Bad Credit – Fast Paths http://fastpaths.com/ Tue, 21 Jun 2022 13:46:43 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://fastpaths.com/wp-content/uploads/2021/05/default.png Bad Credit – Fast Paths http://fastpaths.com/ 32 32 3 in 4 online shoppers experience buyer’s remorse, survey finds https://fastpaths.com/3-in-4-online-shoppers-experience-buyers-remorse-survey-finds/ Tue, 21 Jun 2022 13:46:43 +0000 https://fastpaths.com/3-in-4-online-shoppers-experience-buyers-remorse-survey-finds/ Online shopping can lead to impulse buying and the temptation to overspend, preventing consumers from reaching their financial goals, according to a new survey. (iStock) While online shopping is a convenient way to purchase the items you need and compare prices between retailers without leaving the comfort of your home, survey data indicates that it […]]]>

Online shopping can lead to impulse buying and the temptation to overspend, preventing consumers from reaching their financial goals, according to a new survey. (iStock)

While online shopping is a convenient way to purchase the items you need and compare prices between retailers without leaving the comfort of your home, survey data indicates that it can also lead to bad shopping habits. consumption.

Nearly three quarters (74%) of online shoppers have experienced buyer’s remorse, according to a recent survey by coupon search website Slickdeals.

The most common regret expressed was that the value of an item was less than expected for the price (39%), followed by not really using an item purchased online (34%). About a third (32%) of consumers said they regretted spending too much money when shopping online.

If you feel the need to splurge, keep reading for tips on how to curb overspending habits. Plus, learn more about how to manage your credit card debt. One strategy is credit card consolidation, which involves paying off high-interest credit card debt with a fixed-rate loan. You can read more about personal loans for debt consolidation on Credible.

3 WAYS INFLATION AFFECTS YOUR PORTFOLIO AND HOW TO FIGHT RISE IN PRICES

How to Adopt Healthy Spending Habits When Shopping Online

One of the most common consumer regrets is that they spend too much money when shopping online, according to the survey. If you share that sentiment, check out these tips from credit reporting company, FICO, to help you stop overspending online:

  • Don’t shop online when you’re in a bad mood. Get yourself in a clear frame of mind before whipping out your credit card to avoid unnecessary spending. You might also want to stay away when you’ve been drinking – around six in 10 consumers have admitted to shopping online while intoxicated, according to Slickdeals.
  • Wait a day before making an online purchase. Move the item out of your cart and into a list to save it for later. If you still need the item in the next few days, think carefully if the purchase is worth it.
  • Avoid Buy Now, Pay Later (BNPL). Installment finance options like BNPL can tempt you into spending too much on a purchase you can’t really afford. And if you miss a BNPL payment, it could hurt your credit score.
  • Make a shopping list with spending limits. Just like at the grocery store, you should come prepared with a detailed list of the items you need, to avoid impulse buying those you don’t have. Also set a dollar limit for how much you’re willing to spend per item.
  • Put some money aside for a “splurge fund”. This separate account can come from birthday money, work bonuses or other cash receipts. If you need retail therapy, you can tap into that extra cash reserve instead of relying on credit or dipping into your emergency savings.

As a bonus, you can put your rainy day fund into a high yield savings account and watch the balance grow over time with interest. You can visit Credible’s online financial market to compare savings rates from multiple banks at once.

5 MONEY TIPS TO ACHIEVE YOUR SAVING GOALS

What to do if you’re struggling with credit card debt

Shopping online can be a gateway to overspending for consumers struggling to manage their credit card balances. If you’re having trouble keeping track of your spending behavior, learn more about common debt repayment methods in the sections below.

Consider meeting with a credit counselor

Non-profit credit counseling agencies offer free or low-cost debt management services to consumers struggling with financial planning.

A credit counselor can analyze your monthly income and expenses to help you establish a budget. In some cases, they might sign you up for a debt management plan (DMP) to pay off your creditors in fixed installments. Credit counselors may even be able to negotiate with creditors on your behalf to secure a lower interest rate or waive late fees.

You can find a licensed credit counseling agency in your area on the Department of Justice website.

HOW TO MAXIMIZE YOUR CREDIT CARD REWARDS

Use a credit card with balance transfer

Credit card balance transfers allow you to transfer debt from one or more accounts to a new card with a lower interest rate. Applicants with excellent credit can even qualify for a 0% APR introductory offer, effectively giving them a period of up to 18 months to pay off their debt interest-free.

