interest rates http://www.wisebread.com/taxonomy/term/1797/all en-US 8 Times You Need to Walk Away From Your Dream Home http://www.wisebread.com/8-times-you-need-to-walk-away-from-your-dream-home <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-times-you-need-to-walk-away-from-your-dream-home" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-647168754.jpg" alt="Woman learning when to walk away from her dream home" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You think you've found the perfect house. But before you plunge into homeownership, you need to watch out for any warning signs this sale isn't meant to be. Ask yourself whether any of these things apply to you. If so, buying the home of your dreams may just have to wait.</p> <h2>1. You can't afford 20 percent down</h2> <p>The house may have everything you are looking for, but you need to make sure that the sale price isn't beyond your means. Ideally, you want to make a down payment of at least 20 percent. This may be a substantial amount of money, but without that down payment, your lender will likely ask you to pay for <a href="http://www.wisebread.com/what-is-private-mortgage-insurance-anyway?ref=internal" target="_blank">private mortgage insurance</a> &mdash; which can add hundreds of dollars a year to your homeownership costs.</p> <p>Moreover, the more you can put down up front, the smaller your monthly mortgage payments will be. If you are in the market for a home but can't hit that 20 percent mark, consider holding off on buying until you have a larger sum saved. (See also: <a href="http://www.wisebread.com/4-easy-ways-to-start-saving-for-a-down-payment-on-a-home?ref=seealso" target="_blank">4 Easy Ways to Start Saving for a Down Payment on a Home</a>)</p> <h2>2. Your mortgage payments would restrict your ability to save</h2> <p>Even if you have the ability to put 20 percent down on the house, you may find that the monthly mortgage payments are higher than you can reasonably afford. The U.S. government recommends spending no more than 30 percent of your gross monthly income on housing. That means if you earn $3,000 per month before taxes, you shouldn't spend more than $900 per month on your mortgage.</p> <p>You may get approved for a loan much bigger than you expected, but don't use this as an excuse to buy more house than you can afford. If your payments are too high, you will find it harder to live comfortably or save money for anything besides housing costs. If you have to go into additional debt in order to make house payments, then your &quot;dream home&quot; could become more of a financial nightmare. (See also: <a href="http://www.wisebread.com/how-to-make-ends-meet-when-youre-house-poor?ref=seealso" target="_blank">How to Make Ends Meet When You're House Poor</a>)</p> <h2>3. You didn't get a favorable interest rate</h2> <p>There are two key things that impact how much you'll end up paying for a house: the sale price, and the interest rate on the mortgage loan. Even if the sale price is within your predetermined budget, you may find your monthly payments to be onerous if the interest rate is too high. A modest difference in interest rate can mean thousands of dollars in extra costs over the lifetime of a loan.</p> <p>Your past financial history, debt load, and credit score impacts the interest rate that banks are willing to offer. The worse your credit, the higher the rate will be. If your credit score is low, you may be better off in the long run financially if you take time to pay off debt and make yourself more attractive to lenders. (See also: <a href="http://www.wisebread.com/5-ways-to-improve-your-credit-score-fast?ref=seealso" target="_blank">5 Ways to Improve Your Credit Score Fast</a>)</p> <h2>4. Your income situation may change for the worse</h2> <p>You may have found your dream home, but your ability to pay for that house may be based on income that's no longer a sure thing. Have you recently lost your job, or are you on the verge of a layoff? Were you counting on income from investments that have not performed as well as expected?</p> <p>If your income situation is unfavorable, consider waiting to buy a home. You don't want to exacerbate a difficult financial situation by taking on more expense than you can handle at that moment. (See also: <a href="http://www.wisebread.com/make-these-5-money-moves-before-applying-for-a-mortgage?ref=seealso" target="_blank">Make These 5 Money Moves Before Applying for a Mortgage</a>)</p> <h2>5. It's a money pit</h2> <p>You're not opposed to a fixer-upper, but this house has more needed repairs than you bargained for. You also learned that it's horribly inefficient when it comes to heating and cooling. On top of that, there are sizable homeowners association and community fees that you hadn't taken into account. All of this adds up to a house that busts through your budget, and it may be a good idea to walk away. (See also: <a href="http://www.wisebread.com/5-signs-the-house-you-want-to-buy-is-a-money-pit?ref=seealso" target="_blank">5 Signs the House You Want to Buy Is a Money Pit</a>)</p> <h2>6. There are signs that housing prices may drop</h2> <p>It's hard to predict where housing prices will go, but if the market is inflated, you may be better off waiting to see if prices come down. There are countless people who purchased homes during the housing bubble around 2005, only to see home prices drop precipitously. Many of these homeowners ended up underwater on their loans, and some even ended up losing their homes altogether.</p> <p>If you feel like the housing market is overheated and you are willing to be patient, you may save money on the purchase price if you wait for prices to drop. One big caveat to this is that it's also important to pay attention to interest rates. If interest rates are on the rise, it may be better to buy sooner rather than later.</p> <h2>7. The seller wants you to waive an inspection</h2> <p>During the housing boom more than a decade ago, competition for homes was so fierce that sellers often viewed a request for an inspection as a deal breaker. No matter how desperate you may be to land that perfect home, waiving an inspection is a risky proposition that could backfire on you. Without an inspection, you have no way of knowing if a home will be in dire need of repairs, now or down the road. (See also: <a href="http://www.wisebread.com/thinking-of-skipping-the-home-inspection-heres-what-it-will-cost-you?ref=seealso" target="_blank">Thinking of Skipping the Home Inspection? Here's What It Will Cost You</a>)</p> <h2>8. The seller wants you to waive a title search</h2> <p>A search of a home's title is a crucial aspect of the homebuying process. This is where a buyer may uncover things about the history of the home, including when it was built, who has owned it, and whether there are any tax liens. It's extraordinarily risky to waive this contingency, so if a seller insists upon it, consider it a red flag and run. (See also: <a href="http://www.wisebread.com/yes-you-need-home-title-insurance-heres-why?ref=seealso" target="_blank">Yes, You Need Home Title Insurance &mdash; Here's Why</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/8-times-you-need-to-walk-away-from-your-dream-home">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-reduce-mortgage-closing-costs">8 Ways to Reduce Mortgage Closing Costs</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-i-didnt-pay-my-mortgage-off-in-full">Why I Didn&#039;t Pay My Mortgage Off In Full</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-house-hunting-red-flags-you-cant-ignore">12 House-Hunting Red Flags You Can&#039;t Ignore</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-hidden-dangers-of-refinancing-your-mortgage">3 Hidden Dangers of Refinancing Your Mortgage</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/choosing-the-right-mortgage-loan-15-or-30-years">Choosing the Right Mortgage Loan: 15 or 30 Years?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing home buying home loans inspections interest rates mortgage private mortgage insurance red flags title search warning signs Tue, 25 Apr 2017 09:00:12 +0000 Tim Lemke 1931276 at http://www.wisebread.com 5 Questions to Ask Before Signing Up for a New Credit Card http://www.wisebread.com/5-questions-to-ask-before-signing-up-for-a-new-credit-card <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-questions-to-ask-before-signing-up-for-a-new-credit-card" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-534306478.jpg" alt="questions to ask before signing up for a new credit card" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>There's no shortage of attractive offers for new credit cards. The credit card industry is extremely competitive, and you are likely to come across advertising for new cards on television, in print, online, and even on airplanes. But as compelling as these offers can be, you still need to think carefully before applying. (See also: <a href="http://www.wisebread.com/pre-approved-for-credit-card-offers-are-you-pre-qualified?ref=seealso" target="_blank">Pre-Approved for Credit Card Offers: What Does It Mean?</a>)</p> <p>Opening a new credit card account is an important financial decision, and you should consider these five things first.</p> <h2>1. Can you manage a new credit card account?</h2> <p>Before you even begin to consider which credit card to apply for, think about if you need a new credit card at all. If there's any chance that having a new credit card will entice you to overspend and incur debt, then it's best not to apply. (See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso" target="_blank">The Fastest Way to Pay Off $10,000 in Credit Card Debt</a>)</p> <p>Keep in mind, too, that each new credit card you have will generate a new statement to review each month, and another bill to pay. If your new card is from a different issuer than your other cards, then you'll need to create a new online login and you might want to download a new mobile app. Having more cards than you can keep track of increases your chances of losing them or having one stolen.</p> <h2>2. Does this credit card meet your needs?</h2> <p>Just as there are dozens of different cars made for nearly any kind of use, there are hundreds of different credit cards designed to meet every conceivable need. If you tend to carry a balance on your credit cards, then you should be looking for a card with the lowest possible interest rate.</p> <p>You could also look for a card with an interest-free promotional financing offer, to help you pay off your debt sooner. (See also: <a href="http://www.wisebread.com/how-to-pay-less-interest-on-your-credit-card-debt?ref=seealso" target="_blank">How to Pay Less Interest on Your Credit Card Debt</a>)</p> <p>If you always avoid interest charges by paying your entire statement balance in full, then you should be earning rewards for your spending in the form of points, miles, or cash back. (See also: <a href="http://www.wisebread.com/cash-back-vs-travel-rewards-pick-the-right-credit-card-for-you?ref=seealso" target="_blank">Cash Back vs Travel Rewards: Pick the Right Credit Card for You</a>)</p> <h2>3. What interest rates and fees will you have to pay?</h2> <p>Before you apply for a credit card, you should understand all of the costs of the card. Fortunately, credit card issuers are required to prominently disclose the important rates and fees in a standardized table. Any time you see a credit card application, you can look for a link to the &quot;terms and conditions&quot; or &quot;rates and fees.&quot; There, you will find a list of fees including the annual fee, late fee, cash advance fee, balance transfer fee, and foreign transaction fees, if any. It will also show you the standard interest rate and any promotional rates for new purchases, balances transfers, and cash advances. (See also: <a href="http://www.wisebread.com/simple-guide-to-evaluating-a-credit-card-with-an-annual-fee?ref=seealso" target="_blank">Simple Guide to Evaluating a Credit Card With an Annual Fee</a>)</p> <h2>4. Do you qualify for approval?</h2> <p>There's no point in applying for a credit card if you won't be approved. First, you need to look up your credit score. Most credit card issuers now offer free access to your credit score online, and there are several websites that can also provide you with a free credit score.</p> <p>Next, you need to research the credit cards that you are applying for, and learn what kind of credit score is needed. For example, a credit card issuer's website may list each card according to the type of credit history needed, such as &quot;Average&quot; or &quot;Good.&quot; In addition, many credit card issuers will have special cards designated for people who are rebuilding their credit. Finally, you can assume that the most competitive premium rewards credit cards will only be offered to applicants with excellent credit. (See also: <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso" target="_blank">How to Use Credit Cards to Improve Your Credit Score</a>)</p> <h2>5. Is this the most competitive offer available?