What is personal finance?
Personal finance involves various financial decisions as they pertain to an individual, couple, or family. It includes how these units make, spend, save, invest, and generally budget their money. Aspects of personal finance include understanding and managing one’s bank accounts, credit cards, investment portfolios, bills, loans, mortgages, and tax obligations.
Why is fiscal responsibility important?
One of the main reasons that fiscal responsibility is important is that it allows one to achieve short and long terms goals as they pertain to money. For example, one might want to save for upcoming events, like the birth of a child or that child going off to college, to purchase a home, or to retire by a certain age. Since both short and long term goal setting requires discipline and perseverance, fiscal responsibility makes it easier for one to achieve his or her financial goals.
In addition, fiscal responsibility is important in and of itself, aside from its relationship with goal setting. Recent worldwide economic recessions were caused in part by both corporations and individuals taking unprecedented levels of financial risk; in today's global economy the actions of everyone have ripple-like effects to their neighbors. In this sense, we must all do our part and make prudent, wise financial decisions to ensure that the global economy rebounds and stays healthy for this and future generations.
Before signing up for a credit card
Before signing up for a credit card, the first and most important question to ask is “What do I intend to use this for?” Smart and disciplined practitioners of personal finance generally use credit cards only in emergency situations, when traveling, or when purchasing large expenditure items where cash would not be feasible. In addition, they ensure that they will have the means to pay off the credit card in a relatively brief duration of time. Being smart about personal finance means not giving into temptation and using credit cards in reckless or undisciplined ways.
After that important question, other questions to ask and research include:
- Is the rate quoted an introductory rate? If so, when does it expire?
- What will be the rate after the introductory rate expires? Is it fixed or variable?
- Is there a fee for applying or processing an application?
- Are there annual fees? If so, how much?
- Are there late fees?
- Are there overcharge fees?
- What is the grace period for purchases? When will interest begin to be charged?
- What is the spending limit on the credit card?
- What happens if the limit is exceeded?
- Does the card allow for online payments?
- Is there a rewards program for using the card?
Overview of popular credit cards
There are a variety of choices for consumers looking to secure a credit card. Some of the larger issuers of credit cards include ACOM, Rakuten and Citi Gold.
is one of Japan’s leading consumer loan and financial serv ices companies. It currently has about 40% of its shares held by the Mitsubishi UFJ Financial Group, another 40% held by the founders of the company and their relatives, and the other 20% held by various companies, investment groups, and individuals. They issue not only secured and unsecured loans, but also offer their own line of personal consumer credit cards.
is one of the Top Ten Internet companies in the world and Japan’s leading online shopping service. In addition to selling millions of products to its over 50 million strong user group, it has diversified its business line into other ventures, including offering financial services like consumer loans and credit cards.
is a subsidiary business of the Citi Group. They are an affluent banking and financial services company, whose target consumer is one who has at least $50,000 to deposit into their various accounts: checking, savings, money market, and retirement. In addition to their wealth management services, they offer exclusive terms and rates on certain credit cards such as Citi Platinum Select and Citi Premier Pass.
How does Banking Work?
The word “bank” refers to one of three separate but interrelated entities:
- A Central Bank, which issues currency on the behalf of a government and regulates monetary policy in a country.
- A commercial bank, which has deposit accounts, the funds from which it draws upon for further lending and/or capital investments.
- A savings bank, which primarily offers and holds savings accounts. In some cases, it lends loans and/or mortgages to its own members.
In the case of commercial and some savings banks, their banking strategy usually consists of finding lenders and borrowers. A lender would be an individual, company, or sometimes government that chooses to invest its money in the bank in return for a guaranteed interest rate, for an unspecified length of time. The bank pools all the assets of its lenders and re-lends the money to borrowers or invests it in other ways: stocks, bonds, securities, etc. The interest rates that the bank charges to its borrowers are always higher than the rate it guarantees to its lenders. In this way, banks can usually guarantee a profit, provided they do not expose themselves to unmanageable levels of risk. Recent global economic recessions were due in part to banks exposing themselves as such.
Banking in Japan
The banking system in Japan is similar to other first-world nations’ banking systems. In addition to the Bank of Japan, which serves as the country’s Central Bank, there are large multinational banks, midsize national banks, and small regional banks. Some of the larger banks include Mizhuo Bank, Japan Postal Bank, Sumitomo Mitsui Bank, CitiBank, Tokyo-Mitsubishi UFJ, and Shinsei Bank.
A recent growing trend in Japan is the rise of online banking. Banks such as Seven Bank and Sony Bank offer much or all of the same services and features of traditional banks, but without any physical branches or locations. Some of these online banks have relationships that allow their customers certain privileges at other banks, but for the most part, transactions are conducted mostly online or via telephone.
Banks in Japan offer a wide array of consumer financial services, such as:
- Checking accounts
- Savings account
- Money Market and/or Retirement accounts
- Electronic Bank Transfers
- Automated Teller Machines (ATMs)
- Automated Bill Payments (Phone, utilities, taxes, etc.)
- Equity lines of credit
- Credit Cards