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Banking & Credit

Be the Best Trick-or-Treat House on the Block Without Breaking the Bank

by sshrx_ns3li1
written by sshrx_ns3li1

Halloween is the scariest time of the year, but that isn't always due to the ghosts trick-or-treating you, or the creepy clown sightings on the news. The price of Halloween candy, not to mention the cost of costumes and home decorations, can give anyone the heebie-jeebies.According to the National Retail Federation, which surveyed 6,791 consumers from Sept. 6 to 13 about their Halloween shopping plans, the average American will spend $82.93 on Halloween, up from $74.34 last year. All in all, Halloween spending is expected to reach $8.4 billion in 2016.Fortunately, if you are worried about going overboard this year, many decorating experts maintain that it's possible to have the best trick-or-treat house in the neighborhood without breaking the bank. It simply requires a little imagination and preparation on the front end.[See: 9 Scary Things Consumers Do With Their Money.]Candy. We'll start here first, since it's the easiest thing to find cheaply. Buy your candy several days or weeks in advance, so you can be on the lookout for discounts.If you belong to a warehouse club, buying in bulk might save you money. Digital coupon websites like Coupons.com and RetailMeNot.com have coupons for candy and Halloween costumes that you may want to utilize. Just make sure that if you do buy Halloween candy weeks in advance that you hide it, so your family doesn't eat it and gobble all of your savings.Halloween decorations. Check out the dollar stores first. Sure, that may sound obvious, but if you're something of a dollar-store snob, it also may be the last place you would consider."You would be surprised [at] the fantastic finds that can really add value to your Halloween display. There are plastic skulls, dismembered body parts, creepy spiders and so much more," says Felicia Ramos-Peters, who lives in Hurleyville, New York, and is the founder of GetHolidayHappy.com, a website aimed at helping people celebrate holidays with ideas for recipes, decorations and gifts.Jeanine Boiko seconds the dollar store. Boiko is a New York City publicist who also blogs about home decor and owns an Etsy.com shop called Okio B Designs."Stock up on fake skulls, rats and crows, and jars, window decals," she suggests, adding that, "a can of orange or black spray paint can work wonders on sprucing up dollar store finds and creating the 'eek' factor."And if you see nothing you like at the dollar stores, leave. All you have wasted is some time.[See: 10 Oddly Practical Things You Can Rent.]Lights. But one thing to think about while you're at the dollar stores? Lighting."Lighting is everything," says Jamie O'Donnell, an Orlando, Florida resident who has been an event planner for more than 15 years. "Replace the bulbs of your outdoor light with LED lights in orange or purple to cast your house in a spooky glow. It's fairly inexpensive and only takes a few minutes to do but creates a dramatic look."Judging from what you can find online, festive LED lights may run you around $20 to $30 for a string of, say, 40 to 100 lights (which could cost a small fortune if you intend to light up your entire home). The conventional holiday strings of orange or purple lights are generally cheaper, and will likely run you more along the lines of $5 to $15. Of course, you can always buy your lights after the holidays, when they're on sale, to prepare for next Halloween.Sounds and music. Ramos-Peters suggests using sound as part of your Halloween atmospherics."I think music is an underestimated element for outdoor Halloween displays. It is really easy to download or purchase some scary music and sound effects," Ramos-Peters says. "You can turn heads with a display that has some spooky sounds like a chainsaw or evil witch laughing."[See: 11 Ways to Save Time and Money.]Pro Tip: Use What You Have in Your HomePamela Layton McMurtry, an artist and designer in Kaysville, Utah, and author of the e-book "A Harvest and Halloween Handbook," feels it's always effective when homeowners create a spooky scene on their lawn."I love creative, alternative decor for Halloween and go wild for themes taken from literature," she says (think "Alice in Wonderland" and "The Wonderful Wizard of Oz").Now, that might sound like a surefire way to destroy your future retirement funds. You want to entertain your neighbors, not create a multi-million dollar Hollywood movie. But McMurtry says you may be able to find props in your home or at thrift stores. If you really want cheap and effective, McMurtry paints this picture: "Set up a fake campfire with cricket sounds and sad harmonica music. Mound dirt for a grave and put a pair of cowboy boots nearby with a clue about [what happened to] the demised, like a rubber snake."Something else to look for in your basement, attic or thrift store, Boiko suggests, is a long-forgotten Scrabble game."You can use the tiles for easy Halloween decor by spelling out spooky words. I painted the tile holders black and spelled out creepy words on mine," Boiko says.And if you can keep your Halloween costs low, you won't be tempted to spell out Scrabble letters to make phrases like "holiday debt" and "I'm broke." On the other hand, that may be a creative idea. The children on your block may not get creeped out by those words, but you'll send a chill up the spines of their parents..

