Spending Plans

• What is a spending plan?
  A spending plan is an estimate of income and expenses over a period of time. It is considered a tool to help people manage their money. The key to any successful spending plan is to spend less than you earn.

• What is included in a spending plan?
  • Income: wages, loans, grants, scholarships, cash gifts
  • Fixed Expense: rent/mortgage payments, auto payments, insurance, taxes, student loan payments, cable tv
  • Flexible Expense: food, utilities, credit card payments, personal, charitable contributions, gifts, entertainment

Credit Cards and Credit Debt

• Why should I pay more than the minimum balance on my credit card?
  The principal balance paid on each payment is minimal compared to the interest when you pay the minimum payment. By paying more than the minimum payment required, one is actually able to pay down the balance of the loan faster. Always pay at least the minimum required and make sure the payment arrives by the due date. If the payment arrives late, the interest rate on the card may be inceased, and late charges will be incurred.

• What is a teaser rate?
  A teaser rate is a short-term, below-market interest rate offered to attract customers to sign-up for, or switch to a certain credit card. It may also be referred to as an introductory rate. Be careful to make sure that switching does not end up costing more in the long run. Balance transfer fees and minimum transfer fees could make your transaction expensive.

• What should I look for in a credit card besides the interest rate?
  (Make sure fees are zero or at least as low as possible )
  • Application Fee
  • Annual Fee
  • Cash Advance Transaction Fee
  • Grace Period (Should be at least 20 days)
  • Late Payment Fees
  • Minimum Finance Charge
  • Interest Rate Calculation Method (Do not choose a 2-cycle method if you plan to carry a balance on your card)
  • Inactivity Fee
  • Balance Transfer Fee
  • Close-out Fee

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Identity Theft

• How does identity theft affect me? What can thieves really do?
  
  • Go on spending sprees using your existing credit/debit accounts
  • Open new credit accounts using your personal information, leaving the delinquent accounts on your credit report
  • Set up phone or wireless service in your name
  • Counterfeit checks or debit cards or make electronic transfers in your name, cleaning out your bank account
  • Open new bank accounts and write bad checks
  • Give your name and information to police during an arrest
  • File for bankruptcy under your name to avoid paying debts
  • Buy a car by taking out an auto loan in your name
  • Get driver's license and other identification issued with their picture and your name and ID number
  • Ruin your credit, which in turn may make it hard to get a job, housing, or a vehicle
  • YOUR CREDIT IS YOUR FINANCIAL LIFE

• How does identity theft occur?
  Identity theft occurs when someone wrongfully acquires, and uses a consumer's personal identification, credit, or account information to their advantage. Ways thieves steal a person's identity include:
  • Dumpster diving
  • Shoulder surfing - may use a cell phone to record your pin and account numbers
  • Computer hacking or phishing
  • Insider access - stealing information while on the job
  • Posing as a landlord or employer to con information from an employee
  • Pre-texting or vishing over the telephone or Voice Over Internet Protocol (VoIP)
  • Stolen mail, wallets, purses, etc.

• How can I protect myself from identity theft?
  
  • Shred or burn all documents not needed, that contain personal financial information, such as credit card solicitations and receipts
  • Monitor bank and credit card statements on a regular basis to ensure all charges and/or account activites are legitimate
  • Mail documents wisely by using USPS collection boxes or the post office instead of unsecured mailboxes
  • Never give personal information over the telephone, mail, or internet unless you are sure who is requesting the information
  • Do not use obvious passwords, such as birthdates, nick names, or part of your Social Security Number
  • Passwords should be at least 6 characters if possible and contain a combination of letters, numbers and a symbol
  • Never open links sent in unsolicited emails; use firewalls, anti-spyware, and anti-virus software on your computer
  • Review personal credit reports at least once a year from each of the three credit bureaus, using the annual credit report website

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Phishing

• What is 'phishing'?
  
  • Sending fraudulent email that solicits confidential information like ones' passwords, bank account numbers, or credit card information, by impersonating banks or other financial institutions
  • The email links to an authentic-looking Web page, complete with company logos, even though it is a fraud
  • Phishers use information provided by the consumer to make charges using the victim's credit card, making withdrawals from their bank account, or open new accounts using their personal information

• How do you avoid 'phishers'?
  
  • Never directly respond to emails requesting personal information.
  • When prompted for a password, give a fake one first; a phishing site will accept it, whereas a legitimate one will not.
  • Make sure the site is secure. Look at the bottom of the browser's window for an icon of an unbroken key or a lock that is closed, golden, or glowing. Double-click on the icon to display the site's certificate and make sure it matches the company you are supposed to be connected to.
  • If the email message authenticity looks doubtful, contact the institution itself.
  • Enter Web-addresses directly into the browser or by using bookmarks personally created to avoid hitting spoofed sites.
    
    
• Contact proper authorities to stop 'phishers'.
  
  Cut and paste the fraudulent activity in a new email (or if using Netscape, drag & drop) to the Federal Trade Commission (FTC) at spam@uce.gov, as well as the Anti-Phishing Working Group (APWG) at reportphishing@antiphishing.org.

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Financial Aid

• When should I apply for financial aid?
  Students seeking financial aid should apply as early as possible. Applications for the upcoming academic year are available the beginning of January. To receive the best financial aid package possible, students should have their applications submitted by March 1st, the priority filing date for Montana. Students are encouraged to apply online at www.fafsa.ed.gov.

• What is the difference between an Unsubsidized Loan and a Subsidized Loan?
  
  • Unsubsidized Loan: A Federal loan that begins accruing interest the moment it is accepted. The student may elect to pay the accruing interest while in school or have interest add to the principal loan.
  • Subsidized Loan: Federal loan that does not begin to accrue interest to the student until after your grace period ends, or the point when you withdraw from school. Note: The federal government pays the interest on subsidized loans while the student is in school.
  • The student may pay early on these loans without penalty.
  • Students should try to pay the interest on unsubsidized loans while in school, as it keeps their total debt lower upon graduation.

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Return to regular view	Text-only	Updated: 6/10/08