Here's a 9-step guide to calculating your credit card interest - We Are The Mighty
MIGHTY MONEY

Here’s a 9-step guide to calculating your credit card interest

When it comes to credit cards, understanding your interest rate and how it works can be the difference between staying out of debt with an excellent credit score and falling behind in your payments and dipping to sub-par credit score ratings.

Your interest rate is the amount your credit card charges you to borrow money. If you pay your credit card balance in full and on time, you generally don’t need to worry much about your interest rate, which is expressed as an annual percentage rate (APR).

But if you’re carrying a balance on your credit card, you’ll notice you owe more over time, and that’s because of the interest rate. Credit cards are notorious for being one of the most expensive types of consumer debt, with an average interest rate of about 17%.


While in most cases you probably don’t need to calculate your credit card card interest rate — your statements should clearly reflect how much interest is owed on any unpaid balance and your APR should be clear on your statement and your bank’s website — you may want to get an idea of how much your balance is costing you on a day-to-day basis.

Here’s a 9-step guide to calculating your credit card interest

Here’s a quick cheat sheet to help you when it comes to calculating your own credit card interest rate.

1. Pull up your credit card information

Log on to your financial institution’s website or pull out your latest statement (if you haven’t switched to paperless billing yet, get on that!) to find the pertinent information you’ll need to calculate your credit card interest.

You’ll need to find:

  • your purchase APR
  • the number of days in your billing cycle

2. Get to know the terms

The way your credit card works boils down to a few different terms, two of which include annual percentage rate (APR) and, more generally, your interest rate.

Although APR stands for annual percentage rate, your credit card company uses this percentage number to determine the interest you’ll be charged each month when you don’t pay your credit card off in full and carry a balance.

Keep in mind that your credit card may have different types of APR, like a:

  • purchase APR (usually applied to the overall purchases you make with a card),
  • balance transfer APR (usually applied to any balances transferred from another credit card)
  • introductory APR (usually applied to purchases made during the promotional period after opening a new credit card)

3. Find your purchase APR

In order to calculate the interest you owe on any leftover balances on your credit card, you’ll need to find your purchase APR. If you can’t find this information readily, try calling your bank, or click on your card’s terms and conditions section.

Here’s a 9-step guide to calculating your credit card interest

4. Determine your average daily balance (or balance subject to interest)

This is the aggregate total of what you spent and either paid off and/or were refunded every day throughout your billing cycle, divided by the number of days in your billing cycle.

If you’ve always paid your purchases in full by the due date, you won’t have any interest payments to make and your average daily balance isn’t really a factor. However, if you plan to carry a balance, to calculate your average daily balance when you need to determine interest, log onto your bank account online and track the charges and credits that went through on each individual day, creating a rolling total as you move through the days of your billing cycle.

This will provide you with an aggregate total that you can then divide by the number of days in your billing cycle (which you’ll find in step five).

5. Get the number of days in your billing cycle

Different credit cards have different amounts of time between billing cycles. A typical credit card statement is paid out in 30-day billing cycles.

6. Divide your APR by 365

Since your APR is your annual interest rate, you’ll need to divide your APR by the number of days in the year to get your daily interest rate. So for example, an APR of 13.99% would become: 0.1399/365 = .00038 daily interest.

7. Multiply your daily rate by your average daily balance

Once you know what you’re charged daily for interest, you can multiply that number by your average daily balance to find the daily interest you’ll owe. So for example, if your leftover balance after paying your credit card is id=”listicle-2639175991″,000, you would get: .00038 x id=”listicle-2639175991″,000 = .38.

Here’s a 9-step guide to calculating your credit card interest

8. Multiply your daily interest rate by the number of days in your billing cycle

If you determined that you have a 30-day billing cycle, then the credit card interest you would owe on a balance for the 30-day cycle in this example would be: .38 x 30 days = .50 in interest.

9. Ask about your credit card’s grace period allowance

Some credit cards offer a grace period between when items are purchased and when they absolutely need to be paid off before accruing interest. Check in with your bank to learn if you have a grace period on your accounts and what the exact grace period is in order to better avoid paying interest.

Also read:

This article originally appeared on Business Insider. Follow @BusinessInsider on Twitter.

MIGHTY MILSPOUSE

Organizations offer financial support for families impacted by COVID-19

Military support organizations have distributed thousands of dollars in financial assistance to service members and their families impacted by COVID-19, with services available for living expenses, emergencies, education and more. The application process, eligibility requirements and availability of funds vary by organization. Below is a breakdown of information provided by officials from each organization:


Here’s a 9-step guide to calculating your credit card interest

AIR FORCE AID SOCIETY

The Air Force Aid Society has distributed ,414 in assistance for financial needs attributed to COVID-19.

Services available: Emergency assistance through no-interest loans and grants; need-based educational grants, merit-based scholarships; and on-base community programs.

How to apply: Our central point for seeking assistance is the local base Airman Family Readiness Center. They have all been declared mission-essential by local commanders. All of them can and do take applications online and any contact is minimized. For members not near a base, we have reciprocal with our fellow relief societies. They will render assistance and we will reimburse them (see the list below). This mutual support extends to our partners at the American Red Cross, particularly for those not near any military installation. Airmen can call the dedicated American Red Cross Military Service line and be assisted.

For airmen not near a base, the Air Force Aid Society has reciprocal agreements that allow you to receive assistance through these other agencies:

  • Army Emergency Relief (located at Army installations, worldwide)
  • Coast Guard Mutual Assistance (located at Coast Guard installations, worldwide)
  • Navy-Marine Corps Relief Society (located at Navy installations, worldwide)
  • American Red Cross Service to the Armed Forces: call 877-272-7337

Visit https://afas.org to learn more about the Air Force Aid Society.

