What Do I Need to Know About the Advance Child Tax Credit Payments?

Q: I’ve heard that the IRS will start making advance payments toward the Child Tax Credit of 2021 this summer. What do I need to know about these payments?

A: The advance payments of the Child Tax Credits of 2021 will be distributed monthly to eligible families, beginning on July 15, 2021. Here’s what you need to know about these payments.

What are the changes to the Child Tax Credits for 2021? 

As part of the American Rescue Plan Act (ARPA) of 2021, the Child Tax Credit (CTC) for tax year 2021 will be significantly expanded.

Here are the most important changes to the CTC for 2021:

  • Families claiming the CTC will receive up to $3,000 per qualifying child between the ages of 6 and 17 at the end of 2021. The credit will include children who turn 17 in 2021.
  • Families claiming the CTC will receive $3,600 per qualifying child under age 6 at the end of 2021.
  • The credit for qualifying children is fully refundable. This means taxpayers can benefit from the credit even if they don’t have earned income or don’t owe any income taxes.
  • Advance payments of up to 50% of the total CTC per family will be distributed once a month, from July 15 through Dec. 15, 2021.

For comparison’s sake, for 2020, the amount of the CTC was up to $2,000 per qualifying child under age 17 at the end of the year. Also, the credit was only refundable by up to $1,400 per child.

Who is eligible for the Child Tax Credits? 

Taxpayers who have a primary residence in the U.S., and reside in it for at least half of the year, are eligible to receive the child tax credits.

The payments will begin to be phased out for married taxpayers filing a joint return and earning more than $150,000 a year, for heads of household earning more than $112,500 a year and for all other taxpayers earning more than $75,000 a year. Income eligibility will be based on 2020’s tax return (more on this later).

Do I need to take any action to receive the monthly payments? 

Taxpayers need not take any steps to receive the advanced Child Tax Credits. Of course, taxpayers need to file their 2020 taxes, which were due on May 15, 2021. Filing electronically may speed up the receipt of the CTC payments.

How much money will I receive each month through the advanced Child Tax Credits?

The advance payments being sent to qualifying families from July through December will be equal to up to 50% of each family’s total Child Tax Credit. The payments will be based upon the income information found in taxpayers’ 2020 tax returns. If these were not filed yet, the 2019 tax returns will be used to determine each family’s eligibility.

Families eligible for the full CTC will receive half of the total across a six-month time span. This means eligible families will receive a total of $1,800 for children under age 6, or $300 a month per child from July through December, and a total of $1,500 for children ages 6-17, or $250 a month per child from July through December.

How will I receive my monthly payments? 

The IRS has announced that payments will be issued in the same way as the three stimulus payments distributed to all eligible taxpayers since the start of the pandemic. If you received your stimulus payments via paper check, you’ll likely receive the CTC payments the same way, and if you received them via direct deposit, expect the same now.

The one caveat here is for those who have not signed up to receive their Economic Impact Payments via direct deposit but have filed their 2020 tax returns electronically. These taxpayers will receive their CTC payments the same way they filed their taxes; either electronically or via direct deposit.

Can I decline the opportunity to receive the advance payments of the 2021 Child Tax Credits?  

Eligible taxpayers who do not want advance payments of the 2021 Child Tax Credit can choose not to receive them at this time. The IRS has not yet provided the public with instructions for how to officially decline the advance payments, but has promised to update its website when the instructions become available.

Is it a good idea to decline the advance payments of the 2021 Child Tax Credits? 

While it is generally better to receive money owed to you upfront, under certain circumstances it may be better to decline receiving the advanced Child Tax Credits.

If you have reason to believe you will not be eligible for the full CTC amount at the end of 2021, you may end up owing the IRS some or all of the money you received when you file your 2021 taxes. This can happen if your income level rises in 2021, or if you have primary custody of the child(ren) receiving the credit in 2020, but not in 2021. If either of these may apply to you, consider opting out of the advance CTC payments. You won’t miss out on these payments, as you’ll receive whatever is owed to you at the end of 2021.

The advance CTC payments will be a boon for families who are struggling with the financial fallout of the pandemic, but it may not be in every taxpayer’s best interest to accept these payments now. Use our guide to brush up on the details of these payments so you can make an informed decision.

Your Turn: How do you plan to use the advanced Child Tax Credits? Tell us about it in the comments.

What to Do with Your Money When Crisis Hits: A Survival Guide

Title: What to Do with Your Money When Crisis Hits: A Survival Guide

Author: Michelle Singletary

Hardcover: 224 pages

Publisher: Houghton Mifflin Harcourt

Publishing date: May 18, 2021

Who is this book for? 

