Currency & Banking Options

Hi everyone, thanks for taking the time to check in with us here at AmericaPrivateBanking.  I have been doing some reading the past couple of days, and thought I would share some interesting finds I came across about banking in the U.S. and what is available to all of us, now… that we once only dreamed of for the future.

  1. Global Electronic Currency

This sounds like something almost too good to be real, a currency in use all over the world, that is unregulated as of yet, and available for us all to use.  With an electric currency, there is no fumbling through your purse or wallet to find the right change, no going to the coin machine to cash in all your loose change.  This currency is an attainable alternative to the normal routine of banking we can use online every day.  This idea came from an anonymous digital programmer and hit the marketplace in 2009.  You may remember hearing more stories pick up about its uses and possibilities.  It has also come to be known as digital currency.   It exists as a way of exchanging money from person to person and has similar characteristics to actual currency, without the physical form.  What is particularly wonderful about this new trend is how a person can make a transaction immediately, without having to wait for the normal routines to take place.  This means that ownership of property can exchange hands with no borders to be taken into consideration.  Two subcategories that fall under digital currency are virtual currency and cryptocurrencies.  The money is real, and can be used to purchase actual items for use in daily life, but one striking difference is that it can also be used alone in specific networks of people and websites for specific purposes, like social networking and gaming online.  Another subcategory has come to be known as bitcoin, and has no centralized point of control for the flow of money.  Get it?  No big boss in the sky deciding how much of this there is available to the public.

In 1996, E-gold became popular and was actually backed by gold.  Later, in 2006, Liberty Reserve became available.  This was a way for users to transfer their money from one currency to another for a 1% fee on the transaction.  Eventually, these services were put to a halt by the U.S. government, as they were privately centralized and had been linked to many money-laundering schemes.  Since then, and recently, bitcoin has made a splash and is now the leading digital currency avaialable.

  1. Small Online Loans

One great advantage that the Internet has brought to our everyday life is an alternative to payday loans to cover those unexpected expenses.  One of these opportunities is called BillFloat.  This is a company started to offer loans to individuals who have bills they cannot pay.  The money that people are offered for their bills is not handed to them directly, but instead goes straight to the agency or company who is asking for the payment.  Therefore, there is less risk involved, as the money is definitely used for the intended purpose.  As opposed to payday loans, your first payment doesn’t have to come out of your very next paycheck, with this service you have an extra 30 days to make a payment and avoid a $10 late fee.  It cannot, however, be renewed like a payday loan or rolled over.  If the high interest rates of payday loans are a concern for you, BillFloat my be an ideal choice as they are on the lower end when compared to the brick and mortar company down the street.  With many payday loan’s APR going as high as 300% or even 700% of the actual amount, a loan through BillFloat will never go over 36%.  Using BillFloat is as easy as can be, and more hands on than going to a payday loan.  On the website you will enter basic information about the bill you want to pay, which can include insurance bills, auto loans, HOA fees, sanitation, electric, cable, gas, and satellite services.  You know, those bills that keep your live going every day.  To gain this loan, of course you will have to divulge some personal information like your name and social security number as well as banking information.  This is used to make sure you qualify for the service; however, one great feature is that there is no credit check to use BillFloat.  A payment summary and repayment summary are generated once you are approved for the loan and you are able to review it and make sure it is something you are comfortable with.  If this is a service you enjoy using and BillFloat sees that you are a dependable customer, they will extend the amount of credit they are able to “float” you!

  1. Local Currency

One currency trend that is new to America and many people have never heard of is the practice of small towns and communities around the country creating and legally printing their own money as a new option for the residents of these towns.  This idea originated from the Great Depression era in America as a way for business to flourish throughout the country.  While there are many advantages for the towns that have these currencies, the main reason customers love this option is that they can save money on the dollar.  Banks will often trade American money for local currency by shearing off an average of 5 cents per dollar.  Your 95 cents will now be worth about $1.00 in the Berkshires of Massachusetts, using “BerkShares.”  The idea behind the local currency is to put the control back in the hands of the individual communities.  The only drawback is that the currency is only traded through cash, so you can’t use them with your credit or bankcard.  Some examples of this popular method are the “Hours” currency from New York and the “Plenty” currency from Pittsboro, North Carolina.