Here’s a 9-step guide to calculating your credit card interest

ARMY EMERGENCY RELIEF

Army Emergency Relief has supported 128 soldiers with 2,000 disbursed in grants and zero-interest loans related to COVID-19, as of the beginning of May, according to AER officials.

Services available: Active-duty soldiers and their families are eligible for the full range of 30+ AER benefit categories if they were impacted by the DOD travel ban or PCS stop movement order. They can apply online here.

Additionally, in March, AER extended travel ban/stop movement benefits to non-Title 10 reserve and National Guard soldiers who had been impacted. More recently, AER also turned on new benefits for Title 10 and Title 32 soldiers who have been activated for any length of time by the president or their state’s governor to help with the COVID-19 response. The new Title 10/Title 32 benefits are active whenever the activation begins and for 30 days past the end of their activation. Any soldiers who are Title 10/Title 32 can apply for help with basic living expenses and/or personal transportation costs.

How to apply: Recognizing that face-to-face meetings to apply for assistance may be limited or not advisable, AER has arranged a new process to allow for soldiers to electronically submit requests for assistance. Soldiers can go to the AER website to determine the easiest way to get benefits. Soldiers who cannot get in touch with a local AER office for whatever reason can also submit a request 1) by contacting one of the other military aid societies and/or 2) through the American Red Cross by calling 1-877-272-7337 and selecting option 1 for financial assistance.

Visit https://www.armyemergencyrelief.org/covid19/ to learn more about Army Emergency Relief.

Here’s a 9-step guide to calculating your credit card interest

NAVY-MARINE CORPS RELIEF SOCIETY

Navy-Marine Corps Relief Society provided COVID-19-related relief to 502 clients with over 3,000 in interest-free loans and grants, as of this month.

Services available: The services we provide are to assist with the financial needs that arise from the current pandemic, whether that is assistance with paying bills, rent etc. We currently offer a COVID-19 Rapid Response for up to 00; no lengthy application and no need for financial counseling. We also have our traditional loan services available for greater needs

How to apply: Processes for applying vary by location, visit www.nmcrs.org/locations to find out more.

Visit https://www.nmcrs.org to learn more about Navy-Marine Corps Relief Society.

COAST GUARD MUTUAL ASSISTANCE*

Coast Guard Mutual Assistance serves the entire Coast Guard community. To date, it has worked with 438 clients and distributed 2,034.97, according to its website.

Services available: Varying rates of assistance are available to those with lost wages, members in medically-induced quarantine, and travel fee reimbursement. Additional assistance exists for childcare and education assistance, and medical assistance. The full list can be viewed here.

How to apply: Find a local CGMA representative at https://www.cgmahq.org/locations.html.

Visit https://www.cgmahq.org to learn more about Coast Guard Mutual Assistance.

*Information obtained from its website

This article originally appeared on Military Families Magazine. Follow @MilFamiliesMag on Twitter.


MIGHTY MONEY

This is why cash bonuses are different for each troop

You’ve probably seen it plastered all over billboards by now. The Army is offering “up to $40k in an enlistment bonuses!” Some hopeful recruits will learn that they can, in fact, get that down-payment for a Corvette. Another guy could come in that same day and walk out with just the “honor of serving.”

What’s the difference here? Why does one guy get a ‘vette and the other nothing but a hardy handshake? The determination process is kind of convoluted, but it all comes down to the military trying to get the right people in the right places.


Here’s a 9-step guide to calculating your credit card interest

I mean, it’s better to have a brilliant lawyer become an infantry officer than to have an idiot defending troops at a court martial, right?

(U.S. Navy photo by Lt. Ayana Pitterson)

Troops get a bonus based on what they bring to the military, how long they plan on staying in, and when they sign the contract.

So, if you have just a high school education and you want to enlist in a field that’s pretty crowded at a time when everyone is trying to get in for just the 3 years required to get full access to the GI Bill, your bonus prospects are looking pretty bleak. If you have a college degree and plan to use said degree to benefit the military at a time when it’s almost impossible to find others like you — the cash is yours.

With that being said, the stars need to align for everything to work out perfectly. Even if, say, you have a doctorate in law and decide to use your skills in JAG, if you arrive a time when the Army needs more infantry officers, you’re going infantry. Uncle Sam will always have the final say.

Here’s a 9-step guide to calculating your credit card interest

Obviously I’m making fun of water dogs (because they’re so used to enduring jokes by everyone that they won’t flip sh*t in the comments section).

(U.S. Marine Corps photo by Cpl. Adam Dublinske)

Highly trained and highly skilled troops, like cyber security NCOs, often leave the service and jump into higher-paying, civilian-equivalent jobs. The troop that was once the backbone of their unit is now working the IT help-desk at Google, dealing with a quarter of the stress for double the pay. The civilian sector is gunning for these troops by offering sweet cash deals — and the military can’t sustain this kind of personnel hemorrhaging.

If the military didn’t offer retention bonuses, those cyber security NCOs would all jump ship. Suddenly, offering that bonus of 0,000 over a four-year period for an indefinite contract doesn’t seem too unreasonable.

All that being said — and this isn’t to diminish the service or need of anyone who didn’t get an enlistment or a reenlistment bonus — the more competitive your specific skill set is to the outside world, the more of an incentive the military will offer to keep you in.

MIGHTY MONEY

There is no one in NFL history more devoted to veterans than Jared Allen

During his 12-year NFL career, Jared Allen was a heavyweight defensive player, making his presence known on multiple teams, especially the Minnesota Vikings. It was as a Viking that Allen went on a trip that touched his heart and soul, touring with USO to visit servicemen and women deployed overseas. He even told the assembled troops as much.

That’s what led to Jared Allen’s Homes for Wounded Warriors (JAH4WW).