  • Anyone who is struggling to stay on top of their finances.
  • Anyone who’s ever wondered how to handle their money during a financial crisis, such as a pandemic, recession, bear market or energy crisis.

What’s inside this book?

  • Singletary’s expert advice for weathering financial storms.
  • Answers to questions about handling money during a financial crisis.
  • A practical guide for managing common money concerns.

3 lessons you’ll learn from this book: 

  1. The most important steps to take when facing a financial crisis.
  2. How to keep a financial crisis from becoming a catastrophe.
  3. How to manage debt, credit card issues and cash-flow problems.

5 questions this book will answer for you: 

  1. What bills must be paid first when in a financial crisis?
  2. When is it OK to dip into savings?
  3. How can I cut back on spending?
  4. How do I keep from panicking when the stock market is down?
  5. How do I tell a scam from a legitimate opportunity?

What people are saying about this book: 

  • “If you’re one of the tens of millions of Americans who are struggling financially, or if you’re faced with helping others who are struggling, you need to read this. Michelle Singletary has written an outstanding book, filled with no-nonsense, let’s-get-to-it advice that’s immensely practical, easy to read and emotionally reassuring. Stop lamenting your situation and let Michelle show you the way out of your crisis.”  – Ric Edelman
  • “Michelle Singletary, a voice of financial reason and calm throughout the pandemic, helps us move forward with what we need most—answers.  From when to raid your retirement accounts, go back to school, and so much more, her clear, precise guidance will put you on the right track to rebuild your future.”   – Jean Chatzky
  • “This is a compassionate encyclopedia of financial first aid when you stumble, and good financial health practices when you are back on your feet. Michelle Singletary has been the down to earth, practical advisor to the stars — and us ordinary folks — for decades.” – Vicki Robin
  • “Michelle Singletary’s latest book is full of clear, wise advice that anyone can follow—and everyone should—especially when they are thrown a curve in the game of life.” ­- Knight A. Kiplinger

 Your Turn: What did you think of “What to Do with Your Money When Crisis Hits: A Survival Guide?” Share your opinion in the comments.

Is Plaid Safe?

Q: When using peer-to-peer payment apps, banking apps and free-trading apps, I’m often redirected to the Plaid network, where I’m asked to input personal information. Can I feel safe using Plaid?

A: The instinct to be wary of any service that’s asking you to share sensitive information is appropriate and commendable. Most financial apps will ask you to share your banking information, and some will even ask you to share your Social Security number. But it begs the important question; Should you be sharing this information?

While the safety and security of each financial app is individual, apps that are powered by Plaid are safe to use. Plaid is a reputable company that uses encryption and industry-standard security measures to protect your sensitive information.

Here’s what you need to know about Plaid.

What is Plaid? 

Plaid is a financial technology company that serves as an intermediary between financial services and their users. Apps like Venmo, You Need a Budget and Robinhood use Plaid to securely link their users’ financial accounts to their own platforms. This way, the financial apps do not have access to their users’ information; they instead rely on Plaid to supply it for them.

Plaid works by using a universal Application Programming Interface (API) to share users’ data with other applications. APIs are software intermediaries that allow two different applications to communicate. Plaid has developed an API that can be used by any financial institution or application, making it simpler and safer for users to share their financial information digitally.

How does Plaid work?

When you sign up for any of the 3,000+ financial applications currently powered by Plaid, you’ll be asked to choose your financial institution from a list that’s provided by Plaid. Next, you’ll enter your banking login info and password. Some apps will have you create a new password at this point. Once you’ve logged in, Plaid securely shares the information you’ve chosen to link, such as your checking account number, with the app you’re using.

It’s important to note that Plaid itself does not move money around. The technology merely enables other financial apps and their users to send funds from one account to another. Plaid holds onto your encrypted password information without touching your money, while the linked financial app can move your money, but cannot access or know your login credentials.

Is Plaid safe?

Sharing personal information with an app can be unsettling — and it should be. However, you can rest easy, knowing that Plaid uses the highest levels of security possible. When you link your checking account with a financial application by using Plaid, the company instantly encrypts the sensitive data and then shares it with the application using a secure connection.

