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Federal Reserve Posts Record Profit of $41.6 Billion

If you ever played monopoly you may recall having read in the rule book that the bank never runs out of money. Should the bank not have anymore monopoly money they can just make more out with a pen and paper as needed.

In the 1970's president Nixon took the US off the gold standard. That meant the US dollar was no longer backed by gold, but rather our debt, which we repay through taxation. When you hold a dollar bill in your hand you are really holding an IOU. That IOU is the promise of the American people to repay the debt with our taxes.

Since the US dollar is no longer backed by gold the federal reserve can authorize the printing of money without limits, in order to stimulate our economy. Just remember, they authorize the printing, but WE have to pay it back.

Did you know the federal reserve is not a government agency? Its not even an American company. It is a banking cartel made up of some of the richest families in the world. Its their way of controlling who gets rich and who stays poor. 

They authorize the printing of US dollars thereby controlling inflation, deflation, and our taxes.

Do you know how they make their money? By charging interest on the money they authorize our banks to print. Money they created out of thin air, backed by our promise to repay it.

Who do they lend money to? They lend money to banks for the purpose of increasing lending, thereby stimulating our economy.

The problem is the banks don't lend out all the money. Although lenders received billions of dollars in bailout money, they decreased lending by more than half.

So where'd the money go? When asked by the NY Times where the money went, all the major lenders, like JP Morgan Chase and AIG, declined to answer. Such headlines were closely followed by new headlines announcing multi-million dollar bonuses for the same banking executives whose bad decisions put us in this mess to begin with.

The reason I'm telling you this is that you need to realize the government isn't here to help you. The more you rely on them the worse off we'll all be. The government is in place to protect the interests of the rich people who put them in office. That's why the president could spend half a billion dollars running for office, a position that pays only $400,000 a year.

The only way out of this mess is to take responsibility for your own future. Start with a better credit rating by removing the inaccurate or unverifiable negative data from your credit report. Stop using your credit cards to make purchases you don't immediately have the money to pay off, unless its for investment purposes, meaning it will make you more money than it costs to purchase it.

Lastly, start teaching your children about money and credit from an early age. Our educational system was designed to create employees. They barely teach our children how to balance a check book, much less a spread sheet. Don't pass on this ignorance to your children. Educate yourself now and pass on the knowledge so your children won't be in a worse position when they take over.

I would highly recommend Robert Kyosaki's "Rich Dad Poor Dad" to start. Robert has a way of simplifying financial terms so that anyone can quickly grasp them. You can find him at your local library or book store. If you're like me and don't have a lot of spare time for reading, then I would recommend downloading the audio book. You can listen to it when you're driving, play it on your mp3 player, or on your computer. Download 2 free audio books online at www.Audio-BooksOnline.com.

Lender Fees Exposed

So remember the CARD Act that was supposed to help protect consumers from unscrupulous lenders and all their hidden credit card fees? It seems some lenders have already found new ways to whack us over the head with additional fees. Take a look at some of their new methods for collecting more than what you had bargained for...

Interest Rate Games

1. The CARD Act stipulates that fixed rate credit cards can't become variable cards as long as they are paid on time, but if you have a variable rate card you're in for a ride. In the past, variable rate cards were tied to the prime rate. Lenders are now adding a clause that they can use the highest prime rate in the past 90 days. That's an estimated $720M in new revenue for them, right out of consumer pockets.
   
2. A second new strategy targeting those with variable interest rate cards are the new "floor" interest rates. If your card has a "floor" rate of 6% and the prime dips below 4% for 4 months, you won't benefit from the 4% prime rate as your floor rate is 6%.

Fee Games

1. Lenders are now implementing a higher minimum finance charge. That means if you only incurred an interest charge of $4 in any given month, but their minimum finance charge is $20, then you'll have to fork over another $16.
2. You know how you used to get hit with a $25-$45 late fee when you paid late?  Those late fees are now increasing in size in proportion to your credit balance.
   