However, balance transfer cards are generally reserved for borrowers with a very good credit score, defined by the FICO model as 740 or higher. Therefore, debtors with good or bad credit may not qualify. Additionally, many credit card companies charge a balance transfer fee, usually between 3% and 5% of the transferred amount.

You can visit Credible to compare balance transfer credit cards for free without affecting your credit score.

RENT PRICES ARE RISING ACROSS THE COUNTRY, REPORT SAYS

Consolidate your credit card balances into a fixed rate loan

Credit card consolidation allows borrowers to consolidate multiple higher interest rate debts into one monthly payment with a personal loan. According to the Federal Reserve, personal loans typically offer lower rates than credit cards, which means you may be able to save money in interest charges, pay off debt faster, and lower your monthly payments. through debt consolidation.

Personal lenders determine interest rates and eligibility based on the length and amount of the loan, as well as the creditworthiness of the borrower. Applicants with good credit and a low debt-to-income ratio (DTI) will be eligible for the lowest interest rates available, while those with fair or worse credit may not be eligible at all.

Personal loan rate by credit score

Most lenders allow you to prequalify to see your estimated interest rate with a soft credit check, which won’t affect your credit score. You can prequalify with multiple lenders at once in Credible’s personal loan marketplace.

DEBT COLLECTORS CAN NOW CONTACT YOU BY TEXT, EMAIL AND SOCIAL MEDIA

Do you have a financial question, but you don’t know who to contact? Email the Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.

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How to Improve Your Chances of Getting Approved for a Loan Without a Credit Check https://fastpaths.com/how-to-improve-your-chances-of-getting-approved-for-a-loan-without-a-credit-check/ Fri, 17 Jun 2022 14:36:37 +0000 https://fastpaths.com/how-to-improve-your-chances-of-getting-approved-for-a-loan-without-a-credit-check/ The average credit score in Australia is 550; scores below 500 are considered poor, while anything below 400 is considered extremely poor. A bad credit score indicates that you have a habit of paying your bills and loans late or not paying them at all. Lenders often charge higher interest rates to loan applicants with […]]]>

The average credit score in Australia is 550; scores below 500 are considered poor, while anything below 400 is considered extremely poor. A bad credit score indicates that you have a habit of paying your bills and loans late or not paying them at all.

Lenders often charge higher interest rates to loan applicants with poor credit ratings, viewing them as higher risk than other applicants. Also, some will refuse applications with bad credit scores. Therefore, seeking loans for bad credit is the ideal option for people who are in urgent need of money but have bad credit scores.

Here are some tips on how to improve your chances of getting approved for a no credit check loan:

Show proof of income

Most lenders look at your credit score when evaluating your loan application, but some take other factors into account. Therefore, you may still qualify for a loan even if you have a bad credit rating, but lenders will try to determine if you can repay the loan on time.

They can do this by asking you to provide your payslip. But if you are unemployed, you must prove that you have another reliable source of income as reliable businesses or investments. This will give them confidence that you will repay the loan on time.

They’ll also want to assess your debt-to-income ratio (DTI), the portion of your monthly income that goes to paying off your debts. Most lenders require a DTI of 40% or less; the lower, the better.

1. Put safeguards in place

Placing collateral is another strategy you can use to increase your chances of getting a loan without a credit check. Using your home or other valuable property as collateral makes you a low-risk borrower.

Lenders would be more willing to accept applicants with collateral even if their credit scores are poor. Setting up collateral can be a good idea if you need a large sum of money. Moreover, you could even negotiate a lower interest rate and a longer repayment period.

However, if you don’t make your payments, lenders may be able to recoup their losses by selling or auctioning off your assets.

2. Apply with a co-signer

Using a co-signer is another great idea to improve your chances of loan approval when you have bad credit. However, some lenders do not allow co-signing in their loan applications, so be sure to check out different lenders.

You can choose a friend or family member with a reliable income or an excellent credit score for a co-signer. By signing as a co-signer, they will accept responsibility for repaying your loan in the event of default.

3. Work with the right lender

Although lenders have different ways of evaluating loan applications, it can be difficult to get a loan if you have bad credit. Fortunately, some lenders do not check credit history and only care if the applicant can repay the loan when it is due.

If you are looking for ways to improve your chances of getting a bad loan, be sure to research loans from suitable lenders. Gday Loans, for example, connects its clients with direct lenders who offer no credit check loans.

Improve your credit score

Improving your credit score is the best way to increase your chances of getting a loan. But building a credit score can take time.