  1. State-owned Banks

This is a trend that is gaining traction, with one state in America, North Dakota already owning its own institution, the Bank of North Dakota in Bismarck.  When you go to most any bank in America, the Federal Deposit Insurance Corporation backs the money you deposit.  The difference with State-owned banks is that the individual state is responsible for backing the money that is used in the facility.  While there are close to twenty other states looking at this as a model for their own finances, few of them have surpluses in their budgets like North Dakota, which made it possible to move forward with this idea and gain approval from the Federal Government of America.  Because state-owned banks are not private institutions, the real advantage to choosing a state owned bank is that they will be far less likely to take serious risks with the money in their care.  The Bank of North Dakota was founded in 1919, and when thousands of banks were collapsing around the country during financial crises throughout the years, this institution stood strong and lasted unbelievably well because they had less risk leveraged in remaining open.  Doesn’t the idea of having your money in a safer place sound like a great alternative?  Something that will get many people’s attention about state owned banks is that they are able to offer a wider range of loan flexibility with more competitive rates as well.  This feature would apply to mortgages, student loans, and even loans made to small businesses.

  1. Company Credit Unions

              One of the biggest disadvantages to contemporary banking is the slew of banking fees laid on the client.  One way many people avoid this is by turning to a credit union.  If you work for a really large company, it will most likely have a credit union to offer its employees, like American Airlines and IBM.  The normal services people look for in banks, such as checking accounts, savings accounts, and small to medium size loans are all available with this option.  Although these banks do not usually have the flexibility with hours of operation, they come with many noticeable benefits to offer their members.  Imagine if you were able to have money automatically deducted from your company check each month as a way of paying off loans or adding to your savings account.  This is available with company credit unions, ending the hassle of making these choices over and over again each month, and helping to keep consistency in your retirement savings routine.  In some places you can find credit unions that work with hundreds of different companies, improving the flexibility in the amount of services they are able to offer.

I mentioned the pool service that built my pool in my last blog post and would like to continue with that trend and give another local business some publicity. The owner is a close friend of mine whose business is actually part of the Tennessee Valley Federal Credit Union. As a small business owner the credit union provides him with more features and at a lower fee schedule than a big bank would. He learned about the advantages of using their service from me of course! Their business is a 24-hour emergency towing, roadside assistance, and repossession service based in Chattanooga, TN. Click here to visit their website if you ever need roadside help in or around the greater Chattanooga area. This is my way of giving back to the world and maybe helping some local business owners grow as well.

As I always say if you have any questions or need help with anything banking related you’re more than welcome to reach out to me via e-mail or our comment section below. I love talking to people and educating them on how to better manage their money and stretch it the farthest!

Should You Take Out A Second Mortgage?

Many people debate about whether or not to take out a second mortgage on their home to pay for upgrades such as pools, landscaping, or additional space.  You might wonder, “Is this a good idea?”  It all depends on your credit and how much your home is worth.

If your home is worth more than what you have in it, then you are a good candidate for a second mortgage and would be considered a low-risk candidate to mortgage lenders.  Before you apply for a second mortgage, however, you need to do your research.  Find the lenders who will give you the best rates and will work with you to ensure that you are getting the best deal.

Ideally you don’t want to put yourself into more debt without increasing the value of your home. I’ve seen people taking out second mortgages to pay for new toys like a boat….that is the worst possible thing you could do. Burying yourself in debt buying items you can’t afford is one of (in my opinion) the main reasons our economy nearly collapsed in 2008. Too many people were given mortgages that they truly couldn’t afford because the banks were able to back these with imaginary money. We all see how well that played out and since then it’s become increasingly difficult to acquire credit, especially for larger purchases such as house or a property.

If you’re going to take a second mortgage it should be for a practical purpose that actually provides you with a return on investment. Using this money to upgrade your home’s value would be the best course of action. Whether you need a new kitchen, a paved driveway, or even an in ground pool installed all of those make more sense than a frivolous purchase that will depreciate in value quickly. The lender is going to be much more willing to approve your mortgage application if they know the money is going to be used to increase to value of the home the mortgage is held against. Given that home values should continue to rise you could almost justify one of the above purchases as a solid investment. While it may not make you a bundle of cash I’m sure everyone in your home would greatly benefit from a new pool on a day to day basis. Sometimes your return on investment doesn’t have to be strictly financial gain. Life is short and whatever you can do to increase your ability to enjoy every day is a smart decision!

If you are tossing this idea around and want to make upgrades to your home we highly suggest looking at having a pool constructed. This can bring the biggest increase to your home and property value over just about anything else. I live in Chattanooga, TN and actually have an in ground pool myself. It’s complete with a wonderful stamped concrete deck that looks just like a real wooden deck! The guys at www.chattanoogapoolservices.com did my pool and I couldn’t have been happier with their work. Mention that you saw them on AmericaPrivateBanking and I’m sure you’ll be given the white glove treatment.

