How I Made $125 in 5 Minutes

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When I originally applied for the Citi Thank You Premier credit card, it had a $125 annual fee.

A couple of months later, they started offering the same card with no annual fee.

I emailed customer service and asked them to refund the annual fee.

They did!

That was the easiest $125 I ever made, and yet another reminder that it never hurts to ask for what you want because you just might get it.

Look Beyond Pay For Greater Job Satisfaction

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Would a salary increase make you happier? Or are there other changes in your job that would be more meaningful to you? Read the stories of four real people who found more fulfilling work through some surprising decisions in my article, Look Beyond Pay For Greater Job Satisfaction.


How Getting A Raise Affects Your Taxes

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You’ve finally received a hard-earned raise. Unfortunately, that raise has bumped you into the next tax bracket.

Does that mean you should tell your employer you don’t want the raise after all? If all of your income is going to be taxed at a higher rate, with your new raise, you’re actually going to take home a smaller paycheck. Right?

Fortunately, this statement isn’t true, but it’s a common misconception about how our progressive federal income tax system works. While people are taxed at higher rates when they earn higher levels of employment income, only a portion of their income, not all of their income, is taxed at the higher rate.

Take a look at how the system works in my article, How Getting A Raise Affects Your Taxes, at Forbes.com.

5 Little-Known Tax Deductions And Credits

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Do you want to minimize your tax bill? Then you need to know about all the deductions and credits available and which ones apply to you. However, if you don't have the time or desire to read tax-prep books in your spare time, you can read about five deductions and credits that might save you some money come tax season in my article 5 Little-Known Tax Deductions And Credits.

Winter's record low mortgage rates could increase thanks to Congress

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Mortgage rates remain at or near record lows, but it's unclear how long that might last.

That's because Congress late last year tied a payroll tax-break extension for millions of workers to what amounts to a new hidden tax on anyone who takes out a mortgage or refinances their home loan.

The full impact has not yet been felt, but lenders are already taking notice.
 
Learn about this hidden tax in my Interest.com article, Winter's record low mortgage rates could increase thanks to Congress.

Surprising Credit Card Benefits

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Credit cards don't just make it easier to shop - they also provide a number of free benefits that many consumers aren't aware of.

As long as you use credit responsibly and pay off your balance in full and on time every month, you might consider paying for more of your purchases with credit instead of debit or cash.

When you pay with credit, you can get help from your credit card company if you don't get what you paid for, change your mind, find a lower price or need some extra cash.

Head over to Yahoo! Finance to read my article, Surprising Credit Card Benefits, to learn more about these credit card features and how to take advantage of them.

Borrow Money for Next-to-Nothing with a 15-Year Mortgage

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Right now, you can get a 15-year fixed-rate loan for around 3%.

That’s on par with the current annual inflation rate of 2.9%.

 Inflation is generally a bad thing--it erodes the value of your money. It means that what you can buy with a dollar today you won’t be able to buy with a dollar next year--it will cost you $1.03. The year after that, it will cost you $1.06. In ten years, assuming a steady rate 3% rate of inflation, it will cost you $1.35.

But if you have a fixed-rate mortgage, inflation has a benefit: while the prices of everything else are rising, your mortgage payment stays the same.

But it will feel like it’s shrinking.

That’s bad news for your lender, but it’s good news for you.

Learn more about current mortgage interest rates and your different fixed-rate loan options in my latest story for Interest.com, Record-low mortgage rates will put a spring in your step.

Misconceptions About Past Performance and Future Returns

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Beginner investors, along with many experienced investors who should know better, have a tendency to look at an investment's historical returns when deciding whether to buy.

After all, we look at the past performance of many things in our lives to gauge how they might perform in the future. We buy Hondas and Toyotas because of their reliable histories; we admit students to college based on their high school transcripts; we reject a would-be suitor who cheated on his or her ex.

However, when choosing an investment, past performance should be only a minor consideration. Find out why in my article, Misconceptions About Past Performance and Future Returns.

6 Benefits to Increasing Your Credit Limit

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Increasing your credit limit just means giving yourself the opportunity to spend beyond your means, right?

Not necessarily. Increasing your credit limit can have a number of upsides if you manage your credit wisely.

Learn how in my Investopedia article, 6 Benefits to Increasing Your Credit Limit.

What Happens When You Can't Pay Your Taxes?

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When it comes to taxes, you're supposed to pay them gradually throughout the year so that in April you either don't owe very much or are entitled to a refund of overpaid taxes.

But sometimes your life situation changes or an unusual one-time event takes place during the year and when you prepare your annual return, you get an ugly surprise - you owe hundreds or thousands of dollars that you not only didn't see coming, but that you simply don't have.

While this isn't a good situation to be in, it's not the end of the world - there are a number of ways to resolve it. Learn about your options in my Investopedia article, What Happens When You Can't Pay Your Taxes?

What Is a Short Sale?

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If you’re shopping for a home, you’ll probably come across at least one property that’s listed as a short sale.
Many buyers are unfamiliar with this term and don’t know how a short sale works.

