Banking http://www.wisebread.com/taxonomy/term/800/all en-US How to Liquidate a Loved One's Estate http://www.wisebread.com/how-to-liquidate-a-loved-ones-estate <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-liquidate-a-loved-ones-estate" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/unpacking_boxes_at_her_new_home.jpg" alt="Unpacking boxes at her new home" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When someone you love dies, at first, you may only be able to think about the emotional things: How you will miss them, how different your life will be without them, and maybe, if they were suffering, a sense of gratitude that their pain has ended.</p> <p>Unfortunately, most of us also have to deal with logistics when someone in our family departs this world. If you are named executor of the estate, the heirs have the right to expect you to turn over their inheritance in a timely manner. Part of settling an estate is dealing with the personal possessions of the deceased. Often this must be done before the house or condo can be sold, or the lease terminated, and the estate closed out. The more possessions the departed owned, the more difficult this task can be. Some triaging is in order.</p> <h2>Before death</h2> <p>If your loved one is elderly, it's a good idea to encourage and help them to dispose of clutter and organize their possessions as an ongoing project. Focus on how discarding piles of old newspapers could make their home safer, or on how those clothes from the 1940s might be appreciated by the high school theater department. A wonderful project to do with an elderly loved one is to organize old photos, because there may be people in them that you can't identify without their help. (See also: <a href="http://www.wisebread.com/why-holding-onto-too-much-stuff-is-a-burden-for-your-loved-ones?ref=seealso" target="_blank">Why Holding Onto Too Much Stuff Is a Burden for Your Loved Ones</a>)</p> <p>While doing these projects, if it feels right, you can gently inquire about any items they might be saving for particular family members, which is especially helpful to know if the person <a href="http://www.wisebread.com/heres-what-happens-if-you-dont-leave-a-will?ref=internal" target="_blank">hasn't created a detailed will</a>. The process may be frustrating and time consuming &mdash; after all, they may have had this stuff since before you were born, and it can be understandably hard to part with such things. But the more you can do with the cooperation of the property's owner, the easier things will be after they're gone. You run less risk of accidentally disposing of important papers or family treasures.</p> <p>Sometimes the decluttering process is prompted by a move. When my elderly cousin had to move into assisted living, my family and I gradually cleared out the house she had been living in for decades. While she wasn't able to help us on site, we were able to set aside possessions we thought she might want to keep, bring them to her new home, and have her make decisions. Many of the old photos and letters we found were great conversation starters during our visits, especially when her memory began to fail.</p> <h2>Immediately after death</h2> <p>If your loved one was living in their home up until the day they died, you may need to check on the home immediately after leaving the hospital, to make sure it's secure and safe. Of course, if your loved one had pets, they must be attended to and rehomed without delay.</p> <p>Within the first week, you'll want to clear out the kitchen to prevent problems with pests, mold, and odor. Clean out the refrigerator and get the trash out of the house. Discard or give away any nonperishable pantry items.</p> <p>If you have not already done so, you may also need to immediately look for items to be used in the funeral. If your loved one is not being cremated, you may need to retrieve a nice outfit for the body to be dressed in. It's common to display photos, awards, and other mementos at funeral services, as well. If you're writing the obituary, you may find useful information in the home, such as school yearbooks or scrapbooks. Any record of military service is important to gather, so that your loved one can receive the posthumous honors they are due.</p> <h2>After the funeral</h2> <p>A few years ago, my family lost an uncle who was the last of his generation. After the funeral lunch, we gathered in his home and experienced the strange feeling of being allowed to roam through his rooms uninvited. I suspect even my eldest aunts felt a bit like naughty children. We were all sad, but it was also a little bit &hellip; fun.</p> <p>On your first visit to start sorting through the home of the deceased, take a deep breath and look around so you can remember how the home looked when they lived there. Remember that while the task you are undertaking will be difficult and sad, it may also be exciting, because you could uncover letters and other relics from the past that may help you come to know your loved one better than you ever did when they were alive.</p> <p>Here are a few steps to make the task of clearing out their belongings less stressful.</p> <h3>1. Sort through it all</h3> <p>There are two ways to sort through the personal possessions in the home of the deceased. One way is to comb through everything yourself, which can be exhausting. The second way is to hire an estate sale company to sort through everything for you. Many reputable estate sale companies offer sorting and trash removal as part of their service. In fact, they advise that you throw nothing away, because you might inadvertently chuck something of value. I actually tossed an old automobile company shareholder brochure into the trash while sorting through my relative's home, only to have second thoughts and retrieve it. It ended up selling for $20. (See also: <a href="http://www.wisebread.com/12-financial-moves-to-make-when-a-loved-one-dies?ref=seealso" target="_blank">12 Financial Moves to Make When a Loved One Dies</a>)</p> <p>In exchange for preparing and conducting the sale, the estate sale operator keeps a percentage of the proceeds, and may also charge fees. Such an arrangement could save you a lot of work. However, keep in mind that if you don't sort through the home yourself, you may miss items of sentimental value that you didn't know were there. The sale operator may promise to set aside any family photos and documents, but they won't know as well as you know what you would want to keep.</p> <p>This happened to me. A few months after my cousin's estate sale was over, I was online researching her obituary. Imagine my shock when I found, online, images of her original baptismal certificate and her parents' wedding certificate, written in Slovak calligraphy. These documents had apparently been sold on eBay, but I couldn't find the original listing so I had no chance to contact the buyer or seller. The most charitable assumption I could make was that the estate sale company had inadvertently sold these items that obviously fell into the &quot;sentimental value&quot; category.</p> <p>If you decide to do the sorting yourself, I have a few recommendations based on experience:</p> <ul> <li> <p>Bring a friend or family member along for help.</p> </li> <li> <p>Drag trash and recycle bins through the home as you work.</p> </li> <li> <p>Pack up boxes of papers to sort through in the comfort of your own home.</p> </li> <li> <p>Don't throw away anything old before checking its value. You'd be surprised what people buy on eBay!</p> </li> </ul> <h3>2. Make sure that heirs get a chance at keepsakes</h3> <p>Beyond any specific property named in the will, you probably want to make sure that everyone who was close to the deceased gets a memento to remember them by. This is tricky territory, because many decadeslong family fueds have started over granny's handmade quilts or even Uncle Joe's second-best TV trays. Some families may leave this task to the closest surviving relative.</p> <p>But if there are a number of survivors of equal status, you might need a more formally mediated approach. After my great uncle passed, my family used an interesting method of distributing property of both sentimental and practical value: a family auction. All the heirs walked through the house and bid on the items there, with the moderation of an auctioneer. Every dollar they paid went into a pot, later divided equally among them. You can do such a private auction before an estate sale, or in place of one. Another system is to run an auction with points instead of cash, with each relative starting with the same number of points.</p> <h3>3. Sell what can be sold</h3> <p>If you decide to hire an estate sale company, interview and research the candidates carefully. The online review website Angie's List reports that Auction Services listings, which include listings for estate sales companies, make up one of its most complained-about categories. Thirty percent of those reviews score a D or F from customers.</p> <p>Before a sale, you should remove anything from the house that the family intends to keep. Make it clear to the auction company what you're keeping, because they will base their prices on the amount they estimate they can make from the sale. If a sentimental item is too large for you to remove before the sale, make sure the sale company clearly marks it as not for sale.</p> <p>Assuming you do want an estate sale, it's not a given you'll find an estate sale company that will agree to work with you. If the house has a lot of stuff but no high-value items, many estate sale companies will refuse to take on the job because they typically earn their money by keeping a percentage of the sale's proceeds.</p> <p>In that case, you may be forced to run the estate sale yourself, list items in the local paper, or find a low-end operator to take the job on the cheap. Make sure to check the local regulations before advertising a garage sale.</p> <h3>4. Dispose of what can't be sold</h3> <p>Once you're down to items that no one in the family wants that also aren't worth enough to sell, your next step is to donate what you can to charity. Typical items in this category are: used clothing that doesn't qualify as vintage, worn furniture, and everyday dishes. The most expeditious way to get this stuff out of the house is to request and schedule a pickup with a local charity. Goodwill, Salvation Army, and Habitat for Humanity are three that commonly make pickups; your area may have these or others. If you don't find a charity that will pick up your items, you could pay movers to deliver the stuff to the nearest resale shop, or deliver it yourself.</p> <p>Try to avoid dumping stuff on the curb &mdash; some cities will fine you for this. If you can't get a charity to take the items, you could list them on Freecycle or advertise them on Craigslist as available for free. Also, some newspapers don't charge to print ads for free items.</p> <h3>5. Pay for junk removal if you must</h3> <p>If you're able to do the work of getting the junk out of the house, check with your local government offices to see if you can get a large trash receptacle parked at the curb or schedule a large item pickup for free or at a low cost. You can also check with your local home improvement store; some now sell large heavy duty bags or bins that you can fill with thousands of pounds of junk and call them to pick up. The bag option usually costs only about $150-$200, compared to about $300-$850 to rent a trailer-sized trash receptacle for a week and have it hauled away full. Cost really depends on your area and the amount of stuff you're tossing.</p> <p>The more expensive option is to pay a full-service junk removal company that will come into the home and remove everything you ask them to. These companies may charge $500 per truckload. On the upside, the work for you is minimal.</p> <p>Once you have removed, given away, sold, donated, or thrown away every last item in your loved one's home, you're ready to bring in a housecleaner for a thorough cleaning, and list the home for sale.</p> <p>This is a good time to devote some attention to the mementos that you decided to keep in your own home. Display knickknacks in a case, hang a framed photo on the wall, or get that ring resized so that you can see these precious things and be reminded of your departed loved one often.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/how-to-liquidate-a-loved-ones-estate">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/6-things-you-should-know-about-joint-checking-accounts">6 Things You Should Know About Joint Checking Accounts</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/9-end-of-life-cost-savings-your-survivors-will-thank-you-for">9 End-of-Life Cost Savings Your Survivors Will Thank You For</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-garage-sale-items-that-sell-like-hotcakes">12 Garage Sale Items That Sell Like Hotcakes</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-fair-way-to-split-up-your-familys-estate">The Fair Way to Split Up Your Family&#039;s Estate</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-sell-your-house-despite-your-messy-kids">How to Sell Your House Despite Your Messy Kids</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking Family cleaning death in the family declutter estate planning funeral losing a loved one Fri, 20 Apr 2018 09:00:06 +0000 Carrie Kirby 2130996 at http://www.wisebread.com Can't Get Business Credit? Consider Alternative Financing http://www.wisebread.com/cant-get-business-credit-consider-alternative-financing <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/cant-get-business-credit-consider-alternative-financing" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/at_my_garden_store.jpg" alt="At my garden store" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>In an ideal world, you'd be able to turn to your banker or business credit card to borrow money any time you needed it for your business. But not everyone has a long enough credit history or a high enough credit score.</p> <p>If you're losing sleep because you need cash quickly and traditional sources are not working out for you, it may be worth considering alternative financing. The interest rates and fees can be significantly higher than for a traditional bank loan or on a great <a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses?ref=internal" target="_blank">business credit card</a> deal, but they can come in handy in a cash crunch.</p> <p>Here's a quick crib sheet to help you determine the right type for you. (See also: <a href="http://www.wisebread.com/10-smart-ways-to-get-a-small-business-loan?ref=seealso" target="_blank">10 Smart Ways to Get a Small-Business Loan</a>)</p> <h2>Take stock of industry-specific options</h2> <p>If you work in a field such as ecommerce, look into lending programs tailored to your industry or the platforms where you sell your products or services. One example is the Amazon Lending program, an invitation-only program for merchants who run Amazon stores, which helps them finance inventory.</p> <p>Often programs like this are tailored to the cash-flow quirks of particular industries. If you're not aware of lending programs specific to your industry, ask your trade association for ideas.</p> <h2>Consider factoring</h2> <p>In factoring &mdash; a type of financing that is often used by companies that sell merchandise through big retailers &mdash; you sell your accounts receivable to a company called a &quot;factor&quot; at a discount. In one common type of factoring, the factor buys your invoices and purchases the right to collect the money owed from your customers. Once your customers pay their invoices, you get the face value of the invoice, with a small discount subtracted, often in the neighborhood of 2 to 6 percent. The factor will give you 70-90 percent of the value of the invoice up front, and the rest when the customer pays it.</p> <p>One reason some small-business owners like this type of financing is the factor bases the decision to buy the invoices on their customer's credit, not the business owner's. For instance, if you make a household gadget that a big retailer has stocked on its shelves, the factoring company would decide whether or not to buy the invoice based on the retailer's credit, not yours. That could be a plus if your credit profile is not strong.