Financial Setbacks for Engaged Couples, Ameritrade Reports

The majority of couples who are currently engaged are planning to pay all of their wedding expenses without asking for any financial assistance from their parents. Moreover, almost one half of engaged couples are planning to spend lower than $10,000 on their wedding day. This is according to a recent report from TD Ameritrade Holding Corp.

Moreover, the report also found out that the majority of lovers do not regard as deal-breakers setbacks such as bad credit, foreclosures, student loan debt, and unemployment.

In the end, the major problem is bankruptcy. In fact, over 3 out of 10 engaged people said that it would be one of the reasons to cancel the wedding. In addition, 27 percent said that they would reschedule the wedding.

According to Carrie Braxdale, managing director of investor services of Ameritrade, more couples are getting married in the latter part of their lives. Consequently, they are creating more financial problems into their marriage such as credit card debt and student loan debt.

The areas where couples are likely to have very high expenses for their wedding day are the Northeast, and then next to that is the West. The majority of people begin to set aside money in the same year prior to the wedding. On the other hand, 9 percent begin saving money for the wedding more or less two years beforehand.

Ameritrade also discovered that 41 percent of couples below 31 years old asked financial assistance for their wedding expenses from their parents, while 21 percent of older couples ask help from parents.

Based on data from wedding website The Knot, wedding funds are getting bigger for the first time since the year 2008 at the same time as the improving economy. Another report from XO Group Inc. last March discovered that 11 percent of couples have expenses exceeding $40,000.

With the exception of honeymoon expenses, the average cost for a wedding was $27,021. The most costly place to have a wedding is in Manhattan, with average costs of $65,824.

Hope Sparks for AEA

The National Credit Union Administration website brings good news for the AEA, as they post in their website that the agency has improved during the first quarter of this year. The agency however still has a lot to go before they work through bad debt and for its asset ratio to increase.

The credit union imposes a subordinated debt deposit in order to give it additional capital; this is according to NCUA specialist John Zimmerman.

AEA was able to report a positive total assets ration during the fourth quarter of 2011 with 2.69 percent, this is the first time the ratio was announced since the NCUA placed the company into conservatorship on December of 2010.

The positive assets ratio continued to grow as it increased to 2.85 percent at the end of March this year. This is commendable since it only had a negative 7.77 percent on the same period last year.

The company also reported a profit of more than $839,000 in the first three months of the year. This continuing development that started last year, has now earned about $6.2 million profits for the company.

The credit union has an increase of $11 million worth of sales in their deposits, but the number of people applying for membership has decreased to 41,750. This is a lot fewer than the 46,015 members the company had last year.

The net worth of the corporation increased to $7 million last March from $6.1 million on December of 2011. The number of delinquent loans that they issued has lessened in the first quarter; this probably means that the past loans of the companies have been settled during the period.

The credit union used to have $8.9 million worth of delinquent loans last December, which decreased to $2.4 million last March.  The company reported that they have recovered and foreclosed their assets worth about $7.8 million in the first quarter of the year.

AEA Progresses But Have Problems with Bad Debt

Based on the call report of the credit union during the first quarter of this year, there are a few flickers of progress for AEA. The call report was put online this week in the website of National Credit Union Administration.

However, it is still struggling with bad debt and its net worth to total assets ration is still supported by a $20 million worth of cash infusion which NCUA gave to AEA during December.

According to NCUA public affairs specialist John Zimmerman, the credit union was supported by giving additional capital through a deposit, also known as subordinated debt. Consequently, AEA’s net worth to total assets ratio for quarter four 2011 was 2.69 percent.

At the end of March, AEA’s ratio was up to positive 2.85 percent. One year earlier, their ratio was minus 7.77 percent.

Moreover, AEA’s profit for quarter one 2012 was $839,000. That is in line with the profit-making trend observed during 2011, with a $6.2 million ending cumulative profit.

During quarter one 2012, AEA reported shares and deposits up by $11 million. But the membership is decreasing from 46,015 members one year earlier to 41,750 members this year.

Zimmerman added that AEA constantly developed its performance for quarter one and AEA is developing its net worth as well. For the month of March, it reported $7 million of net worth, which is an increase from $6.1 million during December. On the other hand, the credit union had minus $18.6 million net worth during March of last year.

