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Credit card is no longer viewed as a luxury but as a necessity. Numerous banks are excitedly entering the market with offers of credit cards, even savings accounts. Recently, credit cards began to be issued to anyone requesting them. Frankly, it pleases everybody, even if the proposal is slightly ahead of demand. The number of credit cards in circulation is one of the indicators of well-being of the people. The interest of the banks in what concerns the spreading of credit cards is clear: it is not only the commission for issuing cards, but the commission with the outlets. Payment for purchases and services is done without commissions, but the card holder has to pay to the bank an average of 2-2.5% of the amount. The card issuing bank receives 1% while the other costs of the operation go to the bank acquirer.

Given all these facts, the credit card is just another type of bank loan. The main difference is that the user has a plastic card with which he or she can shop. Nevertheless, the system of repayment is the same as in any bank loan: the user has to pay monthly a certain amount. This amount is established by a bank loan calculator depending on the income, loan term and interest rate. Especially for these loans, banks do not grant huge sums.  

If the average credit card user spends about 9000 dollars a year, it is not difficult to calculate the bank's income plus fees for cash withdrawals, on average, 3% on each transaction. The same average credit card holder takes about 60% of loan funds in cash. And, of course, interest rates are limited. As experts estimate, taking into account the costs of maintaining the bank's ATMs, cash collection and so on, each bank credit card brings revenue to 3.8% of the spent amount. So, the banks issuing credit cards are beneficial. Therefore, most banks will continue to build their portfolios on credit cards. Holders of credit cards find this method convenient and advantageous as credit cards are the most civilized way of repeated borrowing.

For a long time, I thought that credit card business is totally unnecessary, mostly when paying cash.  And now, after doubts and hesitations, more out of curiosity, most of us have a credit card. 90% of them can confirm that everything that was said about the advantages of credit cards is the real truth. Many have said that you need to carefully choose the bank, keeping an eye on the conditions, as if there was any trick. In principle, most banks n have more or less similar conditions.

It makes no sense to open a card with an overdraft facility without the grace period. Free period should be required. The duration of the grace period generally is between 50-55 days. Some may extend this period even up to 60 days, while others, in their desire to attract clients, came out with a proposal of up to 200 days, but only for the first time. There is a difference in the definition of the grace period from the date of expenditure of loan funds prior to the date of payment.  How did all go so easy? It turned out that all is elementarily simple. SMS-messages, e-mail and the Internet – that is what makes the use of a credit card as easy as possible.

Internet banking is increasingly gaining momentum and bank loan calculator can be used online by each and every client. If you still do not have internet or do not use the Internet banking it is enough to work with bank’s accounts. In order to maintain a sense of balance, it is important to properly manage your finances and keep everything under control. Banks are very different among themselves, but all have a high degree of protection. So you are safe, no matter of online tool you use.

A very important point is how to repay the loan. Information ‘How can I pay credit’ posted on the websites of most banks should be examined closely. There are ways in which you do not pay extra commissions but first you should be sure you fulfill all the required conditions.  If credit card debt remains outstanding until the end of the grace period, you will need to make a minimum payment – from 5 to 10% of the amount spent plus interest.

There is quite a remarkable contrast between the credit card and consumer credit. If consumer credit is set to the amount and date of the monthly payment, you can repay the credit card all in one day, if you have the necessary financial means. You do not need to go to the bank; it is enough to write a check and send it by mail. If, with consumer credit, you filled in an application for early repayment, the bank charges a penalty for failure to comply with its commitments. With a credit card this does not happen. Also, the bank loan calculator differs very much in what concerns the features taken into account. For instance, a consumer credit requires a minimum income, but that does not happen with a credit card.

Withdrawing cash from a credit card means paying a commission. There is, therefore, a recommendation to use credit card to pay for, but not for cash withdrawals. In fact, the commission is not very big. For example, you must pay a commission of 3% of the total amount. The most convenient feature of this credit card is that you do not have to count every penny. For example, when you go to the dental clinic, you will never know how much to pay. With the credit card you feel much calmer and more confident. The more you are using a credit card, the higher the credit limit provided by the bank. As a rule, you should first make very small loans. But if you bring your own tools to actively use the card for payment, the loan will increase.

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Published March 19, 2012 | By Morosanu Ancuta Elena | Posted in Banking

The loan officer

A loan officer is a person who is the intermediary between the bank or another lending institution and its clients (the borrowers).  The loan officer is the person who you want to discuss if you want a bank loan (regardless of which kind).

