Tag Archive | Credit card

The Facts about Payday Loans the CFPB would rather you did not know about

We have officially reached a point where a good number of people are all too aware that the Consumer Financial Protection Bureau (CFPB) is on a mission to cripple – possibly even eliminate – the payday lending industry. The CFPB officially released its proposed regulations for this industry earlier this summer, and it seems that the Bureau and the payday lending industry are on a collision course. There are some things about payday lending that the CFPB would probably rather that you did not know about.

Are Payday Loans PredatoryIs the Glass Ceiling Sending Women to Payday Lenders

When you think of a predator, you probably think of a vicious, wild animal that hunts down defenseless creatures in the wild. This is a pretty brutal picture, right? It’s easy to understand why the CFPB continues to refer to payday lenders as being predatory. They want people to picture huge lending companies that are mercilessly making life difficult for the poorer people of this country. The truth, however, doesn’t seem to indicate that payday lenders are predators at all.

The CFPB has been collecting consumer complaints via an online database for several years now. Consumers are allowed to log complaints about every type of financial service/product from their local banks to debt collectors. They are also able to log complaints about payday lending companies. If payday lenders are really preying on people, you’d think that a lot of those people would be doing everything they could to make it stop. That means that we would expect to see tens of thousands of complaints about payday lending in the CFPB’s official database.

That’s not what we’ve seen, though. Payday loan complaints make up a miniscule amount of total complaints logged thus far. As a matter of fact, complaints about payday lending companies account for far less than 1 percent of the total complaints logged to date. But there are plenty of complaints in the database that people have taken the time to officially submit. Mortgage lenders, debt collectors and even credit card companies have managed to be the most complained-about topics so far.

One would have to assume that if the CFPB is receiving more complaints about mortgage loans, credit cards and other types of financial products/services that the Bureau would focus on doing what they can to introduce rules that those industries must adhere to; rules that would more effectively protect consumers. But what are they doing instead? They have focused a lot of time, energy and money on regulating an industry at the federal level that is already regulated quite effectively at the state-level.

What we have here is another case of an arm of the federal government sticking its nose where it doesn’t belong. If payday loans were such a huge problem – if payday lenders were predators – then people (to the tune of about 10 million to 12 million per year) would not be going back to these lenders, and they would certainly be logging complaints about being preyed upon.

Could it be that the larger lending companies can afford to do what they want because they have more money and maybe even help to prop up the political careers of certain elected officials? Maybe. Could it be that since the CFPB has been nothing more than a puppet for the Obama administration (and Obama has gone on record about his personal disdain for payday loans) that the group is simply using its power to toe the line, so to speak? People need money for emergency expenses. Payday lenders are often the only resource that lower income households can turn to. Complaints about the industry from real people are minimal. SO why the continued focus on an industry that supplies a legitimate service and that consumers are obviously not against? These are the kinds of questions that need to be brought to the table, and the CFPB must answer them if it hopes to maintain any semblance of being a legitimate protector of American consumers.

How to Start and Grow an Emergency Savings Fund

Jim is a hardworking family man. He manages to earn enough to keep the bills paid, and maybe have a little fun on the weekends. For the most part, Jim and his family are doing pretty well. Yes, they sometimes have to live tight in between paychecks, but so do millions of other people. He keeps plugging away and providing for his family. One day in early December – just before he was going to go out with his wife to buy Christmas presents for the kids – there is an emergency in the house. A busted water line is creating havoc. Jim is looking at a hefty repair bill, and right on the verge of the holiday shopping season. The worst part is that Jim doesn’t have an emergency savings fund started. He is going to have to scramble in order to get the water line fixed, and still be able to shop for the kids.money-problems_7-most-common-causes-of-divorce

This may sound like a bad situation, and it really is. Unfortunately, our fictional friend Jim is not all the different than the majority of Americans. Studies show that nearly 2/3 or American households do not have enough emergency cash set aside to deal with an emergency expense that would cost more than $500. That’s right, people are living on the cusp of bad things happening all the time, and most don’t have the money to deal with these expenses. If you don’t, it is high time to get started. Here are the steps you should follow to start and grow your emergency savings fund.

