
Why is it good? Money can grow untaxed! It reduces your taxes!
What's the catch? Any money you take out is added to your income, so you pay tax on it then. Also, you can't put money you take out back in.
How much can I put in? 18% of your income from last year (unless you're rich).

That just about covers the holding accounts!

INVESTING!
Congratulations on your nest egg! I'm glad to see that you're saving lots, even if you don't have much idea what to do with it yet. Being thrifty savers will make it much easier to secure your future.

Before you start buying anything though, you need to decide what you're doing with the money. The sooner you need the money and the less flexible the withdrawal date, the less risk you should take (which means reducing or eliminating the amount of stock you own). As the "money is needed" date approaches, you should scale back your risk level (so you might start off 50% stocks/50% bonds and end up all GICs. Of course, if the goal was something like "buy ALL the ice cream" that you could easily delay a couple years, you can take on more risk because you can delay if there's a bad year or two.

If you need the money in five years or less, you should probably just invest in GICs, savings accounts, and bonds. With that time horizon, you don't have time to make up for a bad year, so you need a near-guarantee of your principle being intact. If you're looking at 5 to 10 years, you can take a bit more risk with your money, so you could look at having a bit of stock exposure (at least for the first few years), while still relying mostly on bonds and guaranteed stuff. If you're looking at investing for retirement or for a far-off goal (a baby's university education or a trip around the world when you're 45), you can start getting fully into stocks.

Index investing is a great idea for almost all investors. It's easy, protects you from your worst enemy (yourself), and guarantees that you won't do much worse than the overall market (which has drifted upwards for the past 100+ years). In case you're not clear on the concept, index funds are investments that pool the money of many people to buy stocks or bonds that represent a certain part of the market (like, say, all Canadian stocks). Because they're only trying to mirror the market, they're cheap to run and don't charge much in the way of fees (as opposed to active mutual funds, which might charge 2.5%/yearly or more).

Let's say you're looking at saving for retirement and you guys are 25. People commonly say that you should take 100 and subtract your age, and that gives you about what percentage of stocks you want to be in (with the other portion being bonds). So you'd have 75% stocks and 25% bonds. I'm a big fan of the "Couch potato" style portfolio, where you divide up your money into a few index funds and just rebalance them yearly or every few months to keep them near your target percentages.

Canadians actually have a few good ways to invest in indexes. You can either get a brokerage account and buy ETFs (which have lower fees and which you buy like stocks and cost money when you buy and sell them) or you can buy index funds (which usually cost nothing to buy, but tend to have higher fees).

I really like (and use) TD bank's index e-funds. There's no trading commissions (so you can add money as often as you want) and the fees are very low (though higher than index ETFs). You just need to sign up at the bank and then register for the e-funds, which you can buy and sell online using TD's EasyWeb banking interface. It's simple to use and can hold RRSPs, TFSAs, and unregistered stuff as well.

For myself, I have 25% TD Canadian Bond Index-e, 25% TD Canadian Index-e, 25% TD U.S. Index-e, and 25% TD International Index-e. I have the bonds in my TFSA, since bond interest counts as regular income and gets fully taxed.

If you wanted to use ETFs instead (which would mean you would be trading only a couple times a year, lest commissions devour your profits), you could either trade at the big banks (most are $30/trade unless you have a lot of assets with them) or with a discount brokerage (which charge about $5 to $10 per trade). I have an account with Questrade, though I don't use it for ETFs.

Conclusion

That should give you a pretty good overview of investing here in Canada! Keep saving and investing and you'll be all set when you're older. If you want a good general purpose finance book to read, check out The Wealthy Barber by David Chilton. If you have any questions, feel free to ask here or in the long-term investing thread. Here are some good links for more information:

Good blogs!

TFSAs!
RRSPs!

Couch potato portfolios
TD's Easyweb online banking
Questrade Discount Brokerage

# ? Nov 6, 2010 14:57

big shtick energy: May 27, 2004

Chernori posted:

Hello fellow Canagoon! Here's a wall of text for what you need to know about investing in Canada (as far as I know, please do your own research and check with professionals!):

You should crosspost this to the long-term investing megathread.

# ? Nov 6, 2010 16:13

Magnificent Quiver: May 8, 2003

I've got a question and figured this would be the most appropriate place to ask it.

I have a credit card with the USAA, and I found out today that in the last two weeks someone had racked up about $700 in purchases for ringtones and Japanese porn or whatever. I immediately called the USAA to cancel the card and they said they'd submit a fraud report and get back to me in five days with the results.

How worried should I be? Is it really just as simple as trusting the customer when they say the charges were unauthorized?

# ? Nov 7, 2010 00:39

RaoulDuke12: Nov 9, 2004; The race is not to the swift, nor the battle to the strong, but to those who see it coming and jump aside.

Speaking from experience but not as an expert, common sense dictates a lot of what they put into consideration. If your purchase history shows a penchant for japanese porn and ringtones from those vendors, then they likely won't believe you.