What if you have an emergency and need it after a short time?

You can follow these steps if you cannot wait for the normal process of increase your credit score and improve your chances of getting a loan:

  • Exceed the minimum monthly payment of your credit balance
  • Pay all your past debts
  • Create different credit accounts
  • Look for loans from lenders offering loans without a credit check
  • Pay your current debts and bills
  • Confirm if your credit file has an error

The essential

You can still receive a loan even if you have a bad credit rating, as long as you know and research all of your opportunities. Keep in mind that there are many factors a lender can use to decide whether or not to give you a loan in addition to your credit score.

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The Fed raises rates by 0.75%. Here’s what it means for borrowers https://fastpaths.com/the-fed-raises-rates-by-0-75-heres-what-it-means-for-borrowers/ Wed, 15 Jun 2022 21:52:29 +0000 https://fastpaths.com/the-fed-raises-rates-by-0-75-heres-what-it-means-for-borrowers/ Image source: Getty Images Consumers could be affected in several ways. Key points In a bold move to fight inflation, the Federal Reserve implemented its biggest rate hike in 28 years. As a result, consumer borrowing could soon become much more expensive. For months, inflation has been galloping. And consumers are struggling to pay for […]]]>

Image source: Getty Images

Consumers could be affected in several ways.


Key points

  • In a bold move to fight inflation, the Federal Reserve implemented its biggest rate hike in 28 years.
  • As a result, consumer borrowing could soon become much more expensive.

For months, inflation has been galloping. And consumers are struggling to pay for essentials like gas, groceries and utilities. The problem has become so severe that many people are depleting their savings and racking up credit card debt just to stay afloat.

Meanwhile, the Federal Reserve just took a huge step to help fight inflation: it raised interest rates by three-quarters of a percentage point. It’s the biggest rate hike since 1994. And it means borrowing is about to get much more expensive.

Consumers need to be prepared to pay

Let’s get one thing clear – the Fed doesn’t actually set consumer interest rates. So when we talk about rate hikes, we’re referring to the federal funds rate, which is the rate that banks charge each other for short-term loans.

But when the fed funds rate rises, consumer interest rates tend to follow. And that can be both a good and a bad thing.

Consumers with money in savings accounts can benefit from higher interest rates. But those looking to borrow money could find themselves stuck paying more in the form of higher mortgage rates, personal loan rates, and more.

Higher interest rates can also cause problems for borrowers with variable interest rates on their debt. This means that consumers with credit card balances and HELOCstyle=”text-decoration: underline”> could see their interest rates increase.

Will rate hikes curb inflation?

The reason the cost of living has risen so much right now is that the supply of available property has not been sufficient to meet buyer demand. That’s because unemployment levels have been low for some time, and between stable incomes and remaining stimulus funds, consumers have had more money to spend.

If borrowing rates rise, consumers might start spending less. This could help supply catch up with demand. And once that happens, prices should start falling.

Now, if consumer spending declines to a point, it could actually trigger a recession. And that’s not ideal. As such, the Fed’s drastic interest rate hike is seen by some as too extreme. But given soaring inflation, it is also easy to argue that this is a necessary measure.

In May, the consumer price index rose 8.6% on an annual basis, according to the Labor Department. This is a level of inflation that the Fed cannot ignore. And raising interest rates is really the only weapon she has in her arsenal to help what has become a major crisis for everyday consumers.

Nevertheless, there are steps we can take to avoid being harmed by rising rates. Those with credit card balances, for example, should strive to pay them off as quickly as possible. Waiting could mean getting stuck paying more interest. Similarly, those looking to secure a fixed rate loan may want to move as soon as possible, before borrowing rates really start to skyrocket.

Mortgage borrowers with adjustable rate loans can also consider refinancing to a fixed rate loan. Granted, mortgage rates are high right now across the board, but at least that way borrowers know what rate they’re expecting.

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How I Saved $21 in 10 Minutes Shopping on Amazon https://fastpaths.com/how-i-saved-21-in-10-minutes-shopping-on-amazon/ Mon, 13 Jun 2022 21:22:53 +0000 https://fastpaths.com/how-i-saved-21-in-10-minutes-shopping-on-amazon/ Image source: Getty Images Being loyal to a retailer sometimes pays off. Key points Pets are wonderful, but they can be expensive. Price comparisons are a smart way to save money. Credit cards can improve your financial situation if you use them wisely. Thanks to rampant inflation, life is getting more expensive these days. So […]]]>

Image source: Getty Images

Being loyal to a retailer sometimes pays off.