According to the Plaid website, the company uses these measures to keep your information secure:

  • End-to-end data encryption. Plaid uses a combination of the Advanced Encryption Standard (AES-256) and Transport Layer Security (TLS) to keep your personal information completely safe.
  • Multi-factor authentication.  An extra login step adds another layer of security.
  • Cloud infrastructure. Plaid uses secure cloud infrastructure technologies to enable quick and safe connection.
  • Robust monitoring. The Plaid API and all related components are continuously monitored by a security team.
  • Third-party security reviews. Security researchers and financial institutions regularly audit Plaid’s API and security controls.

When using an application that is powered through Plaid, practice standard online safety measures. Check the URL to ensure you have the correct site, look for the lock icon and the “s” following the “http” in the address. Also, make sure the security settings on your device are updated and set to their strongest levels. Finally, if you need to choose a new password for the app, be sure to choose a strong, unique code and not to share it with anyone.

In a world that is increasingly mobile, Plaid safely connects users to thousands of financial apps and 11,000 financial institutions across the country. Follow basic online safety protocol, keep your login info private, and you can use Plaid knowing your information is secure.

Your Turn: What steps do you take to keep your data safe? Tell us about it in the comments.

Learn More:
getdivvy.com
plaid.com

5 Steps to Take Before Making a Large Purchase

Have you been bitten by the gotta-have-it bug? It could be a Peloton bike that’s caught your eye, or maybe you want to spring for a new entertainment system, no matter the cost. Before you go ahead with the purchase, though, it’s a good idea to take a step back and follow the steps outlined here to be sure you’re making a decision you won’t ultimately regret.

Step 1: Wait it out

Often, a want can seem like a must-have, but that urgency fades when you wait it out. Take a break for a few days before finalizing a large purchase to see if you really want it that badly. For an extra-large purchase, you can wait a full week, or even a month. After some time has passed, you may find that you don’t want the must-have item after all.

Step 2: Consider your emotions

A bit of retail therapy every now and then is fine for most people, but draining your wallet every month to feed negative emotions is not. Before going ahead with your purchase, take a moment to identify the emotions driving the desire. Is this purchase being used as a means to fix a troubled relationship? Or to help gain acceptance among a group of friends, neighbors or workmates? Or maybe you’re going through a hard time and you’re using this purchase to help numb the pain or to fill a void in your life. Be honest with yourself and take note of what’s really driving you to make this purchase. Is it really in your best interest?

Step 3: Review your upcoming expenses 

What large expenses are you anticipating in the near future? Even if you have the cash in your account to cover this purchase, you may soon need that money for an upcoming expense. Will you need to make a costly car repair? Do you have a major household appliance that will need to be replaced within the next few months? By taking your future financial needs into account, you’ll avoid spending money today that you’ll need tomorrow.

Step 4: Find the cheapest source 

If you’ve decided you do want to go ahead with the purchase, there are still ways to save money. In today’s online world of commerce, comparison shopping is as easy as a few clicks. You can use apps like ShopSavvy and BuyVia to help you find the retailer selling the item at the best price.

Step 5: Choose your payment method carefully

Once you’ve chosen your retailer and the item you’d like to purchase, you’re ready to go ahead and make it yours! Before taking this final step, though, you’ll need to decide on a method of payment.

If you’ve saved up for this item and you have the funds on-hand for it now, you can pay up in cash or by using a debit card. This payment method is generally the easiest, and if it’s pre-planned, it will have little effect on your overall budget.

If you can’t pay for the item in full right now, consider using a credit card with a low interest rate. Most credit card payments have the added benefit of purchase protection, which can be beneficial when buying large items that don’t turn out to be as expected. Before swiping your credit card, though, be sure you can meet your monthly payments or you’ll risk damaging your credit score.

Another option to consider is paying for your purchase through a buy now, pay later program. Apps, like Afterpay, allow you to pay 25% of your purchase today, and the rest in fixed installments over the next few months. This approach, too, should only be chosen if you are certain you can meet the future payments.

Large purchases are a part of life, but they’re not always necessary or in the buyer’s best interest. Follow these steps before you finalize an expensive purchase.

Your Turn: What steps do you take before finalizing a large purchase? Tell us about it in the comments.

Learn More:
thesimpledollar.com
thebalance.com
fool.com
moneywise.com

All You Need to Know About HELOCs

If you’re a homeowner in need of a bundle of cash, look no further than your own home. By tapping into your home’s equity, you’re eligible for a loan with a, generally, lower interest rate and easier eligibility requirements. One way to do this is by opening up a home equity line of credit, or a HELOC. Let’s take a closer look at HELOCs and why they can be an excellent option for cash-strapped homeowners. 

What is a HELOC?