</h2> <p>It's easy to find credit card offers, but it can take some time to locate the most competitive offer for your needs. If you are looking for a card with the lowest interest rate, then you need to look at the terms and conditions of multiple cards to find the best offer. And if you are trying to earn rewards, then you need to estimate the value of the rewards you would receive from the card, based on your own personal spending habits. Finally, you also need to take into account the value of any cardholder benefits offered, and the cost of the annual fee and other fees. (See also: <a href="http://www.wisebread.com/5-best-sign-up-bonuses-for-airline-miles-credit-cards?ref=seealso" target="_blank">Credit Cards With the Best Sign Up Bonus Offers</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jason-steele">Jason Steele</a> of <a href="http://www.wisebread.com/5-questions-to-ask-before-signing-up-for-a-new-credit-card">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-12"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-your-unused-credit-cards-may-be-costing-you">How Your Unused Credit Cards May Be Costing You</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/stop-making-these-5-costly-credit-card-mistakes">Stop Making These 5 Costly Credit Card Mistakes</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-to-expect-when-youre-expecting-a-huge-credit-card-bill">What to Expect When You&#039;re Expecting a Huge Credit Card Bill</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-surprising-ways-revolving-debt-helps-you">5 Surprising Ways Revolving Debt Helps You</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-moves-to-make-before-cutting-up-your-credit-card">6 Moves to Make Before Cutting Up Your Credit Card</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards applications competitive offers credit card offers credit history credit score interest rates terms and conditions Tue, 18 Apr 2017 08:30:11 +0000 Jason Steele 1926749 at http://www.wisebread.com How a Credit Card Cash Advance Costs You More Than a Purchase http://www.wisebread.com/how-a-credit-card-cash-advance-costs-you-more-than-a-purchase <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-a-credit-card-cash-advance-costs-you-more-than-a-purchase" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-625782024.jpg" alt="Learning how a credit card cash advance costs more" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Credit cards are all about convenience. With one swipe, anything we want or need is right at our fingertips; and that includes cash. That convenience comes at a steep price, however &mdash; quite literally.</p> <p>Credit cards call it a &quot;cash advance&quot; when you use them to take cash out at an ATM, or use one of their convenience checks to pay for purchases (for example, when the vendor doesn't take credit cards, but will take a check).</p> <p>Here is what you need to know before even considering a cash advance, and some alternative solutions for when you need funds fast.</p> <h2>What is a credit card cash advance?</h2> <p>Taking a cash advance is done much the same way as making a withdrawal with your debit card. Instead of taking your own money out of your bank account, however, you borrow directly from your credit card. You may also receive checks in the mail from your card issuer that allow you to make credit card purchases via check payments. Again, this is not your money &mdash; the checks will pull funds from your credit card account.</p> <h2>What happens when you take a cash advance</h2> <p>Most credit card issuers impose entirely different terms on cash advance transactions. First, you will be charged a transaction fee, which will either be a flat rate or a percentage of the cash advance you're withdrawing (typically between 2 percent and 5 percent). Additional ATM fees and foreign transaction fees if you're out of the country may apply as well.</p> <p>In addition to fees, you'll likely be hit with a much higher interest rate. In some cases, the APR can be double the percentage for regular purchases. This catches many people off guard, since they're unaware different terms apply for cash advances. The longer it takes you to pay off this amount, the more that hefty interest will pile up.</p> <p>There is no grace period for cash advances, either. Typically, you have a month or so to pay off a credit card purchase in full before accruing any interest charges. This doesn't happen with a cash advance &mdash; you pay interest starting the day you make the transaction.</p> <p>Credit card companies also typically impose a separate limit on the amount of money you can take in a cash advance. This will often be much lower than your actual credit card limit.</p> <h2>How much will this actually cost you?</h2> <p>Let's say you are going out for dinner with friends, and you need to get a quick $40 from an ATM using your credit card. First, you will be hit with the cash advance fee. Next, you will start incurring interest on that withdrawal immediately (possibly around 30%). Furthermore, the operator of the ATM may also impose its own fees, which can be anywhere between $3&ndash;$5 per transaction. You could be looking at anywhere from $10&ndash;$15 in fees for taking out $40 (and that's assuming you pay it off by the next billing cycle). As you can see, that $40 dinner could wind up costing you $15 extra. Now imagine if you were borrowing $1,000 or more!</p> <h2>Alternatives to credit card cash advances</h2> <p>Simply put, you should always use a debit card to access cash instead of a credit card. Most major banks offer debit cards that can be used at in-network ATMs for no additional fees. In addition, many banks and credit unions are part of a larger ATM network that allows transactions for no additional fees.</p> <p>If the issue is that you're simply short on money, or stuck living paycheck-to-paycheck, a cash advance is not the solution. Instead, consider ways you can bring in extra income. Perhaps you can take up a part-time or side gig, sell a few items on eBay, or throw a big garage sale. (See also: <a href="http://www.wisebread.com/how-to-come-up-with-1000-in-the-next-30-days?ref=seealso" target="_blank">How to Come Up With $1,000 in the Next 30 Days</a>)</p> <h2>When is it Ok to take a cash advance?</h2> <p>A cash advance isn't the best option, but if it's your <em>only</em> option in an emergency, take it. Be sure to understand that there will be fees involved and that you need to repay the money you borrowed as soon as possible.</p> <p>Cash advances should never be used for everyday expenses, &quot;fun&quot; money (shopping or gambling, for example), or even to make ends meet until your next paycheck. It can be all too easy to fall into a cycle of cash advances, which will ultimately lead to credit card debt. (See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso" target="_blank">Fastest Way to Pay Off $10K in Credit Card Debt</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jason-steele">Jason Steele</a> of <a href="http://www.wisebread.com/how-a-credit-card-cash-advance-costs-you-more-than-a-purchase">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-dirty-secrets-of-credit-cards">The Dirty Secrets of Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-a-balance-transfer-offer-a-good-deal">Is a Balance Transfer Offer a Good Deal?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/i-dont-love-capital-one-how-to-get-a-lower-apr-or-possibly-not">How to Get a Lower APR, or Possibly Not</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/your-interest-rates-are-about-to-go-up">Your Interest Rates Are About to Go Up</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-scary-facts-about-credit-card-debt">6 Scary Facts About Credit Card Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards APR borrowing money cash advance debt emergencies fees interest rates limits transactions Fri, 14 Apr 2017 08:30:14 +0000 Jason Steele 1925859 at http://www.wisebread.com How to Protect Yourself From Predatory Lending http://www.wisebread.com/how-to-protect-yourself-from-predatory-lending <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-protect-yourself-from-predatory-lending" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-479413254_0.jpg" alt="Man learning how to recognize predatory lending" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>Predatory lending has long been a problem for consumers. There is no exact definition of a predatory lender, but in general, these lenders either try to overcharge consumers for loans, or talk them into riskier loans that come with higher interest rates. Predatory lenders have one goal: They want to make as much money as possible on their loans, regardless of whether the loan product actually makes financial sense for the consumers.</p> <p>How, exactly, do people fall for this? It's actually not surprising when you understand the degree of manipulation predatory lenders will use. By targeting mainly elderly, low-income, or simply uninformed victims, these financial predators bank on convincing folks with poor or no credit that they have no other options for obtaining financing.</p> <p>If you don't fit the above criteria, don't think you're completely off their radar, either. Should you ever lose your job, need cash for an emergency, or suddenly find yourself facing steep medical bills, you just might be the next target of a predatory lender.</p> <p>Worried that a predatory lender might have targeted you? Here are the warning signs.</p> <h2>The Lender Wants You to Sign Now</h2> <p>Honest lenders will never pressure you to sign loan documents before you are comfortable. Legitimate lenders give you time to study the paperwork and research the fees and rates associated with the loan.</p> <p>Predatory lenders want you to sign paperwork as quickly as possible. That way, they can stick you with their high-cost loans before you have the chance to research lower-cost alternatives. Never do business with a lender who pressures you to act quickly. The odds are high that such a lender is a predator.</p> <h2>The Interest Rate Suddenly Rises</h2> <p>Predatory lenders like to entice new customers by advertising below-market interest rates on their websites or print ads. But when you actually call these lenders, you're told that you don't qualify for these low rates. Once these lenders have you on the phone, they'll try to convince you to sign up for a loan with a far higher rate.</p> <p>Don't fall for this trick. Companies that advertise interest rates that are far lower than their competitors are usually not trustworthy. The odds are high that these are predatory lenders trying to trick gullible borrowers.</p> <h2>They Tell You Not to Worry About Your Credit Score</h2> <p>Legitimate lenders rely heavily on your FICO credit score to determine if you should qualify for a loan and at what interest rate. This score tells lenders how well you've paid your bills in the past.</p> <p>Beware of lenders who say that your credit score doesn't matter or that they can approve you for a loan no matter how low your score is. Lenders who make these promises will charge you sky-high interest rates because they know that you're desperate for a loan. You're much better off working to <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=internal" target="_blank">improve your credit score</a> than taking out a costly high-interest-rate loan. Pay all your bills on time and pay down as much of your credit card debt as possible. Slowly, but steadily, your credit score will start to rise, and you can avoid the high rates of predatory lenders. (See also: <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt?ref=seealso" target="_blank">5 Ways to Pay Off High Interest Credit Card Debt</a>)</p> <h2>The Lender Asks You to Lie</h2> <p>Making false claims about your income or debt on a loan application is a crime, and you could face significant fines if you do. Predatory lenders, though, might encourage you to inflate your income or provide other false information.</p> <p>Ignore this temptation. No legitimate lender will ask you to lie on an application. Instead, lenders will take extra steps to make sure that the information you do provide on an application is true. For instance, they'll ask you to provide copies of your most recent paycheck stubs, bank account statements, and tax returns to verify your income.</p> <h2>Your Lender Tries to Talk You Into a Riskier Loan</h2> <p>Be careful if your lender continues to push a loan that sounds risky. Maybe you want to apply for a fixed-rate loan with a term of 15 or 30 years. If your lender pressures you to instead apply for an interest-only loan with a balloon payment &mdash; or something equally as complicated or risky &mdash; walk away. Legitimate lenders will never try to talk you into a loan that you don't want.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/how-to-protect-yourself-from-predatory-lending">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-10"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-the-age-of-your-credit-history-matters">Why the Age of Your Credit History Matters</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-surprising-ways-revolving-debt-helps-you">5 Surprising Ways Revolving Debt Helps You</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-shouldnt-panic-if-your-credit-score-drops">Why You Shouldn&#039;t Panic If Your Credit Score Drops</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-overdraft-protection-racket-why-banks-want-you-to-overdraw-and-how-you-can-get-your-money-back">The Overdraft Protection Racket: Why Banks Want You To Overdraw, And How You Can Get Your Money Back.</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-avoid-a-sweetheart-scam">How to Avoid a &quot;Sweetheart Scam&quot;</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Consumer Affairs credit score interest rates lies loans manipulation predatory lending risk scams warning signs Tue, 07 Mar 2017 10:31:34 +0000 Dan Rafter 1901334 at http://www.wisebread.com Why the Age of Your Credit History Matters http://www.wisebread.com/why-the-age-of-your-credit-history-matters <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-the-age-of-your-credit-history-matters" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-472468032.jpg" alt="the age of your credit history" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>A healthy credit score shouldn't be underestimated.</p> <p>This three-digit number plays a pivotal role in your financial life, including whether or not you'll qualify for auto loans, mortgages, or credit cards, and if so, what interest rates you'll pay. It can even affect your career, particularly if it's in the finance field: A brokerage firm isn't likely to hire a candidate they suspect isn't good with money. (See also: <a href="http://www.wisebread.com/15-surprising-ways-bad-credit-can-hurt-you?ref=seealso" target="_blank">15 Surprising Ways Bad Credit Can Hurt You</a>)</p> <p>Given how much weight your credit score carries, you should do everything within your power to maintain a high score. Yet, before you can maintain a good score, you have to understand the components that make up your credit score.</p> <h2>What Makes Up Your Credit Score</h2> <p>Credit scores aren't determined by a single factor, but rather multiple factors. Once you open a credit account, your creditors report account activity to the credit bureaus on a regular basis. The bureaus compile data related to your accounts, and based on reported information, the bureaus formulate a credit score.