Credit card balance transfer offers can also be used to reduce the interest paid on bank loans or other loans. If the credit limit is high enough, you may even be able to pay off the loans completely. Some credit cards provide credit card cheques for this purpose, but you’ll need to be careful. Some credit card cheques have higher interest rates than the credit card itself, so read the fine print very carefully. Some credit cards also allow you to transfer the balance from store cards. This can be useful after an intensive shopping spree!
Types Of Balance Transfers
There are two main types of credit card balance transfer offer. Many credit card companies offer users the chance to transfer balances for a rate of 0% for a fixed period, such as six or nine months. Once this offer has expired, the interest rate on the transferred balance will revert to the standard variable rate, which is likely to be considerably higher.
The best way to take advantage of 0% balance transfer offers without ending up with higher interest rates is to get a new credit card about a month before the balance transfer offer expires. Then you can transfer the outstanding balance on your old credit card to a new card and continue to save money on credit card repayments. Remember not to apply for too many new cards at once, as this could damage your credit rating.
The second type of balance transfer offer is one that offers a fixed rate on the money transferred for as long as it remains on the credit card. This may be a good option if you’re currently paying interest at a higher rate. These offers tend to offer a rate of around 5% which is considerably lower than standard interest rates. With this type of offer, there’s no need to worry about transferring balances every few months.
Credit Card Purchase Rates
With this type of offer, it’s best to check the rate that applies to purchases. Credit cards that offer a low balance transfer rate often have a higher rate for any spending on the credit card. It is also common to take any payments you make off the lower rate total first, which means you could end up paying quite a bit for spending on the card.
Each type of balance transfer offer has advantages depending on the amount of debt you have, how you spend and how you plan to pay off the credit card balance. Some credit cards and store cards have annual percentage rates that are well over 20%. Shopping around for a balance transfer card could save hundreds.
Assets can be described as anything that holds value. Assets can be all types of things from cars to houses. Assets can be used in helping to build credit. For example if you are applying for a house loan, you might use your car as an asset, to show that if you default on a payment, that you have assets to fall back upon such as your car.
Capital can be a bit of tricky term as it can be used in several different situations to do with finances. Capital can be described as the assets that are available for use towards creating further assets; it can also apply to the cash in reserve, savings, property, or goods.
Debt is amount of money or something of value that is borrowed from a person referred to as a debtor. Usually a debt that is borrowed will carry some type of penalty along with the payback such as an interest, or service.
Debt Consolidation is replacing multiple loans with a single loan that is normally secured on property. This can often reduce your (the borrowers) monthly outgoing interest payments by paying only one loan which is secured on the property sometimes over a longer term. Because the loan is secured, the interest rate will generally be considerably lower.
Equity is the difference between the value of a product (for example a house) and the amount that is owed on it.
Liabilities refers to the sum of all outstanding debts in which a company or individual owes to it’s debtors.
Principal is used to describe the amount of money that is borrowed without including any interest or additional fee’s.
Term refers to the length of a debt agreement. For example if you were to take out a loan for a house over 10 years. 10 years would be the term.
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Most banks however provide secure financial service networks using Secure Sockets Layers or other technology that encrypts information you send over the Internet. That means the data you send from one computer to another is encrypted to prevent outsiders from peaking in and seeing your private information.
This technology, referred to as SSL technology is now accepted or compatible with most browsers including Internet Explorer and Netscape Navigator. Usually you’ll see a little yellow padlock in the right lower hand corner of your screen, indicating that a page is being secured using this technology.
Other Security Measures
Most Internet banks offer other protective measures to ensure your information is kept safe and secure. Some examples of other security measures in place include:
You will create your own online access account number and code that you will need each time you log in.
Many banks limit the number of times you can attempt to log in per day and lock you out if you exceed this. That way someone can’t attempt to break your login code easily.
Most banks offer limited sessions that require you to re-login after you have been inactive for a period of time preventing anyone from viewing your information if you leave your computer for too long.
In developed economies monetary policy has to serve the function of stabilization and maintaining proper equilibrium in the economic system. But in case of underdeveloped countries, the monetary policy has to be more dynamic so as to meet the requirements of an expanding economy by creating good conditions for economic growth. Monetary policy can be strategic, intermediate and tactical. Under strategic or primary goals the following tasks are very important.
– Increase of employment among the population;
– Normalization of the price level;
– Containment of inflationary processes;
– Acceleration of economic growth;
– Increase in production volumes;
– Alignment (balancing) of the balance of payments of the state.
By contrast intermediate goals are realized by changing the interest rates and the amount of money in circulation. In this way, it is possible to adjust the current demand for the goods and to reduce (increase) the supply of money. The bottom line is to influence the level of price policy, attract investment, increase employment and increase production. At the same time, it is possible to maintain or revive the conjuncture in the money (commodity) market;
Tactical goals are of short-term nature. Their task is to accelerate the achievement of more important – intermediate and strategic objectives:
– Monitoring the supply of money;
– Control of the interest rate level;
– Control of the exchange rate.
Types of Monetary Policy
Each country chooses its own kind of monetary policy. It can vary, depending on external conditions, the state of the economy, the development of production, employment and other factors. The following types are distinguished:
1. Soft monetary policy (its second name is “cheap money policy”) is aimed at stimulating various sectors of the economy by regulating interest rates and increasing the amount of money. At the same time, the Central Bank performs the following operations: – Makes transactions on the purchase of government securities. All operations are conducted in the open market, and the proceeds are transferred to the banks’ reserves and to the population’s accounts. Such actions allow increasing the amount of money supply and improving the financial capacity of banks. As a result, the interbank loan is in great demand;
– Minimizes the rate of bank reservations, which significantly expands the lending opportunities for various sectors of the economy;
– Reduces the interest rate. As a consequence, commercial banks gain access to more profitable loans terms. At the same time, the volume of loans extended to the population on more favorable terms and the attraction of additional funds in the form of deposits.
2. Rigid monetary policy (its second name is “expensive money policy”) is aimed at imposing various restrictions, restraining the growth of money in circulation with the main goal – restraining inflationary processes. With a strict monetary policy, the Central Bank performs the following actions:
– Increases the limit of bank reservations. In this way, a reduction in the growth of the money supply is achieved;
– Raises the interest rate. For this reason, commercial structures are forced to stop the flow of borrowing from the Central Bank and to limit the issuance of loans to the public. The result is a suppression of the growth of money supply;
– Sells government securities. At the same time, transactions are made on the open market due to current accounts of the population and reserves of commercial credit and financial organizations. The result is the same as in the previous case – a decrease in the volume of the money supply.