Enough about me rambling about how much I enjoy my pool and let’s get back to how you can get your own. Make sure you do your due diligence when searching for a lender and compare their rates and terms. Try to negotiate with them, tell them you’ve gotten a better offer from someone else and you’d like to see if they can beat it. (even if you have to bluff, this tactic can work wonders and not just in the mortgage game!) Make sure you’re clear that the loan will be used for home improvements and you could even bring an estimate from your local pool construction service so they know you’re serious. This should go a long way in getting you approved, especially if you don’t really have much equity in your home to borrow against.

If you run into any issues or would like some more personalized advice feel free to reach out to me via e-mail and I’ll be happy to assist. While I can’t promise to get you approved I can promise to do my best to guide in the right direction towards getting exactly what you want! I didn’t start a banking blog on a whim, I actually do have some valuable insider knowledge and am more than willing to share it with those in need.

Top 5 Reasons To Bank With Credit Unions

Most people have seen credit unions around their town or city, but many don’t know the difference between local or national banks and credit unions.  There are some great benefits to banking with a credit union versus a traditional bank.

Here are some great reasons to bank with credit unions:

1. Keep It Local:

When you bank with a credit union, you are essentially dealing with a small business.  So, in turn, credit unions are more understanding toward small business owners trying to get loans and promote the local economy.  By keeping it local and banking with a credit union, you are supporting your local economy in a multitude of ways, and because credit unions are ultimately controlled by the customers, or member-owners, the people working there take the time to develop more personal relationships with them which benefits everyone.

2. Lower Costs:

National banks are notorious for charging their customers much higher fees for everything from online banking, checking and savings accounts, overdraft charges and more.  Local credit unions are able to offer their members lower loan rates, free checking and savings accounts, and generally lower fees on almost all of their services.  This is one of the biggest reasons people switch over from traditional banks in favor of credit unions.

3. Membership:

When you join a credit union, your membership gives you the power to elect who will serve on the Board of Directors, and this ultimately gives you a say in how the organization operates.  Many credit unions serve people who are employed in a certain profession, such as teachers, postal employees, or firefighters.  Other credit unions offer potential membership to people who live in a certain geographic area.  Most people can join a credit union based on one or several of these factors.

4. Better Service:

Since most credit unions are smaller, they pay more attention to the customers that they see day in and day out.  Some places will even assign a specific teller or representative to work with you, and this can lead to a more personalized experience.  If this person knows you by name and has spent the time developing a relationship with you, they are more likely to help you get approved for a mortgage or get a better interest rate on a CD, among other things.  Better service leads to happy customers, and the overall environment of the credit union is much more positive than that of a big bank who cares more about shareholders than customers.

5. Flexibility:

If you have a recent foreclosure in your past, or your credit is in bad shape, credit unions are infinitely more forgiving than national banks in this regard.  Because credit unions offer more personalized service, they have more flexibility in determining if you are credit-worthy since the screening process is not automated as it is in larger banks.  The credit union representatives can look at factors other than credit scores, employment histories, or down payment sizes to determine if you qualify for a loan.  This is a huge advantage to anyone with a troubled credit history, especially when someone has been turned down by the bigger banks.

If you are looking to join a credit union, do some research and find out which one is the best fit.  With thousands of credit unions worldwide, chances are you’ll find a great match for your financial needs.

Should Small Businesses Change Their Banking Methods?

Many small businesses don’t know that they can use different methods of banking other than just going to their local bank and setting up a business checking account.  Business owners who don’t have brick and mortar shops can benefit from some of the newer, quicker methods of accepting money from their clients.

A good example would be limousine companies, who usually consist of an owner and several drivers.  Most limo companies book their clients over the phone, so they can’t readily accept a check or cash as payment.  With new technology, such as Square and other similar mobile card reader devices, businesses can accept payment immediately and on the go.

Businessman giving money on dark background

This would especially benefit limousine owners, taxi drivers, and other businesses without a physical store.  Many people don’t carry cash around anymore, so if the drivers have the mobile card reader on hand, they are more likely to get a tip.

When small business owners start thinking outside the box and utilizing these different payment acceptance methods, they will significantly grow their businesses.  As they start making more money, they can eventually work with private bankers who will help them manage their new found wealth.

Limo companies often have to turn down business because they don’t have enough limos or drivers to provide service to everyone who calls in to book something.  Imagine if they were to have enough capital to purchase more limos, such as Lincoln Navigator stretch SUVs, Hummer limos, towncars, and stretch limousines.  They could also hire more drivers to handle to influx of new business.

If you own a small business, especially one without a physical location, you should consider using more portable payment methods.  You will bring in more money, pay less processing fees, and gain more customers.  This will ultimately grow your business, and you will have plenty of money to invest back into your business, or put toward your retirement.