Either way, they'll have you sign an affadavit saying the charges were fraudulent. If you're lying and they find out, they'll take you to court (probably have you thrown in jail too).

So yeah, as long as the charges are fraudulent and there's enough evidence to indicate that's likely the case, they will take your word for it. It's not hard for them to figure out. I'm surprised they didn't cancel the card sooner for suspicious activity.

# ? Nov 7, 2010 01:24

polyfractal: Dec 20, 2004; Unwind my riddle.

Edit: Realized this was probably more appropriate in the long term investment thread.

polyfractal fucked around with this message at 14:22 on Nov 8, 2010

# ? Nov 7, 2010 17:04

LordSeXXXenb3rg: Apr 10, 2004; The king of procrastination

Okay, the basics:

Prior bad decisions led to my wife and I having about $20K of CC debt when we got married.
I'm the sole income, since my wife is home with the baby. Even if we wanted to do external childcare, it was essentially as much as my wife was making, so that option's out.
Mortgage, CC bills, student loans, utilities, and food budgets use essentially all my monthly income.
We've been paying minimums on everything, and extra money in the budget going to the highest APR. Cards are NOT in use, and balances have been consistently dropping. Yay!
We have a 2-3 months in emergency funds before we'd have to turn back to these drat cards.
I have about $27K in 401k, $5.5 of which is in an active loan which we used to buy a car.
I'm considering taking an $11K loan from the 401k (which is the max I can do - only half the vested balance is available for loans) to pay down CC balances and give us a little more room in monthly finances.

Is this a crazy/bad financial idea? I feel like an extra $70 a month can go a long way towards further reducing balances. Are there other things I should do first? We're already budgeting pretty close to the vest and no one will touch my mortgage for a refi since I'm at about 135 LTV. I call all the card companies every 6 months or so and ask about lowering rates, but no one's budging.

Here's the situation on cards, and my ideas around distributing the $11K.

code:

				Balance	
				after	New
			Min	401k	min
Userer	Balance	APR	payment	loan	payment
ChaseA	10355	12.24%	209	5125	104
ChaseB	491	2.90%	10	490	10 (lifetime 2.9% APR on an old balance transfer)
HSBC	175	14.99%	10	0	0
CapOneA	600	13.90%	13	0	0
Amex	1464	15.24%	33	0	0
CapOneB	4530	17.90%	113	1000	25 (1 year 0% APR on the remaining $1000)
401k loan				180
Totals	17615		388	6615	318

Thoughts, finance gurus?

# ? Nov 7, 2010 19:32

froglet: Nov 12, 2009; You see, the best way to Stop the Boats is a massive swarm of autonomous armed dogs. Strafing a few boats will stop the rest and save many lives in the long term.

You can't make an Omelet without breaking a few eggs. Vote Greens.

LordSeXXXenb3rg posted:

Okay, the basics:

Prior bad decisions led to my wife and I having about $20K of CC debt when we got married.

I'm the sole income, since my wife is home with the baby. Even if we wanted to do external childcare, it was essentially as much as my wife was making, so that option's out.

Mortgage, CC bills, student loans, utilities, and food budgets use essentially all my monthly income.

We've been paying minimums on everything, and extra money in the budget going to the highest APR. Cards are NOT in use, and balances have been consistently dropping. Yay!

We have a 2-3 months in emergency funds before we'd have to turn back to these drat cards.

I have about $27K in 401k, $5.5 of which is in an active loan which we used to buy a car.

I'm considering taking an $11K loan from the 401k (which is the max I can do - only half the vested balance is available for loans) to pay down CC balances and give us a little more room in monthly finances.

Is this a crazy/bad financial idea? I feel like an extra $70 a month can go a long way towards further reducing balances. Are there other things I should do first? We're already budgeting pretty close to the vest and no one will touch my mortgage for a refi since I'm at about 135 LTV. I call all the card companies every 6 months or so and ask about lowering rates, but no one's budging.

Here's the situation on cards, and my ideas around distributing the $11K.
code:
				Balance	
				after	New
			Min	401k	min
Userer	Balance	APR	payment	loan	payment
ChaseA	10355	12.24%	209	5125	104
ChaseB	491	2.90%	10	490	10 (lifetime 2.9% APR on an old balance transfer)
HSBC	175	14.99%	10	0	0
CapOneA	600	13.90%	13	0	0
Amex	1464	15.24%	33	0	0
CapOneB	4530	17.90%	113	1000	25 (1 year 0% APR on the remaining $1000)
401k loan				180
Totals	17615		388	6615	318
Thoughts, finance gurus?

I think this would be only a solution as a very last resort. 401k is a retirement account, and nobody should ever make that sort of decision lightly.

Have you tried getting a consolidation loan, or possibly a hold put on your student loans if you're struggling paying everything off? That might help by giving you some breathing room.

# ? Nov 8, 2010 03:28

Hughmoris: Apr 21, 2007; Let's go to the abyss!