</p> <h2>Borrow against your receivables</h2> <p>Another type of financing that may come in handy is borrowing against your receivables, particularly if you run a professional services firm. If you use popular accounting software programs such as QuickBooks, Freshbooks, or Xero Accounting, you may be able to borrow against your receivables through Fundbox.</p> <p>Fundbox will let you borrow up to $100,000 against your receivables and repay the loan over 12 or 24 weeks. You can figure out what it will cost you using the <a href="https://fundbox.com/pricing/" target="_blank">calculator</a> on the site. You must pay back the loan each week in a preset amount (part of the amount owed, plus a fee) for the duration of the repayment period.</p> <p>You don't need a credit check or personal guarantee, approvals can happen in a matter of hours, and you can get the loan as soon as the next business day once approved.</p> <p>The challenge with this type of financing is that Fundbox automatically deducts the money you owe from your business bank account. If money is flowing into the business slowly, you could end up in a period where you have very little cash on hand until you repay the loan.</p> <p>If you're going to go this route and aren't sure if you'll have enough free cash to run the business during the repayment period, do a cash-flow projection with your accountant to be sure. As in all financial matters, it's important to understand what you're taking on. (See also: <a href="http://www.wisebread.com/how-to-pull-your-small-business-out-of-a-cash-crunch?ref=seealso" target="_blank">How to Pull Your Small Business Out of a Cash Crunch</a>)</p> <h2>Try an alternative loan</h2> <p>A working capital line of credit from an alternative lender is another option that might help you in a pinch. At <a href="http://www.kqzyfj.com/click-2822544-11145625">Kabbage</a>, one fast-growing provider, small business owners can apply for a credit line of up to $250,000. Kabbage offers six-month and 12-month repayment terms. Each month, you'll pay a fee of 1.5 percent to 10 percent, based on your business's performance. For example, if you borrowed $10,000 for six months with a 4 percent monthly fee, you would pay $1,667 each month for the loan repayment, plus $400 a month in fees.</p> <p>Peer-to-peer lending (aka, P2P lending) is also an option. You can borrow money from investors, who may be institutional funds or private individuals, instead of going to a bank. Among the providers are <a href="https://lending-club-smb.sjv.io/c/27771/343774/5120">Lending Club</a>, Prosper, Upstart, and Funding Circle. Generally with peer-to-peer lenders, your interest rate will be based on your credit profile, so the stronger your credit, the better your options.</p> <h2>Get an advance</h2> <p>In the past few years, more companies have been offering small businesses advances on the money they expect to receive in a given month from certain sources of business. They can be helpful when you're in a jam, but make sure you understand what you're actually paying for the money, because some providers charge quite a bit for this type of financing.</p> <p>One example of a service in this space is PayPal Working Capital. This service offers loans based on your PayPal sales history, up to a maximum of 30 percent of your annual PayPal sales (and up to $97,000 for your first loan). Fees depend on the amount you borrow, your annual PayPal sales, and the percentage of your receipts that are deducted to pay back your loan. For example, if you borrow $5,000, you have $20,000 in annual PayPal sales, and you repay 30 percent of your PayPal receipts every month, you'll pay a one-time fixed fee of $615. Pay back less every month and your fixed fee will go up.</p> <p>As in the case of Fundbox financing, repayments of advances are typically deducted automatically from your business bank account at regular intervals.</p> <p>Once you're out of your cash crunch, turn some attention to doing what you can to add to your revenue and profits. Your business will be a lot healthier if you can finance most of your growth out of cash flow. And the stronger it is, the easier it will be to find financing at great rates in the future.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fcant-get-business-credit-consider-alternative-financing&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FCan%2527t%2520Get%2520Business%2520Credit_%2520Consider%2520Alternative%2520Financing.jpg&amp;description=Can't%20Get%20Business%20Credit%3F%20Consider%20Alternative%20Financing"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Can%27t%20Get%20Business%20Credit_%20Consider%20Alternative%20Financing.jpg" alt="Can't Get Business Credit? Consider Alternative Financing" 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/elaine-pofeldt">Elaine Pofeldt</a> of <a href="http://www.wisebread.com/cant-get-business-credit-consider-alternative-financing">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/need-business-credit-build-your-personal-credit-first">Need Business Credit? Build Your Personal Credit First</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/how-to-pull-your-small-business-out-of-a-cash-crunch">How to Pull Your Small Business Out of a Cash Crunch</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/4-signs-you-should-sell-your-small-business">4 Signs You Should Sell Your Small Business</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/10-smart-ways-to-get-a-small-business-loan">10 Smart Ways to Get a Small Business Loan</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/is-your-small-business-targeting-the-wrong-customer">Is Your Small Business Targeting the Wrong Customer?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking Entrepreneurship alternative financing business credit small business owner small business tips Thu, 12 Apr 2018 08:30:09 +0000 Elaine Pofeldt 2128964 at http://www.wisebread.com Interest Rates Are Rising: Here's Where to Keep Your Cash http://www.wisebread.com/interest-rates-are-rising-heres-where-to-keep-your-cash <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/interest-rates-are-rising-heres-where-to-keep-your-cash" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/beautiful_black_woman_portrait_0.jpg" alt="Beautiful black woman portrait" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>These past 10 years, interest rates have been so low it just about didn't matter what you did with your cash. There was a certain convenience to that &mdash; you didn't have to move money back and forth between checking and higher-rate accounts, because they paid almost the same. As a bonus, you didn't have to track money market returns to be sure the rate your account paid was still competitive, because they all paid just a fraction over 0 percent.</p> <p>That has changed. The Fed has already started raising interest rates, and will probably raise rates another three-quarters of a percentage point this year. Already, rates are high enough that it makes a difference where you hold your cash, and that difference is starting to get significant. (See also: <a href="http://www.wisebread.com/how-to-benefit-from-rising-interest-rates?ref=seealso" target="_blank">How to Benefit From Rising Interest Rates</a>)</p> <p>Let's take a look at where you should be holding your money, as well as a few reasons why you need cash on hand.</p> <h2>What cash to hold</h2> <p>There are four main reasons to hold cash: liquidity balances, planned expenses, temporary holdings, and an emergency fund. The size of your temporary holdings may vary quite a bit from time to time, but the others have pretty specific parameters that it's worth being clear about.</p> <h3>Liquidity balances</h3> <p>Your income arrives in chunks that don't precisely match the due dates of your bills. Liquidity balances are the cash you keep on hand to smooth that out, so that you can pay each bill when it's due. Sizing the cash demands of your liquidity balances is easy: It's the total of all the bills that might come due between income payments. Once you know this amount, you can set it aside for when you need it.</p> <h3>Planned expenses</h3> <p>Everybody has some expenses that are not regular monthly bills, but are nevertheless known in advance. Some of these <em>are</em> regular, they're just not monthly: tax payments, insurance premiums, tuition payments, etc. Others are irregular, such as discretionary payments on things like home improvements, airfare for your vacation, buying a boat, etc. Regular or irregular, if there's a near-term payment to make, it's good money management to hold some cash to pay it.</p> <h3>Temporary investments</h3> <p>Sometimes you have cash that you've decided to invest, but that you aren't ready to invest <em>yet</em>. Maybe you don't know exactly where the money should go until the next time you rebalance your portfolio. Maybe you expect market conditions to improve. Maybe you're accumulating money to meet the minimum balance of some fund. Whatever the reason, until you're ready to invest, you're holding the money as cash. (See also: <a href="http://www.wisebread.com/how-the-risk-averse-can-get-into-the-stock-market?ref=seealso" target="_blank">How the Risk Averse Can Get Into the Stock Market</a>)</p> <h3>Emergencies</h3> <p>Your emergency fund is cash set aside to handle a financial crisis &mdash; a job loss, a medical bill, a home repair, etc. Having the money on hand means that you won't have to turn to credit cards or other forms of debt to get through your emergency. Experts often recommend an emergency cushion of three to six months' worth of daily living expenses. Your unique situation &mdash; such as an expensive medical condition or a high-paying job that would be difficult to replace &mdash; may call for a larger fund. (See also: <a href="http://www.wisebread.com/5-minute-finance-start-an-emergency-fund?ref=seealso" target="_blank">5-Minute Finance: Start an Emergency Fund</a>)</p> <h2>Where to hold your cash</h2> <p>In the U.S., we have a complex history of rules related to ceilings on the rates banks can pay, special exceptions to those rules, and free-market efforts to get around those rules. There are a lot of different kinds of institutions that hold cash and a lot of different kinds of accounts available at one or another of those institutions.</p> <p>Whatever sort of institution you choose, you still need to figure out what sorts of accounts to use for your cash. Here are the usual suspects.</p> <h3>Checking accounts</h3> <p>For most people, a checking account is their main gateway into the banking system. Their paycheck is direct deposited into their checking account, and most of their bills are paid out of their checking account.</p> <p>Back in the 1980s and 1990s, banks had to pay reasonably competitive interest rates to pull in money to support their (highly profitable) lending. That became less and less true in the early 21st century, until the financial crisis put an end to it. At the moment, checking accounts pay so little interest that you might as well just ignore it.</p> <p>That doesn't mean you shouldn't have a checking account &mdash; it's just no longer where you should hold your liquidity balances or your cash to cover planned expenses, until just a day or two before you need to make a payment. (See also: <a href="http://www.wisebread.com/9-common-mistakes-youre-making-with-your-checking-account?ref=seealso" target="_blank">9 Common Mistakes You're Making With Your Checking Account</a>)</p> <h3>Reloadable debit cards</h3> <p>These are a relatively new invention, created for people who don't need (or can't manage) an ordinary checking account. As the name suggests, it functions as a debit card. There is usually some limited ATM access and some sort of bill-paying feature.</p> <p>Once little more than fee-generating boondoggle for the banks, rule changes made them pretty fair for consumers a few years ago. Since these new rules went into effect, a reloadable debit card had been a reasonable place to hold your cash balances when rates were low, but now that interest rates are going up they're only reasonable for people whose circumstances make a bank account impractical.</p> <h3>Savings accounts</h3> <p>It used to be that you opened a savings account even before you opened a checking account. Now an ordinary savings account is almost pointless. At least at my bank, a savings account pays the same minuscule rate as a checking account, so I might just as well leave my excess cash in my checking account.</p> <p>When you think about savings accounts nowadays, though, you're usually not thinking about a savings account at your local bank. You're thinking about an internet savings account. (See also: <a href="http://www.wisebread.com/6-important-things-to-look-for-in-a-savings-account?ref=seealso" target="_blank">6 Important Things to Look for in a Savings Account</a>)</p> <h3>Internet savings accounts</h3> <p>These are just ordinary savings accounts, except they're at a bank that's willing to pay up to get your money, and that offers a convenient web interface for moving money to and from your checking account. The money moves by ACH transfer, typically in two or three days. This is quick enough to make these accounts very useful as a place to hold your cash.</p> <p>Unlike a lot of other kinds of financial accounts (where the terms and conditions vary in complex ways), the terms and conditions of internet savings accounts tend to be relatively standard, making it easy for savers to compare one account to another and pick the one that offers the best deal. (See also: <a href="http://www.wisebread.com/5-best-online-savings-accounts?ref=seealso" target="_blank">5 Best Online Savings Accounts</a>)</p> <h3>Money market funds</h3> <p>Money funds are a legacy of 1970s interest rate regulations. They pool money from shareholders, invest it in short-term securities, and share the return. Because they just share whatever return they get, returns go up quickly when interest rates rise. (Unlike savings and money market accounts, where banks that already have your money won't raise rates until they have to.)</p> <p>Although very safe, investments in a money market fund are not guaranteed. In fact, one money market fund lost enough money during the financial crisis that it was unable to make investors whole. That prompted major players in the money market to simultaneously all try to get out of assets with even the slightest risk. Basically, that was the financial crisis.</p> <h3>Money market accounts</h3> <p>Created in the early 1980s as a carefully carved-out exception to interest rate regulations, money market accounts were created in a way that didn't cannibalize on checking or savings accounts (basically, they only allowed six withdrawals per month and only three of those could be by check). They had advantages over a money market fund: They paid an announced rate (instead of just whatever the fund could earn in the market), they were guaranteed to pay off at 100 cents on the dollar, and they had FDIC insurance. That's all still true. (See also: <a href="http://www.wisebread.com/money-market-accounts-ideal-for-emergency-funds?ref=seealso" target="_blank">Money Market Accounts: Ideal for Emergency Funds</a>)</p> <h3>Other possibilities</h3> <p>There are a lot of other places you might hold cash for the short term: Demand note accounts (basically an IOU from a major financial corporation packaged up like an internet savings account), cash management accounts (a money fund or money market account wrapped up inside a brokerage account), CDs, and Treasury bills.</p> <h2>Bottom line</h2> <p>It no longer makes good sense to just keep your money in your checking account &mdash; the simplest version of cash management. Now that you can earn a return that's more than a fraction above zero, the time has come to manage your cash more actively.</p> <h3>Simple, but not too simple</h3> <p>The easiest version of active management is just to shift most of your liquidity balances, near-term planned expenses, and temporary investments into some sort of higher-yield account.</p> <p>Just do this: When your paycheck (or any other money) arrives in your checking account, transfer most of it to your higher-yield account. Two or three days before your bills need to be paid, transfer the necessary amount of money back to your checking account.