You can find a loan officer, most common, in banks, but also in other financial institutions such as, for example, credit brokers and so on.
They search for the best loan solutions for their clients and propound them the conditions that they have to fulfill to be eligible for that loan.
Regarding the studies, a loan officer should have some economic studies in finance and economics, or experience in sales and banks. In addition to specialized studies, a loan officer should have solid knowledge about computing, because most loan contracts must be entered using a computer program in a computer system.

A loan officer should have, also, good communication skills and relationship, because they are in constant contact with clients and, everyone knows that today working with people can be very hard and demanding (because people are difficult and everyone knows it).
There are several types of loan officers: commercial loan officers, they usually work with institutions and companies who want a loan. Mortgage loan officers – they deal with loans for people who want to acquire a house or want new real estate loan for property (be it house, flat or land) they already own.

The loan officer

The loan officer

Consumer loans officer – they are working with people who want an acquisition of goods with a lower value, for example a car, a computer or some furniture for the house.
Loan collection officers – they contact borrowers with problems regarding their payment. They contact those clients to see if they can  reach  to a solution or a compromise, if this does not happen the loan collection officer initiates collateral liquidation after which an asset that belongs to those who borrowed (a car for example, or even a house) is sold to repay the loan.
To be a loan officers, also, requires being able to travel, for example mortgage loan officers are, most of the time, working away from their offices , visiting homes or land that want to be sold or bought.
The loan officers can work in a bank or they can be independent. An independent loan officer is working with unions and private mortgage companies, and in the same time, in this case the remuneration can be only commission-based. A loan officer usually works from the office or building department of the mortgage broker or lender, while an independent loan officer does the same, but he / she has the freedom and the flexibility to work on their own time.
The duties of the loan officers are: They must prospect the market and find customers who are in need of a loan and are eligible for it. A loan officer guides them and they are trying to offer them the best solutions during the entire loaning process.

The loan officer should, also, study the client’s financial history and the present financial situation. He/she should be available to meet with clients and to provide them all the information they need, to be honest about loan fees and other charges that may occur during the loaning process. The loan officer should be able to handle very well the customer’s complains and to take the best action to solve them.
How to become a loan officer: First you must meet the requirements for the studies. That means that you need to have economic or financial studies, if you graduated something else, that’s no problem, you can register for a course in economic or you can follow a college with this specialization. Secondly you have to prospect the market and to look for friends or for persons you know would need a loan. This will help a lot when you present to your interview (you should say it in the resume) that you can bring several clients for the company. Join a team of agents or brokers and from there you go on to bigger companies, or you can try your luck right there. If you succeed in a bank you will be first employed as a teller or customer service representative, but this shouldn’t discourage you because you can go from there any ware you want.

The loan officer

The loan officer

The loan officer career is a challenging one that involves working with and helping people, it can give you unlimited income but you must work very hard to get to the top, because this kind of job is a difficult one and the numbers of candidates is increasing every year and so the competition is very high.

If you are interested in this career you must know that the loan officer job is based on the market’s loan possibility. So if the market is weak your income will be weak and if the market is high your income will be high and there are no guaranties that this king of scenario can’t happen from month to month.

It is true that this job pays a lot more then others, but you have to be very careful because not everyone can do it, so before you start thinking if you want to become a loan officer you should answer with “yes” to all the questions, if you answer “no” to just one maybe this job is not for you.

Do you like to communicate with others?

Do you have the power of persuasion?

Do you guide yourself by the fact that what doesn’t kill you, makes you stronger?

Do you like challenges?

Do you trust yourself even if sometimes things don’t work the way you want them to?

Do you like to travel a lot, if your job requires, even on your on expense?

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Published April 9, 2011 | By Nations Loan | Posted in Banking

Credit counseling

Educating consumers is quite hard, but this process can bring you a relaxed future. Credit counseling is represented by the educational courses offered to consumers about how to avoid debts which cannot be paid back. Credit counseling is not a credit education for real, but it has an important contribution to consumers’ financial education.

A credit counseling involves a negotiating process, and usually a debt management plan is established for the consumer. This kind of plans can help the debtor to pay back by having a payment deal with the creditor. Debt Management Plans, which are set up by counselors, offer lower payment fees and interest rates. Often, there are offered reductions to consumers.  After a consumer joins a management plan, the creditors will restrict his accounts for future charges. The most popular advantage of a credit counseling program and a debt management plan is that multiple payments for credits and loan consolidate into one monthly payment, which is in most of the cases less than the sum of all customer’s payments.