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Banking & Credit

The Perils of Skipping Loan Payments This Holiday Season

by sshrx_ns3li1
written by sshrx_ns3li1

The holidays are fast approaching and that means there are presents to buy, trees to trim and merriment to be made, all of which will cost you money. Fortunately, your credit union, bank or credit card issuer may be willing to let you skip your monthly payment in December or January.“Skip-a-pay [programs] are a popular way for banks to add quick fee revenue while giving their clients some extra cash in their pockets,” says John Oxford, a spokesman for Renasant Corporation, which operates 171 banking, investing and wealth management offices in the South. While Renasant Bank previously offered a skip-a-payment program, it does not currently have one.At other institutions, these programs allow customers to skip their monthly payment in exchange for a small fee. Some lenders may even donate a portion of the fee to a local charity so it seems like a win-win for all involved.Not so fast, say some financial experts. Skipping one payment might not seem like a big deal, but it can have a negative impact on your finances.5 Reasons to Skip the Skip-a-Payment OptionRich Hyde, the COO of Prestige Financial Services in Salt Lake City, works with clients trying to raise their credit score and finds some use skip-a-payment programs to stretch their money through the holidays to buy gifts for friends and family. Although skipping a payment may be preferable to racking up debt on a high-interest credit card, it doesn’t come without drawbacks.You lengthen the term of your loan. You may be skipping a payment, but you’ll still need to eventually make it. “They are essentially letting you take the payment from December or January and adding it to the life of the loan,” says Kelsa Dickey, owner of Fiscal Fitness Phoenix. Skipping a payment every year means you could be paying an auto loan for five to six months longer than originally planned.You add to the interest you pay. Not only will the term of the loan be longer, but you’ll pay more interest as well. A $5,000 credit card balance at a 24.99 percent APR accrues roughly $100 in interest each month. As a result, skipping a payment means you’ll end up owing more the next month even if you haven’t used your card.You might forget to make the following payment. Hyde is concerned skipping one payment might snowball into several payments. “Customer behavior can be impacted [by skipping a payment],” he says. “Anything that gets people out of the habit of paying is a bad idea.” You could ding your credit score. If you do happen to forget the next month’s payment, than you could see a drop in your credit score. Plus, you’ll likely get hit with a late fee which typically runs around $35. Dickey adds that some people might be tempted to skip payments even if their lender doesn’t offer a skip-a-payment program. However, doing so could negatively impact your credit score and damage your relationship with the lender, making it difficult to receive loans or lines of credit in the future.You are reinforcing poor money habits. While all the above reasons are enough to say “no thank you” to skipping a payment, Dickey says there is one more to consider. “By skipping a payment, you’re saying Christmas gifts are more important than something like a car that gets you to and from work,” she says. “There’s a much deeper rooted problem of putting things that are not essentials in front of things that are essentials.” Declining to skip a payment is one step toward creating healthy money habits and smart spending priorities.When Skipping a Payment Might Make SenseWhile experts say skipping a payment to buy gifts doesn’t make much sense financially, there may be a time and place for skip-a-payment programs.“If a consumer wants to free up cash for the holidays and doesn’t mind a minimal fee and an added month on their loan, it can be a beneficial short-term move,” Oxford says, “but it should not be used to avoid a payment just because the offer is there.” To minimize the impact of skipping a payment, he recommends people use a portion of their tax refund, if possible, to make an extra payment later in the year. For people who are in a bind and considering a payday loan or going into debt to pay the bills, Hyde says skipping a payment would be the lesser of two evils. Meanwhile, Dickey believes using a skip-a-payment program is understandable in cases of unemployment. “If it comes down to putting food on the table, yes [skip a payment],” she says.Skipping a payment may also be a good strategy if you are planning to use the money from that payment to wipe out a high-interest debt. Installment loans, such as those for cars, typically have a much lower interest rate than what might apply to a credit card. Financially, it might make sense to skip an auto loan payment for one month, and send that money to pay off a credit card account.However, Dickey says most people don’t skip payments for strategic reasons. Instead, they do so to spend more on gifts or holiday deals. She asks, “If your parents knew you were skipping a payment or going into debt to give them a gift, would they want it?” She’s betting the answer is probably no. .

