Archive for the ‘Bank Savings’ Category
Thursday, September 2nd, 2010
Many first time investors think that they should invest all of their savings. This isnt necessarily true. To determine how much money you should invest, you must first determine how much you actually can afford to invest, and what your financial goals are.
First, lets take a look at how much money you can currently afford to invest. Do you have savings that you can use? If so, great! However, you dont want to cut yourself short when you tie your money up in an investment. What were your savings originally for?
It is important to keep three to six months of living expenses in a readily accessible savings account dont invest that money! Dont invest any money that you may need to lay your hands on in a hurry in the future.
So, begin by determining how much of your savings should remain in your savings account, and how much can be used for investments. Unless you have funds from another source, such as an inheritance that youve recently received, this will probably be all that you currently have to invest.
Next, determine how much you can add to your investments in the future. If you are employed, you will continue to receive an income, and you can plan to use a portion of that income to build your investment portfolio over time. Speak with a qualified financial planner to set up a budget and determine how much of your future income you will be able to invest.
With the help of a financial planner, you can be sure that you are not investing more than you should or less than you should in order to reach your investment goals.
For many types of investments, a certain initial investment amount will be required. Hopefully, youve done your research, and you have found an investment that will prove to be sound. If this is the case, you probably already know what the required initial investment is.
If the money that you have available for investments does not meet the required initial investment, you may have to look at other investments. Never borrow money to invest, and never use money that you have not set aside for investing!
Tags: Budget, Financial Goals, Financial Planner, How Much Money, Hurry, Inheritance, Initial Investment, Invest Money, Investing, Investment Goals, Investment Portfolio, Investments, Living Expenses, Savings Account, Six Months, Time Investors
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Tuesday, August 24th, 2010
Financial success isn’t a hard task to master. It simply takes dedication, hard work and a little old fashioned commitment.
But it also takes a little knowledge. Too many consumers are ignoring what are financial truths. They run up large amounts of debt just to appear successful to those around them. They surround themselves with things that only make them feel better for a minute.
They ignore the fact that a debt-free and well managed financial life is a wonderful way to eliminate stress, which is all too common in today’s world.
What do you need to do to become financially successful?
First, you need to spend less than you earn. Sounds easy, but it really isn’t. It is easier to spend less than it is to earn more. You simply have to cut your costs. You have to stop charging on your credit cards and you have to stop shopping. Look closely at where your money is going. Look at what you already have around you. Get all those projects completed before you buy things for a new project.
You have to have a budget and stick with it. Budgets don’t tell you how to spend your money, they tell you how to save your money. You can easily see where your money is going. You can identify areas that you can cut back on. Then, you can set spending goals. A budget is a great way to challenge yourself. There is nothing better than saving more money than you thought you could. Surprise yourself with a budget that works.
From your budget, you should be able to find the money to start paying off that credit card debt. If you are severely in debt, you may need to get a second job and sell some things to get a head start. Stop using those cards and start paying them off. They are draining the life out of your finances on a daily basis.
You should be contributing to a retirement plan. Research your options and take advantage of them. Don’t wait until tomorrow, it will be too late. Start now. When you pay off your debt, put that money to your retirement as well. Who knows — you may be able to retire early.
Once you have your debt paid off you should have a savings plan. There are goals that you can set for your savings. You may want new furniture or to go on a vacation. You should also save at least three to six months of money to cover your monthly expenses in the case of an emergency. This will cushion your budget from any repairs, emergencies, illnesses or job losses that may happen.
Financial success isn’t difficult. It is simply a habit that you have to nurture and maintain. Take the time to sit down and get started. Work on it until it becomes second nature. The more you work on it, the better you will become at it.
Tags: Budget, Budgets, Consumers, Credit Card Debt, Credit Cards, Daily Basis, Dedication, Financial Success, Head Start, How To Save Your Money, How To Spend Your Money, Little Knowledge, Retirement Plan, Second Job, Shopping, Stress, Wonderful Way
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Wednesday, August 18th, 2010
In this day and age, there really shouldn’t be any reason to make certain financial mistakes. Do a search of the internet and you will find that there are thousands of articles out there that warn you of the pitfalls of certain choices. Advice for living a financially stable life is everywhere. What are you waiting for?
