Twila Van Leer

Add a Selfie To Your Credit Card Application

November 4, 2017 By Twila Van Leer

Add Selfie to Identification — Banks and other financial companies are likely to see the advantages of biometric identification and offer it as another safeguard for customers

The ubiquitous selfie may find yet another niche in the area of personal finances. Your bank may request one when approving a purchase or considering a credit card application.

Visa Inc., a payment processing giant, is launching a platform that will allow banks to use various forms of biometrics such as fingerprints, face recognition, voice, etc., that will provide positive identification.

In its simplest form, a bank may ask for a selfie and a picture of a current driver’s license or passport as backup. The technology will compare the photos for facial similarities and the validity of the supporting license or passport, all within seconds.

Selfies also could come into the picture with online shopping. Chipped credit and debit cards have made some inroads into fraud in retail shopping, but protecting online shoppers still is a concern. One in six potential transactions is declined because of suspicious activity.

Banks routinely autodial a customer when there is a question. The new technology would allow the customer to use Apple’s Touch ID or other fingerprint recognition technology or provide a selfie to verify the transaction.

Visa Inc. officials believe that soon customers can choose among a variety of authentication methods, whichever technology suits them.

The recent breach of data at Equifax, a huge credit bureau, with millions of bits of personal data stolen, has been impetus for more serious thinking about how such information can be protected.

It is harder to mimic a person’s face, fingerprint or voice, the innovators say. Passwords that have been common methods of protecting information have flaws that make them vulnerable because few people change them frequently enough or make them complex enough to avoid fraud. If they use the same password for more than one purpose, a breach at one site will put other locations at risk.

It is likely that the technology will be initially used in larger financial institutions. It took two years for chip technology to integrate itself into financial transactions. But ultimately, banks and other financial companies are likely to see the advantages of biometric identification and offer it as another safeguard for customers.

Ways to Save On Taxes

November 3, 2017 By Twila Van Leer

There are some entirely legitimate tax maneuvers that can save you money when it is tax time.

The first involves state-based college savings plans. Those plans are best if you have a long time to let your contributions grow. But even if your student is about to head off to college, you may be able to wring a last-minute benefit. Most states offer deductions or credits on your taxes if you are saving for higher education, and they don’t limit the amount of time you have to build your fund. You can put money in and take it out again shortly to reap the benefit. A few states require that you have the money in the education account for at least a year before qualify for the deduction. Contact your plan or go to SavingForCollege to get the specifics.

Health Savings Accounts, designed to help pay the consumer’s share of medical costs, also have a built-in tax break. The contributions are deductible as you pay them and stay tax-deferred as the account builds; withdrawals are tax-free as long as they are used for the qualified medical expenses. Some experts suggest a health savings account even if contributions to a 401(k) fall short of the full amount matched by the employer. The trick, though, it to leave the health savings account alone so it can grow the maximum amount possible. That leaves you to pay deductibles and copays out of pocket. Do the math and see where the break-even point comes.

Roth IRAs give you the ability to withdraw money tax-free in your retirement. That’s a huge advantage if you have kept your IRA intact and let it grow through compounding. There is a limit, however, on IRAs. The limit is $133,000 for an individual (as of 2017) and $196,000 for married couples filing jointly. Taxpayers can get around those limits by contributing first to a traditional IRA and then converting to Roth IRAs, since there is no limit on Roth conversions. Income taxes generally apply to conversions, but the bill could be low, even zero, if you don’t take a deduction and don’t have much money in IRAs outside the one being converted. The IRS bases the tax on a conversion on the proportion of the taxpayer’s IRA holdings that have not yet been taxed.

There are additional IRA manipulations you can do to maximize your tax advantage, but the maneuvering becomes more complex. A visit with a tax accountant might be advisable when he being to contemplate “mega backdoor Roths.”

Toys R Us Files For Bankruptcy

November 2, 2017 By Twila Van Leer

Amazon has claimed yet another victim in the retail world as Toys R Us declares bankruptcy, joining a long list of retail chains that have succumbed to the pressure of competition. In its filing, the toy store claimed $5 billion in debt and asked for protection from debtors as it goes into the holiday season, its busiest time.

The toy store will keep its 1,600 Toys R Us and Babies R Us stores open during the bankruptcy proceedings. What ultimately will happen to its 65,000 workers is still unclear. The store has suffered from the disadvantage of having to price too high to outdo competitors such as Amazon.