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Banking & Credit

3 Strategies to Avoid Soaring ATM Fees

by sshrx_ns3li1
written by sshrx_ns3li1

You\r
probably don’t need a survey or statistic to alert you that ATM fees are higher than ever. But in case you do: Earlier this month,\r
Bankrate.com released a survey of 25 banks in large cities, which concluded that the\r
average cost of using an out-of-network ATM is now\r
$4.52, a record.\r
\r
That’s the amount of the national average ATM surcharge ($2.88) plus the average fee to\r
use another bank’s ATM ($1.64), because generally, if you use another\r
bank’s ATM, you’re hit twice. The out-of-network bank will charge you,\r
and your own bank will, too.\r
\r
And,\r
of course, $4.52 is only the national average. If you’re in New York City and\r
get money from an out-of-network ATM, on average, you’ll pay a little\r
over $5, according to Bankrate’s data. And if both banks have\r
above-average surcharges, the price to access your money becomes\r
even more expensive.\r
\r
Of\r
course, talk to bankers, and they’ll tell you there’s a reason for those\r
fees: Banks have to\r
maintain the ATMs.\r
\r
One\r
can argue that the fees are nonetheless too high, but if you’re interested in\r
exactly what goes into the maintenance of an ATM, here’s a quick breakdown from\r
John Oxford, director of corporate communication and external affairs at\r
Renasant Bank, a regional bank headquartered in Tupelo, Mississippi:\r
\r
Government compliance. Many laws dictate how banks must operate. ATMs had to be upgraded\r
in recent years to be compliant with the American with\r
Disabilities Act, Oxford says.\r
\r
Fraud protection. No surprise here, if you consider how frequently identity theft occurs. "ATMs\r
have had to add skimmer detection and other items such as higher-quality\r
cameras and lighting to make sure clients are and feel safe," Oxford\r
says.\r
\r
Maintenance\r
and service. It isn’t just that money needs to be routinely stocked into\r
the ATM, lest money run out. There’s insurance to pay on the ATM, and the bank\r
leases the property where the ATM is located, Oxford says.\r
\r
EMV\r
chip compliance. You’ve heard about how credit cards are being revamped with\r
embedded microchips that will store and better protect cardholder’s\r
information. ATMs need to be ready for that and upgraded, Oxford says.\r
\r
There is another cost as well, which\r
consumers often overlook, says John Pataky, an executive vice president at\r
EverBank, a financial services company that offers online banking: The price tag of the machines themselves. \r
\r
"Some machines are owned by the institution, but many are leased from\r
the major players in the industry, Diebold and NCR," he says.\r
\r
Still,\r
while there may be a reason for higher fees, that doesn’t mean you have to help\r
shoulder those costs. If you are tired of being hosed by ATM fees, try these strategies.\r
\r
Analyze your banking life. If you don’t like paying ATM fees,\r
make sure you use an ATM that belongs to your bank or is within its ATM network. The\r
symbols alerting you to what network you can use should be on the back of\r
your debit card, or you can inquire at your bank.\r
\r
That\r
said, even if you know what you’re doing, sometimes you need cash\r
in a hurry, and even the biggest banks can’t afford to have their ATMs on every\r
street corner. So if you continually find yourself using an out-of-network ATM and being charged a fee, ask yourself: What’s going on? When does this most often occur?\r
\r
If\r
this seems to happen frequently, you’re probably not\r
taking enough money out when you visit your bank’s ATM, and there’s your\r
problem. In other words, there’s probably a simple fix in your\r
routine to keep you from running short on cash. \r
\r
Maybe,\r
for instance, you should download your bank’s or credit union’s mobile app on\r
your phone, or visit its website and look for fee-free ATMs you\r
can use. Maybe it’ll turn out that you frequently use an ATM that’s out of\r
network when two blocks away, there’s one in your bank’s network.\r
\r
Take cash out at the grocery or drugstore. Here’s a simple\r
fix. Many retail establishments, including grocery stores, will let you take out\r
some cash, often up to $50 – and almost\r
always without a fee. Assuming you shop fairly regularly, take out a little extra as needed when you\r
shop, and you could make using the ATM a thing of the\r
past.\r
\r
Get a better bank. Maybe you need to find a financial institution that doesn’t foist a hefty fee every time you use an out-of-network bank, or\r
one that at least has more ATMs in its network. You may want to try an online\r
bank; many reimburse ATM fees, although some of those banks require you to keep\r
a hefty amount of money in your checking account to qualify.\r
\r
You could also consider switching to a\r
credit union. These operate like banks but are nonprofits that serve their\r
members rather than maximizing corporate profits (which isn’t to say that\r
members never complain about them, or that they never have high fees).\r
\r
"Nearly all credit unions\r
participate in a shared ATM network that provides surcharge-free access to\r
their members’ accounts. No single bank can boast as many ATM locations as the\r
CO-OP Network, the largest credit union-owned, surcharge-free ATM network with\r
nearly 30,000 locations nationwide," says Mike Schenk, a vice president of\r
economics and statistics with the Credit Union National Association.\r
\r
Whatever you do, try\r
to avoid paying ATM fees. If you take out $20, for instance, and you’re paying\r
a collective $5 to two different banks, you’ve just lost 25 percent of\r
that cash to two easily avoidable fees. If you aren’t paying attention to\r
your ATM fees, it may seem like only a few dollars here and there, but that’s exactly what banks are\r
banking on..

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Banking & Credit

Goodbye FICO, Hello VantageScore?

by sshrx_ns3li1
written by sshrx_ns3li1

For more than 25 years, credit scores have been practically synonymous with FICO, the shortened name of the Fair Isaac Corporation. However, a new company, VantageScore Solutions, has emerged in recent years and is chipping away at FICO’s dominance in the credit score business. “VantageScore Solutions is an effort to provide more choice in the marketplace,” says Ezra Becker, vice president of research and consulting for the credit bureau TransUnion. The credit scoring company is the result of a combined effort of all three major credit bureaus: Experian, Equifax and TransUnion.The company was founded in 2006 and has gained traction. From 2014 to 2015, VantageScore credit scores were used more than 6 billion times, double the amount used from 2013 to 2014. Just as with FICO scores, VantageScore credit scores are used to determine the likelihood someone will pay back a debt. “Credit scores are a scaled representation of the probability of default,” Becker explains. Last December, House Resolution 4211 was introduced in Congress to allow Fannie Mae and Freddie Mac to use alternate credit scoring methods when making mortgage decisions. Jill Gonzalez, analyst for WalletHub.com, says if the bill is passed, it might result in the programs adopting VantageScore, a move that could be a major coup for the company.“What Fannie and Freddie do now is use outdated models,” Gonzalez says. A switch to VantageScore would change the way applications are evaluated and make it easier for borrowers who have low credit scores under the FICO model to purchase a home. Plus, it could further dent FICO’s hold on the credit score industry. Navigating the Sea of Credit ScoresBecker is quick to note Americans use the word FICO to describe credit scores in the same way they may use the word Kleenex to describe facial tissue. The word has turned into a generic term for how lenders evaluate creditworthiness, but Becker says there is actually a variety of credit scores that can be used.Each of the major credit bureaus has, at one time, created its own score. Other companies, like CreditXpert, are in the business as well. Even within FICO, there are numerous scores. While FICO Score 8 may be most widely used for credit card applications, student loans and other credit decisions, there are FICO Auto Scores, FICO Bankcard Scores and older versions of FICO’s main scoring model that may be used for mortgages.VantageScore seems to be making in-roads in the industry, in part, because it offers a simplified scoring method. “VantageScore has three scoring models,” says Bethy Hardeman, chief consumer advocate at Credit Karma. “For comparison, FICO has over 50 different scoring models.” While each credit bureau may use a different version of the FICO score for various lending scenarios – for example, for mortgage lending, Experian uses FICO Score 2, while Equifax uses FICO Score 5 – VantageScore is uniform across all three companies. The only reason a VantageScore could vary from one bureau to another is if a lender chooses not to report an account to all three companies, according to Becker.What It Means for YouA move to VantageScore could be good news for consumers, particularly those with a weak credit history. VantageScore 3.0 is the most current version and looks back 24 months at a person’s credit history, a feature that allows it to score more people who have little or no recent credit history. “[The company’s] latest scoring model can score up to 35 million more consumers compared to other models due to its broader consideration of credit data,” says Hardeman, adding that the free scores offered on Credit Karma come from VantageScore. The wider consumer net is also because the model can score people with as little as one month of credit history compared to six months for FICO scores, Gonzalez explains. Score models are created using anonymous sample consumer demographics and credit data. While VantageScore 3.0 is a relatively new model, older FICO scores may be based on decades old data. “A score created in 2002 may not be appropriate for the lending environment and consumers today,” Becker points out.The bottom line for borrowers is that VantageScore may make it easier for some people to get access to credit, but it won’t wipe away all financial sins. “If someone is undeserving of credit due to a history of not paying [bills], that won’t change [with VantageScore],” Gonzalez says.Rather than hope a change in score will make credit available, consumers should stick with the tried-and-true methods of paying on time and limiting the debt they carry. .