AEA might be converting delinquent loans to foreclosures since there was a decline in the number of delinquent loans but an increase in the number of foreclosures.

During December, AEA had $8.9 million loans overdue by 12 months or more, but it was down to $2.4 million during March. In contrast, AEA’s foreclosed and repossessed assets reached $7.8 million during quarter one 2012, which is up from $2.1 million foreclosures in 2011.

How to Fix Your Credit Card Debt

According to Hamm, one very effective technique to get out of credit card debt is to call your credit card company and negotiate for a lower interest.

Most people are burdened by the worsening debt because of credit card use. Credit card can be acquired easily at first and can also easily trap you to spend more without proper thought. Impulsive buying and poor choices can lead you to so much debt before seeing your first bill.

Eventually you will find it difficult to pay your card debt and you might even be shocked at the first sight of the minimum payment required. This is the start of you financial struggle.

I can relate to this struggle because I have been into it before. I kept adding debt until I reached a point that seemed to be impossible to fix and it was so painful.

One of the steps that I took was to call up the credit card companies and told them my real situation and then start negotiating.

Let me share with you how I did it. But first let me warn you not to use this tactic if you depend on your credit card in bringing food to your table because it might just backfire on you. The credit card company might close your card. However, if you are in a situation where you do not depend so much on your credit card, then this technique might be of help to fix your credit card debt. Through negotiation you can convince the credit card company to lower the interest charged to your account which can help you to save a lot of money in the long term.

For example, if you have a credit card debt of $10,000 payable in 8 years at 19.9percent interest rate, the total amount of interest you will be paying for that period is approximately $10,055. If that interest rate is reduced to 9.9 percent, the total amount of interest for the period is $4,516 thus a saving of $5,500.

How to do the negotiation? The first step is to call the company and explain your situation and your appeal to stretch your payment and to reduce the interest. If the person you are talking to will not accept your proposal talk to the person higher or the supervisor. The secret is not to get angry. The response maybe “no” but eventually you will be passed to somebody who can decide on your case. But remember to engage in this tactic only if you do not rely on your card because the bank might cancel your card or reduce your limit but you still owe them money. If you can handle your situation without your card then go for this tactic and it can help you save a lot of money.

American’s Less Usage of Credit Cards Worries Visa and MasterCard

It was observed this year that Americans were not using often their credit cards. This is bad news for both Visa and MasterCard. These two companies reported their quarterly earnings last Wednesday.

Master Card will report its results before the stock market opens while Visa will make its report after the stock market closes.

WHAT’S UP: One of the big factors that contribute to the economic growth is consumer spending. In fact, 70 percent of economic growth is due to consumer spending. From January to March, consumer spending rose by 2.9 percent- the highest growth in a period of a year. This is a good start for Visa and MasterCard which do the processing of credit card and debit card payments. But despite an increase in consumer spending, they charged less. In January and February, the charges went down to $5 billion, according to Federal Reserve.

The card companies are expecting overseas customers and rich cardholders in the increase of card use. Sales of jewelry and other trinkets are consistently high as recorded in retail shops like Saks Inc. and Tiffany & Co. The charges of American Express increased 12 percent more in the first three months as compared to last year on the same period.

The economic crisis is not yet over and consumers are not up to spend more and use their cards. In February the recorded credit card debt is $799 billion which is 15 percent lower than what was recorded in December 2007, the beginning of the Great Recession.

This trend worries Visa and MasterCard because they make money through the processing fees they are charging from card usage. They need consumers to use their cards more often to survive.

The companies could cover up loses in charges from credit card use through debit card usage. However, banks that issue debit cards to consumers are discouraging them to use their debit cards because of the regulations that limit the amount of fees which the banks can charge from the use of debit cards.

WHAT IS TO BE EXPECTED: According to analysts Visa expects to make earnings of $1.51 per share on revenue of $2.4 billion, while MasterCard will earn $5.29 per share on revenue of $1.79 billion.

LAST YEAR QUARTER’s FIGURE: Visa made $1.23 per share with recorded revenue of $2.24billion and MasterCard earned $4.29 per share on revenue of $1.5 billion.