Decide How Much You Need to Save

No action in life worth taking is worth taking without a plan. You need to decide how much money you should have in your emergency savings fund. Old pros at the saving game sometimes have up to one year’s worth of their take home salary saved up. Others have up to three months’ worth of their monthly expenditures (mortgage, car payment, groceries, etc…) in their funds. These may seem like lofty goals. In the beginning, you should strive to at least have a month’s worth of your expenditures covered via your emergency fund. That way if the worst were to happen, and you lost your job, you would have at least a little bit of wiggle room to cover things while you get yourself sorted out. Calculate your average monthly household expenses and make that your goal.

Check Your Budget to See How Much You Can Contribute Each Month

Most people have some expenses in their budgets that they can cut back on or eliminate in order to start saving money. Maybe it is the expensive coffee, cigarettes or even cable TV bill that you can live without every month. Find these little expenses, and begin to cut back on them. Take every penny that you’d normally pay toward these expenses and add the cash to your savings. It takes a bit of work at first, but once you get used to doing this, you’ll find it easy to add money to your savings as a part of your routine.

Stay Consistent

Avoid the temptation to use your emergency fund as a fun money fund. If you must, start a separate, smaller savings account for non-emergency spending. Remember, though, that you want to get money for serious emergencies in the future, so stay consistent with socking money away, and avoid making impulse purchases.

Ideally, your emergency fund should be easy to get to in times of need. However, you can – and should – still seek to earn interest on the money. Check into a money market account that provides a debit card. These accounts typically earn more interest than regular savings accounts, and you can get ready access to your money during emergency situations. Before you know it, you’ll reach your first emergency savings account goal, and then you can move on to adding even more to it as time goes by.

Credit Card Debt will rise to HOW MUCH in 2016??

Just about everyone is at the very least thinking about reducing their level of debt. It is no fun walking around from one day to the next, owing creditors thousands of dollars. And while not everyone will take action to reduce their consumer debt levels, the fact that people are becoming more informed about dealing with debt is most definitely a good thing. A recent study indicates that by the end of the year credit card debt here in the United States is going to rise to… wait for it… a stunning $55.billion. The study that revealed this new figure was conducted by CardHub and used information from the Fed’s preliminary G.19 consumer credit report.098303c025b64b3da866d55de5907528

According to this report, American consumers paid nearly $35 billion toward their credit card debt in just the first quarter of 2015. This represents a seven percent increase from the first quarters of 2013 and 2014. Some of this increase has been attributed to factors, like the reception of annual bonuses, New Year’s resolutions and people getting their tax returns. Whether or not these things contributed toward debt payments being so low at the beginning of 2015 has yet to be determined. The bottom line seems to be that there was just more debt to pay in 2014 than there had been previously.

Previous year’s studies have usually shown that the 1st quarter of the year regularly results in plenty of debt being paid off, only for that debt to raise back up over the remainder of the year. Going back as far as 2009, the first quarters of each year showed the average pay off level reaching $35.9 billion with the median amount being about $33.5 billion.

Back in 2009 American consumers paid off about $874 million in debt. By the time 2010 rolled around debt began to eclipse payment levels by about $2.5 billion. And when it got to be 20111, things got even uglier, with the level jumping 1,696 percent. The year 2012 saw things settling down by about $12 billion, but credit card use was still on the rise. Debt increased in 2013 by nearly $39 billion, and didn’t slow down in 2014. That year, debt increased by $57 billion. There is no doubt about it – credit card debt can increase so quickly that it is no wonder it gets out of control on a nationwide level. According to data provided by CardHub’s study, American consumers currently owe about $831.2 billion in consumer credit card debt, with the average per-household amount being $7,177.

As 2015 crept into the final quarter, the Fed’s G.19 report indicated that debt levels were continuing to rise. Revolving debt (think credit cards here) rose up to nearly $900 billion, and that after staying close to the $890 billion mark since the fourth quarter of the previous year. Credit card debt, however, was not the only type of debt to increase. The total amount of consumer debt – revolving debt, student loans, car loans, etc… – rose nearly $21 billion dollars in April of 2015. With that debt tallied in the complete number for total debt levels settles in at $3.384 TRILLION!

As much information as people have about the importance of avoiding getting into debt, it is almost shocking that debt levels continue to increase. But, with employment issues and salaries pretty much stagnating in recent years, it is understandable that many working class American consumers are simply relying on their credit cards and other forms of credit in order to just keep their heads above water each month.

