Your knowledge is the best defence when it comes to your money. Therefore, you need to learn tactics and these words to best defend your finances from those who want to trick you. You know best about how you spend, save, and invest your money from the moment you laid on your first euro. These are some words that are completely RED FLAGS.
Deferred Interest
This situation pops up everywhere you go on ads like, “Buy this twenty-five thousand euro car at zero per cent interest rates for twenty-four months!”. But you need to know what type of interest they are offering customers during these situations. There are two main types, waived and deferred. Waived means zero per cent interest rates free and clear, meaning you will not need to pay any insurance on that car. While deferred means customers will still need to pay the interest. If customers do not pay off the amount by the end of twenty-four months or miss a payment you actually owe ALL of the interest that has built up. Do not let these small mistakes come tumbling down back to you.
Suitability
It sounds great! The company is here to find what is most suitable for you or what they “think” is suitable for you. It is the bare minimum professionals are legally required to adhere to is the suitability rule, basically, it can not harm you. They are not obligated to recommend the best financial product for you. It can become very cloudy and murky especially if the advisor earns a commission of any of the products. It could be you are receiving something that is unsuitable for you but gives an advantage to the other individual. The fiduciary standard is when a financial professional must act in your best interest.
Wiring Money
Wiring money is actually not bad or dangerous but it is the context of why they are asking is what can potentially be a red flag. Many of these appear as money-making scams especially during stressful vulnerable times, like wiring a large sum of the money to purchase a home. It is important to stay vigilant if you are putting down a down payment and suddenly getting a new email “updating” the information.
Many things sound better than what they really are. Take the time to look further to really understand what they are saying and what you really need. Avoiding these red flag words can save you from loss of money and headaches.
Lucas Zhang was a Finance major at Ohio State University. He writes about finance, mortgages, and technology for Irish Mortgage Brokers.
Relevant Links: Credit card interest, money transfer scams