A HELOC is a revolving credit line that allows homeowners to borrow money against the equity of their home, as needed. The HELOC is like a second mortgage on a home; if the borrower owns the entire home, the HELOC is a primary mortgage. Since it is backed by a valuable asset (the borrower’s home), the HELOC is secured debt and will generally have a lower interest rate than unsecured debt, like credit cards. You will need to pay closing costs for the line of credit, which are generally equal to 2-5% of the total value of the loan.

How much money can I borrow through a HELOC?

The amount of money you can take out through a HELOC will depend on your home’s total value, the percentage of that value the lender allows you to borrow against and how much you currently owe on your home. 

Many lenders will only offer homeowners a HELOC that allows the borrower to maintain a loan-to-value (LTV) ratio of 80% or lower. 

A quick way to find a good estimate of the maximum amount you can borrow with a HELOC is to multiply your home’s value by the highest LTV the lender allows. For example, continuing with the above example, if your home is valued at $250,000 and your lender allows you to borrow up to 80% of your home’s value, multiply 250,000 by 0.80. This will give you $200,000. Subtract the amount you still owe on your mortgage (let’s assume $100,000) and you’ll have the maximum amount you can borrow using a HELOC: $100,000. 

Is every homeowner eligible for a HELOC?

Like every loan and line of credit, HELOCs have eligibility requirements. Exact criteria will vary, but most lenders will only approve the line of credit for homeowners who have a debt-to-income ratio of 40% or less, a credit score of 620 or higher and a home with an appraised value that is at minimum 15% more than what is owed on the home. 

How does a HELOC work?

A HELOC works similarly to a credit card. Once you’ve been approved, you can borrow as much or as little as needed, and whenever you’d like during a period of time known as the draw period. The draw period generally lasts five to 10 years. Once the draw period ends, the borrower has the choice to begin repaying the loan, or to refinance to a new loan. 

How do I repay my HELOC?

The repayment schedule for a HELOC can take one of three forms:  

Some lenders allow borrowers to make payments toward the interest of the loan during the draw period. When the draw period ends, the borrower will make monthly payments toward the principal of the loan in addition to the interest payments. 

For many borrowers, though, repayment only begins when the draw period ends. At this point, the HELOC generally enters its repayment phase, which can last up to 20 years. During the repayment phase, the homeowner will make monthly payments toward the lHELOC’s interest and principal. 

In lieu of an extended repayment phase, some lenders require homeowners to repay the entire balance in one lump sum when the draw period ends. This is also known as a balloon payment. 

How can I use the funds in my HELOC?

There are no restrictions on how you use the money in your HELOC. However, it’s generally not a good idea to use a HELOC to fund a vacation, pay off credit card debt or to help you make a large purchase. If you default on your repayments, you risk losing your home, so it’s best to use a HELOC to pay for something that has lasting value, such as a home improvement project. 

How is a home equity line of credit different from a home equity loan?

A home equity loan is a loan in which the borrower uses the equity of their home as collateral. Like a HELOC, the homeowner risks losing their home if they default on it. Here, too, the exact amount the homeowner can borrow will depend on their LTV ratio, credit score and debt-to-income ratio.

However, there are several important distinctions between the two. Primarily, in a home equity loan, the borrower receives all the funds in one lump sum. A HELOC, on the other hand, offers more freedom and flexibility as the borrower can take out funds, as needed, throughout the draw period. Repayment for home equity loans also works differently; the borrower will make steady monthly payments toward the loan’s interest and principal over the fixed term of the loan. 

A home equity loan can be the right choice for borrowers who know exactly how much they need to borrow and would prefer to receive the funds up front. Budgeting for repayments is also simpler and can be easier on the wallet since they are spread over the entire loan term. Some borrowers, however, would rather have the flexibility of a HELOC. They may also anticipate being in a better financial place when the repayment phase begins, so they don’t mind the uneven payments. 

Your Turn: Have you taken out a HELOC? Tell us about it in the comments.

Learn More:
creditkarma.com
marketwatch.com
thepennyhoarder.com
investopedia.com

Dream First, Details Later: How to Quit Overthinking & Make It Happen!

Title: Dream First, Details Later: How to Quit Overthinking & Make It Happen!

Author: Ellen Bennett

Hardcover: 240 pages

Publisher: Portfolio

Publishing date: April 27, 2021

Who is this book for? 

  • Wanna-be entrepreneurs wondering how to get started.
  • Anyone looking for inspiration and guidance on making their dreams come true.

What’s inside this book?

Bennett’s incredible story of how she built a multimillion-dollar company by leaping into the unknown and accepting a challenge from her boss.
Motivation, tips and practical advice for making your personal dreams come true.