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Banking & Credit

Don't Fall for These Cyber Scams

by sshrx_ns3li1
written by sshrx_ns3li1

Internet scams used to be like the villain in a low-budget children's show. You could spot the bad guy a mile away, and you were probably more amused than afraid. Remember the Nigerian prince who insisted you were due an inheritance, if you'd send in your personal information? Or the email declaring you'd won a giant lottery? All you had to do was send in your bank account numbers, and you'd get your prize.How quaint. Even cute, almost.But today's scammers have grown up and are decidedly scary. Which is why it's smart to stay familiar with the latest and not so greatest in cyber scams. How might you get ripped off in the near future? Lots of ways, if you aren't on guard.[See: 9 Scary Things Consumers Do With Their Money.]Be wary of any financial institution that asks you to take a selfie – with your ID. That's a malware trick that McAfee technicians have discovered in the last few months, according to Gary Davis, chief consumer security evangelist at Intel Security, a Santa Clara, California-based company that makes McAfee computer security software. He says a type of malware (software, used for evil purposes) has surfaced in Hong Kong and Singapore, and attempts to trick computer users into taking a selfie with a personal ID, which obviously would be the worst sort of personal information for a criminal to have."I'm in awe every time I see how creative and clever the bad guys are," Davis says.And, sure, you might think that this sounds on par with the Nigerian prince and lottery scam (Who would fall for this?), but Davis says this malware, once you've managed to download it, will lay dormant and not ask you for financial information until you do some online banking and are probably expecting to be asked some questions. One would like to think that most consumers would stop and reflect –and not pose for a selfie – with their driver's license (even if they do think their bank is asking them to snap the shot), but it's easy to imagine that many consumers would answer the more routine questions, like, "What's your mother's maiden name?"[See: 10 Warning Signs of Identity Theft.]Be skeptical of USB sticks. You can use these data storage devices, also called USB flash drives, to back up information but also to download software, a PowerPoint presentation, a computer game, recipes or almost anything you can imagine. And while most USB sticks or flash drives are perfectly safe to use, Davis says that Intel Security's technicians have been finding ransomware being transmitted through USB sticks.Ransomware is a type of malware that, once it's in your computer, will shut everything down. Suddenly you won't be able to access any of your files until you pay a cash ransom to the hacker who sent you the ransomware. Ransomware is on the rise, industry experts say, affecting not only individuals but school districts, hospitals and businesses. Meanwhile, think about all the times you've stuck a USB stick into your computer. Many people use these frequently without second thought."I can't count the number of conferences I've been to, where they're just handing out USB sticks … If you don't know the history of the USB stick, don't connect it to your drive," Davis advises.[See: 10 Money Leaks to Shut Down Now.]Be aware of Google Voice scams. Jayne Hitchcock – whose pen name is J.A. Hitchcock – had this particular scam attempted on her very recently. Hitchcock, a Maine-based author of the upcoming book, "Cyberbullying & The Wild, Wild Web: What Everyone Needs To Know," put her phone number on a Craigslist ad she posted in hopes of selling a bunch of books she no longer wanted. Not long after the ad went up, she received a text from a phone number she didn't recognize. She Googled the number and found nothing bad, so she replied."Then I got a call from a 202 Washington, D.C., area code that had a prerecorded female voice saying it was Google Voice and to input the two-digit code I received," Hitchcock says. "I then got a text from this person telling me to input '50.'"That made Hitchcock's something's wrong antenna go up, so she wrote back and said to check out her website, netcrimes.net; if he wasn't a scammer, she wrote, she invited him to call her from the local number he was texting from."I never heard from him again," Hitchcock says.So what was the problem? What would have been so bad if Hitchcock had typed in the two-digit code?"What they do is steal your phone number, essentially using it as a forwarding number for them to scam other people," Hitchcock says. It can be such a hassle to get your phone number back that some people don't even bother and instead cancel it, she adds.Steer clear of emails with links to YouTube.com. Nobody needs to be told that YouTube is a massively popular website, and con artists are leveraging its all-ages appeal, according to Rich Drees, a Miami-based entrepreneur who runs a social media marketing company.Drees says crooks will sometimes send consumers emails with a link that leads to a YouTube video. Or, rather, it looks like it's going to lead to a YouTube video."Instead, you're taken to a page that looks exactly like the real thing, but you're asked to sign on, thus enabling the scammer to hijack your account," Drees says.One major hint that you have a problem, Drees says: "Check the address bar carefully when you arrive to ensure that it contains YouTube.com. If it contains another word before that, like Anotherword-YouTube.com, it's not YouTube. "These cyber tactics are only going to get worse, according to Davis."It used to be that proximity mattered," he says. "If you were a thief, you had to go to the bank, and it was high-risk, low reward. But that's why cyber crime is so attractive. It isn't dangerous for the bad guys, and it's difficult for them to be caught, especially if it's somebody who lives in another country. It's a growth market." 10 Ways to Protect Yourself From Online Fraud.

