Is the Financial Crisis going to affect?

Hi all,
I just want to know whether the financial crisis will affect H1B holder and EAd holders. Is already the effect have started?

With Regards
Sriha

Hello, Sriha

I'm no financial expert, but my understanding of the current financial crisis and how it affects people would lead me to believe that the effects are not going to be terrible for everyone. People who have mortgages or other types of loans may feel the pinch due to rising interest rates, but if you rent and basically live within your means (as opposed to being heavily in debt, or live off credit cards and not your actual salary), you should be fine.

As for the banks, your money is most probably FDIC-insured. The Federal Deposit Insurance Corporation insures US bank deposits up to $100 000, usually, so even if your bank goes under, you're not likely to lose your money.

The way regular people like you or me will be affected is in the rising prices of basic goods, like food and gas. But even with this effect, it won't be as bad as the Great Depression, for example. People will still be able to live reasonably well. In fact, this may be a great time for everyone to take stock of how they live their lives and spend money, and maybe develop better habits and start practising financial responsibility.

There may be some political or social repercussions for H1-B or EAD holders - American citizens may become slightly more possessive of American jobs and American money, for example. But this hasn't happened yet, so for now, I think things are still quite stable.

I hope this puts your mind at ease.

Ansuya

Sriha,

Not an easy question - I would say everyone is affected, directly or indirectly. The ones affected directly are the ones that lost jobs as a result of the bankruptcies and layoffs as a result of cost cutting.

Indirectly the impacts are far greater - the credit crisis makes it difficult for people to get credit and as you know everything in the global economy is very credit driven. Cost of getting credit (called cost of capital) shoots up for companies and small businesses leading them to slash costs. This could cost layoffs. People may have difficulty getting loans. Several small business will be directly impacted by unavailability of loans. All of these have cascading and ripple effects on the economy (people cutting back means reduced profits leading to more layoffs etc)

However American economy is known to be very resilient and we will come through this mess.

EAD/Green Card holders and citizens are in slightly better shape (than H1B holders) since their status is not tied to the employer but then these are not things that you can control.

I would say, the best things to do (as always) is keep your skills current, in case you lose your job. Be "interview ready". Have an updated resume, and always know how the job market is doing. Cultivate a network of friends and professional contacts. Rationalize your spending and cut wasteful spending.

Hope this helps...

Originally Posted by sriha

Hi all,
I just want to know whether the financial crisis will affect H1B holder and EAd holders.

With Regards
Sriha

Thanks for the providing me the info. My hubby and I have different views reg keeping money in account or rather pay twds credit card? Which is good at the current situation?


With Regards
Sriha

In my opinion, in ANY situation, you should try to pay off the full balance on your credit card every month. Keeping money in your savings account and earning a paltry sum in interest while paying interest on the balance on your credit card account doesn't make sense.

It is better in the long run for your credit rating, peace of mind, and sensible financial planning, not to accrue interest on your credit card account. This will ensure you are always living within your means and you are less likely to get into credit card debt in the future, which is something a lot of Americans seem to battle with.

I hope I have understood your query, and that my answer helps to clarify your issue.

Ansuya

I would agree with Ansuya - however it also depends on your credit card terms. Sometimes you may be able to take advantage of a credit card's promotional offer of No interest - 0% APR for 18 months etc. In that case, it can be beneficial to have the amount on the credit card and keep it on the checking acct to earn an interest. However this holds ONLY if your checking account/savings account earns a better interest and you are paying no interest on the credit card.

In short, basic advice is to pay off your credit card in full every month, unless you are financially sophisticated enough to know what you are doing. (and keep excellent record of money, expiration of terms etc)

Originally Posted by sriha

My hubby and I have different views reg keeping money in account or rather pay twds credit card? Which is good at the current situation?


With Regards
Sriha