4 lessons you’ll learn from this book: 

  • How to ignore your inner worrier and take action.
  • How to gather courage to venture outside your comfort zone.
  • How to use creative problem-solving to conquer the inevitable challenges you’ll encounter during your journey.
    How to transition from “flying by the seat of your pants” to the “well-oiled machine” stage.

3 questions this book will answer for you: 

  • Can I really make my dream come true through pure determination and hard work?
  • What should be my first step toward making my dreams come true?
  • Do I need to have all the answers in place to make my dream a reality?

What people are saying about this book: 

  • “Ellen Bennett is the platonic form of a go-getter who inspires go-getter after go-getter to become a better go-getter. In an afternoon with Ellen there is never a dull moment, so be prepared to be inspired, motivated and delighted by her humor, wit and grit. If I could bottle her productivity and enthusiasm I would, but since I can’t, I will just read her book.” —Zooey Deschanel
  • “I love, love, love this book! The true story of a true heroine for our times — bold, brash, and entirely honest about the downs and ups of making dreams come true.” —Angela Duckworth
  • “This book is delicious. It’s inspiring, beautiful and actionable, and it might be just what you need to unlock the door and help you get going.” —Seth Godin
  • “Ellen Bennett’s infectiously inspiring story of grit and entrepreneurial spirit, Dream First, Details Later is a powerfully honest and colorful account of her wild journey from line cook to business owner. In it, she gives license to break free from self-doubt and to seize the wheel for your own journey to success.” —Danny Meyer
  • “Dream First, Details Later is a rare book that combines inspiration with action. Learning Ellen’s story is enjoyable on its own, but here she’s gone above-and-beyond to leave readers with practical advice. I will be recommending this one far and wide!”  —Chris Guillebeau

 Your Turn: What did you think of Dream First, Details Later? Share your opinion in the comments.

Learn More:
amazon.com
goodreads.com

Essential Tools for Every New Homeowner

As a new homeowner, you likely have a long list of items you need or want to purchase for your new digs. From welcome mats to plungers and wall hangings, there’s lots to buy in the first weeks after moving day. As you browse through window treatments and home decor, don’t forget to stock up on the basic tools every new homeowner needs.

A well-stocked toolbox is essential for every homeowner, but choosing which tools to pack inside that kit can be confusing. What do you really need, and what’s just an extra? Can you get by with only one screwdriver, or do you have to spring for the whole set? So many questions — and we’ve got answers! We’ve compiled a guide to stocking a homeowner’s toolbox at every skill level. Happy fixing!

Basic tools

If you’ve never pretended to be a handyman, but you’d like to have basic tools in the house in case something needs minor repair, here’s what belongs in your toolbox:

  • Claw hammer. From hanging up pictures to securing loose railings, a hammer is your go-to tool for most basic jobs around the house. Consider also getting a lightweight pin hammer for smaller jobs.
  • Screwdriver set. It’s worthwhile to invest in a set of screwdrivers so you have various sized flat-heads and Phillips-heads handy for any kind of job. You can pick up a set of 10 screwdrivers at your local home improvement or hardware store, or order one from Amazon.
  • Pliers set. Here too, a set of different sizes and types is your best bet. Look for pliers with a good grip and that are sized well for your hands.
  • Adjustable wrench. A wrench will enable you to tighten or loosen virtually anything.
  • Allen wrench set. A universal allen wrench set will set you back just $10. You’ll use these wrenches anytime you order a piece of furniture that requires assembly.
  • Handsaw. A handsaw is great for trimming lumber and cutting through drywall, fiberglass and other thin materials.
  • Extension cord. Every house should have, at minimum, one indoor extension cord and another outdoor cord for jobs requiring electric tools.
  • Utility knife. Use this handy cutter to open boxes, hard plastic packages, shave wood and more.
  • Tape measure. A retractable 25-foot tape measure will come in handy when you need to measure space for new furniture or decor items. You may want to get a pocket-sized tape measure as well so you can bring it with you when you measure items at a store.
  • Hardware. Keep a generous selection of screws and nails on hand in case you need one in a hurry.
  • Level. A simple floating-bubble model will help keep your wall pictures and shelving straight.
  • Flashlight. It’s always a good idea to have a source of battery-powered light in case of an outage. Also consider a rechargeable flashlight that can be recharged by hand so you are never without a source of light.