</p> <p>It probably comes as no surprise that your payment history and the amounts you owe have a tremendous impact on your personal score. Your payment history makes up 35% of your score, while the amount you owe makes up 30% of your score. If you pay your bills on time, avoid delinquencies, and keep your balances within a reasonable range, you'll eventually build up to a solid score.</p> <p>But even when you take these measures, good credit doesn't happen overnight. Because there's another factor that contributes to your overall score: When credit bureaus formulate credit scores, they also take into account the <em>age </em>of your credit history.</p> <p>The age or length of your credit history &mdash; which makes up 15% of your credit score &mdash; doesn't have as big an impact on your score as your payment history and amounts owed. Still, you shouldn't downplay the importance of credit age.</p> <h2>How Credit Age Relates to Credit Risk</h2> <p>Most of us rely on credit for an auto loan, a house, and a credit card. Even so, being a creditor is risky business, and banks don't arbitrarily approve credit applications. They consider several factors before approving financing, such as your income and your credit score. Even if you have adequate income and pay your bills on time, the bank might reject your application if you don't meet the minimum credit score requirement for a loan. This can happen if you have a young credit history. (See also: <a href="http://www.wisebread.com/why-you-need-credit-and-how-to-build-it-from-scratch?ref=seealso" target="_blank">How to Build Your Credit From Scratch</a>)</p> <p>The age of credit history affects overall scores because a longer history provides a better assessment of risk level. Credit age takes two elements into consideration: the age of your oldest account, and the average age of all your accounts. The longer accounts remain open, the more your credit matures. And as your credit matures, credit scoring models slowly add points to your score.</p> <p>To illustrate, if you've had a credit history for the past six years with no negative activity appearing on your credit report, credit bureaus evaluate your entire borrowing pattern, and based on your history and record, deem you a responsible borrower. This is a fairly accurate assessment given the length of credit history. As a responsible borrower, you're rewarded with additional credit score points.</p> <p>But let's say you've only had a credit file for six months or a year. Given your short credit history, credit bureaus can't accurately rate creditworthiness. Despite paying your bills on time, you don't have a long borrowing track record. There just isn't enough evidence to gauge how well you manage credit &mdash; this happens with time. You have a short credit history, and unfortunately, your credit score pays the price. The good news, however, is that this is a temporary problem.</p> <h2>What Can You Do?</h2> <p>Credit scores range from 300 to 850. If you're aiming for a <a href="http://www.wisebread.com/5-ways-life-is-amazing-with-an-800-credit-score?ref=internal" target="_blank">perfect credit score</a>, understand that it takes years of responsible credit habits to achieve. It doesn't matter how well you manage your credit accounts in the first one or two years, you probably won't have as high of a credit score as someone who's had A+ credit for eight or nine years &mdash; but you can get there.</p> <p>Remember, your payment history and the amount you owe make up 35% and 30% of your credit score, respectively. So while your credit score might be low due to a short credit history today, keeping your credit card balances low and making timely monthly payments will gradually increase your score. (See also: <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso" target="_blank">How to Use Credit Cards to Improve Your Credit Score</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/why-the-age-of-your-credit-history-matters">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-11"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-surprising-ways-revolving-debt-helps-you">5 Surprising Ways Revolving Debt Helps You</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-why-credit-scores-and-reports-are-not-the-same">Here&#039;s Why Credit Scores and Reports Are Not the Same</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-protect-yourself-from-predatory-lending">How to Protect Yourself From Predatory Lending</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-shouldnt-panic-if-your-credit-score-drops">Why You Shouldn&#039;t Panic If Your Credit Score Drops</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-why-youre-too-old-or-too-young-for-a-mortgage-loan">4 Reasons Why You&#039;re Too Old — Or Too Young — For a Mortgage Loan</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance age credit bureaus credit history credit score interest rates loans on time payments risk Tue, 07 Mar 2017 10:01:04 +0000 Mikey Rox 1901331 at http://www.wisebread.com 5 Sales Strategies Your Bank Uses to Make Money http://www.wisebread.com/5-sales-strategies-your-bank-uses-to-make-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-sales-strategies-your-bank-uses-to-make-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-482043394.jpg" alt="Woman learning sales strategies her bank is using" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Many people fail to realize that their banking institution is, in fact, a business. And as such, they're using a wide range of marketing and sales strategies on you, whether you realize it or not. It's up to you to be the smart customer. Let's review five of the sales strategies you should keep an eye on.</p> <h2>1. Cash or Gift Card Offer for Opening an Account</h2> <p>When a new bank branch opens in your neighborhood, you may receive a mailer informing you that you could receive a hefty cash bonus or gift card for opening a new account. Free money may sound great, until you realize that there is a catch. Very often you have to meet a minimum balance deposit for a required period of time, effectively locking you into doing business with the bank. Think about it: How often do you switch banks? Consider whether you really want to deal with having a new bank account before you jump at the offer.</p> <h2>2. Free Checking Account</h2> <p>There's no such thing as a free lunch, and some <a href="http://www.wisebread.com/banks-still-offering-free-checking-and-great-interest-rates?ref=internal" target="_blank">free checking accounts</a> are no exception. Common requirements that banks impose on their customers include:</p> <ul> <li>Maintaining a minimum balance. Some banks require a minimum daily balance per statement cycle to have a $0 monthly maintenance fee;<br /> &nbsp;</li> <li>Meeting a minimum number of transactions. Some banks may require you to use your debit card a minimum of 10 to 12 times per month; or<br /> &nbsp;</li> <li>Making at least one monthly deposit. Often, that monthly deposit must be a direct deposit from your employer.</li> </ul> <p>Banks may set only one of these requirements or a combination of them. If you were to fall short on any of these requirements &mdash; such as making only 11 out of 12 required monthly transactions, or having an account balance below the required minimum for even just one day &mdash; you would get charged a fee for using your &quot;free&quot; checking account. Make sure you can easily meet their requirements before signing up.</p> <h2>3. Higher Interest Rate on Savings</h2> <p>A bank may offer what sounds like a very high savings rate, but the bank will use language such as &quot;up to 2% APY.&quot; To get the promised 2%, you'd have to keep a very high balance. Depending on the amount of money you actually have to put into the savings account, you might end up with a lower rate than you already have &mdash; 0.20% or 0.25% APY, for example. (See also: <a href="http://www.wisebread.com/5-best-online-savings-accounts?ref=seealso" target="_blank">Best Online Savings Accounts</a>)</p> <h2>4. ATM Fees Refund</h2> <p>Let's face it: ATM fees are annoying, and some banks will offer to reimburse all or some of the ATM fees to make up for the inconvenience. However, the limit of the ATM fee reimbursement varies widely per banks. Some banks offer $10, $15, or $20 per statement cycle or month. With the average ATM fee at $2.90 in 2016, you could easily eat up any of those refunds in just a few trips to the ATM. Consider your ATM needs and options in your area before you sign up with a bank with limited network ATMs. (See also: <a href="http://www.wisebread.com/8-ways-to-make-sure-you-never-pay-an-atm-fee?ref=seealso" target="_blank">8 Ways to Avoid ATM Fees</a>)</p> <h2>5. Mobile Check Deposit</h2> <p>You've seen the TV ads: a busy Millennial, mom, or retiree totally ecstatic about how they can save time by depositing checks on the go with their smartphone. Snap, click, deposit! It's great for the average person with a few checks for small amounts, but if you're a freelancer or small business owner who thinks this will save you trips to the bank, think again. There are all sorts of limits on the amount per check (and even amount per 30 days) that you can deposit this way. Some banks offer special equipment that allows higher limits, but still, it may not be as convenient as you think. (See also: <a href="http://www.wisebread.com/7-modern-ways-to-send-money-to-your-kid?ref=seealso" target="_blank">Modern Ways to Send Money Instead of Using a Check</a>)</p> <h2>The Bottom Line: Know Your Bank Fees!</h2> <p>When you're unhappy with your current financial institution, the promise of better banking through a higher savings interest rate, lack of fees, or refund of all ATM fees may sound enticing. While some of these selling points can indeed improve your financial situation, make sure to thoroughly review the requirements, if any, to gain access to the promised features. (See also: <a href="http://www.wisebread.com/switch-to-a-better-bank-in-5-easy-steps?ref=seealso" target="_blank">Switch to a Better Bank in 5 Easy Steps</a>)</p> <p>When facing a list of potential requirements, do a cost-benefit analysis. For example, can I leave a $5,000 deposit to get a 1.5% APY without putting any pressure on my monthly budget? If so, then take advantage of that higher savings rate. Be a smart bank user, shop around, and evaluate all of your options.</p> <h2 style="text-align: center;">Like this article? Pin it!&nbsp;</h2> <p>&nbsp;</p> <p style="text-align: center;"><a href="//www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-sales-strategies-your-bank-uses-to-make-money&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%20Sales%20Strategies%20Your%20Bank%20Uses%20to%20Make%20Money.jpg&amp;description=5%20Sales%20Strategies%20Your%20Bank%20Uses%20to%20Make%20Money" data-pin-do="buttonPin" data-pin-config="above" data-pin-color="red" data-pin-height="28"><img src="//assets.pinterest.com/images/pidgets/pinit_fg_en_rect_red_28.png" alt="" /></a> </p> <!-- Please call pinit.js only once per page --><!-- Please call pinit.js only once per page --><script type="text/javascript" async defer src="//assets.pinterest.com/js/pinit.js"></script></p> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Sales%20Strategies%20Your%20Bank%20Uses%20to%20Make%20Money.jpg" alt="5 Sales Strategies Your Bank Uses to Make Money" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/5-sales-strategies-your-bank-uses-to-make-money">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/switch-to-a-better-bank-in-5-easy-steps">Switch to a Better Bank in 5 Easy Steps</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-signs-its-time-to-find-a-new-bank">5 Signs It&#039;s Time to Find a New Bank</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-earn-a-good-interest-rate-in-a-low-rate-environment">How to Earn a Good Interest Rate in a Low-Rate Environment</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-benefits-and-drawbacks-of-credit-unions">The Benefits and Drawbacks of Credit Unions</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-countries-where-banks-pay-crazy-interest-rates">10 Countries Where Banks Pay Crazy Interest Rates</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking atm fees atms cash incentives credit unions interest rates mobile deposits sales strategies savings accounts Tue, 21 Feb 2017 10:31:29 +0000 Damian Davila 1893288 at http://www.wisebread.com The 25 Best Credit Cards From Credit Unions http://www.wisebread.com/the-best-credit-cards-from-credit-unions <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-best-credit-cards-from-credit-unions" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_smile_credit_card_588598074.jpg" alt="Woman using best credit cards from credit unions" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Credit unions have come a long way from their local, affinity group roots. These days credit unions offer all of the convenience and service of their much larger brethren, but usually at lower cost &mdash; and often with more personal customer service. Joining a credit union has never been easier, as most credit unions make membership available to almost anyone through affiliated nonprofits and groups. Of course, credit cards are among the banking products a credit union will offer.</p> <p>We've collected 25 of the best credit union credit cards on offer, many equal or superior to big bank cards. Have a look, and then decide if it's time to finally <a href="http://www.wisebread.com/9-good-reasons-to-choose-a-credit-union-instead-of-a-bank">dump your bank and join a credit union</a>.</p> <h2>Our Top 10 Credit Union Credit Cards</h2> <p>The 10 cards at the top of our list feature relatively low interest rates and familiar credit card features and perks.</p> <h3>State Department Federal Credit Union: Visa Platinum Card</h3> <p>The SDFCU offers a pair of Platinum Visa cards with several attractive benefits, including no balance transfer fees, and a rewards program called &quot;Flexpoint.