Here are the most common mistakes that I’ve seen people make. I’ve even made a few of them myself. These are the financial mistakes that you can learn from. You’ve probably made a few of them yourself, they are very common.
Mistake #1: Using that little plastic card to get what you want.
We’ll just start off with the number one mistake out there. This is probably the most common mistake in the country. Almost every person in the US today has a credit card. It is almost like a right of passage when you turn eighteen. There are even people out there that aren’t eighteen yet that have them.
Credit card debt is the fastest way to ruin your finances. It is easy to acquire and difficult to pay off. The minimum balance doesn’t pay off enough of your outstanding balance to help you very much. You will be paying on your balances for decades. Even a $500 balance can take you over a decade to pay off if you simply make the minimum payment.
Add in the interest rate, which rarely goes down. If you miss a payment, you will really be paying the bank. Thirty percent interest is common on a credit card once a payment has been missed. And you only have to miss that payment by a day — which can happen in the mail or processing if you don’t plan ahead well enough.
Mistake #2: Buying more home than you can afford.
With the real estate market in the state it is today, many people are regretting their housing decisions. Adjustable rate mortgages are acceptable loan products for some people. But only if they can afford the maximum rate that the loan can hit if interest rates go up. Too many people only consider that introductory rate. They stretch and purchase as much as they can afford. Then, when rates go up and their rate adjusts, they can’t afford the payment. Add that to a slowing housing market, and you may have a foreclosure on your hands.
If you are going to buy a home, make sure that you purchase what you can afford. Take out a fixed-rate mortgage so that you know what your payments will be. If rates go drastically down in the next couple of years, you can always refinance. If rates go up, you are protected. Try to aim for a 15-year mortgage over a 30-year. It will save you hundreds of thousands in interest. But if you can’t do it, a 30-year fixed-rate mortgage is an acceptable loan choice for the purchase of a home.
Mistake #3: Not controlling your money.
Too many people live paycheck to paycheck. They have no savings. They have no retirement plan. They have nothing to back them up in the case of an emergency. They have no control over their money.
You have to take control of your finances if you want to retire someday. You have to learn how to budget, save, invest and spend. All it takes is a little time. And once you get in the habit, you will notice that your life has more control. You should say where your money goes, not lenders or creditors or anyone else.
Mistake #4: Not saving for retirement.
There are more seniors in the work place now than there were twenty years ago. And even more than there were fifty years ago. If you want to retire with enough money to live comfortably, you have to start putting something back today. Start an IRA. Contribute to your employer’s 401(k) plan. Figure out how much you need to invest and find a way to do it. This is your future. You don’t want to reach sixty and realize that you can’t afford to stop working. There is no guarantee that you will be able to draw social security or other forms of assistance then. What if you become ill and have to retire? What if you get hurt? Prepare for the future. Start saving for retirement today.
Tags: Adjustable Rate Mortgages, Choices, Credit Card Debt, Decade, Decades, Housing Decisions, Interest Rate, Interest Rates, Introductory Rate, Loan Products, Mail, Maximum Rate, Minimum Balance, Minimum Payment, Mistake, Pitfalls, Real Estate Market, Reason, Right Of Passage, Stable Life
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Tuesday, August 10th, 2010
Financial Budgeting, Income, Costs and Hints (Part 3 of 5)
Part 3 is: Start Saving!
So you are loaded down with bills to pay each month and are wondering how you can begin a savings account for emergencies and other high-expense endeavors. In other words, where can you find that extra cash to put away for later?
Firstly, when configuring your budge, plan for your savings first. You will grow richer each month if you begin to pay yourself first. Before paying any bills, decide on a set amount that you will pay yourself first – maybe five or ten percent – or whatever you decide – of your paycheck. Then, deposit the amount into a savings account before paying any bills.
When you do this at the beginning of the month, your entire paycheck will not suddenly slip through your fingers. If you wait until the end of the month, there may be nothing left to save. Paying yourself first will give you a systematic way to make your money grow. Regardless of your profession or your income, this system will work if you stick to it.