</p> <h3>Not so simple</h3> <p>If you're into this sort of thing, you can get as fancy as you want.</p> <p>If your finances are sufficiently under control, you can skip the step of having your income enter via your checking account only to be transferred to your higher-yield account. Instead, you can arrange to have your direct deposit go straight into your high-yield account. That gets you earning your higher yield a couple of days earlier, and potentially cuts the number of transfers you need to make in half.</p> <p>Especially for expenses with due dates that are well-known but further off than this month, it may make sense to do something with CDs or Treasury bills.</p> <p>It may be more convenient to keep your temporary investments closer to where the investments are going to be held &mdash; perhaps in a money market fund in the same family as the other mutual funds you hold, or one with your brokerage firm.</p> <p>The possibilities are endless. But the time for just leaving your money idle in your checking account has ended.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Finterest-rates-are-rising-heres-where-to-keep-your-cash&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FInterest%2520Rates%2520Are%2520Rising_%2520Here%2527s%2520Where%2520to%2520Keep%2520Your%2520Cash.jpg&amp;description=Interest%20Rates%20Are%20Rising%3A%20Here's%20Where%20to%20Keep%20Your%20Cash"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Interest%20Rates%20Are%20Rising_%20Here%27s%20Where%20to%20Keep%20Your%20Cash.jpg" alt="Interest Rates Are Rising: Here's Where to Keep Your Cash" 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/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/interest-rates-are-rising-heres-where-to-keep-your-cash">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/6-important-things-to-look-for-in-a-savings-account">6 Important Things to Look for in a Savings Account</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/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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-reasons-to-love-your-bank">6 Reasons to Love Your Bank</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/how-to-benefit-from-rising-interest-rates">How to Benefit From Rising Interest Rates</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-earn-money-with-your-emergency-fund">How to Earn Money With Your Emergency Fund</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking balances cash checking accounts debit cards emergency funds interest rates internet savings accounts money market accounts savings accounts Wed, 11 Apr 2018 08:30:05 +0000 Philip Brewer 2129647 at http://www.wisebread.com Best Money Tips: 5 Kinds of Bank Accounts That Everybody Needs http://www.wisebread.com/best-money-tips-5-kinds-of-bank-accounts-that-everybody-needs <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-5-kinds-of-bank-accounts-that-everybody-needs" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_credit_card_laptop_635916734.jpg" alt="Couple getting bank account everyone needs" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found articles on bank accounts that everyone needs, important employee rights that teens should know, and how to create a calming evening routine.</p> <h2>Top 5 Articles</h2> <p><a href="http://www.moneyaftergraduation.com/2018/04/09/5-bank-accounts-everybody-needs/">The 5 Bank Accounts Everybody Needs</a> &mdash; Five bank accounts may seem like a lot, but they each serve an important purpose in managing your daily expenses and long-term goals. [Money After Graduation]</p> <p><a href="https://www.moneyunder30.com/important-employee-rights-teens-should-know">The 8 Most Important Employee Rights Teens Should Know</a> &mdash; By law, you are entitled to individual rights at the workplace, even if you're a teenager without a lot of experience. [Money Under 30]</p> <p><a href="https://www.theclassysimplelife.com/my-calming-evening-routine-essentials-to-create-your-own/">My Calming Evening Routine &amp; Essentials to Create Your Own</a> &mdash; Your evening routine starts earlier than you think. If you want to sleep restfully, you'll need to be more conscious of what you eat from the early afternoon onward. [The Classy Simple Life]</p> <p><a href="https://www.csmonitor.com/Business/2018/0407/What-s-behind-the-plunge-in-bitcoin">What's behind the plunge in bitcoin?</a> &mdash; Analysts say that the biggest factor behind the plunge of value in bitcoin and other cryptocurrencies is the prospect of government regulation. [The Christian Science Monitor]</p> <p><a href="http://www.pretendtobepoor.com/do-grown-ups-need-an-allowance/">Do Grown-ups Need an Allowance?</a> &mdash; When your finances it joined with your spouse's, it can make a lot of sense for each person to have an allowance that they can spend on whatever they want. [Pretend to Be Poor]</p> <h2>Other Essential Reading</h2> <p><a href="https://www.popsugar.com/smart-living/How-Thread-Needle-44722342">This Incredibly Helpful Needle-Threading Hack Will Save You SO Much Time and Sanity</a> &mdash; Threading a needle is frustrating and time-consuming for a lot of people. If you are one of those people, this hack will change your life.&nbsp; [PopSugar Smart Living]</p> <p><a href="http://www.experian.com/blogs/news/crucial-things-know-student-loans-repayment/">Crucial Things to Know About Your Student Loans and Repayment</a> &mdash; Join Experian's #CreditChat tomorrow at 3 p.m. ET for a discussion on important things you should know about your student loans and repayment. [Experian]</p> <p><a href="https://nosidebar.com/spring-curating/">Four Simple Steps for Spring &ldquo;Curating&rdquo;</a> &mdash; When you keep to many things unintentionally, they lose their significance. Taking care of them and putting them away makes them shine the next time you bring them out again. [No Sidebar]</p> <p><a href="https://www.getrichslowly.org/crossover-point/">The crossover point: How to know when you&rsquo;ve achieved financial independence</a> &mdash; It only takes a few simple calculations to figure out if you've reached financial independence. [Get Rich Slowly]</p> <p><a href="https://centsiblyrich.com/top-5-reasons-to-spend-on-a-condo/">Top 5 Reasons To Spend On a Condo</a> &mdash; Most condos come with a maintenance fee, but in exchange you don't have to deal with the upkeep for shared areas and other facilities. [Centsibly Rich]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/amy-lu">Amy Lu</a> of <a href="http://www.wisebread.com/best-money-tips-5-kinds-of-bank-accounts-that-everybody-needs">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/why-i-like-big-banks">Why I Like Big Banks</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/get-ready-to-manage-your-bank-and-other-cash-accounts">Get Ready to Manage Your Bank (and Other Cash) Accounts</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/4-ways-your-credit-union-is-changing-for-the-better">4 Ways Your Credit Union Is Changing — for the Better</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-i-still-write-paper-checks">Why I Still Write Paper Checks</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/beating-bank-fee-increases">Beating Bank Fee Increases</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking bank accounts best money tips Tue, 10 Apr 2018 08:00:09 +0000 Amy Lu 2130274 at http://www.wisebread.com Need Business Credit? Build Your Personal Credit First http://www.wisebread.com/need-business-credit-build-your-personal-credit-first <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/need-business-credit-build-your-personal-credit-first" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/minded_woman_holding_bank_card_and_doing_shopping.jpg" alt="Minded woman holding bank card and doing shopping" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The most exciting opportunities in a small business often arrive unexpectedly. And sometimes, taking advantage of them requires money &mdash; more than you may have at the moment. Whether you need to fill a big retail order or hire contractors to complete a professional services contract, you'll be able to act a lot more quickly if you have business credit lined up.</p> <p>Many small business owners don't realize that their personal credit plays a big role in obtaining the business credit they need until they actually apply for it. Entrepreneurs are often surprised to discover that for both <a href="http://www.wisebread.com/10-smart-ways-to-get-a-small-business-loan?ref=internal" target="_blank">small-business loans</a> and <a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses?ref=internal" target="_blank">business credit cards</a>, lenders typically require a <a href="http://www.wisebread.com/what-does-your-personal-guarantee-on-a-business-credit-card-mean?ref=internal" target="_blank">personal guarantee</a>.</p> <p>It's very difficult to get credit based solely on the business's credit profile unless you run a very substantial-sized business. So how can you get business credit if you have a limited personal credit history or made mistakes with your personal credit in the past? There's really only one answer if you want to borrow at attractive interest rates. It's buffing up your personal credit.</p> <p>Fortunately, you can make a difference in your credit profile quickly if you start doing the right things today. Here are some strategies to put into action ASAP.</p> <h2>Create a wall between your business and personal finances</h2> <p>If you've been using your personal checking account to deposit payments from clients, make this the week you get serious about your finances and open a separate business checking account. To do so, your bank will probably require you to have an employer identification number (EIN), so make getting one your first step, if you don't have one already. You can <a href="https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online" target="_blank">apply online for an EIN</a> from the IRS.</p> <p>Keeping a separate business bank account will help you to maintain the protections that come with your <a href="http://www.wisebread.com/llcs-and-s-corps-and-c-corps-oh-my?ref=internal" target="_blank">business entity</a>, if you have set one up, safeguarding you from financial liability. It will also force you to bring valuable discipline to how you manage your business and personal finances. If you are constantly raiding your business bank account to pay personal bills or vice versa, you probably don't really know where you stand in either area. Getting clear will help you to make better financial decisions in both arenas, which should ultimately lead to better credit.</p> <h2>Know your personal credit score</h2> <p>If you have poor personal credit, it will be hard to get a business loan. Many people don't know their score, so take a few minutes to find out what yours is this week. You can buy your personal credit scores from each of the three major credit bureaus (Experian, TransUnion, and Equifax), and at MyFICO.com. It usually costs less than $20.</p> <p>Many <a href="http://www.wisebread.com/the-5-best-credit-cards-that-offer-free-credit-scores?ref=internal" target="_blank">credit cards also offer free credit scores</a> for cardholders. While each paid and free credit score will be slightly different from the one ultimately used by your business lender, they can give you a good estimate of what that score will be. (See also: <a href="http://www.wisebread.com/fico-or-fako-are-free-credit-scores-from-credit-cards-the-real-thing?ref=seealso" target="_blank">Are Free Credit Scores from Credit Cards the Real Thing?</a>)</p> <p>Your FICO credit scores &mdash; the ones used most often by lenders &mdash; reflect <a href="http://www.wisebread.com/the-5-things-with-the-biggest-impact-on-your-credit-score?ref=internal" target="_blank">five factors</a>, including your payment history, the amounts owed, the length of your credit history, your credit mix, and new credit (opening a lot of new cards can be considered risky behavior).</p> <p>FICO scores range from 300 to 850. If you're going after a small-business loan, most lenders want to see a FICO score of 700 or better. If yours is below that, take the time to <a href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps?ref=internal" target="_blank">rebuild your credit</a> before applying for business credit.</p> <h2>Take charge of your personal debt</h2> <p>Pay down any balances on your personal credit cards as quickly as you can. It will be hard to get business credit if you are maxed out personally.</p> <p>Focus on the cards with the highest interest rates and highest credit utilization to improve your situation most quickly. (With revolving credit, lenders look at the ratio of your current balance to your available credit to come up with a <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=internal" target="_blank">credit utilization ratio</a>. The lower your credit utilization, the better.)</p> <p>If you have maxed out one personal card but other cards are empty, consider spreading the debt among those other cards by doing a balance transfer. Ideally, look for a <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?ref=internal" target="_blank">0% APR balance transfer deal</a>.</p> <h2>Limit use of your personal cards</h2> <p>If you know you'll need business credit in the next three to six months, do all you can to limit your current spending on personal credit cards, unless you're paying off the balance each month. Make sure to pay all of your credit card bills on time, as well.</p> <p>Running a business inevitably comes with financial surprises. The more work you do to keep your personal credit in shape, the easier it will be to handle the unexpected &mdash; and the more peaceful your life will be.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fneed-business-credit-build-your-personal-credit-first&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FNeed%2520Business%2520Credit_%2520Build%2520Your%2520Personal%2520Credit%2520First.jpg&amp;description=Need%20Business%20Credit%3F%20Build%20Your%20Personal%20Credit%20First"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Need%20Business%20Credit_%20Build%20Your%20Personal%20Credit%20First.jpg" alt="Need Business Credit? Build Your Personal Credit First" 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/elaine-pofeldt">Elaine Pofeldt</a> of <a href="http://www.wisebread.com/need-business-credit-build-your-personal-credit-first">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/10-smart-ways-to-get-a-small-business-loan">10 Smart Ways to Get a Small Business Loan</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/cant-get-business-credit-consider-alternative-financing">Can&#039;t Get Business Credit? Consider Alternative Financing</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-small-business-credit-cards-affect-your-personal-credit">How Small Business Credit Cards Affect Your Personal Credit</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-build-business-credit-when-youre-self-employed">5 Ways to Build Business Credit When You&#039;re Self-Employed</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-5-best-credit-cards-for-small-businesses">Best Credit Cards for Small Businesses</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking Entrepreneurship business credit credit score debt management personal credit small business small business tips Wed, 04 Apr 2018 08:30:09 +0000 Elaine Pofeldt 2124241 at http://www.wisebread.com How to Benefit From Rising Interest Rates http://www.wisebread.com/how-to-benefit-from-rising-interest-rates <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-benefit-from-rising-interest-rates" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/money_growth_graph_on_a_chalk_board.jpg" alt="Money Growth Graph on a chalk board" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Interest rates went up three times in 2017, and they are under consideration to be increased yet again within the next couple of months. As interest rates continue to rise, what does that mean for you as a borrower?</p> <p>While rising interest rates means it costs more for you to borrow, it also can work in your favor. Here are a few examples of how The Federal Reserve hikes can benefit you financially.