It’s a new year, hopefully we can all see a light at the end of this dismal economic tunnel. There are of course numerous ways to spend less on almost everything, which I’ve posted in this blog and website, TheFrugalLifestyle.com, however, there are several ways can we maximize the savings or credit we have.
Money magazine’s end of 2011 issue highlights several action plans we can take in order to save wisely and borrow judiciously.
SEARCH FOR YIELD
Online banks, with less overhead, are a great place to start. Savings accounts at American Express or Discover Bank yield 1% – no great shakes but five times the national average. Also, check out high-yielding checking options at a local bank, where you can often find rates above 2%. There are trade-offs, though. For instance, to get that rate, you may have to commit to making at least 10 debit card transactions a month and sign up for direct deposit.
Search for the best rates where you live at moneyrates.com/rewardschecking.htm. Call the bank about terms and qualifications that may apply. Also, visit bankrate.com to make sure the banks you’re considering earn at least three stars for safety.
DON’T RULE OUT BORROWING
“Expect to see aggressive offers from banks, whether it’s for a mortgage or a credit card,” says Sherief Meleis, a partner at Novantas. In November, for example, the average home-equity loan was charging 6.98%, and credit card APRs went as low as 7%. Be advised, though: Lending standards aren’t loosening. Visit LendingTree.com for free loan quotes from multiple lenders.
APPLY FOR A REWARDS CARD
Your excellent credit score qualifies you for the very best offers. Sign-up bonuses are up 25% – and are expected to stay that way for the coming year, according to NerdWallet.com, which tracks credit card offers.
Don’t wait too long to apply; with debit card reform passed, legislators are likely to turn to credit cards next. And who knows how that will affect your perks.