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Banking & Credit

What Millennials Want From a Bank

by sshrx_ns3li1
written by sshrx_ns3li1

As the youngest and largest generation, millennials are making their mark on society. From trading taxis for Uber rides to delaying marriage and home ownership, young adults are turning many conventions on their head.Even their banking habits can be unconventional, although industry experts say all generations share certain values when it comes to wanting a financial institution that is stable and secure. "Core expectations are the same, but the way millennials interact with banks is very different," says Matthias Goehler, senior vice president and head of industries at the e-commerce solutions company SAP Hybris.[See: 10 Retirement Planning Moves to Make in Your 20s.]Here's a look at some of what's important to millennials when it comes to banking, and how those things differ from older generations.Technology is a must. As digital natives, millennials are unsurprisingly looking for ways to integrate technology into their banking experience. "Their preferences are very orientated toward quick interactions, either online or on a mobile app," says Lars Holmquist, senior vice president for the Americas at Collinson Group, a global firm that develops loyalty and lifestyle benefits programs. Those interactions could range from checking a balance to making a deposit digitally. "To me, convenience and access are the main drivers," Holmquist says, when explaining millennial interest in mobile banking.Cash is still king. Despite their inclination toward technology, millennials aren't planning to give up their cash anytime soon. Qualtrics, in conjunction with Accel, surveyed 8,000 adults to learn how the different generations approach their money and payment options. "What we found is that 80 percent of millennials say they still use cash, and 64 percent carry cash most of the time," says Mike Maughan, head of global insights at Qualtrics and a millennial himself. Mobile payments not as hot as online payments. Mobile payments may seem like a logical choice for millennials, but they have been slow to catch on. While millennials are 16 times more likely than baby boomers to use Apple Pay or Android Pay, their use still lags far behind that of cash. Millennials are five times more like to use cash than mobile payments, according to the Qualtrics study. "What that's indicating to us is that there's a long ways to go before mobile payments catch up," Maughan says. However, what is hot among millennials is the use of online services such as Venmo and PayPal, which allow users to send payments that bypass the bank completely. Maughan notes 62 percent of millennials use Paypal, and young adults are six times more likely than older generations to use Venmo.[See: 12 Financial Terms Every Retirement Saver Should Know.]Privacy may be exchanged for a personalized experience. When it comes to privacy, Goehler says millennials may be more inclined to share personal information, assuming it benefits them. "In terms of day to day life, millennials are less concerned than older generations," he says. "[They say] I'm OK sharing something if I get something of value in return."That something of value may be a more personalized banking experience. For instance, millennials may be OK with their data being used if it results in offers tailored to their interests or an app that intuitively knows what to display first. "Call it almost the Amazon effect of offer management," Holmquist says. Instead of having to search for relevant information, millennials may gravitate toward systems that use their personal data to display relevant information immediately. Branches are not obsolete. As banking apps become more functional, "One might have anticipated that millennials aren't visiting the bank," Maughan says. However, they are visiting the bank and in roughly equal numbers to baby boomers. The Qualtrics survey found 30 percent of millennials report they visited a bank in the past week. Meanwhile, 33 percent of baby boomers said the same.[Read: The 10 Best Banks of 2016.]Future wants center around quick and easy banking. Goehler anticipates millennials will continue to press for banking changes that will make transactions more flexible and mobile. For instance, he notes some banking activities, such as mortgage applications, may require a personal meeting to verify a person's identity. "Millennials want to do this instantly," he says. "[They're wondering], why can't I do that on a video conference?"Banking laws and regulations will undoubtedly play a role in how much financial institutions can do remotely, but millennials would probably be happy to do as much as possible from their phone. "In the end, it's the ease of doing business [that's important]," Goehler says, summing up just what millennials want from a bank.How to Save for Retirement on Less Than $40,000\r
\r
.

