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Continuing from my last post on ReservePlus (401k loan with debit card), let me share the pros and cons of going for such a program.

Pros:
Once you terminate your old job and switch over to a new employer,

• You need not pay back the loan within a short period of 2 months (as in traditional 401k loan).
• You can repay the 401k loan within 5 years of taking it regardless of whether you are employed or unemployed.
• You can avoid paying huge taxes and early withdrawal penalties.

Cons:

• With a debit card, you get easy access to money therefore chances are you can be tempted to borrow unnecessarily.

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“Be wary of Paypal emails that have internet links or response addresses, they are phishing emails.”

All of us must have heard it 101 times! But what many of us have not heard is that now cyber criminals have come up with a new type of phishing email to trick Paypal customers. The email, which appears as if it has come from PayPal, notifies the recipient of fraudulent activities in his or her account.

Dear Customer,

We recently noticed that few attempts have been made to log in to your account from a foreign IP address.

If you had accessed your account while travelling, then the unusual login attempts may have been initiated by you.

However, if the logins are not initiated by you then please call the given number as soon as possible to verify your identity.

This is a security measure to protect your PayPal account.

Thank you for your patience as we work together to protect your account.

To get started, please call the given number

Best Regards,

PayPal Security Center

Unlike the usual phishing emails, there is no link given in the mail. Instead, the email urges the recipient to call a phone number to confirm their credit card details. When dialed, users are greeted by an automated voice saying:

“Welcome to our account verification. Please enter your 16 digit card number.”

Once the card information is entered, the con artists are free to steal it for their own use.

More and more employees following a 401k plan are being offered a debit card to access 401k loan funds. The card thus issued is known as ReservePlus.

How does this work?

When a company offers a 401k plan to any employee, the latter has to transfer the approved loan into a Reserve Plus account online. Then the employee receives a debit card which they can use to take out less than 35% of the loan amount they have been approved for.

The loan starts off as soon as an employee removes cash from the account. The employees receive the bills directly and not through payroll deduction. They can pay back the loan in the same way as they pay off their credit cards. Depending upon the employer, the employee may also get a revolving loan thereby taking out money and paying it back within a specific time period.

Since 2003, there have been a growing number of employees applying for the ReservePlus debit cards and as such experts feel, the program has lured even the reluctant consumers to participate in retirement plans.

Interested to know the pros and cons? Well, you have to wait for my next post:)

Technorati Tags: 401k loan and debit card, reserveplus

Re-aging your account may not be the first option but it can be used as a technique to clean your credit history.

Find out what is account re-aging.

A debit card is a plastic card or a credit card without debt. The word debit means “ to subtract ” and, as the name suggests, when you use your debit card you are subtracting money from your account. Unlike credit cards, debit cards allow you to spend only the amount that is in your bank account. Debit cards look like credit cards but operate like personal checks as the money is directly pulled out from the card holder’s bank account.

Most of the banks offer the following types of debit cards:

* Cards designed solely for ATM withdrawal (PIN required)
* Cards that allow ATM withdrawals as well as purchases (signature required)

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