&quot; Variable interest rates range between 7.49% and 15.24%, depending on credit score. The SDFCU is open to employees of the US State Department and their families, affiliated companies, and members of the American Consumer Council, which anyone can join.</p> <h3>GTE Financial Credit Union: Visa Platinum Card</h3> <p>The Platinum Visa from GTE Federal Credit Union offers attractive interest rates (8.49% for the best credit scores) and no balance transfer fees. Many credit union cards are shy with the rewards points, but this card features 2x and 3x points on promotional purchases throughout the year. Visa Alerts and Travel and Baggage insurance round out the perks. Membership in the GTEFCU is through employers, family members, or by joining GTE's CU Savers club.</p> <h3>Air Force Federal Credit Union: Visa Platinum Card<strong> </strong></h3> <p>You don't have to be a pilot to enjoy the benefits of the AFFCU Platinum Visa.There's no annual fee for this card, relatively low interest rates (starting at 8% for those with excellent credit scores), and 2,500 bonus CURewards points just for signing up. Membership is open to military service personnel and their families, government employees and their families, DOD contractors, and members of the Airman Heritage Foundation, which anyone can join for a fee.</p> <h3>Navy Federal Credit Union: cashRewards Credit Card</h3> <p>This card features no annual fee and an attractive cash back rewards program that returns 1.5% for every dollar spent. Interest rates start at 9.9%, so be sure to take advantage of the rewards while keeping balances at zero. There are no annual fees, no balance transfer fees, and no foreign transaction fees with this card. Membership is open to current and former service members, DOD civilians, and their families.</p> <h3>Pentagon Federal Credit Union: Platinum Rewards Visa Signature Card</h3> <p>The relatively high interest rates on this card (starting at 10.24%), make it an unwise choice for cardholders who carry a balance. For those who can keep balances low, the attractive rewards program can pay well, with 5x points for gasoline purchases and 3x for groceries. No annual fee and no foreign transactions fee keep the cost of this card down. PenFed membership is open to service members and their families, affiliate organizations, and members of Voices for America's Troops or the National Military Family Association, both of which anyone can join for a one-time fee.</p> <h3>Pentagon Federal Credit Union: Premium Travel Rewards American Express</h3> <p>As with the other PenFed card on this list, interest rates aren't the lowest, but the rewards are attractive, especially for frequent travelers. This card features a 12 month 0% balance transfer APR and pays 20,000 bonus points if new cardholders spend $2,500 in the first three months. There's no annual fee and no foreign transaction fees. PenFed membership is open to service members and their families, members of affiliate organizations, and members of Voices for America's Troops or the National Military Family Association, which anyone can join for a one-time fee.</p> <h3>Navy Federal Credit Union: Go Rewards Visa Signature Card</h3> <p>This Visa Signature card offers a decent rewards program &mdash; 3x points for restaurants, 2x for gasoline and 1x for everything else &mdash; at the cost of relatively high interest rates (9.74% to 18%, depending on credit score). There is no annual fee, no balance transfer fee, and no foreign transaction fee. Membership is open to current and former service members, DOD civilians, and their families.</p> <h3>Affinity Plus Credit Union: Visa Premier Classic</h3> <p>This no frills card from Affinity Plus Credit Union offers relatively low interest rates (8.65% to 18%, depending on creditworthiness), no annual fee, and no balance transfer fee. Other perks include a Rental vehicle damage waiver and Visa spending alerts. Membership is open to employees of the State of Minnesota, affiliate organizations, and members of the Affinity Plus Foundation, which anyone can join for a one-time fee.</p> <h3>NASA Federal Credit Union: Visa Platinum Advantage Rewards</h3> <p>This basic rewards card offers a point per dollar spent, which are redeemable for travel and merchandise. There is no annual fee and no balance transfer fee. Interest rates range from 10.17% to 18%, with a balance transfer rate of 7.90% on transfers made in the first 90 days. Membership is open to NASA employees and their families, affiliate organizations, and members of the National Space Society, which is free to join.</p> <h3>McGraw-Hill Federal Credit Union: Visa Platinum Card</h3> <p>This Platinum Visa card features interest rates between 9.9% and 18%, which is middle of the pack for this collection of cards. There is no annual fee. The rewards program requires a separate login on the credit union's website. The card offers Visa services not every credit union card offers, such as roadside assistance and car rental insurance. Membership is open to employer groups, members of their families, and members of VOICE foundation, which anyone can join.</p> <h2>Other Credit Union Credit Cards to Consider</h2> <p>If none of the above suit your needs, consider one of these.</p> <h3>Pentagon Federal Credit Union: Gold Visa Card</h3> <p>No frills, no fees, and relatively low interest rates (8.99% to 18%).</p> <p>PenFed membership is open to service members and their families, affiliate organizations, and members of Voices for America's Troops or the National Military Family Association, which anyone can join for a one-time fee.</p> <h3>Pentagon Federal Credit Union: Platinum Cash Rewards Visa Card</h3> <p>Cash back on gas of 3% or 5%, depending on which card you qualify for (Standard or Plus).</p> <p>PenFed membership is open to service members and their families, affiliate organizations, and members of Voices for America's Troops or the National Military Family Association, which anyone can join for a one-time fee.</p> <h3>Pentagon Federal Credit Union: Promise Visa Card</h3> <p>No fees, relatively low interest rates (8.99% to 18%).</p> <p>PenFed membership is open to service members and their families, affiliate organizations, and members of Voices for America's Troops or the National Military Family Association, which anyone can join for a one-time fee.</p> <h3>Pentagon Federal Credit Union: Defender Visa Signature Card</h3> <p>Cash back on all purchases of 1.5% and $100 bonus credit if new cardholders spend $1500 in the first three months.</p> <p>PenFed membership is open to service members and their families, affiliate organizations, and members of Voices for America's Troops or the National Military Family Association, which anyone can join for a one-time fee.</p> <h3>Lake Michigan Credit Union: Prime Platinum Visa Card</h3> <p>This card offers a relatively low interest rate (Prime + 3.00%) and no annual fee.</p> <p>Membership is open residents of Michigan, family members, and members of the ALS foundation, which requires a one-time fee.</p> <h2>Lake Michigan Credit Union: Max Rewards Visa Card</h2> <p>Cash back of 3% on gas (up to $500 per month), 2% on groceries (unlimited) and 1% on everything else (unlimited), redeemable via the CURewards program. No annual fee and no balance transfer fee.</p> <p>Membership is open residents of Michigan, family members, and members of the ALS foundation, which requires a one-time fee.</p> <h3>NASA Federal Credit Union: Visa Platinum Cash Rewards</h3> <p>Unlimited 1.5% cash back on all purchases. No annual, balance transfer, or foreign transaction fees.</p> <p>Membership is open to NASA employees and their families, affiliate organizations, and members of the National Space Society, which is free to join.</p> <h3>Affinity Plus Credit Union: Visa Premier Select Rewards</h3> <p>No annual or balance transfer fees. Earn one CURewards point per dollar spent, Visa Signature perks such as travel accident insurance and cell phone protection.</p> <p>Membership is open to employees of the State of Minnesota, affiliate organizations, and members of the Affinity Plus Foundation, which anyone can join for a one-time fee.</p> <h3>Apple Federal Credit Union: Visa Platinum</h3> <p>Low variable interest rates (5.99% to 18%) and no penalty APR. No annual, balance transfer, or foreign transaction fees.</p> <p>Membership in the credit union is open to anyone who lives, works, worships, volunteers, or attends school in several Northern Virginia counties, their families, and affiliated employee groups.</p> <h3>Apple Federal Credit Union: Signature Reward Visa</h3> <p>No annual, balance transfer, or foreign transaction fees. Earn 3x points on gas, 2x on groceries and 1x on everything else.</p> <p>Membership in the credit union is open to anyone who lives, works, worships, volunteers, or attends school in several Northern Virginia counties, their families, and affiliated employee groups.</p> <h3>Kitsap Credit Union: Visa Gold Card</h3> <p>Low variable APR (Prime +2.9%) and no annual, balance transfer, or foreign transaction fees.</p> <p>Membership is open to people who live work, or worship in the state of Washington.</p> <h3>Abri Credit Union: Visa Platinum Credit Card</h3> <p>Low interest rates (Prime + 3.9%), no annual, balance transfer, or foreign transaction fees. Promotional balance transfer rate of 1.99% for six months.</p> <p>Membership is open to people who live in select Chicagoland counties and their families.</p> <h3>Fort Community Credit Union: Visa Platinum Credit Card</h3> <p>Low variable APR (Prime + 3.99%), no annual, balance transfer, or foreign transaction fees. Cash back of 1% on all purchases.</p> <p>Membership is open to people who live and work in select counties in and around Milwaukee, Wisconsin, and their families.</p> <h3>America First Credit Union: Visa Platinum Credit Card</h3> <p>Cash back of 1.5% on all purchases, no annual or balance transfer fees.</p> <p>Membership is open to those who live, work, or worship in select Utah, Arizona, and Nevada counties.</p> <h3>Suncoast Credit Union: Reward Platinum Visa</h3> <p>Variable interest rates starting at 8.9%, one rewards point for every dollar spent, redeemable for travel and merchandise. No annual or balance transfer fees.</p> <p>Membership is open to those who live or work in select Florida counties and their families.</p> <h3>Alliant Credit Union: Visa Platinum Credit Card</h3> <p>Introductory APR of 0% for 12 months; variable after (9.74% to 21.74%). No annual fee, no balance transfer fee.</p> <p>Membership is open to select employer groups, people who live or work in select Chicagoland counties, or members of a nonprofit, which anyone can join for a one-time fee.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/greg-go">Greg Go</a> of <a href="http://www.wisebread.com/the-best-credit-cards-from-credit-unions">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-a-credit-card-cash-advance-costs-you-more-than-a-purchase">How a Credit Card Cash Advance Costs You More Than a Purchase</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-dirty-secrets-of-credit-cards">The Dirty Secrets of Credit Cards</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/credit-card-fees-hidden-and-otherwise">Credit Card Fees: Hidden and Otherwise</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-a-balance-transfer-offer-a-good-deal">Is a Balance Transfer Offer a Good Deal?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">The Best 0% Balance Transfer Credit Cards</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards APR cash back credit unions interest rates rewards cards Sat, 28 Jan 2017 01:09:38 +0000 Greg Go 1882265 at http://www.wisebread.com Why You Shouldn't Panic If Your Credit Score Drops http://www.wisebread.com/why-you-shouldnt-panic-if-your-credit-score-drops <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-you-shouldnt-panic-if-your-credit-score-drops" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_shocked_bills_183361464.jpg" alt="Woman learning not to panic after a credit score drop" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Credit scores matter &mdash; in a big way. Mortgage lenders rely on these numbers to determine who qualifies for home loans and at what interest rates. You'll struggle to <a href="http://www.wisebread.com/5-best-credit-cards-for-people-with-excellent-credit?ref=internal">qualify for the best credit cards</a> if your score is too low. And getting an auto loan? A low score will leave you again with higher interest rates, if you can find financing at all.</p> <p>So what if your credit score takes a fall? First, don't panic. Second, it's time to take the steps necessary to <a href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps?ref=internal">boost your score</a>.</p> <h2>How Scores Work</h2> <p>Before panicking over a credit score drop, it's important to learn how scores work.</p> <p>The most important credit score is your FICO credit score. Generally, lenders consider a FICO score of 740 or more to be in the top range. But if your score is under 640, you'll struggle to qualify for mortgage or auto loans. And when you do qualify, you'll pay high interest rates because lenders view you as a risky borrower.</p> <p>Your credit score is a quick representation of how well you've handled your credit in the past. If you have a history of mailing in credit card payments late, your score will fall. If you've missed payments on your auto loan in the recent past, your score will, again, take a tumble. A large amount of credit card debt could hurt your score, too. (See also: <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=seealso">The Most Important Ratio That Determines Your Credit Score</a>)</p> <p>If you instead have a history of paying your bills on time and have a manageable amount of credit card debt, you should have a solid FICO credit score.</p> <h2>Checking Your Score</h2> <p>You can order one free copy of each of your three credit reports &mdash; maintained by the national credit bureaus of TransUnion, Experian, and Equifax &mdash; each year from AnnualCreditReport.com. This report will list your credit card, auto, mortgage, and other open accounts. It will also list any of your missed or late payments from the last seven years.