</p> <h2>1. Throw more into savings</h2> <p>Savings accounts and certificates of deposit have been at historically low interest rates in the past few years. While a hike in federal interest rates won't make you rich, it can give you a slight boost in your savings power, for no extra work. (See also: <a href="http://www.wisebread.com/5-best-online-savings-accounts?ref=seealso" target="_blank">Best Online Savings Accounts</a>)</p> <p>As interest rates increase, now is a great time to start socking extra money away into savings accounts and CDs. While putting extra money into savings might not result in as much interest earned from other saving avenues, such as retirement accounts or other investments, you can use the higher interest rates as an incentive to boost your savings or emergency fund contributions.</p> <h2>2. Take advantage of still low interest rates</h2> <p>During the financial crisis of 2007, the credit bubble burst, causing lending to come to a near halt. The Federal Reserve drove interest rates to the floor, and eventually pulled lenders back from the brink.</p> <p>Higher interest rates today may make it more expensive for borrowers than over the past several years, but rates are still near historic lows. While it's important to use caution when borrowing money, now might be the time to strike if you've been on the fence about making a big purchase, such as buying a home.</p> <h2>3. Get more bang for your buck abroad</h2> <p>Traveling abroad can be expensive enough in its own right. But as federal interest rates rise, it could very likely strengthen the U.S. dollar.</p> <p>A stronger dollar means Americans can travel abroad and get a better exchange rate than usual. Thanks to exchange rates working in your favor, you can splurge a little bit more (or save more) than you had maybe originally budgeted for.</p> <h2>4. Pay off consumer debt</h2> <p>The interest rates on your debt will rise if the Fed continues to increase rates. This means you will be required to pay even more interest on your debt, owing more money overall.</p> <p>You can lessen the blow by prioritizing your debt repayment now. The sooner you pay off debt at a lower interest rate, the more money you will save. Use the threat of increasing rates to get your debt paid off as soon as possible.</p> <p>Credit card debt is especially susceptible to climbing interest rates. Credit card debt has its own high interest rate, so any additional increase from the Federal Reserve will only cost you more. Avoid paying extra interest by prioritizing debt repayment today. (See also: <a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt?ref=seealso" target="_blank">The Fastest Method to Eliminate Credit Card Debt</a>)</p> <h2>5. Consider refinancing</h2> <p>If you've been considering refinancing your home or auto loan, you may want to do it before the Fed considers another increase. In addition, if you bought your home at a higher interest rate and have not yet considered refinancing, you may not be getting the best deal available.</p> <p>Even if federal interest rates don't change again, you may still find it advantageous to refinance your mortgage or auto loan to a better rate. (See also: <a href="http://www.wisebread.com/4-smart-ways-to-lower-your-monthly-mortgage-payment?ref=seealso" target="_blank">4 Smart Ways to Lower Your Monthly Mortgage Payment</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-benefit-from-rising-interest-rates&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Benefit%2520From%2520Rising%2520Interest%2520Rates.jpg&amp;description=How%20to%20Benefit%20From%20Rising%20Interest%20Rates"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Benefit%20From%20Rising%20Interest%20Rates.jpg" alt="How to Benefit From Rising Interest Rates" 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/rachel-slifka">Rachel Slifka</a> of <a href="http://www.wisebread.com/how-to-benefit-from-rising-interest-rates">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-three-interest-rates">The Three Interest Rates</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/interest-rates-are-rising-heres-where-to-keep-your-cash">Interest Rates Are Rising: Here&#039;s Where to Keep Your Cash</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-countries-where-banks-pay-crazy-interest-rates">10 Countries Where Banks Pay Crazy Interest Rates</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/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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-things-you-need-to-know-before-taking-out-a-personal-loan">10 Things You Need to Know Before Taking Out a Personal Loan</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Banking borrowing certificates of deposit debt repayment federal reserve interest rates lending refinancing savings accounts Wed, 21 Mar 2018 09:30:19 +0000 Rachel Slifka 2115362 at http://www.wisebread.com 11 ATM Mistakes to Avoid Overseas http://www.wisebread.com/11-atm-mistakes-to-avoid-overseas <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/11-atm-mistakes-to-avoid-overseas" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_withdrawing_money_at_the_atm.jpg" alt="Woman withdrawing money at the ATM" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Thanks to ATMs being so widespread globally, you can travel to a foreign country with little more than a bank card and gain instant access to your cash. However, without an understanding of the differences between using an ATM at home and abroad, you could end up in serious trouble. Here are 11 common ATM mistakes to avoid while overseas.</p> <h2>1. Using your credit card for ATM withdrawals</h2> <p>Credit cards typically charge larger fees when you take out a <a href="http://www.wisebread.com/how-to-reduce-the-costs-of-a-cash-advance?ref=internal" target="_blank">cash advance</a> at an overseas ATM. You&rsquo;ll be charged a cash advance fee, probably an ATM fee, and possibly a foreign transaction fee (unless you have a credit card with <a href="http://www.wisebread.com/smarter-security-and-no-foreign-transaction-fees-the-best-credit-cards-to-use-while-on-vacation?ref=internal" target="_blank">no foreign transaction fees</a>). Plus you&rsquo;ll instantly be charged interest on the cash advance at a higher rate than your purchase APR.</p> <p>Do yourself a favor: Only take out money using your debit card and save your <a href="http://www.wisebread.com/top-5-travel-reward-credit-cards?ref=internal" target="_blank">travel rewards card</a> for direct purchases.</p> <h2>2. Not getting a checking account with no ATM fees</h2> <p>Even if you're using the ATM of the same institution that you bank with at home, you're still likely to get hit with ATM fees just for taking money out. Avoid this by signing up for an account that promises no international ATM fees. Several U.S. banks and financial institutions offer zero ATM fees, and even if the ATM applies one, you'll likely get reimbursed at the end of the month. (See also: <a href="http://www.wisebread.com/11-ways-to-avoid-bank-fees-while-traveling?ref=seealso" target="_blank">11 Ways to Avoid Bank Fees While Traveling</a>)</p> <h2>3. Thinking ATMs can do the same transactions as in the U.S.</h2> <p>If you're hoping to pay bills, transfer money between accounts, or even see an accurate account balance when you&rsquo;re abroad, think again. Many foreign ATMs are relatively one dimensional, particularly when it comes to using them with nonnative cards. Be prepared to only withdraw cash from ATMs and setup online banking or use your bank's app for anything else.</p> <h2>4. Not telling your bank about your trip</h2> <p>As part of their fight against fraudulent activity, banks will often take the precaution of freezing your account whenever anything unexpected happens. This includes you attempting to withdraw cash in another country if you haven't made them aware of your travel plans. All it takes is a quick visit, phone call, or online update to let your bank know where you're going and for how long, and you should have no issues.</p> <h2>5. Not counting your money upon withdrawal</h2> <p>Though no one wants to be standing around in an unfamiliar country flicking through wads of cash, you also don't want to be shortchanged by the ATM. Before you head off, always discreetly check that the amount you've received matches the amount you've requested so you can sort out any issues while you're still there. It's also better to withdraw cash during the day, and from an actual bank premises while it's open so you can simply pop in if a problem arises.</p> <h2>6. Not setting up bank app notifications</h2> <p>Most banks now have apps with systems to alert you when various activities are detected on your account. The most important of these to set up is receiving a notification whenever a withdrawal is made, even if it's one that the bank doesn't suspect as fraudulent. This way you can easily keep track of everything happening on your account while overseas and quickly recognize if something is amiss. (See also: <a href="http://www.wisebread.com/6-big-ways-atms-are-changing?ref=seealso" target="_blank">6 Big Ways ATMs Are Changing</a>)</p> <h2>7. Not keeping a copy of your ATM card somewhere</h2> <p>If your card gets stolen, swallowed by an ATM, or simply lost, then it's important to have backup copies of it. These will allow you to cancel the card quickly as well as order a replacement for when you get home. Rather than having paper copies, it's a better idea to create a digital backup (a photo) and store it somewhere safe. (See also: <a href="http://www.wisebread.com/the-atm-just-ate-your-deposit-now-what?ref=seealso" target="_blank">The ATM Just Ate Your Deposit. Now What?</a>)</p> <h2>8. Not changing the daily withdrawal limit</h2> <p>Many travelers choose to lower their daily withdrawal limit when they head overseas. This means that in the event of someone getting ahold of your card and attempting to withdraw cash fraudulently, they will only gain access to a certain amount.</p> <p>It's also wise to use two accounts to manage your cash. Set up the one without a connected bank card to keep the majority of your travel cash in, and use online banking to transfer money to the other account with the bank card. Your money will then be doubly protected if your card goes missing.</p> <h2>9. Not checking ATMs for skimmers</h2> <p>This is something you should be doing regardless of where in the world you're using an ATM, even if it's at home. But having your card cloned in a foreign country can be even more traumatic, and sorting everything out in the aftermath an inconvenient process.</p> <p>Always take a good look at the card slot before sticking your card in to make sure there's nothing suspicious about it, and if you're in any way concerned, move onto another one. (See also: <a href="http://www.wisebread.com/10-tips-to-save-you-from-an-atm-skimmer?ref=seealso" target="_blank">10 Tips to Save You from an ATM Skimmer</a>)</p> <h2>10. Not having a small cash backup</h2> <p>Despite the fact that ATMs are now easy to find in virtually any corner of the world, it always pays to have a plan B in the event of something going wrong. The best way to do this is to always have a small cash backup that you keep somewhere safe separate from the rest of your cash, just for emergencies.</p> <h2>11. Not having your bank's phone number readily available</h2> <p>Unfortunately, sometimes the worst does happen and you can be stuck with a number of problems at the ATM. When it comes to banking, time can literally mean money in an emergency situation. That's why it's vital that you have your bank's phone number on hand so you can contact them quickly in a crisis. And remember to input the international dialing code if necessary.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F11-atm-mistakes-to-avoid-overseas&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F11%2520ATM%2520Mistakes%2520to%2520Avoid%2520Overseas.jpg&amp;description=11%20ATM%20Mistakes%20to%20Avoid%20Overseas"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/11%20ATM%20Mistakes%20to%20Avoid%20Overseas.jpg" alt="11 ATM Mistakes to Avoid Overseas" 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/nick-wharton">Nick Wharton</a> of <a href="http://www.wisebread.com/11-atm-mistakes-to-avoid-overseas">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/5-of-the-safest-countries-to-visit-in-2018">5 of the Safest Countries to Visit in 2018</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/how-to-provide-proof-of-onward-travel-during-an-open-ended-trip-abroad">How to Provide Proof of Onward Travel During an Open-Ended Trip Abroad</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/5-famous-overseas-film-settings-you-can-visit-on-any-budget">5 Famous Overseas Film Settings You Can Visit on Any Budget</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/11-ways-to-avoid-bank-fees-while-traveling">11 Ways to Avoid Bank Fees While Traveling</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/5-countries-with-no-or-very-low-taxes">5 Countries With No (Or Very Low) Taxes</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking Travel atm fees atms international travel money tips travel abroad travel tips Fri, 16 Mar 2018 09:30:22 +0000 Nick Wharton 2119302 at http://www.wisebread.com Your Bank Took Away Free Checking. Now What? http://www.wisebread.com/your-bank-took-away-free-checking-now-what <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/your-bank-took-away-free-checking-now-what" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_with_bills.jpg" alt="Woman with bills" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You are a financially responsible adult who has been a loyal customer of the same bank for years. Now you find that you've been hit with a random checking account fee. What gives?</p> <p>If you're like most people, you keep enough in your checking account to pay the bills, but you don't store your life savings there. Unfortunately for you, many big banks are changing how they do things. Checking accounts that used to be free are now being charged a monthly service fee if they don't meet certain criteria, like minimum balance and direct deposit amounts per month.</p> <p>So what are your options? If you've been hit with a monthly checking account fee, here are some things you can do. (See also: <a href="http://www.wisebread.com/5-signs-its-time-to-find-a-new-bank?ref=seealso" target="_blank">5 Signs It's Time to Find a New Bank</a>)</p> <h2>Ask your bank for an explanation</h2> <p>If you're finding new fees being tacked onto your bank account statement, you will want to go directly to your bank. Ask them what the fees are and how you can avoid them. If you've been a longtime customer, you may even have leverage to have these fees waived. In any case, find out what is required to avoid these fees altogether in the future.</p> <p>At the very least, your bank should be helpful in working with you to solve this issue. Be sure they spell out exactly what criteria they require for a checking account and what charges they'll make you pay if you fail to meet their requirements. (See also: <a href="http://www.wisebread.com/are-you-paying-these-6-unfair-banking-fees?ref=seealso" target="_blank">Are You Paying These 6 Unfair Banking Fees?</a>)</p> <h2>Utilize direct deposit</h2> <p>To avoid a monthly checking account fee, your bank may require you to have a minimum amount directly deposited into your account every month. For example, this minimum may be $250 per month.</p> <p>Banks like direct deposit because when you have money regularly deposited into your account, you are less likely to overdraft. So long as you have a steady job and your employer utilizes direct deposit, this should be a relatively simple fix. You can ask your human resources department whether you are eligible for direct deposit, or if you can change your current setup.</p> <h2>Keep up that monthly minimum</h2> <p>Does your bank require a monthly checking account minimum? If so, you will need to keep that minimum amount available in order to avoid additional fees.</p> <p>Keep in mind, if the minimum is very high, your money could possibly be put to better use. Money in a checking account likely isn't earning very high interest, if it's earning anything at all. You could earn a better return by investing that money or using it to pay off high-interest debt.