Anoter technique you may try for saving money is to empty your extra change into a coffee can or a jar each day. At the end of the month, roll the coins and put them into your savings account. You may be able to save 30 or 40 dollars each month just with your spare change.
Remember that good money management is more than just a mathematical formula. Its too closely tied with the ups and downs of living to be just that. Your money management plan is always subject to change if your life situation changes. The object of a good budget is to make your money go the farthest in helping you reach your goals, it is not there to force to you to abide by rules.
Dont get discouraged if the budget plan doesnt work perfectly right away. It may involve some revising and editing until it fits your needs. Then, make sure to review it often, and be sure it is making the best use of every penny! Because we know how helpful those spare pennies can be!
Tags: Budget Plan, Coffee, Coins, Emergencies, Endeavors, Extra Cash, Financial Budgeting, Fingers, Life Situation, Management Plan, Mathematical Formula, Money Management, Paycheck, Profession, Saving Money, Situation Changes, Spare Change, Systematic Way, Ups, Ups And Downs
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Tuesday, August 3rd, 2010
Homeowners often become very interested in the Federal Reserve Bank system. Every time the board of directors meets, mortgage interest rates are at risk.
Federal Reserve Bank
The Federal Reserve System acts as the central bank of the United States. Created in 1913, the Federal Reserve sets monetary and financial policies for the financial industry and trades currency with foreign countries. The Federal Reserve also acts as the bank for the federal government. When you send a check in with your tax return, it ends up in the Federal Reserve.
The Federal Reserve System is made up of 12 branch offices. The New York office is the primary office with other branches located across the country.
The primary job of the Federal Reserve is to manipulate fiscal policy. The goal is to fine-tune the economy to create a stable, predictable situation in which businesses can function. Wildly fluctuating economic keys, such as interest rates, can lead to chaos. In the late 1970s, for instance, interest rates shot up into the high teens, causing a major economic slow down.
The Federal Reserve effectively controls mortgage interest rates in a unique manner. Many people mistakenly believe interest rates are actually set by the Federal Reserve. They clearly are not. Instead, the Federal Reserve directly dictates the rates at which one bank can loan money to another. Lets take a closer look.
Every bank in the United States must hold back a percentage of its monetary assets. Put another way, the bank is forced to maintain a savings account. While this money cannot be loaned to consumers, it can be loaned to other banks. In exchange for the loan, a bank agrees to pay back the loan at an interest rate known as the federal funds rate. The Federal Reserve determines the federal funds rate. When you here Alan Greenspan has increase the rate a quarter point, this is what they are talking about.
You are probably wondering how the federal funds rate could possible impact mortgage rates. While there is no direct link, there is a practical one. Banks universally react to the federal funds rate, particularly whether it was raised or lowered. If the federal funds rate is raised a quarter point, you can expect mortgage rates to move up a bit. The bond market also impacts mortgage rates, which is why you will not see the exact same movement as occurs with the federal funds rate.
The Federal Reserve System makes a major effort to maintain a low profile. Most people, however, feel it is the real power behind the economy, not politicians.
Tags: Alan Greenspan, Board Of Directors, Closer Look, Federal Funds Rate, Federal Government, Federal Reserve, Federal Reserve Bank, Federal Reserve System, Financial Policies, Fine Tune, Fiscal Policy, Foreign Countries, Interest Rate, Loan Money, Monetary Assets, Mortgage Interest Rates, Mortgage Rates, Quarter Point, System Acts, Tax Return
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Tuesday, July 27th, 2010
Bankers are seeing less and less new faces at their desk every day. The Internet has taken their clients and provided them with cheaper, easier and more convenient ways to get the money they need. As generations continue to march on, traditional lending companies are being forced to provide newer outlets to get younger peoples business.
Unfortunately, with the lightning-fast expanse of the Internet, theyre failing.
No longer is it required of anyone to trudge down to their local bank to borrow money. Now anyone with access to a computer can apply for loans online. Since most public libraries offer free use of Internet-connected PCs, nearly the entire world has Internet access.
Whats so great about applying for a loan online? Well, first, privacy. Internet browsing is now more secure than ever, with most websites offering highly encrypted loan applications. Server technology can now decode your personal data after it arrives on the loan companys machine. These machines, which are only accessible by security-clearance holding individuals, are top of the line, secure, and hack-proof. Your data is safe.