</p> <p>This is important information to have: It can tell you quickly why your credit score might be lower than you thought. A single missed or late payment can drop your credit score by more than 100 points.</p> <p>But a credit report doesn't list your credit score. To get your score, you'll usually have to pay. You can spend about $15 to order your FICO credit score from Experian, Equifax, or TransUnion. Each of the scores from these credit bureaus might be slightly different, but they should all be fairly similar.</p> <p>Your credit card provider might <a href="http://www.wisebread.com/the-5-best-credit-cards-that-offer-free-credit-scores?ref=internal">provide your credit score</a> with each bill it sends you, too. A growing number of card providers are doing this. Be careful, though: This score might not be your official FICO score, but instead an alternative score. These alternative scores do generally sync up with what your actual FICO score might be, but it's best to order your FICO score if you want to see the same credit score that mortgage and auto lenders will see.</p> <h2>If Your Score Has Dropped</h2> <p>What if your score has taken a fall since the last time you reviewed it? What if it's much lower than you expected?</p> <p>Again, this is not the time to panic. It's the time to act.</p> <p>First, try to determine <a href="http://www.wisebread.com/10-surprising-ways-to-negatively-affect-your-credit-score?ref=internal">why your score might have fallen</a>. Some reasons are obvious: If you forgot to pay your auto loan earlier this year or if you sent in a credit card payment more than 30 days late, your score could dip by 100 points or more. But smaller dips &mdash; ranging from 10 to 60 points or so &mdash; can be the result of less obvious financial missteps.</p> <p>Did you close a credit card lately? You might think that's a smart financial move. After all, once you've paid off a credit card account, you don't want to run up its balance again. By closing it, that can't happen.</p> <p>But closing a credit card can ruin something called your <em>credit utilization ratio</em>. This ratio measures how much of your available credit you are using at any one time. Using too much of your available credit can cause your FICO score to fall. Closing an open credit card account can immediately weaken this ratio. (See also: <a href="http://www.wisebread.com/5-times-its-okay-to-close-a-credit-card?ref=seealso">5 Times It's Okay to Close a Credit Card</a>)</p> <p>Here's an example: Say you have three credit cards all with an available credit limit of $3,000. This gives you a total available credit of $9,000. Say you also have $3,000 worth of credit card debt. You are now using 33% of your available credit.</p> <p>If you close one of those cards, you'll immediately lower the amount of credit available to you by $3,000, from $9,000 to $6,000. If you have the same $3,000 of credit card debt, you are now using 50% of your available credit, for a significantly higher credit utilization ratio.</p> <p>Another reason for a sudden fall in your FICO credit score: Have you been applying for several new credit cards? If you are, your score can fall. Every time you apply for a new form of credit, something called an <em>inquiry </em>is filed on your credit report. Each inquiry can cause your credit score to fall by a small amount, maybe one to five points. If you make several inquiries for new credit at the same time, this can cause a bigger drop to your score.</p> <p>The good news is that inquiries don't always hurt your score by much. Say you are ready to apply for a mortgage loan and you are shopping around with different mortgage lenders. Each of these lenders will run a credit check on you. Each of the inquiries that these lenders make, though, will be counted as just one total inquiry. That's because you are applying for one mortgage loan, not several new credit cards.</p> <h2>Fixing a Drop</h2> <p>Once you determine why your credit score has fallen, it's time to fix the problem.</p> <p>Realize, though, that if your score has fallen significantly from a missed or late payment, it will take time to recover. Pay your bills on time and cut back on your credit card debt. Do this for a long enough period of time &mdash; several months, maybe a year or longer &mdash; and your FICO credit score will steadily improve. (See also: <a href="http://www.wisebread.com/7-ways-to-increase-your-credit-score-quickly?ref=seealso">How to Improve Your Credit Score Quickly</a>)</p> <p>If your score has fallen by a smaller amount, say 10 to 50 points, your recovery period will be shorter. Often, these drops will fix themselves. Pay down a good chunk of your credit card debt &mdash; without closing any credit card accounts &mdash; and your score should improve. Keep paying your bills on time every month, and, again, your score will rise.</p> <p>There are no quick fixes for drops in your credit score. But there are also no scores that can't be rebuilt. All it requires is patience, a willingness to <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal">pay down large amounts of credit card debt</a> and a vow to pay all of your bills on time every month.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/why-you-shouldnt-panic-if-your-credit-score-drops">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-surprising-ways-revolving-debt-helps-you">5 Surprising Ways Revolving Debt Helps You</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-surprising-things-lenders-check-besides-your-credit-score">4 Surprising Things Lenders Check Besides Your Credit Score</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-why-credit-scores-and-reports-are-not-the-same">Here&#039;s Why Credit Scores and Reports Are Not the Same</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-the-age-of-your-credit-history-matters">Why the Age of Your Credit History Matters</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-protect-yourself-from-predatory-lending">How to Protect Yourself From Predatory Lending</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance credit history credit score FICO score interest rates loans qualifying Thu, 15 Dec 2016 10:00:09 +0000 Dan Rafter 1852821 at http://www.wisebread.com 8 Investments That May Soar During Trump's Term http://www.wisebread.com/8-investments-that-may-soar-during-trumps-term <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-investments-that-may-soar-during-trumps-term" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/donald_trump_speech_609937238.jpg" alt="Learning investments that may soar during Trump&#039;s term" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>What will the presidency of Donald J. Trump mean for your finances? No one knows just yet, but it's possible to make some educated guesses based on some of his public statements.</p> <p>President-Elect Trump has advocated for lower taxes and higher spending on infrastructure and defense. He's also pushed for policies that could lead to higher interest rates and inflation.</p> <p>It's worth noting that all investment returns are based on a variety of factors separate from who lives in the White House. But here are some investments that might do well under a Trump presidency.</p> <h2>1. Defense Contractors</h2> <p>At various times, President-Elect Trump has spoken about the need to bolster the U.S. Military and has talked about acting more aggressively against terrorism. So it's not a bad bet to look at major defense contractors including Lockheed Martin [NYSE: <a href="https://www.google.com/finance?cid=21553">LMT</a>], Northrop Grumman [NYSE: <a href="https://www.google.com/finance?q=NYSE%3ANOC&amp;ei=D9I9WICUI8yJef_Us_AL">NOC</a>], and Raytheon [NYSE: <a href="https://www.google.com/finance?q=RTN&amp;ei=NdI9WJmYH8_BeuKspbAL">RTN</a>]. If you're not comfortable picking individual stocks, take a look at mutual funds like the Fidelity Select Defense&amp; Aerospace fund [NYSE: <a href="https://www.google.com/finance?q=FSDAX&amp;ei=QtI9WJDHLJLteM3pgcgL">FSDAX</a>] or ETFs like the iShares Aerospace&amp; Defense ETF [NYSE: <a href="https://www.google.com/finance?q=ITA&amp;ei=W9I9WPDdGsmPeYPRs-AL">ITA</a>].</p> <h2>2. Oil Stocks</h2> <p>Trump has voiced support for allowing oil companies to drill on more land, including offshore areas that were declared off limits under President Obama. Such a change would, in theory, give companies like Exxon [NYSE: <a href="https://www.google.com/finance?q=NYSE%3AXOM&amp;ei=fNI9WNDlDcq_evSXhOAL">XOM</a>] and Chevron [NYSE: <a href="https://www.google.com/finance?q=CVX&amp;ei=wtI9WNm-J8LLeZnHi-AM">CVX</a>] access to more supply. There is one big caveat here, which is that oil prices have already dropped due to a glut of supply versus demand, so it's unclear what impact any changes might immediately have.</p> <h2>3. Heavy Equipment Manufacturers</h2> <p>The President-Elect has said he will &quot;Make America Great Again&quot; through massive investment in infrastructure. This means big construction and repairs of roads, bridges, buildings, and airports. And that work can't be carried out without big machines. Look to a stock like Caterpillar [NYSE: <a href="https://www.google.com/finance?q=CAT&amp;ei=1dI9WMHkHdibee3Wn6AL">CAT</a>], which saw shares rise 7% immediately after Trump's election. Asian companies including Doosan (the maker of Bobcat), Hitachi, and Komatsu could also see good results from an infrastructure spending binge.</p> <h2>4. Steel Companies</h2> <p>The steel industry would also get a boost from more infrastructure spending, and Trump has also promised to crack down on the illegal &quot;dumping&quot; of Chinese steel into the U.S. market. If indeed he's serious about support for American steel, that could be a boon for companies like Nucor [NYSE: <a href="https://www.google.com/finance?q=NYSE%3ANUE&amp;ei=ANM9WNHtNNSIe63PqagL">NUE</a>] and U.S. Steel, [NYSE: <a href="https://www.google.com/finance?q=NYSE%3AX&amp;ei=GNM9WOmbI86feYqyrdAL">X</a>].</p> <h2>5. Cement Companies</h2> <p>Another sector that could see good profits from more infrastructure spending. And if Trump somehow manages to build that wall along the Mexican border, it has to be made out of something. Most of the largest cement manufacturers are overseas, but look at France-based Lafarge, Germany-based Heidelberg, Mexico-based Cemex, and a host of Chinese manufacturers.</p> <h2>6. Private Prisons</h2> <p>The Obama administration this year announced that the Justice Department would phase out its use of private prisons. But there's no guarantee Trump won't halt that process. And if he follows through on his efforts to deport millions of illegal immigrants, the country may need jail capacity to hold them as they go through a judicial process. Companies including Geo Group [NYSE: <a href="https://www.google.com/finance?q=NYSE%3AGEO&amp;ei=JdM9WIn8N8LLeZnHi-AM">GEO</a>] and CoreCivic [NYSE: <a href="https://www.google.com/finance?q=CXW&amp;ei=TtM9WOnyBtibee3Wn6AL">CXW</a>] could cash in. Also look to companies that provide health care and phone services to prisons.</p> <h2>7. Banks</h2> <p>President-Elect Trump has said he will roll back many regulations that were put in place after the financial crisis in 2009. Some supporters have argued that repeal of the Dodd-Frank legislation will free banks up to lend more. Shares of JPMorgan, Goldman Sachs, and Bank of America have shot up since the election. Investors in big banks also may be excited by proposals for lower taxes and more infrastructure savings.</p> <h2>8. Commodities</h2> <p>Many observers predict that Trump's economic policies could lead to inflation. And when prices go up, it's usually a good thing for things like precious metals, oil, and agriculture products. It's possible to invest in commodities directly, or invest in mutual funds and exchange-traded funds that track all commodities or commodity sectors as a group.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/8-investments-that-may-soar-during-trumps-term">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/could-trump-bring-higher-interest-rates-and-inflation-consider-these-money-moves">Could Trump Bring Higher Interest Rates and Inflation? Consider These Money Moves</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/while-waiting-for-rates-i-bonds">While Waiting for Rates: I-Bonds</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-cool-things-bonds-tell-you-about-the-economy">7 Cool Things Bonds Tell You About the Economy</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-invest-when-youre-in-debt">6 Ways to Invest When You&#039;re In Debt</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-carried-interest-may-affect-our-taxes">How &quot;Carried Interest&quot; May Affect Our Taxes</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment donald trump inflation infrastructure interest rates military oil presidency prisons steel Mon, 05 Dec 2016 11:00:09 +0000 Tim Lemke 1845282 at http://www.wisebread.com Could Trump Bring Higher Interest Rates and Inflation? Consider These Money Moves http://www.wisebread.com/could-trump-bring-higher-interest-rates-and-inflation-consider-these-money-moves <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/could-trump-bring-higher-interest-rates-and-inflation-consider-these-money-moves" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/donald_trump_98978789.jpg" alt="Donald Trump could bring higher interest rates and inflation" title="" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>In a matter of weeks, America will have a new President, and people are already speculating as to what a new man in the White House will mean for the economy.</p> <p>Donald Trump outlined a series of policy proposals on the campaign trail, including some that, according to economists, may impact inflation and interest rates. This comes at a time when the Federal Reserve has been hinting at raising interest rates for a while. So if all of this happens, what should you do with your money? Here are some ideas.</p> <h2>If There's Inflation</h2> <p>Ifd the federal government opens up the fiscal spigot, inflation is sure to follow.