“It has been one of the best experiences of my life – something that I’ll never forget,” Allen said of his time visiting troops. “We, as players, probably get more out of it than you do as soldiers and Marines.” Even though his grandfather and younger brother were Marines, the experience changed Allen, inspiring him to create his own charity to support America’s wounded.

Even after he was traded to Chicago and later Carolina, Jared Allen’s Homes for Wounded Warriors carried on no matter where Allen was playing. Even though he’s listed as one of the 50 Greatest Minnesota Vikings of all time, the uniform he wore on the field wasn’t what defined him. If you ask the man himself, he’ll tell you what he does off the field is what matters most.

“Football is what I do, it’s not who I am. The things that we do today — to impact these lives, to change people’s lives — can last forever,” he told SB Nation. “We have a great responsibility to the community that supports us, and to our veterans who allow us to do what we do.”
Here’s a 9-step guide to calculating your credit card interest

Former Vikings defensive end Jared Allen presents free Super Bowl LII tickets to eleven-year-old Tallon Kiminski, son of Minnesota Air National Guard member, Maj. Jodi Grayson.

(U.S. Air National Guard photos by Capt. Nathan T. Wallin)

When it comes to helping wounded veterans, Jared Allen is a godsend. On its website, the JAH4WW says, “Jared was moved by the commitment, dedication, and sacrifices that our soldiers make every day to protect our freedom. He wanted to say thank you to every soldier in the only way that Jared knows how. By embracing the conflict and making a positive life-changing difference in the lives of those who need it most, Jared and his JAH4WW will help make life for wounded vets just a little bit easier.”

Talk is big, but in practice, Jared Allen is much, much bigger than just words. Since its founding in 2009, his organization has helped raise funds to build or revamp homes for injured veterans of Iraq and Afghanistan, raised tens of thousands of dollars from corporations like Wal-Mart and Proctor Gamble to provide everyday household goods for veteran families in need, and on Veterans Day, you can always find the now-retired Allen doing something to help veterans in need.

Here’s a 9-step guide to calculating your credit card interest

NFL player Larry Fitzgerald signs an autograph for troops from the Washington Army National Guard at Camp Ramadi, Iraq, along with Will Witherspoon from the St. Louis Rams, Jared Allen from the Minnesota Vikings, and Danny Clark from the New York Giants in 2009.

(U.S. Army photo by Staff Sgt. Emily Suhr)

“I knew I had to do something to serve our country,” Allen once said of the Jared Allen Homes for Wounded Warriors. “I feel the best way to do that is serve those who serve us.”

If you’re a veteran of the wars in Iraq or Afghanistan who is in need of housing or alterations to suit your disability, apply to Jared Allen Homes for Wounded Warriors on the organization’s website. Jared Allen is one guy you definitely want in your corner.

Articles

This coding boot camp is a great way to get started with a tech career

Here’s a 9-step guide to calculating your credit card interest
(Photo provided by Paul Dillon)


Coding boot camps are programs that teach programming skills. Typically, these boot camps are short (12 weeks to 7 months), often intense (sometimes requiring 90 hours/week), and usually designed to teach beginners enough so that they can become professional junior software developers.

And, the demand for their graduates is robust and growing. According to Dave Molina, a former U.S. Army captain, and the founder and executive director of Operation Code, a non-profit online, open source coding program for active duty military, veterans, and their families, “There are over 200,000 computing jobs open annually in the U.S., with 30,000 of those jobs filled by computer science graduates; however, that number is expected to rise to 1.2 million by 2020. Meanwhile, we have 250,000 U.S. military personnel that exit the service annually, many of whom possess the discipline and aptitude to fill those jobs, if they had some training in computer coding skills.”

These are generally good paying jobs. Rod Levy, the founder and executive director of Code Platoon, a non-profit coding camp in Chicago for veterans, states that “starting salaries for graduates coming right out of the boot camp are about $65,000, rising to about $100,000 after five years of experience. Placement rates for graduates are high.”

So, why are coding boot camps a good option for veterans?

Levy lists several reasons: “As we know, veterans often struggle ‘translating’ their military experience to a civilian audience. Coding boot camps solve this problem by giving veterans job-ready skills that are well understood in the job marketplace”, he said.

“Even more important”, Levy added, “successful software developers typically need to work well in teams, demonstrate grit and resilience, and have to be able to systematically problem-solve. These characteristics are often found in veterans.”

Molina supports this view. He said, “Military veterans have the right set of skills to become programmers. Technical expertise, emotional resilience, psychological persistence, and teamwork—these are the qualities found in our best and brightest and they are the qualities of the best programmers.”

There are coding boot camps to serve about every veteran’s needs. These various coding boot camps are distinguished by the following characteristics:

  • Level of intensity. “Immersive” is around 60 – 80 hours a week; “full-time” can be 30 to 70 hours a week; “part-time” is typically 10 to 30 hours week.
  • In-person or remote. In-person means you spend the majority of the training on-site, with instructors and fellow students on premises. Remote means you do the training on your computer at home regardless of location.
  • Technology stack. Most coding boot camps teach web development or mobile development. Web development means you learn to write applications for the web—some focus on the Ruby on Rails, Python, Node.js or .NET. Mobile development means developing native apps, for example on iPhones or Androids. The most popular technology stacks being taught are Ruby on Rails, Python/Django, Full Stack Javascript, C#/.Net, and Java.
  • Internships/Job Placement. This one is obvious. Coding boot camps that offer internships and/or have high job placement rates for entry-level software developers should be given serious consideration.
  • Population focus. A few coding boot camps serve specific populations and look to tailor their programs to those populations, as well as creating a “safe” space where members of those populations may feel more comfortable. There are coding boot camps just for women, minorities and veterans, to name a few. Obviously, veterans should choose a boot camp that caters to their specific needs, when possible, and leverage their New GI Bill wherever possible.