</p> <p>Take a look and consider your options. If the checking account minimum is too high for your taste, you may want to consider finding a new bank.</p> <h2>Switch banks</h2> <p>Changing banks can be a hassle, but it's one that can be very worth your while. If your current bank is charging you more fees than it's worth, it's time to make a switch. There are still plenty of banks out there currently offering free checking accounts, many of which even earn interest. You have other options. Don't settle for a bank that is not meeting your needs. (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> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fyour-bank-took-away-free-checking-now-what&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FYour%2520Bank%2520Took%2520Away%2520Free%2520Checking.%2520Now%2520What_.jpg&amp;description=Your%20Bank%20Took%20Away%20Free%20Checking.%20Now%20What%3F"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Your%20Bank%20Took%20Away%20Free%20Checking.%20Now%20What_.jpg" alt="Your Bank Took Away Free Checking. Now What?" 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/rachel-slifka">Rachel Slifka</a> of <a href="http://www.wisebread.com/your-bank-took-away-free-checking-now-what">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/interest-rates-are-rising-heres-where-to-keep-your-cash">Interest Rates Are Rising: Here&#039;s Where to Keep Your Cash</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/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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-common-mistakes-youre-making-with-your-checking-account">9 Common Mistakes You&#039;re Making With Your Checking Account</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/charged-with-an-overdraft-fee-get-your-money-back">Charged With an Overdraft Fee? 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/10-things-you-need-to-know-before-taking-out-a-personal-loan">10 Things You Need to Know Before Taking Out a Personal Loan</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking balances checking accounts direct deposit fees minimum amounts switching banks Fri, 02 Mar 2018 09:30:06 +0000 Rachel Slifka 2110677 at http://www.wisebread.com The ATM Just Ate Your Deposit. Now What? http://www.wisebread.com/the-atm-just-ate-your-deposit-now-what <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-atm-just-ate-your-deposit-now-what" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_summer_shopping.jpg" alt="Woman summer shopping" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The United States is filled with ATMs. According to Statistic Brain, there were 425,000 of these machines in the country as of March 29, 2017. Statistic Brain also reported that the average ATM in the United States saw 800 transactions every month.</p> <p>With all of these machines and all of these transactions, it wouldn't be surprising if every once in a while an ATM ate a consumer's cash or check deposit without crediting their account or providing them a receipt. The question is, what should you do if this happens to you?</p> <h2>Contact your bank ASAP</h2> <p>Don't just ignore what happened. Contact your bank, and do it immediately.</p> <p>If you are standing outside your own bank when this happens, using one of your financial institution's ATMs, simply go inside and explain what happened. Your bank can correct the situation on the spot, crediting the deposit to your account and issuing you a paper receipt verifying the funds.</p> <p>That's the simplest solution. But what if you are using a stand-alone ATM that's not near your bank branch? What if you are using an ATM not even run by your bank and it swallows your deposit without recording it?</p> <p>Again, this is frustrating, but don't panic. It's imperative to call your bank immediately. Use the number on the back of your debit card to contact your bank and explain the situation to the customer service representative. The bank will usually credit you for the deposit and perform an investigation. If it determines that you actually did deposit the amount you claimed, it will finally deposit that amount in your account, removing the credit. The time it takes for this to happen will vary depending on your bank.</p> <p>Does this happen often? That's difficult to say. There are no statistics available on how often ATMs eat deposits without crediting consumers' accounts. But what isn't hard to determine is that consumers use ATMs often. A 2017 banking study said that 61 percent of consumers visited an ATM at least once a month. That leaves plenty of room for potential ATM grabs. (See also: <a href="http://www.wisebread.com/6-big-ways-atms-are-changing?ref=seealso" target="_blank">6 Big Ways ATMs Are Changing</a>)</p> <h2>The alternatives</h2> <p>If you want to avoid the chance that your ATM will eat your deposit, you do have other options.</p> <p>If you are depositing cash, your only real alternative is to visit a bank branch in person and make the deposit with a teller. This might be an inconvenience, depending on your bank's branch locations and their hours, but it's safer to hand your cash deposit to a teller than it is to stuff it in an envelope and deposit it in an ATM that could make a mistake.</p> <p>If you are depositing a check, you have more options. Yes, you can deposit your check in person with a teller if you want to avoid the ATM. But you can also sign up with a bank that offers mobile deposit. Using your bank's smartphone app, you can take a photo of your check and deposit that check right into your account from anywhere.</p> <p>Just be aware that mobile banking isn't foolproof, either. Hold onto your checks after you deposit them until you see the money appear in your account. Your bank might send you a message saying that it couldn't read the photo, or that there was an error. You'll have to snap another photo of your check to try again.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fthe-atm-just-ate-your-deposit-now-what&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FThe%2520ATM%2520Just%2520Ate%2520Your%2520Deposit.%2520Now%2520What_.jpg&amp;description=The%20ATM%20Just%20Ate%20Your%20Deposit.%20Now%20What%3F"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/The%20ATM%20Just%20Ate%20Your%20Deposit.%20Now%20What_.jpg" alt="The ATM Just Ate Your Deposit. Now What?" 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/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/the-atm-just-ate-your-deposit-now-what">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/interest-rates-are-rising-heres-where-to-keep-your-cash">Interest Rates Are Rising: Here&#039;s Where to Keep Your Cash</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/10-countries-where-banks-pay-crazy-interest-rates">10 Countries Where Banks Pay Crazy Interest Rates</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/11-ways-to-avoid-bank-fees-while-traveling">11 Ways to Avoid Bank Fees While Traveling</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/how-to-get-cash-while-traveling-abroad">How to Get Cash While Traveling Abroad</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/9-common-mistakes-youre-making-with-your-checking-account">9 Common Mistakes You&#039;re Making With Your Checking Account</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking ate your deposit atms cash checks deposits mobile deposit technology Mon, 05 Feb 2018 09:30:05 +0000 Dan Rafter 2096392 at http://www.wisebread.com 6 Important Things to Look for in a Savings Account http://www.wisebread.com/6-important-things-to-look-for-in-a-savings-account <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-important-things-to-look-for-in-a-savings-account" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/holding_piggy_bank_drawing_front_of_blackboard.jpg" alt="Holding piggy bank drawing front of blackboard" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Having a savings account is important. It's a good place to store your emergency fund, which you&rsquo;d tap if your car unexpectedly needed repairs or you had to weather months without a job.</p> <p>But all savings accounts are not created equal, and there are important factors you should consider before opening one. Here are six features to look for if you are searching for the best possible savings account.</p> <h2>1. Interest rates</h2> <p>The single most important attribute of a savings account is its interest rate, of course. The problem is, interest rates attached to most savings accounts are frustratingly low, with many banks offering a minuscule interest rate of 0.01 percent.</p> <p>You can&rsquo;t grow your money quickly with a rate like that. But the argument has always been that savings accounts aren&rsquo;t the place for stashing money if you want it to grow. Instead, it&rsquo;s a safe place to keep money that you might need to access quickly for an emergency. But if you can find a higher rate, you might as well take it. They&rsquo;re pretty rare. (See also: <a href="http://www.wisebread.com/5-best-online-savings-accounts?ref=seealso" target="_blank">5 Best Online Savings Accounts</a>)</p> <h2>2. No monthly fee</h2> <p>You&rsquo;d think that with such low interest rates, savings accounts wouldn&rsquo;t come with fees. But several banks do, indeed, charge monthly fees to keep a savings account there. Usually, you must maintain a certain minimum balance to avoid those fees.</p> <p>A bank might charge $5 per month if you don&rsquo;t keep at least $300 in your savings account at all times, for instance. Even if you're pretty good about keeping enough funds in your account, why take the chance of incurring a penalty if you ever dip too low?</p> <p>When you&rsquo;re shopping for a savings account, be sure to pick a bank that doesn&rsquo;t charge any monthly fees. These savings accounts are rarely worth the hassle. (See also: <a href="http://www.wisebread.com/are-you-paying-these-6-unfair-banking-fees?ref=seealso" target="_blank">Are You Paying These 6 Unfair Banking Fees?</a>)</p> <h2>3. No minimum opening deposit</h2> <p>Some banks require that you deposit a certain amount of money into your savings account when you open it. Usually, this is a small amount; say $25. This isn&rsquo;t too onerous, especially because you are opening a savings account to actually put money in it, after all.</p> <p>But if you want more freedom to start your savings account with an even lower amount, you&rsquo;ll have to search for accounts that don&rsquo;t require any minimum opening deposit. There are some out there, especially in the form of online-only banks. Just make sure that these accounts don&rsquo;t come with any other fees that might haunt you later.</p> <h2>4. Automatic transfers</h2> <p>Saving money isn't easy. But if you can automate regular deposits into your savings account, you're far more likely to save at least some money each month.</p> <p>You'll want a bank that offers automatic transfers from your checking to your savings account, and make sure that the bank doesn't charge a fee for this service. Even if you set up an automatic transfer of just $50 per month into savings, you'll have $600 after a year. That can add up. (See also: <a href="http://www.wisebread.com/5-ways-to-automate-your-finances?ref=seealso" target="_blank">5 Ways to Automate Your Finances</a>)</p> <h2>5. Mobile check deposits</h2> <p>You just received a check that you'd like to deposit into your savings account. It's a hassle to head to your nearest ATM or bank branch, but mobile deposit solves that. You simply use your bank's app to take a photo of your check &mdash; front and back &mdash; and tell your bank to deposit that check into your savings account.</p> <p>This was once a rare feature. Today, though, it's becoming expected, and it is awfully convenient. Whatever bank is behind your savings account, make sure it offers mobile deposits.</p> <h2>6. Easy withdrawal</h2> <p>What if you need quick access to your savings account to cover a financial emergency in the middle of the night? If your bank has a large network of ATMs in your area, you'll be able to get the money quickly. (See also: <a href="http://www.wisebread.com/6-big-ways-atms-are-changing?ref=seealso" target="_blank">6 Big Ways ATMs Are Changing</a>)</p> <p>Be careful, though, not to use your savings account as if it's actually a checking account. Federal regulations say that you can't make more than six withdrawals from your savings account a month. If you withdraw more, your bank will charge you fees for each withdrawal.</p> <p>Some banks might allow even fewer withdrawals every month. Look into a bank's withdrawal policies before you take out a savings account with it.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-important-things-to-look-for-in-a-savings-account&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520Important%2520Things%2520to%2520Look%2520for%2520in%2520a%2520Savings%2520Account.jpg&amp;description=6%20Important%20Things%20to%20Look%20for%20in%20a%20Savings%20Account"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Important%20Things%20to%20Look%20for%20in%20a%20Savings%20Account.jpg" alt="6 Important Things to Look for in a Savings Account" 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/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/6-important-things-to-look-for-in-a-savings-account">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/interest-rates-are-rising-heres-where-to-keep-your-cash">Interest Rates Are Rising: Here&#039;s Where to Keep Your Cash</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/how-to-benefit-from-rising-interest-rates">How to Benefit From Rising Interest Rates</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-things-you-need-to-know-before-taking-out-a-personal-loan">10 Things You Need to Know Before Taking Out a Personal Loan</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/8-ways-to-make-sure-you-never-pay-an-atm-fee">8 Ways to Make Sure You Never Pay an ATM Fee</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/switch-to-a-better-bank-in-5-easy-steps">Switch to a Better Bank in 5 Easy Steps</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking emergency funds fees interest rates minimum dollar amount mobile deposit savings accounts withdrawals Tue, 19 Dec 2017 09:30:09 +0000 Dan Rafter 2072579 at http://www.wisebread.com 4 Signs It's Time to Find a New Savings Account http://www.wisebread.com/4-signs-its-time-to-find-a-new-savings-account <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-signs-its-time-to-find-a-new-savings-account" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/the_monthly_finances.jpg" alt="The monthly finances" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're putting any money into a savings account, congratulations: You're ahead of most U.S. adults. A survey published in 2016 by GOBankingRates found that 69 percent of American adults had less than $1,000 in their savings accounts.</p> <p>But just because you're saving money doesn't mean that you're putting it in the best savings account. And sometimes, there are signs that you should move your dollars to a new account. (See also: <a href="http://www.wisebread.com/the-types-of-savings-accounts-which-is-right-for-you?ref=seealso" target="_blank">The Types of Savings Accounts: Which Is Right For You?</a>)</p> <h2>Your bank is charging you fees</h2> <p>Because banks don't pay you much interest on savings accounts, they shouldn't charge you any fees, either. Still, there are plenty of savings accounts that do come with fees.</p> <p>The most common is the maintenance fee, usually ranging from $5 to $35 a month. Most banks will waive this fee if you keep a minimum amount of money in your savings account at all times. This minimum can range from $100 to more than $1,000, depending on your bank.</p> <p>Other banks limit the number of free transfers or withdrawals from a savings account to a certain number every month; usually about six. If you go past that number, you'll be hit with a fee for every additional transfer or withdrawal you make. That fee could be as much as $10 for each of these additional moves.