</p> <h3>1. Take a Look at Gold</h3> <p>Gold has long been a popular investment for those seeking protection against inflation, especially during times of political and global uncertainty. Prices for gold spiked in the immediate aftermath of Trump's election, but are still quite low from a historical standpoint.</p> <p>There are several ways to purchase gold. You can buy gold bars or bullion and store it, or purchase shares of companies involved in gold mining. There are also exchange-traded funds (ETFs) that track the performance of gold or gold-related industries.</p> <h3>2. Get Into TIPS</h3> <p>The U.S. Treasury offers something called Treasury Inflation-Protected Securities, or TIPS. These are pegged to the Consumer Price Index, so when the index rises, the value of the investment rises with it. These are solid, low-risk investments that are perfect for when inflation is a possibility, and they are exempt from state and local income taxes. It's also possible to own TIPS in a retirement fund, via an ETF or mutual fund.</p> <h3>3. Invest in Commodities</h3> <p>In addition to gold, there are other commodities that can be used as a hedge against inflation. Many commodities, including oil, wheat, and even live cattle naturally rise with inflation. If you're unsure of which commodities to buy, consider looking at a fund or ETF that invests in commodities broadly. The PowerShares DB Commodity Index Tracking Fund [NYSE: <a href="http://www.google.com/finance?cid=722064">DBC</a>]) and the Fidelity Series Commodity Strategy Fund [NYSE: <a href="https://www.google.com/finance?q=FCSSX&amp;ei=4G48WJC_BdWNmAHcobLABw">FCSSX</a>] are two examples.</p> <h3>4. Get Real With Real Estate</h3> <p>Real estate is another area that often does well during an inflationary period. There are many ways to obtain real estate, either by purchasing property directly, or by buying shares of real estate investment trusts, or REITs. The caveat here is that if interest rates rise, then the cost of a mortgage to purchase real estate will also go up. So it may be smart to get in now while interest rates are still at historic lows.</p> <h2>If Interest Rates Rise</h2> <p>The Federal Reserve is expected to tick interest rates up a bit soon, while Trump's economic proposals could accelerate that process.</p> <h3>1. Invest in Banks</h3> <p>Banks generally do better when interest rates are higher than they are now. Right now, these companies have a low &quot;net interest margin&quot; &mdash; the difference between the interest they earn and the interest they pay out. Higher rates will increase this margin, thus increasing the bank's profitability.</p> <h3>2. Lock in a Fixed Rate</h3> <p>If you have a mortgage with an adjustable rate, now is the time to lock into something more stable, before interest rates rise. Convert your mortgage to a fixed-rate loan now, while interest rates are low. If you don't do this, your rate could adjust upward to a level that you may find unsustainable.</p> <h3>3. Switch to Short-Term Bonds</h3> <p>If interest rates are about to go up, you don't want your money tied up in something that's not paying a high rate. Placing your money in shorter term bonds and bond funds will allow you to remove your money earlier and then reinvest it in something with a higher return once rates rise. Long-term bonds do pay a higher rate than short-term bonds, but you lose flexibility.</p> <h3>4. Bolster Your Cash Holdings</h3> <p>With interest rates at ultralow levels, there hasn't been much incentive to hold on to a lot of cash. But if interest rates rise, you may find it's worth it to have a little more cash on hand, as it will generate some income for you. Stocks and other investments will probably still be more lucrative, but higher interest rates means there won't be as much downside to having more liquid savings, and it may give you more peace of mind.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/could-trump-bring-higher-interest-rates-and-inflation-consider-these-money-moves">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/oh-noes-inflation">Oh noes! Inflation!</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-investments-that-may-soar-during-trumps-term">8 Investments That May Soar During Trump&#039;s Term</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-live-with-inflation">How to live with inflation</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-qe2-could-mean-for-ordinary-americans">What QE2 Could Mean for Ordinary Americans</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-best-money-management-tips-from-john-oliver">7 Best Money Management Tips From John Oliver</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Financial News bonds donald trump federal reserve gold inflation interest rates investing president Wed, 30 Nov 2016 12:00:11 +0000 Tim Lemke 1843966 at http://www.wisebread.com Surprise! There's a Gender Gap in Mortgages, Too http://www.wisebread.com/surprise-theres-a-gender-gap-in-mortgages-too <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/surprise-theres-a-gender-gap-in-mortgages-too" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_chalk_house_29878474.jpg" alt="Woman facing gender gap in mortgage lending" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The gender gap in earnings is well known. According to a recent report by the Economic Policy Institute, the typical woman can expect to earn 83 cents for every dollar that the typical man earns.</p> <p>But studies show another gender gap that negatively impacts women: Research published by the Urban Institute in September said that women tend to pay more for their mortgages even though they are statistically more likely to pay their loans on time than men.</p> <h2>The Numbers</h2> <p>According to the Urban Institute, about 15.6% of female borrowers have what is known as a &quot;higher-priced mortgage.&quot; Borrowers with such mortgages are charged higher interest rates to borrow their home-loan dollars.</p> <p>How high these rates are at any given time varies. The Urban Institute uses the same definition of higher-priced mortgage used by the Home Mortgage Disclosure Act: a mortgage loan with an annual percentage rate that is higher than the benchmark interest rate known as the Average Prime Offer Rate. That rate stood at 3.58% for a 30-year fixed-rate loan as of June 20 of this year.</p> <p>The Consumer Financial Protection Bureau considers a first mortgage loan to be a higher-priced mortgage if its annual percentage rate is 1.5% or more higher than the Average Prime Offer Rate.</p> <p>The Urban Institute found that while 15.6% of female-only borrowers are paying off higher-priced mortgages, just 15% of male-only borrowers are doing the same. The institute found that male-female borrowers who apply for loans together receive higher-priced mortgages only 7.6% of the time.</p> <h2>Why Are Women Paying More?</h2> <p>Why do single women pay more for their mortgages? It's difficult to tell. It might come down to income. The Urban Institute reported that single female borrowers tend to have lower annual incomes than single males. According to the institute, single female borrowers earned an average of $69,200 a year. Single male borrowers had an average income of $94,700. Male-female borrowers had an even higher annual income of $119,000.</p> <p>Income is one of the financial factors that lenders consider when deciding who qualifies for a mortgage and what interest rates they pay. Lenders often charge higher rates as a form of financial protection when they worry that borrowers' incomes are lower, because they fear that these borrowers will be less likely to pay their loans back on time.</p> <p>Borrowers with lower incomes also have less money for a down payment. When borrowers put down less for a house, they are typically charged a higher interest rate, again to make up for the extra risk that lenders take on when loaning them money. Lenders assume that borrowers who put less money down are more likely to stop paying their mortgage loan if they suffer a financial crisis.</p> <p>But what about FICO credit scores? These three-digit numbers tell lenders whether borrowers have a history of paying their bills on time or if they tend to miss payments and run up credit card debt. Lenders charge higher interest rates to borrowers with low credit scores.</p> <p>But from 2004 to 2014, the Urban Institute found, female-only borrowers had an average FICO credit score of 711, similar to the average 712 score of male-only borrowers. That score is significantly lower, though, than the 725 average score submitted by joint male-female borrowers.</p> <p>Credit bureau Experian reported in March of this year that the average FICO credit score for all women is 675, a bit higher than the average score of 670 for men. Women also had 3.7% less average debt than men, according to Experian.</p> <h2>Better Record</h2> <p>Despite paying more for their mortgages, female-only borrowers tend to do a slightly better job of paying them on time than do male-only borrowers. According to the Urban Institute, female-only borrowers had a default rate on their loans of 9.6% from 2008 through 2010. Male-only borrowers had a slightly higher default rate of 9.7% during this same time.</p> <h2>What to Do?</h2> <p>What does all this mean for women applying for mortgage loans? If they are applying for mortgages on their own and want the lowest interest rates possible, they need to make sure that their finances are strong.</p> <p>This means that their FICO credit score should be at least 740 if they want to qualify for the lowest interest rates. It also means that their monthly debts, including their estimated new mortgage payment, should be 43% or less than their gross monthly income.</p> <p>Single male borrowers need to focus on the same factors, of course. But the research from the Urban Institute indicates that strong FICO scores and debt-to-income ratios are especially important for single females who want to avoid the financial burden of a higher-priced mortgage.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/surprise-theres-a-gender-gap-in-mortgages-too">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-it-safe-to-re-finance-your-home-close-to-retirement">Is it Safe to Re-Finance Your Home Close to Retirement?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-should-consider-an-adjustable-rate-mortgage">Why You Should Consider an Adjustable-Rate Mortgage</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/make-these-5-money-moves-before-applying-for-a-mortgage">Make These 5 Money Moves Before Applying for a Mortgage</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/everything-you-need-to-know-about-freddie-mac-and-fannie-mae">Everything You Need to Know About Freddie Mac and Fannie Mae</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-pay-your-mortgage-off-early">Should You Pay Your Mortgage Off Early?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing gender home loans interest rates mortgage gap wage gap women Tue, 29 Nov 2016 11:00:09 +0000 Dan Rafter 1834563 at http://www.wisebread.com 6 Ways to Invest When You're In Debt http://www.wisebread.com/6-ways-to-invest-when-youre-in-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-to-invest-when-youre-in-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/plant_tree_stump_462868653_0.jpg" alt="Learning ways to invest when you&#039;re in debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You know you need to begin investing to save for the future, but you still have some debt to pay off. It is possible to take care of both at the same time?</p> <p>The short answer is that yes, you can pay down debt and invest at the same time. In many ways, this is a personal choice. If you despise debt and sleep better at night knowing that you're paying it off as quickly as possible, that's fine. But if you can tolerate paying off debt at a slower rate and investing some money, you may end up ahead of the game financially over the long-term.</p> <p>Here are some things to consider when deciding how much to invest and how much debt to pay off.</p> <h2>1. Minimum Payments First, Then Invest</h2> <p>While it's certainly possible to pay down debt and invest at the same time, it's never a good idea to invest if you can't make your minimum payments first. If you don't make minimum payments, you'll be on the hook for higher interest, late fees, and penalties. Not to mention that your credit score will take a big hit. Consider investing your money only if you know you can set money aside and still make at least the minimum payments on debt.</p> <h2>2. Tackle the High Interest Debt</h2> <p>If your debt is tied up in credit cards and other things that come with high interest rates, you may want to hold off on investing until that's under control. Credit cards have interest rates in the double digits, and you're unlikely to generate an investment return that outpaces that. Once that high-interest debt is down to zero, then investing becomes much more possible. (See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso">Fastest Way to Pay Off 10K in Credit Card Debt</a>)</p> <h2>3. Use Your 401K Plan</h2> <p>If you work for an employer that offers a 401K plan or something similar, it's worth taking part even if you have some debt. That's because most employers will match contributions up to a certain amount. So it's like getting free money. Any contributions you make to a 401K are deducted from your taxable income, so there are great tax advantages for taking part. Invest what you can while still paying down your debt. Then, when your debt is paid off, increase your contributions.</p> <h2>4. Look at Low-Cost Mutual Funds and ETFs</h2> <p>If most of your debt is tied up in low-interest things like student loans or mortgages, it's okay to set aside some money to invest in things that will generate a good return. In fact, there are many financial planners that argue against paying off low-interest loans early if market returns are higher than interest rates. Over time, stocks have averaged returns of about 7%, which is much higher than interest rates these days. To get this type of return, consider looking at mutual funds and exchange-traded funds that have low fees and are designed to track the performance of the overall stock market.