Understanding the Risks of Letting Someone Use Your Credit Card

It is great to have family members and friends that you love. And most of us like to do favors for those folks when we can help them out. Sometimes, though, relatives or friends may ask a bit more of you than you are comfortable with. For example, what if a loved one asks you if they can “borrow” your credit card? They offer to make payments on them and then you can take the credit card back. In other words, they want to use a line of credit – one in your name – as short-term personal loan. Is it a good idea to come through with this kind of financial assistance for family or friends?bad_credit_card_management

No. Essentially, this person would be asking you to add them as an authorized user on a new line of credit or an existing credit card account. Even if you implicitly trust this person to make payments, it is a dangerous game to open a line of credit and to essentially give someone free reign to do what they want with it. You have to ask yourself why this person does not have their own credit card to use, and what you would do if the worst case happened and they were unable to make payments on the account.

Loved Ones with Bad Credit

Chances are that if someone is asking you to add them as an authorized user on your credit card account that they do not have a good credit score. If they did, they would have no problem opening a new account on their own. Now, what does the bad credit score say about this person? It does not imply that they are irresponsible or that they spend like crazy. It does, however, indicate that they have had problems in the past with lines of credit, and those problems may still be something that your loved one has not sorted out yet.

What if they do not pay?

This is where you could really get into trouble. You have someone who is charging things on the account and they are unable to make the payments. If you are flush with cash at the end of every month and have no problems making the payments for them, then this situation could be okay. However, most of us don’t have unlimited supplies of cash just sitting around and ready to use to help bail someone out of a financial mess.

And that is just what you would end up with if you let someone make purchases on one of your credit card accounts – a big financial mess. Worse than that, you’d also end up with a strained relationship with the person as well. Money can buy a lot of things in this world, but it cannot patch up a strained family relationship or a ruined friendship. If it came down to it, and you didn’t have the money to make payments for an authorized user on your account, you would be the one holding the bag. Your own credit score would take a hit. This would likely drive a wedge between you and your friend/family member. That’s something that you simply don’t want to deal with at any point in time.

Keep this advice in mind, and be prepared to let down these types of requests gently. Explain that you don’t have the resources to pay for another line of credit each month and that you don’t want to add any authorized users to your lines of credit. It may be awkward, but it is better than dealing with a low credit score and a damaged relationship with someone you care about.

The Most Common Money Problems that Americans Face

money-problems_7-most-common-causes-of-divorceSome people say, “More money, more problems.” Many of us, however, would contend that having less than enough money is enough of a problem as it is, and would love the opportunity to have more cash at hand for taking care of expenses and making purchases. Regardless of just how much money you make every year, though, you can take a bit of solace in knowing that many of the most common money problems you face are also issues for your fellow Americans.
But just what are the most common financial problems that people in this country face on a regular basis? It turns out that there are quite a few. With brevity in mind, however, let’s take a look at the list of the most common offenders.
Money Problem #1 – Not Enough Saving Going On
Chances are that at some point or another someone has told you how important it is to save for a rainy day. The problem is, however, that more than a few rainy days have hit our national economy over the past few years, and most people are tapped out in the savings department. Add to this the fact that many people (especially millennials) are not saving much money at all and you get a recipe for financial ruin. While many people may not have the ability to save much, making your savings an ongoing priority is a must – whether you are talking about being prepared for retirement or just making it through that next, proverbial rainy day.
Money Problem #2 – Making it from one Pay Day to the Next
With the price of living getting higher and higher by the day, it is no wonder that so many people have a hard time stretching their funds from one pay period until the next one arrives. A lot of Americans end up “Robbing Peter to pay Paul” and get caught up in a never ending cycle of never quite getting through from one payday until the next one arrives. Putting together a realistic budget – one that you stick to religiously – is the only way to get out of this cycle. You may have to make a few sacrifices – tighten up the belt, so to say – but in the end following a budget will allow you to avoid this all-too-common financial problem that plagues millions of people in this country every day.
Money Problem #3 – Ever Increasing Debt
If there is one financial problem that we would all do well to eliminate it would be the ongoing accumulation of consumer debt. It’s so easy for people to get approved for credit cards these days and then to go hog wild. The short term good feelings that come from making some purchases that you really can’t afford soon become a thing of the past when the ongoing yoke of consumer debt continues to mount up. The first step to getting out of debt is to avoid accruing any new debt. This might mean locking up the credit cards or even getting rid of them entirely. Slowly but surely you can escape the pain of ongoing consumer debt, and you will be very happy that you went without those expensive lines of credit when you are free and clear.
There you have it – a list of some of the most common financial problems that Americans face on a regular basis. If you can take action to get even these three financial problems under control, you’ll begin to feel more in control and will ultimately have more freedom to live the lifestyle of your choosing.

