Apple is an Example of Good Debt

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“Rather go to bed supperless, than rise in debt.”
-Benjamin Franklin

Ben Franklin was one of the greatest minds of his time and shared his wisdom on a great many topics. But when it comes to the subject of borrowing, his anti-debt absolutes don’t serve as a great guide for our more complicated financial world. Unlike in Ben’s time, almost no one goes to debtors’ prison anymore, and in some cases going deep into debt can be a very, very good thing.

Case in point. Apple is one of the richest companies in the world, currently sitting on a $145 billion pile of cash. That’s $145 BILLION. IN CASH. Yet the company recently went to Wall Street and borrowed $17 billion through a bond issue. And the move is being applauded by investors, sending Apple’s stock price soaring.

What’s at play here? Simply the concept that Benjamin Franklin didn’t talk about, which is “Good Debt vs. Bad Debt.” The brilliant (let’s say Genius) folks at Apple wanted to pay cash to their investors but that would have meant bringing some of their cash from overseas and taking a big tax hit. Instead they were able to borrow money at rates close to zero and (wait for it) take a tax deduction. Goal achieved + money saved = Good Debt.

So clearly we see that borrowing money isn’t just for the broke, irresponsible or dumb. Apple is none of those things.

There are lots of examples from personal life as well. Borrowing sensibly to get a college education is Good Debt because of how much more a college graduate can earn. Borrowing sensibly to buy a home can provide tax advantages and an opportunity to build equity. Borrowing money to buy a car can open up access to jobs off the path of public transportation.

And a major Good Debt play is to borrow money to reduce the cost of existing Bad Debt. Every day there are consumers who refinance high-interest credit card and loans debt to reduce their monthly payments and pay less interest over time. This should not be seen as borrowing more, but borrowing better. Since the financial crash, banks have been a lot less willing to lend money to people deeply in debt, even though the government bailed them out and provide them access to capital at historically low rates. Fortunately there are alternatives like Lending Club and credit unions to fill the need.

The only caveat to all of this is that any debt program that you can’t see a way of paying off in the future is Bad Debt. If there is no realistic plan to fulfill a debt obligation, entering into it is not only illogical, but immoral as well. And Ben had a lot to say on that subject.

Put Your Tax Refund to Good Use

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What should you do with that nice tax refund this year? Should you indulge yourself with buying something you’ve always wanted, or do you put it towards something beneficial, like getting caught up with your debt, paying off past-due bills, or building up your savings account?

If you struggle to pay your monthly bills and can’t keep up with credit card payments, you may want to invest your recent tax refund towards managing your debt.

Below are 3 smart ways to put your tax refund to good use:

Pay past due bills. If you are behind on past bills, then paying them off with your tax refund would go a long way in helping improve your credit rating and give you some peace of mind.

Pay off high interest rate loans. You could also make a significant contribution toward paying off any high-interest loans.  It is advisable to pay off loans with high interest rates sooner, if possible. Doing so will save you a good amount of money in interest.

Build your savings or retirement accounts. You may also allocate your tax and save a portion in a retirement or savings account with interest. Feeding the piggy bank has never been a bad idea. Consider opening a savings account with high interest rewards.

If you are in a good position with little or no debt, and have credit cards with low interest rates, then this may be the right time to invest your tax refund by contributing to any type of savings fund or retirement plan. Begin building interest on your money as soon as you can.

tax refundNot everyone has a mind for math or finances.  If your refund is a sizable amount you may want to explore more creative and profitable uses for your money. Or you may be able to significantly reduce the amount of debt you are in. Either situation may call for seeking professional advice from a debt lawyer.

An experienced debt lawyer is practiced in finding debt management solutions and at knowing how state and federal laws work to help the consumer. A good debt lawyer can also help you create a budget, settle your debt, and negotiate with creditors on your behalf. Together you can create a balanced use of your tax refund to reduce your debt and store a little away for the future.

If you do suffer from substantial debt, and need debt relief help, coming into a healthy tax refund may be the lifeline you’ve needed. It is in your best interest to maximize the value of each dollar. Even if the amount is pale in comparison to your total debt amount; there are ways to reduce that debt, and reduce the overall interest rates you’re paying in order to make your refund go farther in making a dent.