</p> <h2>5. Find Investments That Trade Without a Commission</h2> <p>If you're trying to invest and pay down debt at the same time, there's a good chance you may only be able to invest a little at a time. That's okay, but it's important to be aware of the fees and commissions you pay every time you buy and sell. If you're only buying a few shares of a stock but paying $8 in a commission, for example, that fee is cutting into a sizable percentage of your investment. Fortunately, many discount brokerages allow you to trade certain types of investments without paying a commission. Fidelity offers fee-free investing on all iShares ETFs, ETrade offers many commission-free ETFs from WisdomTree and Global X, and TD Ameritrade offers more than 100 ETFs with no transaction fees.</p> <h2>6. Automate as Much as Possible</h2> <p>Finding the balance between investing and paying off debt requires some discipline. If you have some debt but are considering investing, determine in advance what your ideal balance is. Then, set up automatic monthly transfers of money into an investment account, and automate your bills as well. If you get extra money or a raise, consider tweaking the balance accordingly. When you automate, it takes the guesswork out, allows you to stay consistent, and makes it easier to do other financial planning.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/6-ways-to-invest-when-youre-in-debt">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">7 Money Moves to Make as Soon as You Conquer Debt</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-warren-buffett-says-you-should-invest-in-index-funds">Why Warren Buffett Says You Should Invest in Index Funds</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-3-rules-every-mediocre-investor-must-know">The 3 Rules Every Mediocre Investor Must Know</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-prevent-a-debt-spiral">5 Ways to Prevent a Debt Spiral</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/funding-your-401k-when-youre-in-debt">Funding your 401(k) when you&#039;re in debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Investment 401k ETFs fees interest rates market returns mutual funds saving money Wed, 23 Nov 2016 11:30:07 +0000 Tim Lemke 1838645 at http://www.wisebread.com Should You Pay Your Mortgage Off Early? http://www.wisebread.com/should-you-pay-your-mortgage-off-early <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/should-you-pay-your-mortgage-off-early" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/married_couple_home_18525549.jpg" alt="Married couple paying off their mortgage early" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Hate sending that big payment to your mortgage lender each month? You're certainly not alone. But what if you had the ability to pay off that mortgage loan early, either by paying extra dollars toward your loan's principal balance or by paying off the rest of your mortgage in one giant payment?</p> <p>Should you do it? Or are there times when <em>not </em>paying off your mortgage early actually makes sense?</p> <p>Not surprisingly, it depends on a host of factors. Here is what you should look at when determining whether paying off your mortgage early is the best choice.</p> <h2>Tax Benefits</h2> <p>When arguing against paying off your mortgage early, most people point to the mortgage interest deduction. This allows most homeowners to deduct annual mortgage payments.</p> <p>There is a catch here, though: You can only claim the mortgage interest deduction if you itemize your taxes. And you should only itemize if your deductions are higher than the IRS' standard deduction, which as of 2016 stood at $12,600 for married couples filing jointly and $6,300 for singles and married people who file separately.</p> <p>This means that those homeowners most likely to benefit from the deduction are those who have purchased higher-priced homes, have a high interest rate on their mortgage, or are in the very early stages of paying off that mortgage. For other homeowners, the deduction will either be less than or barely more than their standard deduction.</p> <p>This means that you'll need to determine &mdash; perhaps with the help of your accountant or financial adviser &mdash; whether the mortgage interest deduction is really helping you at your current stage of paying off your mortgage. If it is, then factor this benefit in when determining whether you should pay off your mortgage early. But if it's not? Then don't let the promise of a yearly tax deduction influence your choice.</p> <h2>Other Debt</h2> <p>According to Freddie Mac's Primary Mortgage Market Survey, the average interest rate on a 30-year fixed-rate mortgage stood at 3.54% as of Nov. 3. The average rate for a 15-year fixed-rate mortgage was an even lower 2.84%. Those are both extremely low interest rates.</p> <p>At the same time, financial website Bankrate reported that the average variable interest rate for credit cards stood at 16.28% as of Nov. 2.</p> <p>The message here is clear: If you are burdened with high-interest credit card debt, and you have enough money to spend extra on your mortgage loan or pay it off entirely, it makes more sense to put those extra dollars toward your credit cards.</p> <p>It makes financial sense to pay off debt that comes with higher interest rates first. It might feel good to make that big monthly mortgage payment disappear, but it's smarter to whack away at your <a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off?ref=internal">credit card debt</a>, which, thanks to high interest rates, can grow quickly each month.</p> <p>Before deciding to pay extra on your mortgage or pay it off entirely, look at your other debt first: Use your extra money to eliminate the debt that is costing you the most each month.</p> <h2>Are You Staying Put or Moving?</h2> <p>How long do you plan on staying in your home? Do you plan on living out the rest of your days there? Or are you already planning a move in five to seven years?</p> <p>It makes more sense to pay extra on your mortgage loan if you plan on staying in your home for a longer period of time. By paying extra each month, you can shave thousands of dollars off the amount you'll pay in interest during the life of your mortgage.</p> <p>But if you plan on moving in five years, paying extra doesn't make as much sense. You'll sell your home long before you come close to paying it off. So if you're not going to be a long-term resident of your current home, put that extra money to better use.</p> <h2>Are You an Investor?</h2> <p>Those who argue against spending extra on your mortgage say that most homeowners would be better off taking those extra dollars and investing them. This goes back to the low interest rates attached to mortgages today. If you are only paying an interest rate of 3.5% on your home loan, why wouldn't you keep that debt and instead invest in the stock market, where you could make a return of 7% or more on that money?</p> <p>This assumes, though, that you'll actually invest the money that you won't spend on your mortgage loan. If you're more likely to spend it instead, you're better off paying down your mortgage or even paying it off early.</p> <h2>Retirement</h2> <p>Are you close to retirement? You might want to pay off that mortgage early. It's best to enter retirement with as few monthly payments as possible. If you plan to stay in your home after retiring, paying off that mortgage early makes sense. You are then free to use that money that you would have sent to your lender each month however you choose.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/should-you-pay-your-mortgage-off-early">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-personal-finance-calculators-everyone-should-use">15 Personal Finance Calculators Everyone Should Use</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-surprising-things-lenders-check-besides-your-credit-score">4 Surprising Things Lenders Check Besides Your Credit Score</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-ways-to-finance-a-tiny-house">3 Ways to Finance a Tiny House</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/yes-you-need-home-title-insurance-heres-why">Yes, You Need Home Title Insurance — Here&#039;s Why</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-yourself-these-5-questions-before-buying-a-home">Ask Yourself These 5 Questions Before Buying a Home</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing debt homeownership interest rates mortgages paying off early retirement tax benefits Wed, 16 Nov 2016 10:30:27 +0000 Dan Rafter 1833769 at http://www.wisebread.com 4 Easy-to-Fix Reasons Your Savings Account Isn't Growing http://www.wisebread.com/4-easy-to-fix-reasons-your-savings-account-isnt-growing <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-easy-to-fix-reasons-your-savings-account-isnt-growing" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_piggy_bank_100350013.jpg" alt="Woman learning reasons your savings account isn&#039;t growing" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Your savings account seems to be broken.</p> <p>You set it up some time ago, full of hope and high expectations, and you have been moving money into it whenever you can &mdash; but it just isn't growing the way you would expect.</p> <p>The lack of growth in your savings account may be disheartening, but it's probably due to a problem that you can fix easily. Here are the top four reasons your money doesn't grow in a savings account, and what you can do to start seeing higher balances:</p> <h2>1. The Problem: You Make Regular Withdrawals From Your Savings Account</h2> <p>The quickest way to undo all your savings work is to raid the account. Whether that happens because you are regularly transferring funds from savings to checking, or because you're withdrawing cash from your savings account at the ATM, or because you let your savings account act as your overdraft protection, the result is always the same &mdash; your savings account balance stays low.</p> <h3>The Easy Fix: Reduce Access to Your Account</h3> <p>The fix for this problem is to reduce your access to your savings account. Having too-easy access to savings accounts can kill your ability to effectively save money. Instead, consider moving your savings account to a different bank than your checking, and establish a link between the two. With your savings account out of sight, the money will be out of mind. And that's the best way to let it grow without your interference.</p> <h2>2. The Problem: Transfers to Your Savings Account Are Infrequent and Small</h2> <p>You transfer money to your account when you can, but that tends to only happen every couple of months when you finally get ahead of your bills. And even when you are able to make deposits in your savings account, the amounts are never very high. It almost feels like it's not worth transferring the money.</p> <h3>The Easy Fix: Automate Your Savings</h3> <p>Regular Wise Bread readers are well aware of the importance of automating your savings. Doing so allows you to pay yourself first and take away the temptation of extra dollars in your checking account. Set an automatic transfer up once, and you will reap the benefits of savings account growth for good. Remember that there are a couple of ways to make sure your automation helps you build your savings as much as possible:</p> <ul> <li>Automatically transfer a set amount to savings on your payday. If you don't see it in your checking account, you won't spend it.</li> </ul> <ul> <li>Have your paycheck deposited directly into your savings account, and transfer the amount you need for your monthly budget into checking. While this gives you less of a buffer in your checking account, it offers the psychological boost of seeing the numbers in your savings account go up quickly, which can help curb mindless and impulse spending.</li> </ul> <h2>3. The Problem: You Are Saving Money, But Not for Anything in Particular</h2> <p>Without a specific goal in mind, it can be difficult to get psyched about the money in your savings account. Yes, it's great that you have several hundred (or several thousand) dollars sitting in a savings account, but it can feel like having an auxiliary checking account if you don't have a specific purpose in mind for the money. And not having a goal for you money makes it much easier to raid the account if you find yourself lusting after Coachella tickets.</p> <h3>The Easy Fix: Create Targeted Savings Accounts</h3> <p>We are much more likely to feel excited about saving money if we have a specific goal in mind. This is partially due to something known as <a href="http://www.wisebread.com/mental-accounting-why-you-blow-your-tax-refund-but-not-your-raise">mental accounting</a>, which is our tendency to value money differently depending on how it is physically and mentally labeled. You might feel no compunction about &quot;borrowing&quot; $400 from your general savings account for a Coachella ticket, but taking that money from your new car fund would hurt.</p> <p>Many online and traditional banks will allow you to create several targeted accounts, each with its own nickname. Taking the time to put a name to each one of your savings goals can help you save more and spend less.</p> <h2>4. The Problem: Your Interest Rate Is Too Low</h2> <p>Maybe you are doing everything right with your savings account. You have regular, automatic deposits, and you keep your hands off the account. But it's still not growing &mdash; because the interest rate is at rock bottom. According to Bankrate, the average APY for savings accounts is a measly 0.08%, which means inflation is eating into your money if you leave it in your savings account for any amount of time.</p> <h3>The Easy Fix: Transfer Your Money Into a Money Market Account</h3> <p>If you are just getting started with savings, it's probably a good idea to continue to set money aside into your savings account. But if you've grown your savings account over time and get sick of seeing teeny tiny interest payments, then you might want to consider transferring your savings into a money market account.</p> <p>These accounts are a type of savings product that double as a checking account, with an interest rate that is much more generous compared to that of traditional savings accounts. For instance, according to Bankrate, the best money market accounts offer APY rates of up to 1.11%.