Key points

  • Pets are wonderful, but they can be expensive.
  • Price comparisons are a smart way to save money.
  • Credit cards can improve your financial situation if you use them wisely.

Thanks to rampant inflation, life is getting more expensive these days. So I try to make money where I can, and although I like to spoil my pets, I still need to save money on the sometimes expensive things I buy for them. , be it food, furniture or a new cat carrier.

Pets are not cheap!

I added a third cat to my household last fall, but had put off buying a third carrier even though I needed one. Emergencies happen, what if I had to take all three of them to the vet at the same time? I was dragging my feet because carriers can get expensive, and I tried to control my expenses.

As I do so often, I turned to the internet for my research. After asking some cat-owning friends for their carrier recommendations, I decided on a promising make and model, and started checking out a few online and local retailers for their prices. The prices were pretty much the same on every site I looked at, and while I could have picked up the carrier I chose in person rather than waiting for it to ship, the pet store the closest to me that had it on its shelves is 50 miles away. . Have you got seen gas prices lately?

Improve my Amazon game

I sometimes joke that Amazon Prime is my lifeline, so of course I was going to check if they had the carrier I wanted at a good price. And it probably won’t come as a surprise if this Amazon fan also uses the Amazon Prime Rewards Visa Signature Card. I got this credit card in early 2020, shortly before the COVID-19 pandemic changed many people’s relationship with online shopping. I’m no exception, as a frequent Amazon shopper. My annual Prime membership has paid for itself in free shipping every year since 2015 when I joined. It’s very easy for me to shop with Amazon: it knows where I live and I don’t need to create a new account on its site. And it turned out that a nice little surprise was waiting for me when I checked the price of the cat carrier.

What a story!

Here I have to admit that I usually don’t keep a close eye on the 5% back I earn with the Amazon Prime Rewards Visa Signature Card. I really appreciate the occasional surprise I get when I can save a large amount of money on an Amazon purchase. But I don’t always use the rewards when they’re offered at checkout, sometimes preferring to save them for a larger purchase if I know there’s one waiting for me. Lately I’ve been trying to reduce my spending in general, in the face of inflation, and in my continuing mission to become better with money. So since I knew I wasn’t going to be making any bigger Amazon purchases anytime soon, I happily used the $21 in rewards that were waiting for me and marked up my new carrier for the very reasonable sum of $14 $.

Credit cards often get bad press. It’s very easy to overspend, throw your budget out the window, and rack up big interest charges on a credit card balance. But credit cards also offer some perks, including “free money” in the form of cash back or rewards points that can add up to savings on purchases. They can also help you build or improve your credit. I had money in my checking account and could have used my debit card to purchase the new carrier. I had even budgeted for it, as an expense for my senior cat’s upcoming dental work this summer. But by using a credit card instead, I got a new carrier for less than half of what I would have paid otherwise, and I can take less money out of my vet fund.

We’re all trying to save more and spend less these days. While $21 isn’t really a lot of money in the grand scheme of things, I’m definitely happy whenever I can save even a little money by being a smarter shopper. My cats have all checked out the new carrier thoroughly since it arrived, and one even took a nap in it the other day. Money well spent, indeed!

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Conventional Loans: Advantages and Disadvantages https://fastpaths.com/conventional-loans-advantages-and-disadvantages/ Tue, 07 Jun 2022 14:10:55 +0000 https://fastpaths.com/conventional-loans-advantages-and-disadvantages/ You might have a variety of alternatives for your home loan while looking for one. Government-backed loans such as Federal Housing Administration (FHA) and Veterans Affairs (VA) loans are the most common, while conventional loans backed by the private sector are another option. Conventional loans are one of the most popular types of mortgages used […]]]>

You might have a variety of alternatives for your home loan while looking for one. Government-backed loans such as Federal Housing Administration (FHA) and Veterans Affairs (VA) loans are the most common, while conventional loans backed by the private sector are another option.

Conventional loans are one of the most popular types of mortgages used today. Any type of loan (such as a mortgage) offered through a private lender is considered a conventional loan. Conventional loans do not depend on the government to guarantee them.

It also implies that the bank bears all the risk in lending the money. If a borrower doesn’t pay their mortgage, it’s up to the lender to put the house on the market and try to recover what was loaned out. The bank will lose money if the house cannot be sold for enough to cover the loan amount.