</p> <p>If your balance doesn't get too low and you don't plan on making many withdrawals each month, you might never be hit with these fees. But why take the chance? There are plenty of savings accounts that come with no fees. Search for one of those instead. (See also: <a href="http://www.wisebread.com/are-you-paying-these-6-unfair-banking-fees?ref-seealso" target="_blank">Are You Paying These 6 Unfair Banking Fees?</a>)</p> <h2>You're not making enough in interest</h2> <p>You won't get rich off your savings account. Banks are stingy when it comes to earning interest, often offering as little as 0.06 percent or less. Don't expect to grow your savings much with such a paltry rate.</p> <p>But there are some banks that pay higher rates with their savings accounts, some in the range of 1 percent. Again, an interest rate of 1 percent won't make you a fortune. But if you can find a savings account that pays higher interest while not charging you any fees, why not take it? (See also: <a href="http://www.wisebread.com/5-best-online-savings-accounts?ref=seealso" target="_blank">5 Best Online Savings Accounts</a>)</p> <h2>The online banking options are too limited</h2> <p>In addition to low fees and higher interest rates, you should also be hunting for a savings account that is convenient. This means one that offers a robust online banking platform. You want to be able to log onto your account from your laptop, phone, or tablet and quickly transfer money from a checking account into your savings account. You'll want the option of mobile deposit, too, in which you can snap a photo of a check with your phone to deposit it in your savings account.</p> <p>What you don't want is to have to travel to your bank every time you want to make a deposit in your savings account. That's too much work, and now that online banking is so common, unnecessary. (See also: <a href="http://www.wisebread.com/4-things-to-consider-before-you-open-an-online-savings-account?ref=seealso" target="_blank">4 Things to Consider Before You Open an Online Savings Account</a>)</p> <h2>Your bank is closing its most convenient locations</h2> <p>Yes, online banking is easy and simple. But there might still be times when you actually want to visit your bank in person. If your bank is shedding branches, and the branches that it's closing are those closest to you, it might be time to consider moving your dollars to a new savings account.</p> <p>Because savings accounts generate so little financial reward, it's important that they also cause you as little inconvenience as possible. If you have to drive miles to get to your bank's nearest branch, it might be time to hunt for a replacement bank that's just a short walk or drive from your home. (See also: <a href="http://www.wisebread.com/8-ways-your-savings-account-may-be-costing-you?ref=seealso" target="_blank">8 Ways Your Savings Account May Be Costing You</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F4-signs-its-time-to-find-a-new-savings-account&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F4%2520Signs%2520Its%2520Time%2520to%2520Find%2520a%2520New%2520Savings%2520Account.jpg&amp;description=4%20Signs%20Its%20Time%20to%20Find%20a%20New%20Savings%20Account"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/4%20Signs%20Its%20Time%20to%20Find%20a%20New%20Savings%20Account.jpg" alt="4 Signs It's Time to Find a New Savings Account" 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/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/4-signs-its-time-to-find-a-new-savings-account">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/interest-rates-are-rising-heres-where-to-keep-your-cash">Interest Rates Are Rising: Here&#039;s Where to Keep Your Cash</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/how-to-benefit-from-rising-interest-rates">How to Benefit From Rising Interest Rates</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/6-important-things-to-look-for-in-a-savings-account">6 Important Things to Look for in a Savings Account</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/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-5 views-row-odd views-row-last"> <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> </ul> </div> </div> </div> </div><br/></br> Banking Hidden fees interest rates maintenance fees mobile banking savings accounts Fri, 20 Oct 2017 09:00:06 +0000 Dan Rafter 2038886 at http://www.wisebread.com 10 Things You Need to Know Before Taking Out a Personal Loan http://www.wisebread.com/10-things-you-need-to-know-before-taking-out-a-personal-loan <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-things-you-need-to-know-before-taking-out-a-personal-loan" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/hand_giving_and_hand_receiving_money.jpg" alt="Hand giving and hand receiving money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>I recently called my bank to ask about fees for using my debit card on an upcoming international trip. I laughed when the banker followed up by asking, &quot;Are you interested in taking out a personal loan for spending money on your vacation?&quot;</p> <p>There are plenty of good reasons to take out a personal loan, but going on vacation isn't one of them. A personal loan is, in essence, an unsecured loan that you get on the basis of your credit and income &mdash; unlike a mortgage loan or home equity line of credit, which uses your home as collateral. Personal loans have advantages and disadvantages compared to secured loans, so whether you go for one of these when you're in need of cash depends on your individual situation.</p> <p>Here's what you should consider before getting a personal loan.</p> <h2>1. The interest rate may be higher than you expect</h2> <p>When you hear about interest rates in the media, they're often talking about the 30-year fixed rate for a standard mortgage, which has been around 4 percent or lower for a long time now. But a personal loan's interest rate will probably be at least twice that. The reason for the difference: When you refinance your home or take out a home equity line of credit, you're promising to relinquish your home if you can't pay back the debt. That's a bigger risk for you, and less of a risk for the bank, compared to a personal loan. In return, banks give you a low interest rate on secured loans. (See also: <a href="http://www.wisebread.com/the-different-types-of-loans-a-primer?ref=seealso" target="_blank">The Different Types of Loans: A Primer</a>)</p> <h2>2. Your credit score matters more for personal loans</h2> <p>With no collateral, all the lender has to go on is your personal creditworthiness. You can expect the available interest rates to increase steeply if your credit is average or poor, going up as high as 36 percent APR.</p> <h2>3. A personal loan is not a long-term solution</h2> <p>While the typical mortgage is paid off over decades, personal loan terms are typically limited to seven years or less. This can be a good thing, because you should never borrow money for longer than you really need to. But it also means that if you are trying to borrow a lot of money, like for a major home remodel, the payments might be too high for you to keep up with on a personal loan.</p> <h2>4. Banks aren't the only option</h2> <p>As nonprofits, credit unions often offer lower rates and fees than banks for the same personal loan products. Then there are the crop of new &quot;marketplace lenders,&quot; such as SoFi and Prosper, which promise easy, quick online loan approval and good rates, especially to folks with the best credit. This nascent industry has had some bumps in the road, but it's still an avenue worth looking into. (See also: <a href="http://www.wisebread.com/best-lenders-for-personal-loans?ref=seealso" target="_blank">Best Lenders for Personal Loans</a>)</p> <h2>5. Personal loans can be a lifesaver when you need cash quickly</h2> <p>When an urgent financial need rears its head &mdash; a leaky roof, an emergency medical bill, or, heaven forbid, an unexpected funeral &mdash; many people turn to credit cards or payday lenders for help. These lenders can be punishingly expensive, but they may seem attractive because in such situations you just don't have time to sit down and apply for a home equity line of credit or look at refinancing your mortgage.</p> <p>You can get the funds from a personal loan within two weeks of applying online, making it just a little slower than the alternatives and potentially much more affordable. (See also: <a href="http://www.wisebread.com/5-times-personal-loans-may-be-better-than-credit-cards?ref=seealso" target="_blank">5 Times Personal Loans May Be Better Than Credit Cards</a>)</p> <h2>6. Personal loans can save you a lot on debt you already have</h2> <p>One of the most common uses for a personal loan is to <a href="http://www.wisebread.com/5-tricks-to-consolidating-your-debt-and-saving-money?ref=iternal" target="_blank">consolidate existing debt</a>, like credit card balances, student loans, and car loans. You may be able to get a lower interest rate than you were paying on your other debts, and you also have the organizational benefit of having only one bill to pay each month. However, when transferring one kind of loan to another, you should ...</p> <h2>7. &hellip; Be aware of what you may be giving up</h2> <p>Some marketplace lenders heavily market the idea of refinancing student loan debt into personal loans. But before you make a decision like that, you should compare your old loan and new loan carefully, the Consumer Financial Protection Bureau warned in a 2016 release.</p> <p>&quot;[I]n some cases consumers could lose important loan-specific protections by refinancing an existing debt. Specifically, consumers should know that they may sign away certain federal benefits, such as income-driven repayment for federal student loans or service member benefits,&quot; the CFPB said. (See also: <a href="http://www.wisebread.com/8-valuable-rights-you-might-lose-when-you-refinance-student-loans?ref=seealso" target="_blank">8 Valuable Rights You Might Lose When You Refinance Student Loans</a>)</p> <h2>8. You might be better off with a different type of loan</h2> <p>If you're trying to get a better rate on credit card debt while you pay it off, before you commit to a personal loan, shop around to see what else is out there. You may be able to transfer your balance to a <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?ref=internal" target="_blank">card with a promotional 0 percent interest rate</a>. Another potentially better deal could be <a href="http://www.wisebread.com/this-is-when-you-should-borrow-from-your-retirement-account?ref=internal" target="_blank">taking money out of your retirement account</a> for a short time, especially if you have a Roth IRA. Just make sure to pay back whatever you borrow.</p> <h2>9. Watch out for fees and extras</h2> <p>Some lenders will try to throw in an insurance policy or other extra expenses as you close the loan. You may or may not want an insurance policy to make sure that your survivors aren't stuck with your loan if tragedy strikes, but that's a separate financial decision that you should undertake with research, not just because you're under the impression that it's required for your loan. (If the lender says it is, walk away.)</p> <p>Also, ask the lender if they use the &quot;pre-compute&quot; method to calculate interest, or if they have prepayment penalties &mdash; you should avoid these, because both will punish you if you're able to pay the loan back ahead of schedule.</p> <h2>10. Never get a personal loan to fund certain expenses</h2> <p>One of the nice things about a personal loan is that unlike a car loan or mortgage, you don't have to justify your purchase to the lender. However, there are things you should know better than to borrow for &mdash; whether it's with a credit card, a home equity line of credit, or a personal loan.</p> <p>Don't take out a personal loan to buy an engagement ring; why would you want to start out your relationship with a pile of debt? While some lenders may advertise a personal loan as a &quot;travel loan,&quot; that's another bad idea; once the vacation is over, you have nothing that you could sell to pay off the loan if you need to. Do I need to tell you that you shouldn't take out a personal loan for gambling money? I didn't think so. (See also: <a href="http://www.wisebread.com/never-borrow-money-for-these-5-buys?ref=seealso" target="_blank">Never Borrow Money for These 5 Buys</a>)</p> <p>A more complex question is whether it's OK to use a personal loan for a down payment on a home. The whole point of requiring a buyer to make a down payment is to show that they can afford the home and to help them feel invested in the purchase. So your mortgage lender may not like it if you try to fund the down payment with a personal loan. At the very least, with this method, you'll need to get the loan several months in advance of the purchase. But even then, proceed with caution; adding debt in the form of a personal loan could affect your chances of getting approved for the mortgage at all. (See also: <a href="http://www.wisebread.com/5-money-moves-that-will-ruin-your-mortgage-application?ref=seealso" target="_blank">5 Money Moves That Will Ruin Your Mortgage Application</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F10-things-you-need-to-know-before-taking-out-a-personal-loan&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F10%2520Things%2520You%2520Need%2520to%2520Know%2520Before%2520Taking%2520Out%2520a%2520Personal%2520Loan.jpg&amp;description=10%20Things%20You%20Need%20to%20Know%20Before%20Taking%20Out%20a%20Personal%20Loan"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/10%20Things%20You%20Need%20to%20Know%20Before%20Taking%20Out%20a%20Personal%20Loan.jpg" alt="10 Things You Need to Know Before Taking Out a Personal Loan" 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/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/10-things-you-need-to-know-before-taking-out-a-personal-loan">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/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-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-millennials-guide-to-avoiding-credit-card-debt">The Millennials Guide to Avoiding Credit Card Debt</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-easy-ways-to-improve-your-credit-score-during-the-holidays">3 Easy Ways to Improve Your Credit Score During the Holidays</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/7-ways-to-vet-your-mortgage-lender">7 Ways to Vet Your Mortgage Lender</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/all-the-ways-minimum-payments-are-evil">All the Ways Minimum Payments Are Evil</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Banking APR balance transfer credit score fees interest rates lenders personal loans unsecured loan Fri, 20 Oct 2017 08:30:10 +0000 Carrie Kirby 2037745 at http://www.wisebread.com 9 Common Mistakes You're Making With Your Checking Account http://www.wisebread.com/9-common-mistakes-youre-making-with-your-checking-account <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-common-mistakes-youre-making-with-your-checking-account" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/working_at_home_0.jpg" alt="Working at home" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Most of us think about our checking account in only one way: Is there enough money in it? While that's certainly the most important piece of the puzzle, there are plenty of other things to consider to ensure that you're getting all the bangs for your bucks. Beware of these common, costly mistakes you might be making with your checking account.</p> <h2>1. Maintaining a lower balance than you need to cover your expenses</h2> <p>Your top concern regarding your checking account should always be that you have enough money in there to cover your expenses &mdash; even more so if you subscribe to direct deposit and/or autopay services. By engaging in the latter, you're essentially putting machines in charge of your finances, which, while convenient, are not always accurate. If you don't have enough money to cover your bills, you know what happens &mdash; you dip into the negative and you're slapped with insufficient funds or overdraft charges, further dragging you into the red. This oversight also can affect your credit score if you miss the payment for 30 days or more. (See also: <a href="http://www.wisebread.com/the-pros-and-cons-of-autopay?ref=seealso" target="_blank">The Pros and Cons of Autopay</a>)</p> <p>The best you can do for yourself is to commit to keeping your bills covered by your checking account and staying on top of your auto-deposit payments to maintain a positive and accurate balance.