I'm trying to find out what my credit score is. Is MyFico.com legit? Any other preferred methods out there?

*I'm looking at getting an auto loan.

Hughmoris fucked around with this message at 04:28 on Nov 9, 2010

# ? Nov 9, 2010 04:26

FCKGW: May 21, 2006

Hughmoris posted:

I'm trying to find out what my credit score is. Is MyFico.com legit? Any other preferred methods out there?

*I'm looking at getting an auto loan.

Yes, MyFico.com is the official site for FICO scores. You'll have to pay for your score. The text on that page

quote:

*IMPORTANT INFORMATION: When you order your free FICO Score here, you will begin your 10-day trial membership in Score Watch�. If you don't cancel your membership within the 10-day trial period, you will be billed $12.95 for each month that you continue your membership. You may cancel your trial membership anytime within the trial period without charge.

You can get an estimated credit score though Quizzle.com or CreditKarma.com for free, both are legit as well.

# ? Nov 9, 2010 04:38

Hughmoris: Apr 21, 2007; Let's go to the abyss!

Thanks for the quick reply. I have one more question... I am going back to school so my student loan ($1,800) is currently frozen and I don't have to make payments on it until I graduate from the RN program in two years. In the interest of improving my credit score, should I completely pay off that student loan ASAP or leave it alone until I graduate? Does it help my score to have it sitting on my credit report even though I'm not making payments on it?

# ? Nov 9, 2010 04:52

SiGmA_X: May 3, 2004; SiGmA_X

Hughmoris posted:

I'm trying to find out what my credit score is. Is MyFico.com legit? Any other preferred methods out there?

*I'm looking at getting an auto loan.

https://www.annualcreditreport.com/cra/index.jsp

Really tho, why do you want a loan? I'd steer clear if you can. You're in school and you want more debt... Whatever works tho sir.

# ? Nov 9, 2010 05:16

FCKGW: May 21, 2006

SiGmA_X posted:

https://www.annualcreditreport.com/cra/index.jsp

That won't give you a credit score.

# ? Nov 9, 2010 05:20

Hughmoris: Apr 21, 2007; Let's go to the abyss!

SiGmA_X posted:

https://www.annualcreditreport.com/cra/index.jsp

Really tho, why do you want a loan? I'd steer clear if you can. You're in school and you want more debt... Whatever works tho sir.

You make a good point. My reasoning is that I live rent free and I have the GI Bill which is a guaranteed living allowance for the next two years. I have a 1989 Suburban which is not dependable, so I have a motorcycle in case it breaks down. Between gas ($200) and insurance ($100 for suburban and moto) I spend roughly $300/mo on my auto needs. I'm thinking if I sell the suburban and bike and get a new car (Hyundai Accent), my monthly payments + insurance won't be that much higher. Plus I have the dependability of a new car.

Or at least thats just my hosed up reasoning.

# ? Nov 9, 2010 05:28

Murgos: Oct 21, 2010

I have a balance on a CC which is just under 5% of my annual income (from a recent vacation). I would like to pay it off in a reasonably intelligent manner without making too much of a dent in my cash flow or using savings that earn interest.

Is there a good reason not to just use one of those 0% APR for 1 year offers I get daily in the mail and transfer the balance over to that and make even disbursements for 12 months?

Also, and this confuses me, if the offer states that they charge 3% on balance transfers what's to stop me from getting the card and then just paying off the old one as a regular new purchase (which doesn't have an attached fee) and skipping the 3%? Are balance transfer fees really just 'performing a transfer service fee' or is it more than that and thus unavoidable?

# ? Nov 9, 2010 16:27

FCKGW: May 21, 2006

Murgos posted:

I have a balance on a CC which is just under 5% of my annual income (from a recent vacation). I would like to pay it off in a reasonably intelligent manner without making too much of a dent in my cash flow or using savings that earn interest.

I'm of the opinion that you shouldn't try and juggle your balance and just pay the thing off.

I don't think your savings is earning more than what you're paying on interest on the card. Would you borrow money on your card to stick it in a savings account? Of course not, but that's essentially what you're doing right now.

# ? Nov 9, 2010 16:43

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# ? May 23, 2024 09:46

Murgos: Oct 21, 2010

BorderPatrol posted:

I'm of the opinion that you shouldn't try and juggle your balance and just pay the thing off.

I don't think your savings is earning more than what you're paying on interest on the card. Would you borrow money on your card to stick it in a savings account? Of course not, but that's essentially what you're doing right now.

Eh? If I can borrow at 0% while other money earns whatever then I am up the money earned in the interest bearing account.

Also, if you can borrow at 0% and invest at 5% you would be an idiot not too. Every bank in the world earns income by taking advantage of this. However, cash withdrawls on credit cards all carry STUPID HIGH interest rates for exactly this reason.

# ? Nov 9, 2010 17:11

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > BFC Newbies Thread: 33% of the interest paid is tax delectable

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