The Topic No One Wants to Talk About: Credit Card Debt

People like to do all that they can to keep up appearances. Most folks go out of their way to keep their homes and even their vehicles looking good. We put energy and money into looking our best; either through wearing nice clothes, taking better care of our bodies or both. And who can deny that we all like to brag a bit about our families and careers when we meet someone new?sgiwoxtdkkilttb8ixhk

Any time we meet someone for the first time, the dreaded small talk will come up. You know, those conversations about the mundane aspects of life. Even during these types of conversations, we all like to put our best foot forward and to project the best image of our lives as possible. There is one subject, however, that people often avoid talking about as much as possible – credit card debt!
A recent poll indicates that Americans consider credit card debt to be the worst topic possible to discuss with people who they just met. Americans were asked in this poll to rate how likely they would be to talk on a certain topic with a total stranger. Poll participants were asked to rate each topic with a rating between very likely, somewhat likely, somewhat unlikely and very unlikely as their ultimate answers.

Eighty Five percent of poll responders said that they would either be somewhat unlikely or very unlikely to talk about credit card debt with a stranger, which makes this the lowest rated category on the poll.

To put this in perspective, people rated ‘Details about your love life at the second worst, with 84 percent and their work salaries at third worst, with about 80 percent. These are very personal topics, so it is apparent that people feel very embarrassed or put on the spot about credit card debt to place it as being worse to talk about than these hot button topics.
The poll indicated that younger Americans were a bit less embarrassed to talk about credit card debt than their older counterparts. But even with that in mind, 79 percent of Americans aged 18 to 24 stated that they would not be comfortable talking about credit card debt with a stranger.

Debt and Personal Failure

Why are people so afraid to talk about credit card debt? It is probably because many people view debt as being a symptom of personal failure. This is especially true in the years following the most recent financial recession. Americans do not like to admit that they are struggling with debt. If you are someone who finds it hard enough to pay the bills every month, how much harder is it to actually talk with someone about these types of struggles?

Before the most recent recession, credit card debt was not considered to be such an off-limits topic of discussion. Most people were used to living off of credit cards, and it didn’t seem like a serious issue. Today, however, things have certainly changed. People obviously find credit card debt to be a touchy, if not downright painful topic. This study really proves that the majority of us simply don’t want to discuss our credit card debt problems.

If we don’t feel like discussing credit card debt, then we at least need to take action about this embarrassing subject. More American consumers need to do what they can to stop using credit cards for every day purchases and to pay off their consumer debts sooner rather than later… It is a heck of a lot easier to talk about credit card debt when you don’t have any!

Some Good Tips for Women Who are bad with Money

It is no secret that some women are better with money than with others. This can be changed though, there are ways to turn it around and go from bad with money to great with money. Here are some tips for those ladies who are not the best with money so they have a fighting chance to become great with money.

Forex Money for Exchange in Currency Bank

The first thing you need to do ladies is to start by changing one habit at a time. Do you have a bad habit that costs you money? It could be smoking, eating out, shopping, or anything, it does not matter. If you have a bad habit or two you should start by working on getting rid of one bad habit at a time. This will help to free up money for other things such as bills.

Work on your debt. Even if you can only afford to pay twenty extra dollars over the minimum amount due, you should pay it. This will help not only to pay your bill down faster but it will also help you to save money on interest. While you are trying to pay down debt you need to make sure that you do not build up debt on another credit card.

It is okay to seek help when needed ladies. You can go online and find a wealth of information and various articles such as this one to help you navigate yourself through the financial world. If you need more help than you can find online and you need someone to talk to, that is okay as well. Financial advisors have so much information; they have the ability to answer any question you may have. If you need their help, find one to help you.