</p> <h2>2. Keeping more money than you need in your checking account</h2> <p>Keeping enough money in your checking account to cover your expenses should be your main focus, but you also may be doing yourself a disservice by keeping too much money in that account. It's a balancing act, for sure &mdash; but if your surplus can benefit you someplace other than your checking account, you need to move it.</p> <p>Says Michael Banks, founder of personal finance blog The Fortunate Investor, &quot;Money that sits in a checking account accumulates very little in interest. [Some banks], however, offer investor checking accounts that allow you to invest your checking account funds to maximize growth. You don't need to invest all of your money, and it's easy to keep two accounts and transfer as much into your investing account as you feel comfortable with; but the more you invest the more you stand to gain in the long run.&quot;</p> <p>If the idea of an &quot;investment&quot; account gives you anxiety, then consider <a href="http://www.wisebread.com/choosing-a-retirement-account-whats-available-and-what-s-best-for-you" target="_blank">opening a Roth IRA</a> or at least finding a <a href="http://www.wisebread.com/5-best-online-savings-accounts?ref=internal" target="_blank">high-yield savings account</a> instead.</p> <h2>3. Limiting your access to in-network ATMs</h2> <p>When I first moved to Manhattan, there were only a handful of my bank's in-network ATMs on the entire island, none of which were near my apartment. I was never close enough to one when I needed cash, so the fees added up quickly (some out-of-network ATMs charged up to $5 per transaction). This went on for a few months before I wised up, did my research on the most abundant ATM locations in New York City, and switched banks. If you're banking someplace and the ATM locations are prohibitive to you, consider banking elsewhere; you could save a bundle in time and fees. (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 Make Sure You Never Pay an ATM Fee</a>)</p> <h2>4. Paying fees just to have a checking account at a particular institution</h2> <p>Some banks charge a monthly checking account fee if you don't keep a minimum balance in it &mdash; say $1,500, for example. If you don't like keeping excess funds in your checking account, it does not make sense to pay a premium to bank with an institution that charges you for moving money around. Another option you have is opening a free checking account at a credit union.</p> <p>According to a 2016 Bankrate survey, 76 percent of credit unions offer free checking accounts. This is good news in a time when free checking at banks continues to decline almost every year. The survey also noted that an additional 22 percent of credit unions are willing to waive their monthly fee for meeting certain requirements such as signing up for direct deposit or paperless statements. (See also: <a href="http://www.wisebread.com/are-you-paying-these-6-unfair-banking-fees?Ref=seealso" target="_blank">Are You Paying These 6 Unfair Banking Fees?</a>)</p> <h2>5. Spending without checking your balance</h2> <p>Do you know exactly how much money is in your checking account right now? What about a close estimate? If the answer is no, you're not staying on top of your money well enough &mdash; and you definitely shouldn't be pulling out your debit card when your balance is in flux. Before you make a purchase that you even think could compromise your balance, log into your account (easy to do with your mobile app; I log into mine with a fingerprint), and manage your money wisely.</p> <h2>6. Ignoring your transaction history</h2> <p>You need to stay on top of what payments are being deducted from your checking account, even if they haven't actually been deducted yet. Continuing to spend when payments are pending could spell disaster.</p> <p>&quot;Check your account every couple of days to ensure transactions have been posted,&quot; advises Natasha Rachel Smith, personal finance expert at TopCashback. &quot;Be aware of holds on your account as a result of a retailer or merchant requesting authorization of a purchase. For example, gas stations and hotels could put a hold on your account until the actual transaction clears, so be mindful of these transactions when viewing your available funds. I also recommend checking on your transactions for fraudulent charges and reporting them as soon as possible.&quot;</p> <h2>7. Not subscribing to overdraft protection</h2> <p>Banks typically charge a $35 overdraft fee, and it's important to keep that in mind when you know your checking account is getting low. You also should fortify your account with overdraft protection if it makes sense for you. (See also: <a href="http://www.wisebread.com/9-ways-to-avoid-overdraft-charges?ref=seealso" target="_blank">9 Ways to Avoid Overdraft Charges</a>)</p> <p>&quot;Although opting out of overdraft protection can be ideal to not get hit with overdraft fees on debit card purchases, your bank can still charge you non-sufficient funds fee for checks and bill payments that can be comparable to an overdraft fee,&quot; Smith explains. &quot;It is ideal to opt out of overdraft protection when you have a savings account with the same bank. Typically, if you have both, the overdraft fee is less. If you choose to opt in to overdraft protection, always be cautious so you avoid the charge.&quot;</p> <h2>8. Assuming that every debit charge is legit</h2> <p>Once a week I go through my checking accounts to make sure all the debit charges are legit. There have been a few occasions where I've noticed an error &mdash; a fraudulent charge, a subscription I canceled, an incorrect amount charged for an expense that I authorized, or a price hike in my existing memberships. If I didn't do my due diligence and address these errors, nobody else would have. Check in on your money to make sure the numbers are correct.</p> <h2>9. Linking to online retailers you know nothing about</h2> <p>It's becoming more and more common &mdash; especially around the holidays &mdash; for shoppers' financial information to be compromised by a security breach. I'm not going to tell you to stop shopping online altogether, because that's just impractical, but I will urge you to be more responsible in where you spend your money and save your banking information.</p> <p>First, make sure the website is secure. The &quot;https://&quot; distinction designates a secure site, opposed to the more common &quot;http://&quot; protocol identifier for sites that don't require any user information.</p> <p>Second, use common sense. While it's not impossible for well-known retailers with an arsenal of security resources to get hacked, it's much more likely to happen to the small-potatoes shops that can't afford top notch security. Of course, these smaller retailers don't have as much to offer hackers in the way of identity theft. But in any case, use your best judgment when providing your financial info online to prevent being a victim. (See also: <a href="http://www.wisebread.com/5-dangers-of-mobile-banking-and-how-to-avoid-them?ref=seealso" target="_blank">5 Dangers of Mobile Banking &mdash; And How to Avoid Them</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F9-common-mistakes-youre-making-with-your-checking-account&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F9%2520Common%2520Mistakes%2520Youre%2520Making%2520With%2520Your%2520Checking%2520Account.jpg&amp;description=9%20Common%20Mistakes%20Youre%20Making%20With%20Your%20Checking%20Account"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/9%20Common%20Mistakes%20Youre%20Making%20With%20Your%20Checking%20Account.jpg" alt="9 Common Mistakes You're Making With Your Checking Account" 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/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/9-common-mistakes-youre-making-with-your-checking-account">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/your-bank-took-away-free-checking-now-what">Your Bank Took Away Free Checking. Now What?</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/7-reasons-your-card-got-declined-and-how-to-fix-it">7 Reasons Your Card Got Declined (And How to Fix It)</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/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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/avoid-bank-fees">Avoid Bank Fees</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/interest-rates-are-rising-heres-where-to-keep-your-cash">Interest Rates Are Rising: Here&#039;s Where to Keep Your Cash</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking atms autopay checking accounts debit fees insufficient funds Mistakes overdraft transaction history transfers Tue, 17 Oct 2017 09:00:06 +0000 Mikey Rox 2035900 at http://www.wisebread.com Should You Take Out a Loan Backed by Your Investments? http://www.wisebread.com/should-you-take-out-a-loan-backed-by-your-investments <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/should-you-take-out-a-loan-backed-by-your-investments" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/hands_giving_and_receiving_money_usd.jpg" alt="Hands giving and receiving money USD" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you have a taxable investment account, you may have heard from your bank or brokerage lately about the opportunity to <em>borrow </em>against your stock holdings. There are many attractive aspects to securities-based loans, which have gained popularity thanks to marketing campaigns. But there are also reasons to be cautious about this kind of borrowing.</p> <p>Financial firms tout these loans as a convenient and affordable way to access quick cash for anything from a kitchen remodel to bridge financing for a home purchase. What they might not mention is that they have a strong incentive to get you to take out the loans; lending is seen as a good source of reliable income for brokerage firms looking to reduce their reliance on commissions.</p> <p>Securities-based loans (also known in the industry as non-purpose loans and securities-based lines of credit or SBLOCs) have risks, which led the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) to issue a consumer warning about them.</p> <h2>The benefits of securities-based loans</h2> <p>It's not as if your broker is lying if they tell you that taking out a securities-based loan can be a good way to get liquidity when you need it. There are real benefits.</p> <h3>1. Low rates</h3> <p>Brokerage firms have been issuing securities-based loans at rates lower than what you'd pay on a personal loan or credit card balance, and competitive with or better than what you'd pay for a home equity line of credit.</p> <h3>2. Lenient application process</h3> <p>In a 2015 investor alert, the Securities and Exchange Commission noted that &quot;some SBLOC lenders might not run a credit check or conduct an analysis of your liabilities before setting and extending the credit line.&quot; Since the lender has your stock as collateral, they don't need to worry too much about whether you can pay back the loan.</p> <h3>3. Fast turnaround</h3> <p>Funds are typically available less than a week after applying. This speed can be clutch if, say, you are in a competitive bidding situation for a house and want to have a down payment and earnest money ready at the drop of a hat.</p> <h3>4. Keeping your stock (and avoiding taxes)</h3> <p>Of course, if you have stock and you need cash, you could simply sell the stock to pay for what you want to buy. One reason some investors prefer to borrow against their portfolio value is the potential tax advantage: By keeping the stock, they avoid registering a capital gain, which they'd have to pay tax on that year. This benefit may be particularly valued by retired people who hope to hold onto their stock for life and pass it on to their heirs, since the cost basis will be stepped up to the market value at the time of death. This means that any new capital gains will be based on the price of the stocks when they were transferred to an heir, and not the price when they were first purchased.</p> <p>Another situation when avoiding selling stock might really come in handy: If you bought the stock within the past year and want to wait a year before selling it to qualify for the long-term capital gains rate, which is lower than the short-term rate. (The short-term rate is the exact same rate as your ordinary income.)</p> <p>Finally, keeping your stock means retaining the benefits of ownership, including any dividends, voting rights, and potential future gains.</p> <h2>The risks of securities-based loans</h2> <p>With all those pluses, why did the SEC and FINRA warn us about this kind of loan? Because they come with risks that may not be immediately apparent to the borrower.</p> <h3>1. The maintenance call</h3> <p>If you buy a house and the housing market crashes, you may end up owing more than the house is worth; but at least you can keep your home as long as you can make the payments. Not so with securities-based loans.</p> <p>&quot;SBLOCs are classified as <em>demand </em>loans, which means lenders may call the loan at any time,&quot; the SEC warns. Typically, this would happen if the market goes down and the value of the securities you're borrowing against decreases sharply; the lender would make what's known as a &quot;maintenance call,&quot; demanding that you pay all or part of the loan. If you can't, the lender will sell your stock at the current price. If this happens, you'd basically be forced to sell at the worst possible time.</p> <p>What are the odds of this happening? No one can see the future, but the current bull market is considered downright elderly at eight years old, leading many experts to predict a correction or recession sometime soonish. It would be foolish to expect the value of your portfolio to always rise and never fall.</p> <h3>2. Variable interest rates</h3> <p>As with any loan, read the fine print before signing on the dotted line. Many securities-based loans charge variable interest rates, meaning that you will never know how much your interest expenses will be each month.</p> <h3>3. Unexpected tax bill</h3> <p>If you bought a stock at a low price, borrow against it at a higher price, and it dips to a price between those two prices, it could spell tax trouble. If the lender forces a sale to pay the loan, you'll owe capital gains tax on the difference between your purchase price and the sale price &mdash; which could really sting if the sale proceeds went to pay off the loan, leaving you with no cash.</p> <h3>4. Lost freedom</h3> <p>The SEC warns that you will likely have to pay off any securities-backed loans before moving your assets to another brokerage firm &mdash; which could be another reason that brokerages are pushing these loans.</p> <h2>So should you get a securities-based loan?</h2> <p>While your broker's suggestion that you get a securities-based loan might be laden with self-interest, that doesn't mean you have to say no. Weigh the pros and cons before deciding, and consider taking these measures to safeguard the process if you go ahead.</p> <h3>1. Borrow less than you qualify for</h3> <p>Lenders are offering clients loans worth as much as 95 percent of an investment portfolio. The lower the percentage of leverage, the safer you are against the risks of securities-based borrowing.</p> <h3>2. Borrow only against a diverse portfolio</h3> <p>If you only own stocks in the energy sector, it won't take an overall downturn to cause a securities-based loan disaster; a sharp downturn to that one sector could do it. Investing in diverse sectors is always a good idea, but even more so if you're borrowing against your holdings.</p> <h3>3. Have a maintenance call plan</h3> <p>If you can put up the additional funds the lender demands in a maintenance call, you won't be forced to liquidate your shares at an inopportune time. So figure out in advance other ways to meet that maintenance call, whether it's tapping an emergency fund, borrowing from family, or liquidating other assets.