When enrolling for a credit counseling program, you should think that the best thing is that you will get a real reduction for the interest rate. A customer which has a common account will pay a 30% interest rate, but with joining a DMP, banks lower the annual rate to 5-10%. The most important achievement of credit counseling is that they bring delinquent accounts current. This process made by the credit counseling institutions is called “reaging” or “curing” the accounts. After making series of on-time payments through the DMS, the good faith is shown and the debtor gets back the normal status, and his accounts are also nominated as “clean”.

The credit counseling programs and the debt management plans do not eliminate the prior negative information present in the credit reports, but solve the present situation. The credit counseling offers debtors the chance to a fresh financial start and the opportunity to build a positive credit history for the future. A very interesting form of credit counseling is the credit practice course included in schools’ curriculum. This is a great initiative, because the students receive credit counseling long time before receiving any form of credit.

The credit counseling history begins in 1951, when The National Foundation for Credit counseling has been created by credit granters. The initial purpose of NFCC was to create a legal framework and monitor the retail credit market, and in the same time to conduct public awareness campaigns on credit. Credit retailers wanted to help consumers avoid bankruptcy through these credit counseling programs. In 1960s, the first credit counseling local franchises emerged and they offered education and counseling to credit consumers. In the beginning, NFCC did not agree with the telephone based business model, because they thought that face to face counseling was more effective. Nowadays, some changes occurred in the credit counseling business model and most of credit counseling happens through phone.

Credit counseling

Credit counseling

A very important aspect is that not all the credit counseling agencies necessarily belong to a trade organization, and there are more than 1,000 active organizations in the United States of America. Taking into account that they are not required to do so, it is legitimate that the credit counseling institutions do not belong to trade organizations.

The consumer credit counseling services bring useful information to consumers and educate them in such a manner to pay back the money they borrow from various lenders. They use various psychological techniques and all professionals’ teaching skills for “implementing” important aspects into consumers’ minds.

The credit counseling became a mandatory requirement for debtors filing for bankruptcy. This regulation has been introduced by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. In the 180 days before filing for bankruptcy, debtors must complete a program with a credit counseling agency. This is required for educating debtors who have bankruptcy as ultimate solution for the future and to teach them how to correctly make payments. These educational programs include at least one counseling session conducted over the Internet or over the phone. Additionally, a post filing debtor credit counseling session is also required for completing the bankruptcy filing process.

Consumer credit counseling services are very useful because they generally can help three main categories of people: these services educate people who didn’t receive yet any form of credit, those who have received credit and are in bad situations, and those who have no escape and who are preparing their bankruptcy files. In all these three situations, consumer credit counseling services were efficient, and their results were obviously visible. Of course there are exceptions too, because there are people who, after filing for bankruptcy, have applied for credit, got it, and then made the same mistakes as he had done before. In most of the cases, consumer credit counseling is effective, and in time, I think that our children should grow with a good credit education, because we are living in a strong marketed world, and there are many attractive credit offers, but people should think in the same time if the offer opportune for them or not.

Credit counseling is not successful only in the United States of America, but in Europe it is also a growing industry. There are plenty of both for profit making credit counseling agencies and non profit organizations like Christians against Poverty. The largest advice charity is Consumer Counseling Service, in the UK.

Credit counseling

Credit counseling

Credit counseling is a way of going out of a bad financial situation, getting out of debt, and this process usually takes 3-7 years. Cfeta credit counseling became an accepted debt relief method, and most of the lenders agree with it when proposed by debtors. The total credit card balance is repaid, but the interest rate is considerably lowered. People are currently looking for ways to recover from an unkind economy and this business is meeting a tremendous increase. A lot of people have been resorted to using credit cards for paying household expenses. These situations can occur when considerable changes appear in people’s lives: salary decrease, mortgage payments increase or even losing their job. The biggest benefit brought by credit counseling is that all monthly payments will combine in a single payment, with a lower interest rate.

Don’t be afraid to contact the credit counseling companies, because they will help you get out of trouble in an amiable manner, without spending additional unwanted money.