Given all of these various aspects of coding boot camps, what should a veteran look for in choosing a coding boot camp? At a minimum, veterans should consider the following items when selecting a boot camp:

  • Different boot camps are meant to serve different interests. Remote online boot camps, like Thinkful.com, are much more convenient than in-person boot camps, such as Code Platoon, where you have to move to Chicago for a few months. The trade-off for that convenience is that it may be very hard to stay motivated, understand the material thoroughly and ask your peers and instructors questions. In-person boot camps, on the other hand, offer the immediate feedback and support that can be missing in remote programs, although they may not be located near when the veteran lives or works. Consequently, they may be much more expensive to attend.

A representative list of code schools and scholarship information can be found on the Operation Code website at the following link: https://www.operationcode.org/code_schools

  • If your goal is to learn skills for a new career in programming, look for a program that will put you through at least roughly 1,000 hours of coding/instruction, at an absolute minimum. Whether this is in an immersive 12-week program at 80 hours a week, or a year-long program at 20 hours a week is up to you; but 1,000 hours of focused, directed learning in programming is the bare minimum needed to become a competent programmer.
  • The choice of technology stack is often a source of much discussion, with trade-offs discussed around the number of jobs versus the learning curve needed for various languages. In the end, there are many jobs in each of the languages/stacks that are being taught. Always look for a coding boot camp where the programming stack is in substantial demand, with many jobs available immediately upon graduation.

Cost is an important consideration that the veteran needs to keep in mind in selecting the right code camp to meet their needs. Most coding schools offer scholarships to veterans to help to defray the costs. At Code Platoon, for instance, the tuition is $13,000 for the full program. However, all veterans accepted into the program receive a scholarship of $10,500, bringing the total cost of the program to the veteran to $2,500. Travel expenses to and from Chicago, and living expenses while attending the program in Chicago, are extra.

There is no charge for Operation Code programs and services for active duty military, National Guard and reserve troops, veterans, and their spouses. Information on conference scholarships can be found on the Operation Code website: https://operationcode.org/scholarships.

What about using the Post-9/11 GI Bill to attend one of these coding camps? Currently, 5 code schools across the country accept the New GI Bill: Sabio (Los Angeles), Code Fellows (Seattle), Galvanize, RefactorU and SkillDistillery (Colorado).

Most coding schools, however, are not eligible to receive GI Bill funds. Code Platoon hopes to be eligible for GI Bill funding within a year. Each state has its own authorizing agency that approves programs for participation in the New GI Bill, with two years of school operating experience generally required. More information on this subject can be found on the Operation Code website at https://operationcode.org/code_schools.

Internships, mentoring partners, and job placement are all important considerations for the veteran in selecting a coding camp. Code Platoon, for instance, pairs its students with two industry partners, who work with the student during the entire program.

Operation Code offers its military veteran members ongoing software mentorship through its Software Mentor Protege Program, where its members get help with their code, pairing online in a peer-to-peer learning environment with professional software developers for lifelong learning and understanding in an inclusive and nurturing environment.

And, most coding schools help their graduates with job placement assistance, upon completion of their programs.

It is obvious that veterans need to consider a lot of things before applying to a coding camp.

The different types of programs, whether on-site or online, need to be determined. The reputation of the coding camp, the success of its graduates, costs, potential use of the GI Bill, scholarships, internships, mentoring and job placement assistance all need to be carefully researched.

But, one thing is perfectly clear about obtaining the skills necessary to be a successful computer programmer. It offers the opportunity to have a lasting career in a growing, well-compensated field that’s going to change the world.

And, what could be better than that for veterans and their families?

Watch this introduction to Code Platoon:

And now watch this introduction to Operation Code:
Here’s a 9-step guide to calculating your credit card interest
Paul Dillon is the head of Dillon Consulting Services, LLC, a firm that specializes in serving the veteran community with offices in Durham and Chicago. For more visit his website here.
MIGHTY MONEY

Six things to consider with the new payroll tax deferral

More than a million service members had an increase in their September mid-month pay because of the payroll tax deferral program set forth by President Trump. The presidential memorandum directs employers to stop withholding payroll tax until the end of the year to “support working Americans during these challenging times.”

While most civilian companies have declined to implement this directive, the federal government has given service members and civilian employees who make less than $4,000 biweekly or less than $104,000 annually no way to opt-out.

So how does this affect you and your family?


Six things military families might want to consider with the new payroll tax deferral

You will see a boost in pay – but there’s a BIG catch.

For those who are eligible, pay will go up 6.2 percent, which is the amount of payroll tax that is normally paid on wages. This raise in pay will continue through December 31, 2020.

The potential pitfall will come in the new year, between January and April 2021, which is when the taxes that are currently being deferred are slated to be paid back, possibly by taking out twice the normal payroll tax amount each pay period.

The payback will come at a particularly bad time, since most families struggle in the first few months of the new year, while holiday spending bills come due and they wait for their tax refunds.

Do you invest in the TSP, an IRA, or a 529? You may get a nasty surprise in January

While I am a big proponent of automatic investing through payroll deduction or bank transfer since it allows you to “set it and forget it,” this is one instance where a good savings habit could potentially trip you up.

But service members (and their bank accounts!) may be in for a shock if they have their “usual” contributions to the TSP and other investments withdrawn from their pay in January and then have the additional payroll tax deducted as well.

The annual pay raise may offset some of the pain, but it’s not confirmed yet

The proposed defense authorization bill would give service members a 3 percent pay increase in 2021, so this could help ease the pain of paying back extra payroll taxes next year. However, the final bill has not yet been passed by Congress.