Another great reason people are applying online for loans instead of visiting the banker is the immense amount of information available online. No matter what your question, you can find an honest and sometimes highly valuable answer that can save you money, whereas your banker cant know it all. Even if hes highly capable of providing answers, he cant get them all.
Thirdly: accountability. Online lenders have to provide their potential customers with a large amount of information in order to get the sale. If they provide bad service, you can bet that Internet users will post that information online. A simple search for a lender can show you if people are happy with their service, or dissatisfied with it. Lenders go out of their way to make their customers happy, and once again that means better service and quality than any banker.
And probably the most important reason why people submit their loan applications online is the sheer amount of options. Online lending companies have to be greatly competitive which translates into huge savings for people who take the time to look around for the best deals. There are so many online lenders that they are simply forced to provide a high level of service, or people will just not use them.
Online lending has taken huge strides to improve their image, and customers are responding. Borrowing large amounts of cash from an online company is a hugely growing trend. Bankers are not seeing as many faces because they are just overwhelmed with the amount of quality competition on the Internet. Between the advance security, vulnerability and accountability of online lenders, banks just cant keep up.
Tags: Anyone With Access, Applications Server, Entire World, Expanse, Internet Browsing, Internet Users, Loan Applications, Local Bank, New Faces, Personal Data, Privacy Internet, Providing Answers, Public Libraries, Reas, Security Clearance, Server Technology, Simple Search, Top Of The Line, Trudge, Use Of Internet
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Tuesday, July 20th, 2010
You’ve found your dream home and are now ready to start shopping for a mortgage. Several lenders have talked about points. You’ve heard that paying points is the only way to get a low interest rate. But is increasing your initial costs worth getting a lower rate?
For most people, paying points doesn’t make sense. Points, also called discount points or origination fees, are each worth one percent of the loan amount. They are paid to the lender at closing.
Paying points basically allows the borrower to buy down the interest rate.
Points became popular in the early 1980s when mortgage rates were in excess of 15%. Most people could not afford the monthly payments that come with such high interest rates. Lenders began offering discounted rates at a certain fee. Sellers often paid the points in order to sell their properties. This gave buyers affordable mortgages and owners were able to sell their homes.
Times are different now. Interest rates are reasonable. There isn’t a large need to pay a lot of money up front in order to get a lower rate.
Let’s look at the numbers. You have contracted to purchase a home for $240,000. You have the 20% down, which leaves you with a mortgage of $192,000.
You find a 30-year fixed rate mortgage at 6.5% with two points. For closing, you will need to pay $3,840 ($192,000 x 2%) for the points.
The lender can also offer you a rate of 7% with no points.
What do you choose? The lower rate or the lower closing?
At 6.5% you will have a monthly principal and interest payment of $1,207. At 7% your payment increases to $1,270 each month. That’s a difference of $63 per month. If you are looking for a monthly payment reduction, it’s not really a significant one.
It will take you 61 months ($3,840 divided by $63) to recoup your points payment in the form of a lower payment. This is your payback period. But if you had the $3,840 still, it could be earning interest in the bank. If it gets 3% interest in the bank, it would earn about $10 per month. If you pay points, this is interest lost, so subtract $10 from your $63 per month savings. Now divide $53 into $3,840, and your payback period increases to 72 months — six years.
So you have to live in your home for at least six years in order to take advantage of the savings that paying points gives you. Most people don’t keep a mortgage for six years. Unless you are absolutely sure you will live in the home for the time period necessary to recoup your points, you should probably invest your money instead of putting towards points.
If you are looking at paying points in order to reduce your monthly housing payment, you may want to look at a less expensive property. Sixty dollars worth of savings isn’t a lot if you have a tight budget. Chances are that if you have a tight budget to start with, finding extra money for closing would be difficult. And don’t forget, taking out a side loan to get the money to pay points with is defeating the purpose.