The next step

Once you’ve filled your toolbox with the basics, and you become more skilled at around-the-house repairs, consider adding these more advanced tools to your collection:

  • C-clamp. When working on a woodworking project, a clamp will help you hold the wood in place.
  • Stud finder. This ingenious tool will keep you from creating unnecessary holes or drilling where nails already exist.
  • Cordless drill. A cordless drill has dozens of household uses, especially if you get into woodworking or light construction around the house.
  • Hacksaw. These are great for cutting through plastic and metal pipes, tubing, conduit and wood.
  • Safety gear. You’ll need safety goggles, ear protection and dust masks when using power tools.
  • Putty knife. Designed for applying spackle, you can also use your putty knife to remove old paint and to apply grout to tile floors and backsplashes.
  • Wire stripper. Perfect for cutting materials like aluminium, copper, brass, iron and steel, wire strippers are essential for the committed DIYer.

Advanced tools

If you’re exceptionally handy, consider adding these to your toolbox:

  • Sanders. Put the finishing touches on your woodworking projects with a power sander. For best results, you may want to invest in several types of sanders and use each one when it fits the job best. For example, a random orbital sander may be best for simple  home projects, while a belt sander is great for sanding rough surfaces and a rotary sander is your go-to choice for edge work.
  • Carpenter’s square. Made up of a metal ruler and interchangeable heads, a carpenter’s square is used to measure level, right angles, the center of a circle and to check depth. It can be an incredibly useful tool in complicated woodworking, metal and masonry projects.
  • Table saw. This power tool, also known as a saw-bench, is a mounted woodworking tool that is considered the workhorse of any well-equipped woodshop. A table saw can rip,
    cross-cut, miter-cut, square, rabbet and apply shapes to edges of wood stock.

Your toolbox is all set! Now you’ll be fully prepared for anything that needs fixing in your home.

Your Turn: What do you have inside your toolbox? Tell us about it in the comments.

Learn More:
thisoldhouse.com
movement.com
homedepot.com
hgtv.com
butlerheating.com
washingtonpost.com

When Should I Do It Myself and When Should I Leave it to the Pros?

Q: Which home improvement projects can I tackle myself, and which should I leave to the pros?

A: In today’s world, when you can look up how to do practically any project online, it’s tempting to want to do everything yourself, but it isn’t always the best choice. Attempting to do a project on your own can sometimes end up costing more time, money and mess than it’s worth. Here’s how to know when to do it yourself, and when to leave it to the pros.

Home improvement projects you can probably do on your own

While everyone’s level of skill and dexterity is different, these home improvement projects are simple enough for nearly everyone:

  • Cosmetic improvements. This includes painting, wallpapering, wood staining, installing adhesive carpet tiles and replacing the hardware on cabinets and drawers. Before you start, check out tutorials on YouTube for useful tips and tricks.
  • Minor plumbing jobs. Almost anyone can snake a clogged toilet, and most people can handle fixing a minor faucet leak, changing a shower head and even installing a toilet. Again,  when it comes to DIY projects, YouTube is a wonderful plumbing mentor.
  • Minor electrical work. Don’t try to rewire your home on your own (unless you’re a licensed electrician), but you can probably successfully install new light fixtures and change your light switch plates.
  • Install tiles. Think a new backsplash for your kitchen, new tiles for your bathroom floors and walls and new floors for your kitchen and foyer. You’ll need to research exactly how to lay tiles, using a notched trowel to spread your tile adhesive in horizontal strokes. If you’re not comfortable with the installation of your new tiles, you can still save a buck by removing your old tiles with a hammer and chisel before calling in the experts to lay your new ones.

Six questions to ask before tackling a project on your own

  1. Have I done a project like this before? If this isn’t your first time doing a project like this, you can probably handle it now. If it is your first time attempting this kind of project, you may still be able to do it, as long as you’re prepared for the extra work and focus it will involve.
  2. Do I have a reliable resource to turn to with any questions that may arise? It’s best to be prepared in case you run into trouble mid-project. Get that contractor friend on speed dial!
  3. Will this project involve any structural framing? It’s best not to tackle projects that involve cutting through walls, as you run the risk of cutting through engineered lumber and trusses, which can then lose their weight-carrying capacity. If your project fits into this category, have a pro do the job or ask them for guidance before you begin.
  4. Will this job involve any electrical, plumbing or HVAC work? Here, too, you run the risk of messing up structural elements of your home. If your project involves cutting through pipes and wires, it’s probably best to leave it to the pros.
  5. Do I have the resources to complete this job? Many homeowners are eager to start a project on their own and save on pro prices, but they neglect to consider how much time and money the job will take. It’s best to make an estimation of how much the supplies and tools for the job will run you, and how many hours of work you can expect it to consume. You may find the DIY route is not as desirable as you believed it to be.
  6. Will this job risk personal injury? Don’t risk your safety on a project that should really be left to the pros.