Adjusting withholding doesn’t help.

There has been some talk on the internet about adjusting withholding taxes to somehow make up for the payroll tax. This is not a great solution, since the two taxes are not the same. If you increase your withholding, that’s going toward your future income tax bill, not payroll taxes, so it won’t offset January’s tax payback.

If you overpay in withholding tax, you will have to wait until you file income taxes to recoup it.

Save the extra, and save yourself some pain next January

The easiest way to make sure that repaying the deferred payroll tax isn’t a painful experience is to set the extra money aside. The DFAS website says that military members can estimate their payroll tax by taking their monthly base pay and multiplying it by .062 and repeating that process for the four months that the tax is deferred, September through December.

This money can then be saved in a separate, yet easily accessible account. Unfortunately, interest rates are currently very low, so you won’t earn very much interest in such a short time, but at least the money will be available early next year, when it’s due to be repaid.

Getting out? You still have to pay it back

Retired pay is not affected, since it is not earned wages. If a service member leaves the military before the taxes are repaid, they are still on the hook for repayment. Failure to repay these taxes in a timely manner may result in penalties and interest fees.

While it’s possible that service members won’t be required to repay the deferred tax, it’s best not to count on that: it would take action by Congress in order to do that. But if you’ve set aside the funds already, and it turns out that the amount is forgiven, then you will be well on your way to establishing an emergency fund or adding to your existing savings.

DFAS has a dedicated page on the Social Security Payroll Tax deferral. If military families have more questions or concerns, they should contact their installation financial readiness personnel or Military OneSource.

For more savings strategies and inspiration, follow us on social media and visit militarysaves.org and take the Military Saves Pledge, the start of your own personal spending plan.


This article originally appeared on Military Families Magazine. Follow @MilFamiliesMag on Twitter.

MIGHTY MONEY

A full picture of interest rates: why points and fees matter

“What is your interest rate?” This is the most frequently asked question in the lending world. Without a doubt, personal experience compounded with all of the social media questions prove the point every single day. Because I take an educator-first mindset, it is imperative to explain why this is only one small piece of a much larger puzzle when comparing lenders.


An interest rate can be manipulated to look better than it actually is by throwing on origination fees, processing fees, underwriting fees and points to lower the rate. All of these things mean you are actually paying to have a lower interest rate. The VA regulations allow for up to one percent of the loan amount to be charged by the lender in addition to reasonable discount points. This one percent is outside of the other fees paid to outside parties such as an appraisal, credit report, title examination, title insurance and more. This flat (up to) one percent is specifically designed to cover the lender’s services.
Here’s a 9-step guide to calculating your credit card interest

While the VA may allow up to a one percent fee, that doesn’t mean that it is necessary. Many lenders, including myself, will never charge a veteran a fee for doing a VA loan. It’s just not how we envision taking care of each other looks like. Additionally, many financial institutions that typically do charge this fee will occasionally run promotions that eliminate it for a short window of time. It is important to read the fine print when looking up any advertised interest rates, as many will have a disclaimer such as “Rates quoted above require a 1.00% loan origination fee. The origination fee may be waived for a 0.25% increase in the interest rate”.

The origination or other lender fees like in the above scenario are similar to discount points, but are not tax deductible. This is yet another downside of lender fees. Discount points, however, are a tax deductible fee in exchange for a lower interest rate. One point is equal to one percent of the loan amount, and will reduce the interest rate by .25%. Let’s practice some mortgage math on a scenario I pulled up today from an undisclosed lender’s website:

“VA 30 yr fixed loan – Interest rate as low as 3.625% – discount points 2.00

*Rates quoted above require a 1.00% loan origination fee. The origination fee may be waived for a 0.25% increase in the interest rate”

As the disclaimer states, to not pay an origination fee of 1%, the rate goes up by .25%. Now the rate is at 3.625 +.25 = 3.875 … but we still have those two points to deal with!

2 points *.25 each = .5 increase to rate without paying for them. 3.875 +.5= 4.375

That 3.625 advertised rate comes with so many points and fees that it is actually a TRUE rate of 4.375 – a far cry from what was seen on the surface. In a 0,000 home loan, this would make the difference of 9 each and every month if you chose not to pay any of those fees, OR ,000 upfront, out of pocket in addition to the regular closing costs.

Even if you have a motivated seller offering to pay your closing costs, you have a choice to use that money to pay a lender’s fee or you could use that money to buy down points with a lender that doesn’t charge. That 1% lender’s fee could actually be you saving .25% off of the interest rate elsewhere if the seller’s contributions aren’t already maxed out. This is just one way to make your closing cost contributions work for your bottom line instead of your lender’s. All financial matters are based on trust, and this is likely your largest life purchase, so it’s important to be in the know!

Articles

How life changed in one moment for this Marine


At age 18, Cpl. Andrew Richardson was serving in the Marine Corps in Iraq. His squad maintained a perimeter around a medical sanctuary where local civilians could get treatment. Doing so gave Richardson an overwhelming sense of satisfaction and value.

Returning to civilian life, Richardson struggled to find that same sense of value. For five years he floated from job to job, doing construction and working as a roadie and security guard, among other gigs.

Today, he enjoys a fulfilling career in the tech industry, working at Microsoft, and has discovered a passion for programming — all thanks to a chance encounter while tending bar and an intensive 18-week technical training and career-development program.

Curious? Check out the video to see Richardson’s story and then go learn more about Microsoft Software & Systems Academy.

Articles

A Fort Bragg soldier won $2 million and definitely won’t blow it on these 9 things

On Jan. 13, Fort Bragg Army Reserve soldier Johnny Charlestin was celebrating his birthday when he learned that a $3 Powerball ticket he bought was a $2 million winner.