Analysts have suggested the toy giant needs to find ways to compete with the online retailers, such as in-store birthday parties and doing game demonstrations. Too many shoppers are using Toys R Us to see what the trends are among the country’s younger set while doing phone checks on competitive prices at Amazon, Walmart and other stores.

Toys R Us has lots of company among the corporations that have failed to compete effectively with the online competition. A list of almost 20 includes Radio Shack, True Religion Apparel, Gordmans, Payless ShoeSource, Eastern Outfitters, Rue21, Gymboree and a host of others.

Exploiting its current advantage, Amazon is using a $99 annual Prime Membership to attract shopper loyalty, at the same time offering perks such as same-day delivery in a growing number of markets.

Should You Refinance Your Car

November 1, 2017 By Twila Van Leer

Car Refinancing — Should you look at redoing your car loan? There are some reasons that it is a good approach.

When your finances get pinchy, refinancing your larger loans is a tempting idea. Should you, for instance, look at redoing your car loan? There are some reasons that it is a good approach.

Your own situation, lifestyle and other financial commitments should all be considered before you dive into a refinance, but here are some tips:

Car purchases in general have a lot of options. If, on second thought, you think you may have made the wrong choice, reconsider. Paying off the loan more quickly can save as much as $1,000 over the term of the loan. It makes it worth the initial stress of making slightly larger monthly payments.

If interest rates have dropped while you have been paying on the vehicle, refinancing is a good idea. If the deal originally called for a interest rate higher than 6 or 7 percent, you almost certainly will see a savings at a lower rate. Getting your financing through a financial institution rather than through the dealer may get you a better deal. Do a little comparative shopping and see where you can get the best interest.

If during the time you have been paying monthly installments your credit score has improved, you have a bargaining chip for better terms, especially if the car payments, in particular, have been regular and on time. If getting out of debt has been a target you have faithfully zeroed in on, you can reward yourself by looking at a car refinance that will lessen the pressure a bit.

If you have leased a vehicle and the lease is about to expire and you are debating whether to purchase the car or trade it in on something else, consider carefully. The car industry has reported a glut in leased car returns and you may be able to capitalize on that fact. Don’t jump into a new arrangement until you have done some research.

If, in the end, your objective is to have more free money, then a refinance extending the term of the loan, with smaller monthly payments, may be what you need. The negative, of course, is that you will be on the hook for a longer period of time, but freeing up more money will help take away the sting.

Pay Off Student Loans Faster

October 31, 2017 By Twila Van Leer

One of the main reasons Millennials don’t invest more money toward retirement is that they are saddled with education debt. The average amount of student loans in 2016 was a record $37,172. That’s a 6.05 increase over the previous year, according to Cappex.com, a college scholarship website.

Bankrate.com studied the issue and came up with these suggestions to help those with student debt to get out from under the load faster:

Treat the loan as you would a mortgage, making larger payments to reduce the principal faster. A student loan of $25,000 with 6.8 percent interest and a 10-year payback period would cost $288 a month. Upping the payment to $700 per month would clear off the debt in three years.

Make payments twice a month instead of monthly. That would help even out an increased payment. After the initial push to get the loan paid, the money that had been absorbed in student debt then becomes available for other things, including a mortgage and savings toward retirement. Or it could be used to help a child through college, saving him or her the same burden of student debt.

Many experts advise those with student loans to create a plan for paying off in three to five years. Seeing the plan in black and white gives a better sense that this is something that can end. It becomes the basis for a goal that the individual can commit to.

The example is a couple who have $50,000 in combined student debt. They earned about $100,000 a year jointly. They established a budget and cut back on spending. They had bonuses from their jobs that they dedicated to the drive to become debt-free and they put $800 per month into the loan payment. They had paid off the loans in two years where it would have taken eight years if they had made only minimum payments.

Having money put into savings automatically bysteps the temptation to spend everything you earn. Don’t use checking and/or savings accounts you already have. Keep a separate account for the purpose of student debt reduction.

Minimizing the amount of loan assistance you need to complete college by working part-time is a counter step to be considered at the outset. Planning ahead, being willing to sacrifice to keep loans at the lowest possible figure and keeping focused on long-range personal finances will help. Falling off the budgetary wagon when personal wants and desires get first attention will lead to future problems.

The very best advice: live within your means and be conscientious about saving.