Strengthen your financial fitness by making sure banking works best for you and your specific needs. For tips on how to maximize your banking success, just ask Alex, our expert banker. Learn more about credit card surcharges and how they might affect the cost of your credit card purchases. Explore the differences between a fixed interest rate and a variable interest rate. Find out what happens to a bank account once the owner dies. In such cases, do banks honor the individual’s will?
Question: What is a credit card surcharge?
Asked by: Loise from Montgomery Alabama.
Answer: Also known as a checkout fee, a credit card surcharge is a fee charged to customers who pay for goods and services using a credit card. Merchants are charged a credit card processing fee of up to 4% every time a credit card is used to make a payment. The amount of this fee differs depending on the payment network, type of credit card, and the business’ merchant category code. These fees can be quite costly to small businesses and many of them will pass it down to the consumer. If that happens, the business is required to disclose the fee before charging it. Credit card surcharges are legal in the United States, unless they are restricted by state law. Maine, Massachusetts, and Oklahoma currently have a ban on credit card surcharges. The best way to avoid a credit card surcharge is to pay in cash.
Question: Which loans have a fixed interest rate and which ones have a variable interest rate?
Asked by: Justin from Bangor Maine.
Answer: For a fixed rate loan, the interest rate stays the same throughout the life of the loan. Since the interest rate is “locked in”, borrowers will know exactly how much their monthly payments will be. On the other hand, a variable rate loan has an interest rate that fluctuates based on a benchmark interest rate, like the prime rate and LIBOR. Payments will vary depending on whether the benchmark interest rate tied to the loan increases or decreases. If the rate goes up, the monthly payment will also go up and vice versa. Federal student loans and fixed rate mortgages have a fixed interest rate. While home equity loans, home equity lines of credit, credit cards, and adjustable-rate mortgages all have a variable interest rate. A vast majority of auto loans and personal loans are fixed rate loans.
Question: Do banks honor wills?
Asked by: Cheryl from Danbury Connecticut.
Answer: A will is a legal document that details how an individual’s property and assets are distributed at the time of their death. In general, banks don’t accept wills. What happens to a bank account once the owner dies depends on how the account is set up. In most cases, if the joint owner on an account dies, all the remaining owners retain ownership of the money in the account. If the sole owner of an account dies and there are beneficiaries listed on the account, it is the beneficiaries who are entitled to the funds. However, if a beneficiary isn’t listed, the funds in the account belong to the decedent’s estate. During the probate process, an executor will be appointed by the courts to manage the estate’s assets. It is the executor’s responsibility to pay any outstanding debts and disperse the remaining funds in accordance with the deceased person’s will.
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Written by: Alex Sanchez, Branch Manager
Important: For your specific questions about banking, contact your banking expert, Alex, at: alexexpertbanker@gmail.com
Alex has been in banking for almost 20 years. He has worked for such notable banks as Bank of America, US Bank, and Chase. Alex has his bachelor’s degree in Business Economic from the University of California Riverside.
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Source: Trust & Will