“I didn’t believe it, it was a feeling I’ll never forget,” Charlestin said in a press release from the N.C. Education Lottery. “It’s the best birthday present I’ve ever had.”

Charlestin then decided to leave the public spotlight, which is one of the things experts recommend lottery winners do. Hopefully this means he’s smart enough to invest the money wisely.

But since he’s a Fort Bragg soldier, there’s also a real chance he’ll spend his money this way:

1. Taxes will be taken out

Here’s a 9-step guide to calculating your credit card interest
Photo: flickr/Ken Teegardin, Senior Living Center

30.75 percent, or $615,000 goes right back into government coffers. That leaves the enterprising soldier with $1,385,000.

2. Dip and jerky

Here’s a 9-step guide to calculating your credit card interest
Photo: Wikimedia Commons/OAC

The winner’s first stop will be base shoppette where he’ll pick up the proper amount of dip for millionaire soldiers, as well as a little jerky to much on.

3. New car

Here’s a 9-step guide to calculating your credit card interest
GIF: Giphy

This is an obvious stop, but for some reason, the new millionaire will still take out loans of 20 percent or more. Over the next five years, that b-tchin’ Corvette will cost him as much as a Lambo would’ve if he’d paid cash.

4. Electronics store

Here’s a 9-step guide to calculating your credit card interest
Photo: Wikipedia/Chris McClave

Every new video game console, 10-20 games for each, a huge TV, and surround sound. A few movies will round out the purchase, about 500 of them. Most of the movies are about World War II paratroopers.

5. Adult “book” store

Here’s a 9-step guide to calculating your credit card interest
Photo: flickr/leyla.a

This is for other movies. We will not explain further.

6. House

Here’s a 9-step guide to calculating your credit card interest
Wikipedia/Andrew (Tawker)

Finally, the soldier will find a new place to live. Unfortunately, he’ll only realize after the fact that his surround system doesn’t properly fill the new entertainment room with sound. Since he threw away the receipts, he’ll buy a new one and give the old system to a groupie (he’ll have those now).

7. Energy drinks

Here’s a 9-step guide to calculating your credit card interest

This will take up more money than any non-soldiers would expect.

8. All the booze

Here’s a 9-step guide to calculating your credit card interest

There are roughly infinity liquor stores at the Fort Bragg perimeter, as well as a Class VI store on base. These will become empty.

9. Noise citations

Here’s a 9-step guide to calculating your credit card interest
Photo: Wikipedia/Highway Patrol Images

Once the party starts, Fayettnam police officers will be visiting every 15 minutes or so and writing a ticket. By the end of the night, the lottery money will be almost played out.

By the second week, the former millionaire will be attending finance classes on base and applying for an Army Emergency Relief loan to make his payments for the Corvette.

MIGHTY MONEY

The feds crack down on fake veteran charities

You may have seen them standing outside convenience stores, those guys dressed in camo that vaguely resembles a uniform. They have signs saying claiming they are charities that help veterans. Are they legit?

Well, not all of them are.


The Federal Trade Commission, along with law enforcement officials and regulators from offices in every state, DC, American Samoa, Guam and Puerto Rico, announced more than 100 actions and a consumer education initiative in “Operation Donate with Honor”.

The action was a crackdown on fraudulent charities that con consumers by falsely promising their donations will help veterans and service members.

“Americans are grateful for the sacrifices made by those who serve in the U.S. armed forces,” said FTC Chairman Joe Simons. “Sadly, some con artists prey on that gratitude, using lies and deception to line their own pockets. In the process, they harm not only well-meaning donors, but also the many legitimate charities that actually do great work on behalf of veterans and service members.”

Two charities face federal charges

Here’s a 9-step guide to calculating your credit card interest

(Flickr photo by Keith Cooper)

Help the Vets

Neil G. “Paul” Paulson, Sr. and Help the Vets, Inc., (HTV) will be banned from soliciting charitable contributions under settlements with the FTC and the states of Florida, California, Maryland, Minnesota, Ohio and Oregon, for falsely promising donors their contributions would help wounded and disabled veterans.

The defendants were charged with violating federal and state laws related to their actions. According to the FTC’s complaint, HTV did not help disabled veterans, and 95 percent of every donation was spent on fundraising, administrative expenses, and Paulson’s salary and benefits.

Operating under names such as American Disabled Veterans Foundation, Military Families of America, Veterans Emergency Blood Bank, Vets Fighting Breast Cancer, and Veterans Fighting Breast Cancer, HTV falsely claimed to fund medical care, a suicide prevention program, retreats for veterans recuperating from stress, and veterans fighting breast cancer.

In addition to the ban on soliciting charitable contributions, the proposed settlement order bans Paulson from charity management and oversight of charitable assets. To ensure that donors to HTV are not victimized again, HTV and Paulson must destroy all donor lists and notify their fundraisers to do so.

The order imposes a judgment of .4 million, which represents consumers’ donations from 2014 through 2017, when HTV stopped operating. The judgment will be partially suspended when the defendants have paid a charitable contribution to one or more legitimate veterans charities recommended by the states and approved by the court. Paulson must pay id=”listicle-2591219370″.75 million – more than double what he was paid by HTV – and HTV must pay all of its remaining funds, ,000.

Here’s a 9-step guide to calculating your credit card interest

(Photo by Steven L. Shepard)

Veterans of America

The FTC charged Travis Deloy Peterson with using fake veterans’ charities and illegal robocalls to get people to donate cars, boats and other things of value, which he then sold for his own benefit.

The scheme used various names, including Veterans of America, Vehicles for Veterans LLC, Saving Our Soldiers, Donate Your Car, Donate That Car LLC, Act of Valor, and Medal of Honor. Peterson allegedly made millions of robocalls asking people to donate automobiles, watercraft, real estate, and timeshares, falsely claiming that donations would go to veterans charities and were tax deductible.