To understand the process, you have to understand the situation that the seller and the seller’s lender are in.

A short sale occurs when a lender allows a delinquent borrower to sell her home for less than she owes on the mortgage because the home is now worth less than what she originally paid.

A homeowner might want to do a short sale because he can no longer afford the mortgage payments and wants to avoid foreclosure (both have credit score implications).

Lenders might prefer a short sale to a foreclosure.

Read more in my Mortgage-calc.com article, What is a short sale and how does it differ from a foreclosure?


How to Save Money on Lender-Required Flood Insurance

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If your lender requires you to purchase flood insurance, there's good news and bad news.

The bad news is that you'll have to pay flood insurance premiums every year until you pay off your mortgage whether you want flood insurance or not.

The good news is that there’s little need to shop around--the federal government regulates flood insurance premiums, so you’ll pay the same amount no matter which insurance company issues your policy.

You also have a small say in how much your policy will cost.

Your lender won’t require you to purchase contents coverage, so you can skip that (unless you feel you might actually need it).

You can also choose your deductible, up to a maximum of $5,000. Choosing the highest deductible will save you money. But again, if you actually are concerned about your flood risk and $5,000 is more than you could pay if your property were damaged, you might choose a lower deductible.

Finally, you only have to insure your property for the value of the structure. You do not have to purchase $250,000 in coverage (the maximum amount offered), and if your property is worth $150,000, you don’t even have to purchase $150,000 of coverage. The value of your land constitutes part of the value of your property, but you aren’t required to insure your land against flooding.

The appraisal that was conducted when you purchased your home and your homeowners insurance policy are good sources of information about the actual replacement cost of your home’s structure. That’s the amount you’re required to insure.

Aside from the obvious source of flooding--excessive rain--hurricanes, winter storms, and snowmelt can also cause floods. New land developments are also said to contribute to flooding by changing natural runoff patterns.

But in some areas, it's hard to see any logical justification to purchase flood insurance, so if you find yourself in that situation, these tips will help you minimize your insurance costs.

Read more about lender-required flood insurance in my Mortgage-calc.com article, Why You Might Have to Buy Flood Insurance.

Some Life Insurance Policies Aren't as Good as They Sound

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Recently, I saw a compelling commercial for life insurance.

A woman, implying that her husband had died, says how glad she is that he purchased life insurance. His family is okay, she suggests, because he provided for them.

Turns out, though, hubby is very much alive. His family just used his life insurance policy to help his son pay for college.

Despite the commercial's emotional pull, this type of widely available insurance, called permanent or whole-life insurance, isn't a good choice for most consumers. What option should you choose instead, and why? Find out in my Interest.com article, This life insurance policy sounds good, but it's not.


There's No Reward for Paying Your Mortgage with a Credit Card

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A friend recently asked if it was possible to pay her mortgage with a credit card to earn rewards.

I admire her efforts to make the most of her spending, but there's just no way for this to work for most people.

You can't pay your mortgage directly with a credit card because lenders won't allow it.

And while there is a roundabout way to pay through one third-party online service, transaction fees eat into any rewards most homeowners might earn.

Read about this process in my Interest.com article, No Reward for Paying Your Mortgage with a Credit Card.

If you're not "most people," however, you might be able to come out ahead through a service called ChargeSmart, but only by making several months’ worth of mortgage payments at once. It depends on the fee structure for your particular lender. 

Let's say you want to make a $6,000 mortgage payment and your lender is Wells Fargo. ChargeSmart's fee to make this payment is $24.95. If you earn 1% in credit card rewards, that's a $60 reward. After the $24.95 fee, you'll come out ahead by $35.05.

ChargeSmart says that “larger than standard payments may require additional authorization and/or a large payment security fee” to help the company cover its fraud insurance costs. So you can probably only come out ahead so far by making a large mortgage payment before you get hit with extra fees.

Assuming that $6,000 is substantially more than your monthly mortgage payment, you'll need to contact your lender to make sure they correctly categorize your large payment. Do you want it to cover your next several monthly payments, or do you want it to be considered prepaid principal?

If $6,000 represents more than one monthly payment, you’ll need to consider the opportunity cost of sending the money to your lender early rather than investing it. Let's say your monthly payment is only $1,000, so $6,000 represents 6 months' of mortgage payments.

Ally Bank has some of the highest CD rates right now. It's currently paying 0.74% APY on a 6-month CD. If you invested the $6,000 in a 6-month CD, you'd earn $22.42. So now you're only coming out ahead by $12.63 to make a massive mortgage payment all at once.

Personally, I'll sacrifice the $12.63 for the security of stashing the money in a CD where I can access it in case of an emergency.

But if you already have all the emergency cash you could ever need and cash to spare to make a very large mortgage payment (or if your monthly mortgage payment is much larger than average), paying your mortgage through ChargeSmart using a cash-back credit card will let you earn a little (and I mean a little) extra scratch.