</p> <p>Money market accounts generally require a larger minimum deposit &mdash; you can expect to need at least $1,000 to open your account. In addition, you may face fees on your money market account if you allow your balance to dip below a certain level. For most money market accounts, you may write checks on the account, although you are generally limited to no more than six checks (or other withdrawals) per month.</p> <p>For savers who have been diligently putting money aside into a traditional savings account, rolling that money into a money market account can be a great way to put your savings to work for you by increasing your interest.</p> <h2>The Bottom Line</h2> <p>Your savings account deserves to grow and flourish. Most of the problems keeping your balance down are well within your control, as long as you take the time to address them. Don't let an easy-to-fix problem keep you from meeting your savings goals.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/4-easy-to-fix-reasons-your-savings-account-isnt-growing">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-saving-too-much-money-for-a-college-fund-is-a-bad-idea">Why Saving Too Much Money for a College Fund Is a Bad Idea</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-need-to-make-financial-habits-not-goals">Why You Need to Make Financial Habits, Not Goals</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-golden-rules-of-personal-finance-everyone-should-know">10 Golden Rules of Personal Finance Everyone Should Know</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-invisible-savings-tips-that-work">3 Invisible Savings Tips That Work</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-millennial-money-habits-every-retiree-should-learn">6 Millennial Money Habits Every Retiree Should Learn</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance automatic transfers checking account growing interest rates money market accounts saving money savings account Wed, 16 Nov 2016 10:00:09 +0000 Emily Guy Birken 1833768 at http://www.wisebread.com Has Cash Become More Trouble Than It's Worth? http://www.wisebread.com/has-cash-become-more-trouble-than-its-worth <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/has-cash-become-more-trouble-than-its-worth" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/cash_money_78583601.jpg" alt="Learning if cash has become more trouble than it&#039;s worth" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You probably know people who have already quit using cash. I do. They pay their bills electronically, and pay for items purchased at stores with debit cards (or <a href="http://www.wisebread.com/prepaid-cards-about-to-get-safer-and-better">prepaid cards</a>, or credit cards, or any number of alternatives like Apple Pay or Google Wallet).</p> <p>Those people are making their choice based on what's best for them, but maybe society would be better off if people didn't have the choice. At least, that's what Kenneth Rogoff thinks. He's sure enough to have gone to the trouble of writing a book called <a href="http://amzn.to/2fyfK9H">The Curse of Cash</a> to lay out why he thinks so, and to suggest a path to a (nearly) cash-free society.</p> <p>Personally, I'm not convinced.</p> <h2>Rogoff's First Problem: Corrupt Transactions</h2> <p>That scale issue is what Rogoff wants to solve. Using $100 bills, you can fit $1 million in a briefcase. (You've no doubt seen the iconic aluminum Zero Halliburton case in movies. Its dimensions allow that much money, in new or used bills, to fit perfectly.) Drug lords, money launderers, human traffickers, gangsters, and corrupt businessmen can make and receive large payments in a form that's hard to detect and hard to track.</p> <p>Rogoff's idea is that getting rid of large bills will make illegal payments much harder. Your average corrupt government official, Rogoff figures, is going to be a little less interested in taking a bribe if he's going to need a dolly to cart off a steamer trunk full of $10 bills. And if he <em>does</em> take the bribe, it's going to be so cumbersome to move, store, and spend the money as to make it a lot easier to catch him.</p> <p>The idea that getting rid of large bills will reduce crime, and make criminals easier to catch, is not new. There were $500 and $1,000 bills in regular circulation in the U.S. until 1969, when President Nixon ordered them withdrawn for just that reason. There are still old bills in those denominations around, but they're mostly in the hands of collectors &mdash; and tend to sell for well over face value. They're still worth face value at a bank, but any that get deposited get sent to the Federal Reserve to be destroyed.</p> <p>(Note that with those pre-1970 large bills, we're talking big money. Adjusted for inflation, a briefcase full of $1,000 bills in 1969 would have been worth the equivalent of well over $65 million in 2016.)</p> <p>Rogoff isn't the only one thinking along these lines. Just a few months ago the European Central Bank announced their decision to get rid of their &euro;500 banknote, on the grounds that it &quot;could facilitate illicit activities.&quot;</p> <p>For most of the past ten years a briefcase full of &euro;500 bills would have been worth at least $6.5 million, although just at the moment it's only worth $5,520,350.</p> <p>Even after phasing out the &euro;500 banknote, Europe will still have a &euro;200 banknote, worth about $220, so the euro will still come out ahead in the &quot;biggest bribe in the smallest case&quot; competition. (Although behind the $1,000 Singapore banknote, worth over $700, and the 1,000 Swiss franc note, worth over $1,000.)</p> <p>Rogoff's plan would see the elimination of both the $100 and the $50 bills, followed eventually by the elimination of the $20. (Still later, he'd like to see the $5 and $10 replaced with coins hefty enough to be very unhandy for anyone carrying around more than $60 or so the average person has in his wallet right now.) These changes would make high-dollar cash payments almost impossible.</p> <p>To enable all this, he'd like to see a few changes, the biggest of which would be the creation of subsidized bank accounts and debit cards that would be free to poor people. (The government has been moving in this direction for a while, with things like the <a href="http://www.wisebread.com/making-direct-deposit-safe-for-the-garnished">Direct Express card</a>. It's only good for receiving payments of federal benefits at the moment, but it &mdash; or the now common prepaid cards &mdash; could work for this purpose with modest tweaks.)</p> <h2>Rogoff's Second Problem: Negative Interest Rates</h2> <p>Rogoff's second reason for getting rid of cash has to do with the way the Federal Reserve operates.</p> <p>The Federal Reserve adjusts interest rates with the goal of keeping prices stable while maximizing employment. They have some rules of thumb to guide them as to what the appropriate interest rate should be. Sometimes &mdash; such as the whole past seven or eight years &mdash; those rules of thumb have suggested that rates should be negative.</p> <p>Negative rates are hard to make stick as long as cash exists. If your bank account would pay a negative interest rate &mdash; in other words, charge you a fee to hold your money &mdash; obviously you're just going to withdraw your money and hold it as cash.</p> <p>Despite that issue, several central banks are experimenting with negative interest rates. So far, it's been working okay. If interest rates are only slightly negative, it's not worth it to go to the hassle of handling the cash, finding secure storage, insuring it, and so on. But what if the rules of thumb say that interest rates should be very negative? It would be worth it to rent a big vault and hire a bunch of armed guards, if the alternative was to pay several percent negative interest on $1 billion.</p> <p>If there were no high-denomination bank notes &mdash; nothing bigger than a $20 &mdash; then pulling your money out of the bank and stashing cash in a vault simply wouldn't be an option. You'd be stuck taking whatever negative rate the central bank decided was appropriate.</p> <p>Rogoff, who spent a good chunk of his career working at the Federal Reserve, thinks that would be great.</p> <h2>Going Cash-Free &mdash; Or Not</h2> <p>Rogoff's book deals pretty well with the practical issues of switching over, although he punts on a few. In particular, he figures that the infrastructure to make person-to-person payments with immediate settlement &mdash; the electronic equivalent to handing someone a $20 bill &mdash; will be created soon enough.</p> <h3>Cash Is Good at What It Does</h3> <p>However, the fact remains that there are plenty of problems cash solves very well. If you want to sell something that I want to buy, and if I have cash on hand to pay for it, we can execute the transaction without any third-party support. We don't need cards or a machine to read them. We don't need power or an Internet connection. We don't need a financial institution. We don't need a procedure to handle failures of any of those things.</p> <p>Large denomination bank notes are quite handy for transactions modestly bigger than what we usually carry in our wallets. My wife and I have twice sold an old car, each time for a few hundred dollars. One buyer showed up with a few $100 bills, which I was able to quickly verify and easily count. The other buyer showed up with a few dozen $20 bills, which made completing the transaction much more of a production. (Just counting a few hundred dollars in $20s is a non-trivial undertaking for people without much experience doing so, let alone verifying that <a href="http://www.wisebread.com/how-to-spot-counterfeit-money">they're not counterfeit</a>.)</p> <p>Most of the other details, where cash seems more convenient than some cash-free alternative, are effectively dealt with in Rogoff's book. It's full of points to flesh out his proposal, even if he fails to acknowledge some of my personal issues, such as the value of bank notes as works of art, and their value as archetypal objects of yearning.</p> <p>Leaving those trivial issues aside, there's still one big issue that keeps me from being on board with his proposal, which is that it traps everyone in a banking system controlled by the government &mdash; a government that is very likely to use the same tools they use currently (such as freezing bank accounts) in ways that will turn out to be vastly more coercive than they are now.</p> <h3>Cash Keeps You Free</h3> <p>Currently, if the government freezes your bank accounts, you lose the use of most of your money. The government isn't supposed to do this in a punitive fashion &mdash; it's just to make sure you don't abscond with the money before things get sorted out. But of course it is terribly punitive, and you're probably going to try pretty hard to sort things out with the government as quickly as possible.</p> <p>Think how much worse things would be if it weren't just your savings that were frozen, but also your ability to make transactions. Right now if your accounts are frozen, you at least have the theoretical option of putting your finances on a cash basis. If there were no cash, you could literally find yourself starving in the dark because you couldn't buy groceries or pay your power bill.</p> <p>Rogoff, I suspect, would wave that problem away as something that could be easily fixed administratively: There would be rules that would keep the government from freezing your bank accounts so severely as that, along the lines of the rules that already exist for garnishing your wages &mdash; transactions under certain amounts or for certain purposes would be allowed.</p> <p>For me though, that's putting a huge amount of faith to put in those rules and the people overseeing them. After all, fundamental rights have been (and are still being) seriously infringed on the grounds that certain people were &quot;suspected terrorists.&quot; Since access to a transaction account isn't currently viewed as a fundamental right, the threshold for limiting such access would be much more easily crossed. Who would object to freezing the accounts of suspected drug lords and suspected human traffickers? But why would it end there? Surely suspected tax cheats are bad people, and suspected deadbeat dads as well. What about people suspected of being behind on their student loans? (The government can seize most of your money for almost any debt you owe the government, but money from Social Security is safe &mdash; unless you're behind on your student loans.)</p> <p>Knowing I have the option to put my finances on a cash basis is a source of considerable comfort to me.</p> <p>Yes, the circumstances that mean I can put my finances on a cash basis if I need to also mean that criminals can put their finances on a cash basis. I'm willing to accept that, even if Rogoff isn't.</p> <p>I like the fact that cash money just works, without depending on any infrastructure. It's one reason I've long suggested that you <a href="http://www.wisebread.com/carry-some-cash">carry some cash</a>.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/has-cash-become-more-trouble-than-its-worth">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/sensible-ways-to-raise-cash-for-a-wedding">Sensible Ways to Raise Cash for a Wedding</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/47-simple-ways-to-waste-money">47 Simple Ways To Waste Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ow-do-you-deal-with-family-members-who-are-bad-at-managing-money">How Do You Deal With Family Members Who Are Bad At Managing Money?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/financial-tricks-to-master-for-a-happier-life">Financial Tricks to Master for a Happier Life</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-audacity-to-waste-money-for-better-finances">The Audacity to Waste Money for Better Finances</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Lifestyle cash cash is king corruption interest rates kenneth rogoff money management transactions Fri, 11 Nov 2016 10:30:27 +0000 Philip Brewer 1830889 at http://www.wisebread.com