Tags: 192, 1980s, 30 Year Fixed Rate, 30 Year Fixed Rate Mortgage, Dream Home, Fixed Mortgage, Fixed Rate Mortgage, High Interest Rates, Initial Costs, Interest Payment, Interest Rate, Mortgage Lenders, Mortgage Rates, Mortgages, Origination Fees, Payback Period, Payment Increases, Principal And Interest, Shopping, Year Fixed Rate Mortgage
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Thursday, July 15th, 2010
When I started saving, I wasnt saving much. However, I developed an important habit. Whether youve wisely saved money or received a good tax return, dont go out and blow it on more stuff. You can have anything you want, you just cant have everything you want. A.F. Bannerman once shared wise advice worth mentioning here that Ive come to agree with and respect:
Your savings affect the way you stand, the way you walk, the tone of your voice. In short, your physical well being and self confidence. A person without savings is always running. You must take the first job offer. You sit nervously on lifes chairs because any of lifes emergencies throws you into the hands of others. Without savings, a person is often fearful of the present and the future. Being in a state of constant fear is a horrible place to live. A person with savings can walk tall. You can appraise opportunities in a relaxed way, have time for judicious estimates and decisions. You need not be rushed by lifes problems or economic necessity. The person with savings can resign from his work if his principles tell him this is not the place to be. ”
The person who is always worried about rent, food, bills, etc. cant concentrate on long-range career goals. The person with savings can focus on family and service to shape personality and develop character.
2 practical tips to get started:
Track everything you spend. When you keep a log of everything you spend (gum, gas, latte, groceries, everything), you cant help but see patterns in your spending. Youll think twice before buying that next Starbucks. If you live on a budget for every category of expenses you have, youll be amazed at the control you gain over spending.
Savings is actually delayed spending. I didnt understand the expression pay yourself first, until my mid-30s. It means you should set aside a portion of everything you make, save it, then invest it. You should do this regardless of whether or not you have your own business (hopefully you do).
Tags: Career Goals, Constant Fear, Economic Necessity, Emergencies, First Job, Food Bills, Good Posture, Groceries, Gum, Horrible Place, Job Offer, Lifes Problems, Mid 30s, Own Business, Posture, Self Confidence, Starbucks, Tax Return, Tone Of Your Voice, Wise Advice
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Friday, July 9th, 2010
Discover What to do When Your Credit Worth is Damaged
The good thing about bad credit is that you can fix it. If you start now, over time, your bad credit can turn into good credit, and you could qualify for the loans you want at the rates you want. The most important aspect of rebuilding your credit after it has been damaged is showing lenders and creditors that you are serious about repaying your debt and that you can be a reliable borrower over a significant period of time.
Negative account histories remain on your credit report for up to 7 to 10 years, depending on the type of action. Bankruptcy can stay on your report for up to 10 years, and collections drop off after 7 years.
Advice varies widely as to the best methods to rebuild your credit. Some points most experts agree on include:
Starting small – Don’t be intimidated by large debt amounts. Even small payments, made on a regular basis, will improve your payment history and, eventually, your credit score.
Spending less than you earn – Borrowing money to finance a lifestyle that is beyond your means will only land you deeper in debt.
Paying your bills on time – Building credibility as a borrower involves meeting your commitments to pay, early if possible.
Keeping your balances low – When using your healthier or newer accounts, keep the balance that you owe between 25% and 50% of your line of credit. An average of 30% is suggested.
If your credit is damaged and you need more information about the three major credit bureaus, go to www.apscreen.com
Other tips might not seem related to your credit score. Staying at least two years on the same job demonstrates steady employment, and you appear more stable to lenders. You can also open an emergency savings account. Contribute to the account a little at a time on a regular basis. This will not only appear as positive activity to lenders, but also will serve as reserve money to keep you from charging unexpected expenses. Finally, stop borrowing for a while. Certainly avoid borrowing more money from home equity or other lines of credit to pay off credit card debt. Shuffling the debt does not make it disappear.
When establishing new credit, it may be necessary at some point to open a new account once you have paid down your existing ones. Credit unions usually offer the best deals to people with damaged credit. If you are unable to qualify for a credit card, try a smaller company, such as a department store or gas station that might offer you a line of credit.