Conventional loans have a higher credit score requirement than other types of loans. This is because they are not government insured.

So without further ado, here are the advantages and disadvantages of conventional loans:

ADVANTAGES

-You may qualify for a higher loan amount with a conventional loan than with other types of loans. This is because conventional loans are not capped at a certain loan limit like FHA and VA loans are. The sky is the limit in terms of how much you can borrow.

-You can get a lower interest rate on a conventional loan than on other types of loans. This is because your credit score and down payment will likely be higher, putting you at less risk to the lender.

-You will not have to pay private mortgage insurance (PMI) with a conventional loan if you bet 20% or more. PMI is required for FHA and VA loans if you do not deposit at least 20%.

-Compared to other loan choices, conventional loans generally have lower closing costs. You must pay upfront mortgage insurance with an FHA loan, while a finance charge is required for VA and USDA loans. If you know you’ll have enough money to make your down payment, but you don’t want to pay any more interest, a conventional loan may be right for you.

– Down payment requirements are as low as 3%, although credit score requirements are higher. A 20% down payment was previously required to obtain a standard loan. The down payment on a conventional loan can be as little as 3% if you meet all the necessary standards, but if you have bad credit or have money problems, the rate can be higher.

The down payment on an FHA loan is generally the same as the amount needed for an equivalent FHA mortgage. Suppose you have a mortgage of $200,000. The down payment requirement with an FHA loan is 3.5%, or $7,000 on a $200,000 loan. A conventional loan with a down payment of the same amount would require a credit score of at least 620.

– You can find conventional loans with adjustable or fixed mortgage rates. Adjustable rate mortgages (ARMs) generally have lower interest rates than conventional fixed rate mortgages, but they can come with higher down payments and could be risky if interest rates rise significantly in the future.

THE INCONVENIENTS

-You will generally need a credit score of 620 or higher to qualify for a conventional loan. This can be a difficult hurdle for some people to overcome.

– You may have to pay for PMI if you cannot put at least 20% on a conventional loan. This can add significant monthly costs to your mortgage payment.

-You may be subject to a higher interest rate if you have a lower credit rating or cannot afford a large down payment. This is because you will be considered a higher risk for the lender.

-You may have difficulty qualifying for a conventional loan if you have a lot of debt. This is because your debt to income ratio (DTI) will be too high. The DTI is a measure that compares the amount of your debt to your income.

Conclusion

Now that you know the pros and cons of conventional loans, you can start researching lenders to see if you can qualify for this type of loan.

Overall, conventional loans offer great middle ground for people who may not qualify for government-backed loans but still need help getting a mortgage. Talk to your lender to find out if a conventional loan is right for you.

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Why SoFi Technologies grew 22.2% in May https://fastpaths.com/why-sofi-technologies-grew-22-2-in-may/ Sun, 05 Jun 2022 22:52:00 +0000 https://fastpaths.com/why-sofi-technologies-grew-22-2-in-may/ What happened Shares of Sofi Technologies (SOFI -5.93%) rose 22.2% in May, according to data from S&P Global Market Intelligence. Part of the reason for last month’s rebound was that SoFi was absolutely decimated in May, after falling 35.2% in April alone. In the previous month, management pre-announced a lower guide for the year after […]]]>

What happened

Shares of Sofi Technologies (SOFI -5.93%) rose 22.2% in May, according to data from S&P Global Market Intelligence.

Part of the reason for last month’s rebound was that SoFi was absolutely decimated in May, after falling 35.2% in April alone. In the previous month, management pre-announced a lower guide for the year after the Biden administration postponed the resumption of student loan repayments until later in the year.

Still, SoFi isn’t just about student loans, as the company showed progress in building out its fintech ecosystem when it released its first-quarter results.

So what

Initially, SoFi fell further after its earnings report, despite higher expectations for earnings and loss per share. Revenue grew at an impressive 49% pace, and net loss per share of $0.14 also beat expectations, with net loss narrowing to $110 million, improving from a net loss of $177.5 million in the first quarter of the previous year. The company also added 408,000 new members and its members used 689,000 more products than a year ago, up 84%. Management also raised its guidance for 2022, after lowering it the previous month as part of the student loan relief extension.

These metrics are definitely solid, but the stock market is still not in the mood for stocks printing such large losses, and the stock fell first after earnings. The surge in personal loans, considered riskier than student and home loans, may be the cause.