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Banking & Credit

6 Credit Card Blunders to Avoid This Holiday Season

by sshrx_ns3li1
written by sshrx_ns3li1

If you've just finished paying off your credit card debt from last year's holiday shopping, you know that gift buying and paying with plastic can be a dangerous combination.There are so many things that can go wrong (and right) that it would take forever to list every possible way you could spend yourself into the poor house. But whether you're someone who always pays off credit card debt every month or you're still working on paying off debt from Christmas 2009, be sure to at least avoid these credit card blunders.[See: Best Credit Cards: Find the Right Card for You.]Falling for store credit card deferred interest deals. Planning on buying someone a big, expensive gift, or maybe getting something monumental for yourself? Wondering if you should really splurge? That's where deferred interest often lures consumers in. The store will promise that you won't pay interest if you pay off the entire purchase by the end of the advertised period."Every holiday season, many store chains that sell large and expensive items like furniture or appliances start advertising deferred interest offers on their store-branded credit cards," says Alex Gerard, CEO of CardsMix.com, a credit card comparison site. "These offers seem attractive, but they can be dangerous for your pocket if you have little discipline, like the majority of us."If you do have discipline, deferred interest deals can be swell. But it can be devastating if something goes wrong."If you don't pay off the entire purchase and owe even a penny at the end of the advertised period, you will be charged the interest for the whole introductory period," Gerard says.[See: Spend a Windfall Wisely.]Forgetting to track your spending. "The holiday spirit blinds you to how much you're really spending – until the bill comes due in January," says Howard Dvorkin, a certified public accountant and chairman of Debt.com. "So my suggestion is to keep a running list of all your holiday expenses and post them on the refrigerator or somewhere prominent in your home. Once you hit a dollar figure you agreed to stay below – whether it's $300 or $500 or even $1,000 – you and your family agrees to stop spending for the holidays."And if you still have some important gifts you really want to buy? "Everyone agrees to cut from somewhere else in the non-holiday part of the family budget," Dvorkin says.Carrying revolving debt from the holidays. Consumers plan on spending an average of $1,159 on their holiday purchases this year, according to a just-released annual survey of 2,006 consumers (between Oct. 5-9, 2016) from the credit card Discover.You know revolving debt is important to avoid, but you may want to do some math before you whip out your credit card, so you can see what you're getting into. If you were to spend $1,159 on holiday gifts this year, and you had a credit card with an average interest of 15.18 percent (the national average at the time of this writing, according to CreditCards.com), and you planned to take six months to pay it off, you would pay $201.81 each month, spending a total of $1,210.86.That arguably isn't too expensive, spending $51.86 to float $1,159 in gifts in exchange for making your family or friends happy. But, of course, the question becomes – do you only carry that revolving debt for those six months? If you're likely to buy more with your credit card and not pay it off right away, then suddenly that $201.81 payment is going to balloon and will likely become a weight around your neck. For all you know, next holiday season, maybe you'll still be paying off that $1,159 in gifts.Thus, it's vital you pay off that holiday credit card debt as soon as possible.[See: 10 Easy Ways to Pay Off Debt.]Failing to remember that the holidays are ideal for scam artists. It's smart to be something of a Grinch, assuming the world isn't full of good people when you're shopping at your computer or at the mall. From pickpockets to scammers with sophisticated equipment hoping to steal your credit card information when you shop at a public place with unprotected Wi-Fi, some people are out to get you.In Calgary, Canada, for instance, police recently alerted the media that they've seen an escalation in text messages asking consumers if they want to be secret shoppers, and while that might sound plausible, no, these text messages aren't legitimate. And throughout North America, there have been reports of fraudulent online stores and fake shopping apps being created, just waiting for people to find them and type in their credit card information.Be careful about applying for store credit cards. Like deferred interest deals, you'll get a lot of sales employees asking if you'd like to apply for a store credit card. Unless you shop there all the time, and you have a great track record of repaying your credit card debt, your answer should be: no, thanks."It's during the holidays that consumers, revolvers especially, are most susceptible to credit card debt," says Kerri Moriarty, CEO of Cinch Financial, a website that makes customized suggestions to people on what types of financial products they should get.She admits that it might seem "like a no-brainer," to open a store credit card to get a 20 percent discount, "but when you do the math on what it takes to really benefit from the action as a year-round decision and not just a Christmas Eve one, you might be surprised to realize how little of a deal there is – and even more so if you'll carry a balance on that card," she says.Forgetting about rewards on credit cards – or focusing too much on them. According to the aforementioned Discover survey, 46 percent of shoppers said their main reason for using credit cards for holiday shopping was to earn rewards. This is great, if you're racking up rewards and paying off your cards every month. But every credit card and personal finance expert who ever lived will tell you to not overspend just to get a bunch of rewards. Drowning in credit card debt isn't much of a reward.10 Tips for a Budget-Friendly Cyber Monday.

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Banking & Credit

Rising Credit Score but Rotten Credit Report?