In fact, none of the names used in the robocalls is a real charity with tax exempt status. Peterson is charged with violating the FTC Act and the FTC’s Telemarketing Sales Rule.

At the FTC’s request, a federal court issued a temporary restraining order prohibiting Peterson from making unlawful robocalls or engaging in misrepresentations about charitable donations while the FTC’s enforcement action is proceeding.

State enforcement actions

States also identified and charged several charities and fundraisers who sought donations online and via telemarketing, direct mail, door-to-door contacts, and at retail stores. These groups falsely promised to help homeless and disabled veterans, to provide veterans with employment counseling, mental health counseling or other assistance, and to send care packages to deployed service members.

Some actions charged veterans charities with using deceptive prize promotion solicitations. Others targeted non-charities that falsely claimed that donations would be tax deductible. Some cases focused on veterans charities engaged in flagrant self-dealing to benefit individuals running the charity, and some alleged that fundraisers made misrepresentations on behalf of veterans charities or stole money solicited for a veterans charity.

Nationwide education campaign

As a result of these actions, the FTC and its state partners are launching an education campaign to help consumers avoid charity scams and donate wisely.

The FTC has new educational materials, including a video on how to research charities, and two new infographics. Donors and business owners can find information to help them donate wisely and make their donations count at FTC.gov/Charity.

This article originally appeared on Military.com. Follow @militarydotcom on Twitter.

MIGHTY MONEY

Top 9 VA Loan benefits

So, you’ve been told that you should use your VA Loan for your home purchase, but the question is: Why? In this post, we’ll talk about some of the benefits and advantages of using your VA Loan for your home purchase.

Benefits of the VA Loan

1. No Down Payment

The VA Loan does not require a down payment for an eligible property purchase. While a 20% down payment on a conventional loan would be difficult for most service members, the VA Loan enables borrowers to put down 0% to buy a home. As of January 2020, there is no cap to a first-tier VA Loan-making it even better! Remember, though – there are still closing costs involved – even if there’s no down payment, so make sure to budget those in when considering a home purchase!

2. No PMI

While other types of mortgages usually require Private Mortgage Insurance for a lower down payment, the VA loan does not require it. This means less money out of pocket for borrowers and is yet another benefit of using your VA loan.

3. Lower Interest Rates

VA Loans are continuously competitive in their mortgage interest rates. By using a VA Loan, you’re almost guaranteed to receive a better rate than other types of loans.

4. Refinance Opportunities

VA Loan borrowers have two types of refinance options. The VA IRRRL can reduce your interest rate and possibly lower your monthly payment. Then, there’s the VA Cash-Out option that can give you the opportunity to pull cash out based on how much equity is in the property. By doing this, you can use the cash for purchases like renovations or repairs, car purchases, or whatever you need!

5. Advocacy

If you happen to be facing foreclosure, the VA has a loan program that provides foreclosure avoidance counseling and advocacy. These counseling programs help find possible alternatives to foreclosure to save you from a low credit score and heartache.

6. Lower Closing Costs

The VA limits closing cost amounts from lenders who offer VA loan lending. Unlike other types of mortgages, you won’t have to worry about outrageous closing costs where you have to bring a large amount of cash to the closing table. To add to the benefit, the VA also allows up to 4% of the buyer’s closing costs to be covered by the seller – saving you even more money.

7. VA Loan Assumability

Loan assumability is a big benefit to a VA Loan. Because the loan is assumable or transferred to a new borrower, a new eligible buyer could take advantage of a lower interest rate than what is currently offered in the mortgage market. Having the ability to advertise your VA Loan as “assumable” may even help sell your home when the time comes!

8. No Prepayment Penalty

If you are required to PCS, sell the home, or decide to pay off the mortgage, there’s good news! There is no prepayment penalty on a VA Loan. That is yet another reason why using a VA Loan could save you money in the long run. The last thing you need to worry about is paying MORE money when you need to pay off your mortgage!

9. VA Loans are Government-Guaranteed

Another advantage of a VA Loan is that it is backed by a government agency. What does this mean? It means that the federal government guarantees to pay back 25% of every VA Loan regardless of the reason for default. Because this provides participating lenders with a less risky situation, lenders can offer better term agreements to borrowers.

Need More Information?

If you’d like to know more about available VA Loan programs, ADPI has you covered! Our in-house lending team, AmNet is here to help you with the VA Loan process. To speak with one of our awesome loan officers, you can fill out our inquiry form here: https://www.activedutypassiveincome.com/real-estate-agents-and-lenders

This article originally appeared on Active Duty Passive Income. Follow them on Facebook.

MIGHTY MONEY

Time to slay the myth around the magical unicorn called the “VA Loan”

Since transitioning out of the military, I’ve had the, um, “pleasure” of being around a lot more civilians. Some of the questions I’m asked on an annoyingly regular basis are, “Aren’t VA loans awesome? Don’t you get a free house? Did you get yours?”


Here’s a 9-step guide to calculating your credit card interest

After polling some veterans, I realized I should give a little brief on the subject. Time to slay the myth around what a VA loan is or isn’t.

First: The VA loan is, in fact, not a loan at all.

The VA Loan Program, created in 1944 as part of the Servicemen’s Readjustment Act, is a service the Department of Veteran Affairs created to help veterans returning from WWII buy a home.

According to the VA website, “VA Home Loans are provided by private lenders, such as banks and mortgage companies. VA guarantees a portion of the loan, enabling the lender to provide you with more favorable terms.”

Essentially, the VA will co-sign a loan with you, and that gives you a few perks.

Why is co-signing helpful?