Work on that budget ladies. Having a good budget is something that should be considered a must. You should be reviewing it regularly so that you can make any changes needed. A budget is key to helping you stay on track financially so do not just slop one together, spend the time to do it right.

Find small ways that you can save money in your everyday life. Do you buy a coffee every morning? Why not make coffee at home? Use coupons when you go shopping. There are many different ways that you can make small changes every day to help you save money, you just need to sit down and think about the changes you can make.

Ladies do not despair if you are not good with money. You have the power to change that. Ladies you are strong and you can be financially independent if you do certain things to help you down that road. Your financial future depends on the things that you do today.

Financial Tips for Women Going Through a Divorce

No matter how you look at it ladies, divorce is a difficult thing both financially and emotionally. You have to start your finances all over all on your own. This is harder for some women than it is for others. For those who need some tips to make it through the transition, here are some.

You are solely in charge of your finances at this point ladies so you need to make sure that you are taking control. Take the time to gather up all your bills and other expenses for the month. You need to compare the amount of all your expenses for the month to what you will be earning now that you have a single income.

Divorce Ring

Research different divorce methods, you may find that going to court is not for you. Divorce is rather expensive so if you can find a way that will work for you that will also help you to save money, you should do it. There are ways to finalize a divorce without going to court. If you do go to court you will end up paying much more in lawyer fees. If you and your soon to be ex-husband can agree on things you can do it all out of court.

Make sure that any joint bank accounts you have with your soon to be ex are split up. Split the money that are in the accounts between you and your ex and close the account. Then you can open a new account if you need to, or you can just put that money into an account that you already have whether it is at the same bank or a different one.

Most experts say that when a woman goes through a divorce they need to make sure that they have at least one credit card in their name only. This will give you access to credit without your ex being involved in any way. In addition to this you need to make sure that you close any credit card accounts you have open with your ex-husband. This may mean that you have to fully pay off your balance first, but you need to do it as soon as you possibly can.

Ladies, now that you are on your own you need to create a budget solely for you. This will help you to track your income and where your money is going. This is the best way to help you stay out of debt. If you are able to see where your money is going, you may have a better chance to save more.

When you go through a divorce there are a lot of things you need to be thinking about. Make your finances one of those things that you are thinking about during the divorce ladies. You are now going to have only one income therefore you may need to be more careful with your money. That is okay, it may take some time to get into the swing of things but it will come soon enough.

Tips for Young Women on Paying Down Debt

With the gender salary gap getting smaller all the time young women today are making more money than before. With the increase in salary, there is a chance that young women today can end up in more debt than ever before. Here are some tips to help all the young women who have debt work toward paying it off.

Of course you need to work on paying off any debt you have, from say student loans. What you need to do when working to pay off debt is to make your regular payments every month. On top of that you need to figure out what debt that has the highest interest rate and pay more toward that debt. Then keep doing this until all of your debt is paid off.

Debt Snowball

Debt Snowball (Photo credit: LendingMemo)

Most experts agree that if you are looking to add some debt to what you already have, say you want a new car or are planning on buying a home, then you need to be careful. The experts recommend that if possible try to keep your payments on your debt be no more than about fifteen percent of your monthly income. This way you will still have money for the other bills you have, other necessities, and still have some money to put into various savings accounts.

Another tip that most experts agree on is that if you have credit cards you need to keep your balance low. While credit cards are able to help you to build credit, if used inappropriately used they can ruin your credit too. To get the best out of your credit card experts say that you should keep your balance at no more than twenty percent of your credit limit. This way you are not ruining your credit with huge bills, and you are still working at building up your credit.

If you can, you should pay more than your minimum monthly balances. Doing this will help you to pay off your debts faster. This also looks good on your credit score. It will also help you in the future should you want to take out a loan. The bank will see that you try to stay out of debt and make larger payments and they will feel confident that you will be able to pay the loan back. After all banks like loaning money to people who do not need it so they can be sure they will be paid back.

Young women today need to watch out for debt. They need to work on getting rid of any and all debt they have once they are out of school and in the real world. It does not have to be overwhelming when you are working on paying off your debt, but if you do not work at it, you could end up in an overwhelming financial situation.