You may want to look into getting a secured credit card. Offered by several banks and credit unions, secured credit cards are a positive way to show lenders that you can pay bills on time and be trusted with credit. To use a secured credit card, you will deposit a sum of money into a savings account and pay a small yearly fee to the institution offering the card. If you deposit $500, you will have a line of credit up to $500. Using your card on a regular basis and paying it off monthly in full could lead to a traditional line of credit. Once the bank or credit union sees that you are capable of maintaining your secured account, they may extend an offer to you with a fair interest rate.
Another option is to have a friend or relative co-sign for a line of credit with you. This step is risky because you are not only gambling with your loved one’s good credit, but also with their good faith.
After a few months of good behavior, order copies of your credit report from all three credit agencies and check for improvements or errors. Be sure that negative information that you have remedied has been removed. File any complaints in writing and check your report again in a few months to ensure that the changes have been made.
Repairing damaged credit is time-consuming but well worth it, both to your peace of mind and to your pocketbook. For more information about credit reports, you can visit
Tags: 10 Years, Account Histories, Bad Credit, Bankruptcy, Borrowing Money, Commitments, Credibility, Credit Report, Credit Score, Creditors, Earn Money, Lenders, Little At A Time, Major Credit Bureaus, Payment History, Rebuilding Your Credit, Reserve Money, Steady Employment, Three Major Credit Bureaus, Unexpected Expenses
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Friday, July 2nd, 2010
Discover Card now offers its own version of business credit cards. Discover Card has been known for their customer service, and this dedication for service continues in their business credit cards product. Whenever you need to contact them, Discover Card assures you that business credit card specialists will always be on hand, that they will take your telephone calls quickly and that your queries will be attended to promptly. Discover does not treat this availability as a benefit, but rather view it as a service commitment to their Discover Card business customers. There is a wide range of benefits to be had on your Discover business credit cards though. Here follows a few of these:
Cash Back Bonus Business Credit Cards
Using your Discover Rewards business credit card, will entitle you to 5% discounts on office supply purchases, 2% on gas, and 1% on other miscellaneous purchases. This could translate into significant savings for your business, especially because this business credit card also enables you to earn valuable Rewards points
If you opt to redeem your business credit cards cash back bonus in the form of gift cards or e-certificates from their participating 70 brand-name partners, you will have the opportunity of doubling your points. This means that you can get gift cards or certificates to use for a variety of different items and should that be your choice, even a Cruise.
If, on the other hand, you elect to redeem in cash, you can nominate how the payment should be issued and into which account it should go. This could be in the form of a check, an electronic deposit to the bank account of your choice, or as a credit on your business credit card account.
Travel Miles Business Credit Cards
If your business requires frequent travel, the Discover Miles Business Credit Cards will come in useful. Your business credit card account earns up to one mile for every dollar in usual purchases, double miles on your gas (at the pump or in the station) and double miles for travel purchases (plane tickets, car rentals, hotels). There is a limit of $5,000 imposed in terms of the amount you can accumulate on the business credit cards double miles feature, but when all is said and done, that is still a substantial amount.
You wont have to wait long before you can start redeeming the miles on your business credit cards. You can redeem the miles as gift cards from 50 brand-name participating partners in a graduated manner: $5 for 1,000 miles, $25 for 3,500 miles and $50 for 6,000 miles. Once you reach 5,000 miles, you can start redeeming these miles as cash back rewards.
Other Benefits
There are also other, standard benefits for business credit cards. You will get quarterly and annual statements that summarize all expenses charged against your business credit cards; the summaries are already categorized to make your bookkeeping simpler, and you can receive statements online ready for download into popular accounting software applications.
You can customize your employees spending limits on their business credit cards online, and when you use your business credit card to pay for travel, youre automatically covered for accident insurance and car rental insurance. A new benefit is that you can purchase checkbooks with your Discover business credit card, thereby enabling payments to those companies that dont accept business credit cards yet.
Tags: Brand Name, Business Cards, Business Credit Card, Business Credit Cards, Business Customers, Card Business, Card Specialists, Cash Back Bonus, Dedication, Discover Card, Discover Cards, Electronic Deposit, Frequent Travel, Gift Cards, Gift Certificates, Queries, Rewards Points, Service Commitment, Supply Purchases, Travel Miles
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