When new adults try to rent an apartment or buy a car, most people won’t trust them unless they get a “guarantor” to co-sign the loan or the lease, usually in the form of a parent or older family member. After faithfully paying rent and payments on a loan or two, civilians in their 20s build up credit and no longer need anyone to sign off their financial choices.

Military personnel and veterans are a bit different. Our lifestyle inherently makes us look financially untrustworthy.

How are you 24 with no rental history?” I live in a barracks.

You seem to have moved every two years...” Yep.

You disappeared from our system for over a year except for credit card transactions from… Afghanistan. Are you a terrorist?” It’s called deployment!

Here’s a 9-step guide to calculating your credit card interest

Luckily, we have an Uncle Sam willing to co-sign on such a big purchase, or what’s called a Purchase Loan. You’ll be able to get better interest rates than your credit alone could get you, and you can skip the down payment.

Bonus: Uncle Sam will also insure the transaction, allowing you to skip Private Mortgage Insurance.

The Devil’s Details

Just because you can get a loan for down, doesn’t mean you should. Regular people are expected to drop at least 20% value of the house as a down payment.

Here are three different scenarios. Same house, same interest rate, same 30-year loan.

Here’s a 9-step guide to calculating your credit card interest
Here’s a 9-step guide to calculating your credit card interest
Here’s a 9-step guide to calculating your credit card interest

The less you pay upfront, the more you have to pay in compounded interest for the next 30 years. 30 years. That’s your entire military career plus half your next career!

Being able to do less of a down payment is useful in a few scenarios. For example, if you live in California, chances are you won’t ever have 0K cash for a 20% down payment on the crazy prices out here.

A few resources to see how much you can afford while buying a house: RedFin has a quick calculator (above) as well as a more in-depth option. USAA also has one with different loans they offer.

Warning: Anything offered by Uncle Sam comes with a catch

According to the VA website, “VA-guaranteed loans are available for homes for your occupancy or a spouse and/or dependent (for active duty service members). To be eligible, you must have satisfactory credit, sufficient income to meet the expected monthly obligations, and a valid Certificate of Eligibility (COE).”
Here’s a 9-step guide to calculating your credit card interest

A few takeaways:

  • VA Loans are only for houses you will live in, NOT commercial or investment properties.
  • You have to live in the house for at least one year.
  • You can’t buy a multi-family or multi-unit property. No duplexes or apartment buildings (Trust me, I tried).
  • Banks set the terms of the loan (interest rate, payment schedule, etc.) based on your credit and current job, not the VA.
  • The VA might not approve you.
  • Requires at least 181 days active duty completed to be eligible.
  • Dishonorable discharge not eligible
  • Some dependents are eligible
  • Can be used to BUILD a house
  • Receiving a Certificate of Eligibility is required
  • There is a loan fee charged by the VA
  • Closing costs still have to be paid (typically 2-5% of the loan)
  • There is a limit on how much you can borrow without making a down payment based upon where in the country you live.

When good loans go bad

After nearly an hour and being transferred 7 times, I finally spoke to the most unenthusiastic Federal Employee in existence to answer my unanswerable question: “Are VA loans any different in foreclosure or the foreclosure process than a regular civilian mortgage?”

The answer: No, mostly.

The VA will not step in and save you, there are no cash handouts, and the VA will not shield you from the banks that are after their money. The VA will take care of a few fees dealing with the lenders, but that is about it. For more questions: 1-877-827-3702 or visit the payment problems page.

Articles

The Pentagon can’t seem to explain why the cost of moving military families is going up

Here’s a 9-step guide to calculating your credit card interest
Airman Michael Butler, 28th Logistics Readiness Squadron receiving technician, uses a forklift to retrieve a crate at Ellsworth Air Force Base, S.D.


Permanent Change of Station has gotten more expensive, and the Department of Defense doesn’t know why. That’s the general findings of a report released by the Government Accountability Office last year.

Military.com reported earlier this week that the Defense Department would begin a review of the system that oversees military moves as a result of the report.

Accounting for inflation, the cost of a PCS was up by 28 percent between 2001 and 2014, capping at around $4 billion that year, or 3.7 percent of the overall military personnel budget.

The study found that “the services have not reported complete and consistent PCS data, thereby limiting the extent to which DoD can identify and evaluate” the current PCS system. It went on to explain that the Pentagon had not maintained required data nor required the services to independently maintain data that would help the DoD in determining how to reduce the cost of PCS.

PCS moves ranged on average from $2,289 to $13,336, with the Air Force spending the most on average per move and the Marine Corps spending the least.

In a review between services, the Marine Corps was most likely to accurately and consistently report PCS data outside of the direct cost of moving, i.e. the cost of temporary storage, lodging expenses, and tour extension incentive payments. The Air Force and the Army were least likely to report the data.

Because of the lack of proper reporting by the services and the DoD, the report found, it is impossible to determine exactly how to address the rising costs of PCS.

In addition to a lack of complete data on the cost of PCS, the report found that the DoD was not able to explain why personnel were not meeting “time-on-station requirements” because it had not required any of the services to maintain that data themselves.

Of the services who could provide any data on time-on-station requirements, the Air Force was most likely to have some data, and the Marine Corps was least likely to have any data.

The Government Accountability Office described four recommendations to improve the issue of rising PCS costs:

  • Improve the completeness and consistency of PCS data
  • Complete periodic evaluations of whether the PCS program is efficiently supporting DoD’s requirements for assigning military personnel… [and] identify changes in PCS per-move costs
  • Improve the completeness and consistency of data on exceptions
  • Improve the completeness and consistency of data on waivers

The Pentagon agreed most of the recommendations in the report, writing in its response, “We recognize the importance of improving the availability of information needed for effective management of the PCS program.”

Do Not Sell My Personal Information