by sshrx_ns3li1
written by sshrx_ns3li1

If you have a dismal credit score, and you plan to apply for loan for a new house or car, you probably are doing whatever you can to bring your numbers up. You're paying your bills on time. You've been studying your credit reports and contacting the bureaus if you find any incorrect information. Maybe you've even taken out another small loan, just to show lenders that, yes, you've got this.But you may not have this. Not yet, anyway. A high credit score doesn't guarantee a loan. If you are planning on applying for a loan, keep the following in mind.[See: 12 Simple Ways to Raise Your Credit Score.]Your credit history has more to do with getting a loan than your credit score. According to Fair Isaac Corporation, which created the credit scoring algorithm that most lenders use when making lending decisions, excellent credit is when your score is 720 or more. Good credit would be 690 to 719. Fair credit is 630 to 689. Bad credit generally includes scores from 300 to 629.Credit scores and reports do tend to go hand in hand. If you have a high credit score, you probably have a positive credit report. But not always. You may have been a financial disaster up until a few years ago when you completely turned things around, and ever since, have watched your credit score climb.And while a few years of good financial behavior may be enough to get you a loan, lenders may nevertheless be scared by your past.[See: 10 Easy Ways to Pay Off Debt.]"Ultimately, the approval process is different for each applicant and lender," says Carla Blair-Gamblian, a consultant at Veterans United Home Loans, a mortgage brokerage in Columbia, Missouri.And whoever is looking over your loan may not be really looking at your credit history; instead he or she may be using a software program to make the decision."Many lenders use an automated system from Fannie Mae or Freddie Mac to get an approval status, so even if you have a great credit score but had really poor credit in the past, you may not still be able to get a mortgage loan," says Jeremy David Schachter, a mortgage advisor at Pinnacle Capital Mortgage Corporation in Phoenix, Arizona.If you do get approved for a loan, it's then that the credit score kicks in and becomes relevant, according to Schachter."Whatever your credit score is at the time of the application is what's determined for the interest rates," he says.Some items look bad on a credit report; others, don't look as bad. This won't shock you, but the longer you take to make a payment, the worse your credit report looks in the eyes of a lender. If your debt winds up in court, or you have a bankruptcy in your past, or a lien on your home, that could definitely derail your attempt to get a loan.But if you have a lot of late bills in your past, but you always managed to get them paid within 90 days, a lender typically won't be too horrified by that.David Hosterman, a branch manager with Castle & Cooke Mortgage LLC in Greenwood Village, Colorado, says many financing companies have specific guidelines when it comes to "derogatory credit items," and often the guidelines are tied to a specific time."For instance when it comes to home loans, in regards to an FHA loan, [lenders] typically require that a customer is two years discharged from a bankruptcy before obtaining new credit," Hosterman says. "For conventional loans – Fannie Mae and Freddie Mac – they typically require a four-year waiting period."Hosterman adds that these are just guidelines, and if a customer can prove that a bankruptcy was due to extenuating circumstances, like being laid off from work, you might have a better shot of getting a loan with some lenders.[See: How to Live on $13,000 a Year.]Other factors can come into play when it comes to your loan's terms. If you get an approval, and you have that high credit score, you're almost certainly going to get a loan with good terms. But you may not get the best terms possible.When it comes to a mortgage, "interest rates are based on many different factors," says Schachter, adding that several of those factors include your credit score, what kind of property you're buying and how much your down payment will be.If you are denied a loan. You can always apply for another loan with someone else. You have probably heard that applying for multiple loans can make a credit score drop, just what you don't need, but according to MyFico.com, Fair Isaac Corporation's website, if you apply for multiple mortgage, auto or student loans within a 30-day period, your score won't be affected. The company recognizes that you're shopping for a loan, and that it isn't as if you're going to wind up with three car loans and two mortgages. If you apply for multiple credit cards, however, that could drop your score.If you keep getting turned down, however, then at some point you'll need to bow to reality and put off applying for a loan. Fortunately, time heals all financial wounds – eventually. For instance, a bankruptcy will be removed from your credit report, typically after seven years, if it's a Chapter 13 bankruptcy. A Chapter 7 bankruptcy will be removed after 10 years.So you may have to bide your time while you wait for another year or two to go by, and your credit report and its history becomes less worrisome to lenders. The good news is that as long as you keep doing what you're supposed to be doing, and paying off your debts and staying on top of your finances, your credit score will likely keep going up. When you are eventually approved for a loan, the terms you get will probably be even better than they would have been had you received your money today.12 Habits to Help You Take Control of Your Credit.

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Banking & Credit

5 Clues That You're Dealing With a Predatory Lender

by sshrx_ns3li1
written by sshrx_ns3li1

Consumers are often told to stay away from predatory lenders, but the problem with that advice is a predatory lender doesn't advertise itself as such.Fortunately, if you're on guard, you should be able to spot the signs that will let you know a loan is bad news. If you're afraid you're about to sign your life away on a dotted line, watch for these clues first.You're being offered credit, even though your credit score and history are terrible. This is probably the biggest red flag there is, according to John Breyault, the vice president for public policy, telecommunications and fraud at the National Consumers League, a private nonprofit advocacy group in the District of Columbia."A lender is in business because they think they're going to get paid back," Breyault says. "So if they aren't checking to see if you have the ability to pay them back, by doing a credit check, then they're planning on getting their bank through a different way, like offering a high fee for the loan and setting it up in a way that locks you into a cycle of debt that is very difficult to get out of."[See: 25 Fast Financial Fixes.]But, of course, as big of a clue as this is to stay away, it can be hard to listen to your inner voice of reason. After all, if nowhere else will give you a loan, you may decide to work with the predatory lender anyway. That's why many industry experts feel that even if a bad loan is transparent about how bad it is, it probably shouldn't exist. After all, only consumers who are desperate for cash are likely to take a gamble that they can pay back a loan with 200 percent interest – and get through it unscathed.Your loan has an insanely high interest rate. Most states have usury laws preventing interest rates from going into that 200 APR territory, but the laws are generally weak, industry experts say, and lenders get around them all the time. So you can't assume an interest rate that seems really high is considered normal or even within the parameters of the law. After all, attorney generals successfully sue payday loan services and other lending companies fairly frequently. For instance, in January of this year, it was announced that after the District of Columbia attorney general sued the lending company CashCall, they settled for millions of dollars. According to media reports, CashCall was accused of offering loans with interest rates around 300 percent annually.[See: 11 Money Tips for Women.]The lender is making promises that seem too good to be true. If you're asking questions and getting answers that are making you sigh with relief, that could be a problem.Nobody's suggesting you be a cynic and assume everybody's out to get you, but you should scrutinize your paperwork, says David Reiss, a professor of law at Brooklyn Law School in New York."Often predators will make all sorts of oral promises, but when it comes time to sign on the dotted line, their documents don't match the promises," Reiss says.And if they aren't in sync, assume the documentation is correct. Do not go with what the lender told you."Courts will, in all likelihood, hold you to the promises you made in the signed documents, and your testimony about oral promises probably won't hold that much water," Reiss says. " Read what you are signing and make sure it matches up with your understanding of the transaction."You're dealing with pushy sales people. Maybe you went into an office of your own power and free will but suddenly you're feeling as if you won't be able to leave the premises without taking out a loan?That is a very bad sign. Get out.John Henson, a vice president at LendingTree.com, says one red flag is "overly aggressive sales tactics, including using language which obfuscates the actual terms of the mortgage."He also says you could be in trouble if a lender can't explain some of the vocabulary associated with the loan, especially around fees, or if you're having trouble getting the loan terms from the salesperson right away, such as the interest rate, payment amount or number of payments.[See: 10 Ways to Feel Better About Your Money.]The loan is really easy to get. Borrowing money, especially a lot of it, should be difficult. After all, if you're going to borrow tens or hundreds of thousands of dollars for a car or house, a lender would be crazy to not vet you thoroughly and take a look at your credit score and report and make sure you can pay. Not doing that, of course, is partially how the country got into a recession about 10 years ago. Mortgage companies weren't doing enough to learn if consumers could afford to pay back what they were borrowing.So if you're in the process of getting a loan, especially a big one, and you're thinking, "Wow, this is easy, almost too easy," you're probably right. Breyault says you should be especially wary when you're on a car lot, and you're seeing signs like, "Guaranteed loan," and "No credit needed." Those dealerships are notorious for having predatory lending practices."The point of those car lots is as much to sell you on a high interest loan as it is to sell you a car," Breyault says.And if that's the case, it raises another question: If you're paying a fortune on a loan with crummy terms, how much confidence can you have that the same company is selling you a quality product?Dear Younger Me: 12 Financial Truths We Wish We Knew Earlier.