3. Think you'll avoid these charges by not using your card? Think again. Lenders are now implementing an inactivity charge. Fees vary by lender.
4. If you travel to foreign countries you are familiar with foreign transaction charges you would incur anytime you exchanged currencies. Now you may incur these charges even if no currency is exchanged provided a foreign bank is involved.
   
5. And lastly, they've removed the caps on balance transfer fees and increased the minimum charge. That means they can charge you for an entire year of interest upfront on that 0% balance transfer.

The lesson here is that lenders are rewarding those with good credit and payment history, but miss just one payment and you're in for a world of hurt. You'll be hit with a veritable tidal waive of fees that will make you wish you never applied for a credit card in the first place.

My advice? Keep just 1-2 cards with minimal balances and pay them in full each month with an automated payment plan.

How to Boost Your Credit Score Without Credit Repair

Removing negative items from your credit report is one technique for improving your credit score, but it's not the only technique in my tool box. I created this free video to teach you another little known insider strategy you can implement immediately to boost your score as much as 150 points in as little as 45 days.

I have used it on with many clients and have always seen fantastic results.

WARNING: Watch the entire video before taking any action. You need to understand how the strategy works before you can make a decision as to whether or not its right for you.

FICO Reveals 'Damage Points'

For the first time ever, FICO has revealed how much certain derogatory remarks can negatively effect your credit score. Conversely, we now have a more accurate idea of how much removing these items can positively effect your score.

As you can see from the chart, a maxed out credit card can effect your score as little as 10 points, while a recent bankruptcy can decrease your score by as much as 240 points.  Its also interesting to note that the better your FICO score is when the negative remark is added, the more of an effect that remark will have on your score. 

FICO determined how your score would be effected by using complex mathematical algorithms compiled by tracking hundreds of thousands of consumers over a period of years. Over time they were able to determine key indicators that revealed the increasing probability that a consumer would default 90 days or more on a loan or credit.

This chart helps to illustrate how a consumer who had an otherwise flawless credit history can suddenly become a high risk borrower after a recent negative event in their credit history, while those with lower scores are more likely to be habitually poor at budgeting or making timely payments. The sudden change in behavior is a warning sign and therefore caries a higher penalty.

The Truth About Building Great Credit Fast

There's a lot of misinformation out there regarding CPN numbers, Authorized User accounts, and credit lines.

Here's my cliff notes explanation.

CPN Numbers - Celebrities and athletes use these instead of their real SSN.  The myth is that anyone can buy one of these and establish a new credit history from scratch.

There are lots of companies that would charge you hundreds or thousands of dollars for a CPN number. The truth is you can acquire a CPN number for free. 

CPN numbers are legal.  They're used to protect your true identity.  It is illegal, however, to use a CPN number to try and defraud creditors.

The bottom line is you don't want one.  It won't erase your credit history.

Authorized Users - This is when you are piggy backing on someone else's credit history.  The card holder simply calls his lender and asks that you be added as an
authorized user.  They take your SSN and add you onto their account.

Under an Authorized User account you are not liable for the charges made, but you get the benefit of the credit limit, balance, and payment history towards your credit score.

From my research I have concluded that unless you are related or work for the primary account holder, the Authorized User account will not be weighted into your credit score since the implementation of FICO'08.

Still, you'll find several companies selling them for thousands of dollars all over the internet. Don't buy one.

Credit Line - You can acquire a credit card with lines of $5,000 or $10,000 for a few hundred dollars.  These accounts will drop your debt ratio and give you a great
payment history with ALL 3 CREDIT BUREAUS.

They are 100% legal and you will see results in 30-90 days.

Get your credit lines here.

You can get more than one if needed.

Disagree?  Post your comments below.

Best,

Brian Diez

PS: Just click here for your FREE cd, FREE ebook, and FREE coaching call with me!

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