Say you’re somewhere in between, with little debt and a savings plan. A balanced use of your funds could be a good solution; save some money, and use some to pay off any debt.  If you have numerous credit cards, the decision may not be so easy. You need to examine and do the math on the various interest rates each card has. Figure out how much more you’re paying in interest over a three, six, and twelve-month period. Then attack the card that encumbers the largest debt amount.

If managing a large number of cards or a large debt amount you may need to seek debt management advice. Because debt collection laws vary from state to state, not all general information applies to consumers in different states. The matter could grow confusing, or you may simply need an agent to contact and negotiate with your creditors on your behalf; this is where a debt attorney can really help.

The chances are if you are receiving a tax refund, you made an income last year. This can complicate things, because of your income you may not qualify for debt relief options like bankruptcy. If you do have a sizable refund that can considerably reduce your debt, then it’s advisable to use it towards those means. A debt lawyer can provide you with a number of solutions and options in accordance with your state’s laws and with federal laws.

Debt relief help is there for you. It’s rare to come into extra income, and to put those funds towards financial security is a good option. Take the time to weigh your options. If your debt is not overwhelming, then the situation is right to allocate some of your refund towards a retirement or savings fund. You can always contribute a portion of the refund to paying towards some debt, and allocate the rest towards the future. Debt lawyers are adept at helping you find the right budget for any plan.

Understanding the laws, your rights, and your options removes any fear or intimidation you may experience. Having a debt lawyer in your corner, providing you with empowering strategies, will help see you on the road to financial stability. The advice you can obtain will help lay out a clear path for you to be able to reduce your debt and possibly save for your retirement, all with your tax refund. Fortunately, there are resources for consumers just like you! ConsumerLawQA is a website operated by consumer lawyers dedicated to answering your debt law and consumer law questions for free.

Guidelines To Choosing The Best Bank

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Thankfully in the UK, there are a range of bank accounts to choose to store your money with, more account types mean more choice. When it comes to deciding the right type of account for you, there are many things to consider, most notably what account offers the best interest on your money. Over the last few years however, leading high street banks have started to offer a number of interesting incentives with their current accounts.

From holiday insurance to car breakdown cover, there are a number of perks to signing up with high street lenders, and with more benefits being introduced on a monthly basis, the banks are going to war in order to keep their customers’ business. Standard current accounts offer the basic banking facilities, like the ability to pay bills in branch, online banking and additional savings accounts. However, reward current accounts are where all the magic is happening.

Packaged Accounts

Reward current accounts, or ‘package accounts’, offer extra features to entice consumers to switch their bank account – for a fee. Ranging between £5 and £25 per month, banking customers can take advantage of emergency home cover (Halifax), special travel money exchange rates (Barclays) and even free music downloads (Santander), and thanks to increased market competition, the benefits keep getting better.

However, should you choose a bank account solely on the features of the account, instead of focusing on your financial needs? Before you make a choice of what bank to transfer your current account to, make a list of what you need in a bank account, from 24 hour help lines to mobile phone insurance. From here, you’ll be able to filter out the best reward accounts that suit your needs, instead of being blinded by discounted insurance and other perks.

What’s In It For Your Money

The amount of money you pay into your reward current account will determine what benefits you will have access to. Free current accounts are great for people that have no need for perks and extras, and over the course of a year, you could save yourself hundreds of pound in reward account fees.

If you are interest in the perks of a bank account however, then make sure you compare the market to find the best current account, before you apply to switch provider. Money comparison websites have seen a 25 per cent increase in the last year when it comes to people comparing bank accounts, meaning it’s not just a brief trend. When in doubt, always seek the advice of an independent financial advisor.

How You Will Be Banking

One on the best ways to consider which bank to give your custom, is to identify how you bank. If you’re a freelancer working from home, then you’re going to need a bank that’s open during business hours throughout the day.

Furthermore, you’re going to need to locate the nearest branch to you. However if you’re constantly in the office, and can’t get to the bank during the day, this means that you’re going to need to bank with someone that’s more suited to your schedule, opening at extra times during the weekend, etc.