Many consumers sign up for credit cards that offer frequent flier miles every time they are used. The idea of free travel has increased the popularity of these credit cards. Due to the recent turmoil in the industry, airlines are not only charging for checking bags and eliminating some travel routes, but are also reducing the benefits for their credit cards. You may want to reconsider applying for one of the airline’s credit cards and look into getting an American Express Blue Cash card or one of the many other available options.
Click here to read more about the declining value of airline credit cards.
August 17th, 2008 by Matt
Credit cards are a convenient way to purchase items and offer many protections to the consumers that use them. Important to note that they also carry with them some disadvantages. It is no secret that credit card companies make money from late fees and overdraft fees. However, it might be surprising to some that nearly half of all credit card company revenues come from penalty fees. You should be cognizant of this fact when it comes to managing bills in order to ensure that you are not one of those having to pay penalty fees on your credit card.
Check out today’s link of the day from the Christian Science Monitor.
August 16th, 2008 by Matt
Taking on student loan debt is a prospect that many students are facing these days. This column by Laura Rowley covers some of the pitfalls of taking on too much student debt. Feel free to discuss her column in the comments section!
August 15th, 2008 by Matt
Please explain to me in laymen’s terms what capital gains taxes are and if there is a way to get around them at all legally. Thanks! – Henry
Capital gains occur when the shares of a person’s stock appreciate in value. The monetary difference between what the shareholder originally paid and the value of the shares when sold are the capital gains.
For example, at the beginning of 2003, Henry purchased 100 shares of Exxon Mobil (no investment recommendation intended) for $25 apiece. At the end of 2006, Henry’s shares are now worth $75 each, resulting in an increase of $50 per share. Because of his investment acumen, Henry finds himself with $5,000 ($50*100 shares) in capital gains.
To answer the second part of the question, there are a couple of scenarios where one can reduce the tax burden. The first involves holding shares for over a year in order to pay the current capital gains tax rate, which ranges from 5% to 28%. If a person decided to sell his shares after only three months, he would pay capital gains at his current income tax rate, which is usually significantly higher than the capital gains rate. Click here for more information about capital gains.
The second way to reduce the tax burden is by offsetting the gains with the sale of shares that currently have unrealized or paper losses. Selling your “losers†during the same year you sell your winners will help offset the tax liability. However, be careful not to sell a stock that has decreased in value solely to help offset capital gains. This advice is especially true if the company that currently has a paper loss has bright prospects for future gains!
August 14th, 2008 by Matt
Many consumers sign up for credit cards that offer frequent flier miles every time they are used. The idea of free travel has increased the popularity of these credit cards. Due to the recent turmoil in the industry, airlines are not only charging for checking bags and eliminating some travel routes, but are also reducing the benefits for their credit cards. You may want to reconsider applying for one of the airline’s credit cards and look into getting an American Express Blue Cash card or one of the many other available options.