Paying for a home improvement project

Whether you decide to DIY, or you’re going to call in the experts, a home improvement project can cost a pretty bundle. Consider tapping into your home’s equity through a home equity loan or a home equity line of credit through Advantage One Credit Union to help you pay for the project. Increasing the value of your home is one of the best ways you can use your home’s equity.

Your Turn: Are you an avid DIYer? Share your best success stories with us in the comments.

Learn More:
lifehacker.com
plygem.com
homeisd.com
usatoday.com

Micro-Deposit Scams

It probably doesn’t surprise you to know that scammers are always coming up with creative ways to con people out of their money. Recently, there’s been an uptick in an old scam in which crooks reach out to targets and try to gain access to their accounts through micro-deposits. Unfortunately, too many people have already fallen for this scam, and we don’t want our members getting caught in the trap. To that end, we’ve compiled this guide on micro-deposit scams, how they play out and what you can do if you’re targeted.

What is a micro-deposit?

Before we can explore the actual scam, it’s important to understand how a micro-deposit works.

Micro-deposits are small sums of money transferred online from one financial account to another. The purpose of the deposits is to verify if the account on the receiving end is actually the account the sender intended to reach. Micro-deposits are generally less than $1 and can be as small as $0.02. They are also typically deposited in pairs; within one to three business days of linking accounts, two micro-deposits should appear in your account.

As mentioned, micro-deposits are primarily used to verify account ownership. For example, if you’d like to link your checking account at Advantage One Credit Union with an investment account, the investment brokerage firm will want to verify that it’s sending your dividends to the correct account. Before sending any of your investment earnings, it’ll do a test run by sending a pair of micro-deposits to your checking account. You’ll be notified that the firm has sent these deposits, and asked to verify the amount of the deposit by logging into your newly linked account. Once you’ve completed this step, the brokerage account will withdraw the small amount of money sent through the micro-deposits and proceed with regular deposits of investment dividends, as planned.

How the scams play out

Micro-deposit scams can take one of two forms.

In one type of micro-deposit scam, a crook will open as many investment accounts as they can, linking each one to one of a handful of bank accounts. When the micro-deposits begin to come in, the scammer will quickly transfer the money to another account before the brokerage company withdraws the deposits. Though each micro-deposit is small, when multiplied by thousands, the scammer can pull in quite a lot of money  — until they get caught, that is.

But it’s the other type of micro-deposit scam that concerns us more — and should concern you as well. In this scam, crooks will link brokerage accounts with strings of random numbers, hoping to hit a valid account. When a deposit is verified from an account, they will use additional information about the account holder to withdraw funds from this account as they please. Unfortunately, many people are uninformed about this scam and innocently verify the micro-deposits, giving the scammers free access to their accounts.

[Here at Advantage One Credit Union, we’ve had an alarming number of micro-deposits made to some of our members’ accounts. To protect our members and their money, we’ve started sending automatic text message alerts to members when they’ve received a micro-deposit. This way, the member knows about the deposit and, if they don’t recognize the sender, they can let us know they’ve been targeted by a scammer. We can then refuse to let the deposit clear and consider placing a fraud alert on the member’s account. Most importantly, the member will know they’ve been targeted and they can refuse to verify the deposit.]

What to do if you’re targeted

Micro-deposits are small enough to fly under the radar and you may unknowingly verify one of these deposits with an uninformed click. [However, now that we’ve initiated our micro-deposit alert system, you will know when to be on the lookout for a micro-deposit and the verification request that follows it.] Here’s what to do if you’ve received a micro-deposit from an unknown source:

  • Do not verify the deposit. Without verification, the scammer won’t know they’ve hit an authentic account.
  • Do not click on any links embedded in the verification request message or download any attachments.
  • Let us know you’ve been targeted.
  • Report the scam to the Federal Trade Commission at FTC.gov so they can do their part in catching the scammers.
  • Let your friends and family know about the scam so they can be on the alert as well.

Scammers are using micro-deposits to gain access to our members’ accounts, but Advantage One Credit Union is doing everything possible to stop them before they can do any real damage. Together, we can beat the scammers at their game and protect your accounts and your money. Stay safe!

Your Turn: Have you been targeted by a micro-deposit scam? Share your experience in the comments.

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How Do I Read the Fine Print on My Credit Card Paperwork?