</p> <h3>4. Don't borrow to pay for something without resale value</h3> <p>The marketing materials brokerages use to encourage securities-based loans mention vacations. But if your loan gets called in, you can't sell your vacation memories to raise the necessary cash.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fshould-you-take-out-a-loan-backed-by-your-investments&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FShould%2520You%2520Take%2520Out%2520a%2520Loan%2520Backed%2520by%2520Your%2520Investments-.jpg&amp;description=Should%20You%20Take%20Out%20a%20Loan%20Backed%20by%20Your%20Investments%3F"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Should%20You%20Take%20Out%20a%20Loan%20Backed%20by%20Your%20Investments-.jpg" alt="Should You Take Out a Loan Backed by Your Investments?" 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/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/should-you-take-out-a-loan-backed-by-your-investments">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-to-benefit-from-rising-interest-rates">How to Benefit From Rising Interest Rates</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/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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-investment-accounts-all-30-somethings-should-have">7 Investment Accounts All 30-Somethings Should Have</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-three-interest-rates">The Three Interest Rates</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/interest-rates-are-rising-heres-where-to-keep-your-cash">Interest Rates Are Rising: Here&#039;s Where to Keep Your Cash</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking Investment capital gains interest rates lending maintenance call sbloc securities based loans securities-based lines of credit stock holdings Thu, 12 Oct 2017 08:30:10 +0000 Carrie Kirby 2034471 at http://www.wisebread.com Credit Challenged? How Alternative Credit Data Can Help Those With Little or No Credit http://www.wisebread.com/credit-challenged-how-alternative-credit-data-can-help-those-with-little-or-no-credit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/credit-challenged-how-alternative-credit-data-can-help-those-with-little-or-no-credit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/young_woman_working_at_her_office.jpg" alt="Young Woman Working at her office" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you've got no credit file, or a very thin one, you know how hard it can be to get a credit card or loan. Without a credit record, you can't get a credit score, and lenders can't easily judge how much of a credit risk you are.</p> <p>Don't give up. Lenders are slowly beginning to consider other kinds of information when making credit decisions. That may help you get approved for credit, even without a traditional credit score. But it's important to also understand how this so-called alternative data is used, and the implications for your privacy.</p> <h2>What is alternative data?</h2> <p>Traditional credit data relies on information about how you've used credit or debt in the past. It is compiled by the three major credit bureaus: Equifax, Experian, and TransUnion. That data is then used by the major scoring companies, FICO and VantageScore, to build your credit scores. (See also: <a href="http://www.wisebread.com/how-to-read-a-credit-report?ref=seealso" target="_blank">How to Read a Credit Report</a>)</p> <p>Maybe you haven't had experience with credit, or you had a negative experience that doesn't tell the whole story of how you would behave now with a new loan. Alternative data providers look at how reliably you've paid rent, utility bills, or rent-to-own agreements. They dig up nonpayment information, too.</p> <p>For instance, LexisNexis Risk Solutions gathers publicly available documents that show your professional licenses, evidence of college attendance, ownership of assets such as a home or boat, felony convictions, and your address stability. &quot;Address stability is the concept that if you're living in the same address for a period of time, you're more stable than if you're bouncing around four times a year,&quot; says Ankush Tewari, senior director of credit risk assessment at LexisNexis Risk Solutions. &quot;Multiple client studies have shown that people who move frequently are riskier than people who have a stable address history.&quot;</p> <p>LexisNexis Risk Solutions says the data it collects all has some proven ability to predict creditworthiness. By adding this sort of data to regular credit bureau data, it can help score about 40 million consumers who don't have a regular credit score. The company has paired with FICO and credit bureau Equifax to create an alternative credit score called the FICO Score XD. It's only for people whose credit files are so thin they can't get a regular credit score, and it relies on payment data from a consumer's utility, phone, and other bills.</p> <p>According to FICO, the new score should allow lenders to score more than half of all previously unscorable applicants. It's found that more than a third of those people turn out to have a FICO Score XD of at least 620, the cutoff point many lenders use for even considering a credit application. That means more people should be getting approved for credit. The trouble is, the product is so new, FICO has not revealed how many lenders are using it.</p> <p>TransUnion has had a similar scoring model called CreditVision Link since 2015, which incorporates a trended look at traditional credit data (how you've performed over time) with non-credit-related data collected from consumers' banking accounts, payday lending histories, and property, deed, and tax records. TransUnion told The New York Times that about 100 companies &mdash; primarily auto lenders and online lenders, but also an increasing number of credit card issuers &mdash; are using or testing the score. They're usually able to approve about 20 percent more applicants than they could before.</p> <h2>How alternative data can help you</h2> <p>The driving force behind the use of alternative data is lenders' desire to reach new customers who are creditworthy but can't show it through traditional means. &quot;Lenders tell us, 'We don't need help declining more people. We need help growing our business but without increasing our credit risk,'&quot; says LexisNexis's Tewari.</p> <p>That should mean good news for consumers who have been responsible with their finances but who haven't had a chance to build credit or have stumbled along the way. Alternative data may help increase your chances of being approved for a loan or credit card. &quot;It allows consumers to show that, while they may not be in a position to get a mortgage or a car payment, or they have no desire to get a credit card, they are still taking care of everyday financial responsibilities,&quot; says Kim Cole, community engagement manager for Navicore Solutions, a nonprofit credit counseling agency in Manalapin, New Jersey.</p> <p>A new company called FS Card is using alternative data to offer a credit card called Build Card to people who would otherwise have been rejected for a credit card. Build Card's target market is consumers with credit scores of 620 or below, meaning their credit is considered subprime. In the past, the only kind of card these consumers probably would have been able to get is a secured card, which requires a deposit of several hundred dollars upfront.</p> <p>Build Card asks applicants to agree to let the company use alternative data to assess their risk. In addition to traditional credit data, Build Card looks at payday loan information to determine whether an applicant is creditworthy. &quot;We're looking for an inflection point that shows the consumer has changed and is able to take on regular credit,&quot; says Marla Blow, CEO of FS Card. Typically this means they've been able to close out a payday loan. &quot;We're looking at the top 15&ndash;20 percent of payday loan users,&quot; she says.</p> <p>If the applicant is approved, they'll be given a regular credit card &mdash; no security deposit required. Granted, there is a $53 upfront fee, APRs are 25&ndash;29 percent, and the initial credit limit is only $500. But it's a step up from a payday loan. And if you do well with the initial credit limit, you can eventually have it increased to $750.</p> <h2>Concerns about privacy and transparency</h2> <p>One of the biggest concerns with alternative data is that people don't know it's being collected and used. Not everyone wants their financial history and other information rounded up and made available to financial institutions. And, as with any organization that collects personal information, there is always the chance that a data breach could happen. It's one thing if information that was already publicly available is stolen, but it may be more worrisome if you've voluntarily shared payment information that then gets disclosed in a breach.</p> <p>Beyond privacy and security, there are concerns about transparency. If you don't know what information lenders might look at when they're making lending decisions, you can't shape your behavior appropriately. For instance, maybe if you knew that bank overdrafts not only cost you money, but could also cause a lender to frown on your credit card application someday, you would be even more careful about not overdrawing. That's why some consumer advocates say you should first be asked whether you want to opt in to the collection and use of this sort of data.</p> <p>Consumer groups also worry about the accessibility of information that's being collected. &quot;People need to have access to data collected about them,&quot; says Linda Sherry, director of national priorities at Consumer Action. &quot;They need to be able to verify that it's accurate and to put notes on it to say what's happened in their life to justify why these things are happening to them.&quot;</p> <p>You already have those rights when it comes to data on your traditional credit report. The Fair Credit Reporting Act (FCRA) gives you the right to access your credit reports and if you find an error, it says the credit bureau must investigate and so must the bank or credit card issuer who furnished the data. The FCRA also requires creditors and employers to notify you if they've rejected you based on information in your credit report. That way, you can check the information and dispute it if it's incorrect.</p> <p>LexisNexis says you also have those same rights with the alternative data it collects. If you are, say, turned down for a loan because you've got a lien or judgment, you should be notified of that and given the chance to dispute any inaccuracies in the reporting. &quot;Alternative data must be compliant with the FCRA, which requires consumers have access to data that's used in credit decisions,&quot; says Tewari, who adds that his company allows consumers unlimited free access to the data it has on file. You can request it at any time, and as many times as you like. &quot;They have the ability to review it and correct it if there's an error,&quot; he says.</p> <h2>What you can do</h2> <p>While data collectors and lenders are in the driver's seat when it comes to the use of alternative data, there are still some things you can do to build your credit.</p> <h3>1. Pay all of your bills on time</h3> <p>This is always important, but even more so in times when companies are collecting information about how you pay all kinds of bills. Keeping on top of payments could help you build credit that you'll need in the future. Avoid overdrafts on your checking account, too, as this is a costly behavior that could also mar your alternative credit profile.</p> <h3>2. Check your traditional credit report and dispute any errors</h3> <p>&quot;If someone has been denied by the big lenders, that's a wake-up call that they need to go into their credit report, figure out why they're being denied, clean up the credit report as much as they can, and get back on track with a good credit history,&quot; says Consumer Action's Sherry. &quot;That's the best way to show yourself as someone that lenders will trust.&quot;</p> <h3>3. Get a secured card</h3> <p>This is the traditional way to go, and it works. Save up $300, use it as a deposit on a secured credit card, get a $300 credit line, then only make a small purchase with it a few times a year. At the end of a year &mdash; maybe sooner &mdash; you should have built enough credit to get a regular credit card. (See also: <a href="http://www.wisebread.com/the-5-best-secured-credit-cards?ref=seealso" target="_blank">The Best Secured Credit Cards</a>)</p> <h3>4. Ask your lender to look at FICO Score XD</h3> <p>Since this scoring model is fairly new, you likely won't see any immediate results if you request a lender review it. Banks have to pay to get access to this scoring model. But eventually if lenders see enough demand from consumers, they will begin to adopt it. It certainly can't hurt to ask.</p> <h3>5. Consider providing your own alternative data</h3> <p>If you're applying for a loan, it may help to present letters of good standing from your landlord, utility providers, or other monthly services that you pay on time.</p> <h3>6. Don't worry &mdash; yet &mdash; about modifying your behavior to fit the FICO Score XD model</h3> <p>For instance, if you really need to change addresses for the second time in a year, don't hold back just because it might affect your alternative credit score. A whole host of factors goes into most lenders' credit decisions, so no one factor is given too much weight.</p> <h3>7. Monitor your alternative credit record</h3> <p>This is not as easy as monitoring your traditional credit record, but if you're interested you can find out who's collecting your financial details by consulting the Consumer Financial Protection Bureau's list of <a href="http://files.consumerfinance.gov/f/201604_cfpb_list-of-consumer-reporting-companies.pdf" target="_blank">42 consumer reporting companies</a>. You'll have to check with each company's website to find out how to get your free annual report.</p> <h3>8. Correct mistakes if they arise</h3> <p>If you get a note that you've been denied credit due to a piece of alternative data, ask who furnished the information, and make sure it's accurate. You have the same right to dispute errors in alternative data as you do with traditional information on your credit report.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fcredit-challenged-how-alternative-credit-data-can-help-those-with-little-or-no-credit&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FCredit%2520Challenged-%2520How%2520Alternative%2520Credit%2520Data%2520Can%2520Help%2520Those%2520With%2520Little%2520or%2520No%2520Credit%2520%25282%2529_0.jpg&amp;description=Credit%20Challenged%3F%20How%20Alternative%20Credit%20Data%20Can%20Help%20Those%20With%20Little%20or%20No%20Credit"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Credit%20Challenged-%20How%20Alternative%20Credit%20Data%20Can%20Help%20Those%20With%20Little%20or%20No%20Credit%20%282%29_0.jpg" alt="Credit Challenged? How Alternative Credit Data Can Help Those With Little or No Credit" 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/yasmin-ghahremani">Yasmin Ghahremani</a> of <a href="http://www.wisebread.com/credit-challenged-how-alternative-credit-data-can-help-those-with-little-or-no-credit">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-surefire-ways-to-maintain-a-good-credit-score-in-retirement">5 Surefire Ways to Maintain a Good Credit Score in 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/what-the-new-credit-card-formula-means-for-your-wallet">What the New Credit Card Formula Means for Your Wallet</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-benefit-from-rising-interest-rates">How to Benefit From Rising Interest Rates</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/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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-times-you-should-never-take-a-loan">6 Times You Should Never Take a Loan</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking alternative credit data borrowing credit history credit score lending privacy Tue, 10 Oct 2017 09:00:06 +0000 Yasmin Ghahremani 2033790 at http://www.wisebread.com