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Published April 7, 2011 | By Nations Loan | Posted in Banking

The bank card

When thinking about progress, the most obvious thing that comes into people’s mind are new gestures and activities human behavior has incorporated throughout history. It’s pretty simple to say today “click there” or “Google it”, and even using an ATM is quite familiar to many of us. But people 20-50-100 years ago weren’t familiar to our facilities and didn’t have any idea how technology would evolve in time. Even the concept of money has developed and now we use cards to store our financial resources. Having a small card in your wallet and being able to buy a car, or an apartment with it, is pretty cool for these days and bank cards have entered in your lives for few decades and the concept is still under development.

The cards are as their name says – plastic cards that provide a payment method and an alternative to cash. A card can be functionally called an electronic cheque, and in some cases, it is specially designed for Internet use, so there is no physical card.

Cards can be categorized in two main classes, by the way money arrive in the account directly related to the card. For consumers, the difference between a debit card and a credit card is that the credit card allows the consumer to spend money on credit, from the issuing bank, whereas the debt card deducts the balance from consumer’s deposit account. There is the possibility for banks to issue combined cards, with both credit and debit option implemented. If you have this type of card, a merchant will ask you if you would like to use the “credit” or the “debit” option in that purchase. Generally, “debit” requires a personal identification number to be supplied (the PIN). The “credit” should be made in person. Most merchant agreements in U.S.A forbid picture ID as a requirement for using a Credit Card.

There are three important ways to process the debit card transactions: online debit, offline debit and Electronic Purse Card. There are some well known brands, like Visa or MasterCard, which are accepted almost everywhere, but there are also other types of debit cards, which are regionally accepted, like Switch and Solo are in the UK, Carte Bleue in France, Interac in Canada or Laser in Ireland. The advent of the euro, in Europe, and the need for cross-border compatibility determined many of the local brands to be re-branded with the Maestro logo, which is a part of the MasterCard brand too.

The bank card

The bank card

In the U.S.A., there are some interesting credit and debt card offers, and the most well known cards are those from Bank of America. The Bank of America credit card offer brings a wide range of alternatives to cash, and meets different needs. Taking into account that all customers are unique, the needs are also different from one to another customer. The Bank of America credit card offer includes credit card offers categorized in different sections (Popular Credit Cards from Bank Of America, Automotive Credit Cards from Bank Of America, Bank Of America Everyday Credit Cards, Credit Cards for College & University Students, Credit Cards for Shopping from Bank Of America and many others) and you can observe that there are Bank of America credit cards for a lot of purposes, and they come to meet a wide palette of customers’ needs. It is best to analyze the offer before making any decision, and most important aspect is to compare what the product offers with your needs, and see if it fits with them. Bank of America credit cards are designed for a lot of purposes, but when choosing one of the credit cards from Bank of America, take care to perfectly fit with what you need.

Another important financial institution in the U.S.A. is ex- Bank One Corporation, which merged with JPMorgan Chase & Co. in 2004. Consumers still refer to this bank with the old name, though they know that change occurred few years ago. Bank One still offers credit cards for consumers’ needs, and they are an important company on credit cards’ market in U.S.A. Bank One Credit Cards are categorized in the same manner as Bank of America credit cards are, by purposes, and if you would like to have a Bank One Credit Card you should visit the JPMorgan Chase & Co. website for more information. There is a wide offer for consumers and also if you have a good credit report and a high credit score you could get a good interest rate.

The credit score and the credit report are the most important evaluation tools used for creditors to check people who have applied for credit cards or any other types of loans. When you have applied for a card bank, your file is analyzed, and the information in your credit report is checked and also credit score is recalculated to see if the person is trustworthy.

The bank card

The bank card

Very popular in the U.S. are also GE Money bank credit cards and they are well known because the issuing company is a reliable corporation on the American market, and you can find very good offers among the products’ range at GE Money. You should check out GE Money credit cards offer and you should see if there is any product fitting your needs.

Taking into account credit/debt cards advantages on cash, you should analyze these companies’ offers and see if you find good products for your needs. Carrying a card will help you avoid walking with a lot of cash in your wallet/pockets, and notice that this payment method has raised security, in comparison with cash and cheques. No matter if you would like to have a Bank of America Credit Card, a Bank One Credit Card or a Credit Card from GE Money, first of all analyze your needs, and compare them with issuer’s offer. Don’t pick a product just because it is at promotion, and check if you really need it.

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Published April 7, 2011 | By Nations Loan | Posted in Banking

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