Q: Paperwork from credit card companies always seems to be filled with tiny print that’s hard to read and even harder to understand. How do I read the fine print from my credit card issuer?

A: Fine print is designed to keep you from paying attention, but it often contains important information you can’t afford to miss. Here’s what you need to know about reading and understanding the fine print on credit card applications and billing statements.

What do all those terms mean, anyway?

First, let’s take a look at 12 basic credit card terms that are important to know but are often misunderstood:

  • Accrued interest – The amount of interest incurred on a credit card balance as of a specific date.
  • Annual Percentage Rate (APR) – The rate of interest that is paid on a carried credit card balance each year. The amount of interest charged each month will vary according to the current balance. This number can be determined by dividing the current APR by 12 to get the monthly APR rate, and then multiplying that number by the current balance.
  • Annual fee – The yearly fee a financial institution or credit card company charges the consumer for having the card.
  • Balance – The amount of money owed on the credit card bill.
  • Billing cycle – The amount of time between the last statement closing date and the next.
  • Calculation method – The formula used to calculate the balance. The most common is the daily balance method, where charges are calculated by multiplying the day’s balance by the daily rate, or by 1/365th of the APR.
  • Cash advance – Money withdrawn from a credit card account. Cash advances usually have strict limits, higher interest rates and fees.
  • Credit limit – Also known as a line of credit, this refers to the maximum amount of money that can be charged to your credit card.
  • Default rate – Also called the penalty rate, this refers to an especially high rate of interest that kicks in if the consumer is late in making monthly payments and/or has violated the terms and conditions of the card.
  • Grace period – The time between making a purchase and being charged interest on that purchase.
  • Late payment notice and fee – These will alert the consumer to a missed payment and its associated fee.
  • Minimum payment – The smallest amount of money the consumer can pay each month to keep the account current.

What’s the big deal about all the small print on my credit card application?

Don’t sign on the dotted line (or digital signature pad) just yet! Those microscopic letters on your credit card application actually contain important information. Here are some common claims you might find on an application and what the small print below these claims actually says:

Claim: Sign-up bonus: $950!

Fine print: Must spend $3,000 on the card within the first three months of ownership. Redeemable only at participating airlines.

Claim: Interest-free offer!

Fine print: Expires after 18 months, the same time a 22.5% interest rate kicks in.

Claim: 0% balance transfer!

Fine print: With a $300 balance transfer fee.

Claim: 5% cash back on grocery spending!

Fine print: Capped at $1,000 per quarter and only at participating grocery stores.

Claim: Cash advance of up to $1,500!

Fine print: With 20% interest and a $200 cash-advance fee.

Claim: Generous 25-day grace period!

Fine print: We reserve the right to shorten the grace period at any time.

How do I find the fine print on my credit card application or statement? 

Read the fine print before you sign up for a credit card offer. You can find this information on the credit card’s paper or digital application under a label marked “Pricing and Terms” or “Terms and Conditions.” You can also find this information when researching credit cards online; look for it under the “Apply Now” button where it may be labeled as described above, or as “Interest Rates and Fees” or “Offer Details.”

If you’ve already signed up for the card, you’ll find these conditions on the “Card member Agreement” that generally accompanies a new credit card. The text will be lengthy, but will likely be divided into sections, including a pricing schedule, relevant fees and payment details.

Your credit card statements will also have lots of fine print, though most of it will be on the back of the bill. This information will include all the information from your application, as well as some additional information, including reports to credit bureaus, how your interest rate on the balance is calculated, how you can avoid paying interest on your purchases and how to dispute fraudulent charges on your bill.

You can find the small print on your credit card applications and statements by looking for an asterisk (*) or dagger (†), which indicates small-type footnotes at the end of the page or document.

Do I need to read all the fine print? 

Fine print will appear all over your credit card paperwork, but it’s best to pay attention to the tiny letters near the points you most care about. For example, be sure to read up on the information given on all special promotions, introductory offers, bonuses, rewards and more. In general, you’ll find this rule to be true: “The large print giveth, and the small print taketh away.” In modern English, this means that the large print is designed to grab your attention and make you sign up for the card immediately, while the small print contains all the qualifiers, exclusions, justifications for future cancellations and more, about these claims.

Fine print written in financial jargon can be difficult to spot and to understand, but ignoring the small words on your credit card paperwork can have disastrous consequences. Let our guide help you learn how to read the fine print on your credit card applications and statements. Don’t let anything get past you!

Your Turn: Have you ever regretted missing the fine print on your credit card paperwork? Tell us about it in the comments.

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