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Banking & Credit

Why Life Insurance Premiums Are Expected to Decrease

by sshrx_ns3li1
written by sshrx_ns3li1

For the past decade, the insurance industry and state regulators have been working on a new system for how life insurance companies determine whether they have enough money in reserve to pay out their claims. Known as principle-based reserving, the framework has been adopted by 46 states and was rolled out across the nation on Jan. 1, 2017. Insurance companies have three years to transition to the new system that uses simulation models to estimate the necessary reserves to cover future claims. Some experts in the industry expect life insurance premiums to drop as companies adjust to the new reserve requirements.[Read: 10 Things You Didn't Know Life Insurance Could Do.]The move to modernize life insurance reserves. The use of principle-based reserves represents a major shift for the industry, and one that reflects the changing face of life insurance policies. "If we go back 50 years, most of the life insurance products were very similar," says Nancy Bennett, senior life fellow with the American Academy of Actuaries. So it wasn't too problematic that state regulators required insurers to use a standard formula to determine how much cash to keep in their reserves for claim payments.However, the market has changed significantly, and companies now offer a variety of term, whole and universal policies. As a result, the old rigid system of calculating reserves no longer worked. In some cases, companies had accumulated large reserves, "far larger than what you would think would be needed," Bennett says.Since the formula didn't allow for variations, companies were unable to adjust the size of their reserves on their own. "We and other companies went to the NAIC [National Association of Insurance Commissioners] and said we want to work with you to right-size the reserves," says Shawn Loftus, senior vice president and chief actuary of USAA Life Insurance Company. The result of that work is the new principle-based reserving model, which offers companies more flexibility when determining how much capital to have on hand. The first wave of regulations affects two types of polices: term life and universal life with secondary guarantee.[Read: Should You Use Life Insurance to Fund Your Retirement?]Some premiums may go down. Bennett says it's hard to tell whether premiums will be affected as a result of the new principle-based reserves, but those in the industry are optimistic consumers will see savings. "The big picture from our end is this rule is going to make life insurance premiums cheaper," says Justin Halverson, founding partner at Great Waters Financial in Minneapolis.Term life insurance, in particular, could benefit from the change. According to a 2012 Impact Study from NAIC, companies are projected to reduce their reserves anywhere from 38 percent to 64 percent as a result of principle-based reserving. Loftus says USAA Life expects to drop premiums by up to 15 percent on some policies, with the average savings being 2.6 percent. Reduced premiums only apply to new policies and will not affect current customers.The situation for universal life with secondary guarantee is a little more complex. Joseph E. Roseman Jr., managing partner for O'Dell, Winkfield, Roseman and Shipp in Charlotte, North Carolina, says the structure of permanent policies shifted from whole life to universal life in the late 1970s and early 1980s. During the next two decades, business for universal life boomed, but reserves didn't always keep up. "They were minimally funding policies," he says.Now, the new regulations may result in some of those universal life policies needing to beef up their reserves. The 2012 Impact Study found some reserves may drop as much as 44 percent while others may need to boost their coffers by up to 63 percent. However, better reserves mean consumers can feel confident their plan will remain solvent. And life expectancy tables have been recalculated so premiums will be spread over a longer period, a change that should keep premium increases to a minimum.Lower your life insurance premiums. Consumers shouldn't expect to see their existing premiums drop as a result of principle-based reserves. The lower prices will only be for new policies, but that should still be welcome news for those living on a tight budget. "About 35 percent of our members are living paycheck to paycheck, so price is a big deal for them," Loftus says. To find out if they can take advantage of lower premiums, the company is recommending all its members conduct an annual insurance review.Part of that review includes getting quotes for a new policy or additional coverage to supplement an existing policy. Halverson cautions anyone getting quotes to be sure the company in question is actually using principle-based reserves. While some firms, such as USAA Life, are implementing the change immediately, insurers have until Dec. 31, 2019 to comply. And a handful of states have not yet adopted the new framework.[Read: 10 Financial Perks of Getting Older.]"[Another] big warning would be to not go dump your current coverage," Halverson says. Getting a quote at a lower cost doesn't mean the company will sell you a policy. The results of a health exam, for example, could result in an application being denied. "Make sure you've had a guaranteed offer," Halverson urges.Principle-based reserving represents a major change for the insurance industry, and it could have benefits for your bottom line as well.10 Tax Breaks for People Over 50.

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