However, after the report, several analysts came to the title’s defense. Oppenheimer analyst Dominick Gabriele said:

SoFi is more fee-oriented today, and their original loans are super premium for both students and individuals (yes, even personal). … They learn to take out credit cards, but the card is still a very small part of the business. We are less focused on credit for SoFi compared to other lenders.

During the conference call, SoFi management pointed out that its average FICO score on its borrower base was 746, which is quite high. Unlike other fintechs such as Reached who look further down the credit spectrum, SoFi’s loans should hold up better than others in a downturn, as the analyst said.

After the positive analyst comment, CEO Anthony Noto stepped in and bought 39,000 shares at $6.50 on May 13, increasing his holdings by $253,500. This seemed to start the stock’s big rise, which continued throughout the month as the broader fintech sector rebounded.

Image source: Getty Images.

Now what

Despite May’s rise, SoFi is still trading near all-time lows. So is it still a purchase?

It’s a bit difficult to assess SoFi today, given that it’s growing at a very high rate but still posting significant quarterly losses, while its product mix is ​​changing and its underwriting hasn’t changed. not been through a bad recession.

In the short and medium term, the title is likely to evolve with the evolution of the macroeconomic outlook. This outlook is rather pessimistic at the moment, but things could also turn out better than expected, given that sentiment is almost at an all-time low.

In the long run, SoFi will likely win or lose based on how well it serves customers and whether it continues to sell its core borrowers to more and more products over time. In general, SoFi’s cohort of Prime customers should do well, and I expect SoFi to be a success, ultimately; however, it’s hard to know exactly when the company might become profitable, and a bad recession could turn things upside down. Still, at this low valuation, SoFi is definitely a stock growth investors should study closely.

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Op-ed: Oppose restrictions on credit card interchange fees | News, Sports, Jobs https://fastpaths.com/op-ed-oppose-restrictions-on-credit-card-interchange-fees-news-sports-jobs/ Sat, 04 Jun 2022 04:10:40 +0000 https://fastpaths.com/op-ed-oppose-restrictions-on-credit-card-interchange-fees-news-sports-jobs/ Consumers in West Virginia rely on credit cards for their day-to-day needs, from paying for groceries and school supplies to covering emergency auto repairs or medical expenses. Accepted almost everywhere, credit cards offer robust security, fraud protection, and access to credit that might not otherwise be available. Interchange fees, which are only a […]]]>

Consumers in West Virginia rely on credit cards for their day-to-day needs, from paying for groceries and school supplies to covering emergency auto repairs or medical expenses. Accepted almost everywhere, credit cards offer robust security, fraud protection, and access to credit that might not otherwise be available. Interchange fees, which are only a fraction of a cent on every dollar transacted, make this possible.

The U.S. Senate Judiciary recently held a hearing called, “Excessive Swiping Fees and Barriers to Competition in Credit and Debit Card Systems”, which is an effort by merchants pushing Congress to restrict credit card interchange fees and add routing mandates — and it’s bad for consumers.

Restrictions on credit card trading would deprive credit unions of essential resources that work day in and day out to serve their communities and force them to choose between funding vital programs that benefit their communities or continuing to operate credit card programs. low cost that provide lines of credit to members who would otherwise not be able to obtain them.

The current trading system provides security for consumers, merchants and financial institutions. These fees cover the cost of fraud detection, credit monitoring, and fraudulent purchase protection that reassures consumers and merchants when bad actors attack. The robust security features that make credit cards so attractive to consumers come at a cost. While interchange fees now cover these costs, a potential reduction in these fees, coupled with an alarming increase in fraud, poses a real threat to data security.

Credit card routing mandates can also hamper data security. The proposed routing mandates would give retailers the ability to choose the network they use to route credit card purchases, which is often the cheapest option. Unsurprisingly, the cheapest option is often not the safest or most reliable. This will happen at a time when we need more financial security, not less.

The rate – and cost – of criminal activity is on the rise. When a merchant’s systems are hacked or a card is otherwise compromised, financial institutions absorb a significant portion of the costs.

* $1,600/card – The average fraud payment in 2020

* $6.50: average cost to replace contactless cards

* 36% – Number of credit unions reporting higher fraud losses, 2019-2020

It is important to recognize that credit cards represent an extension of unsecured credit to a consumer, which means that financial institutions provide a loan to a consumer each time a credit card is used to purchase goods or services. services from a retailer or merchant on a network that was uniquely developed for this purpose.

When merchants pay an interchange fee, it is the cost they incur for the service of using the card network. Imposing additional compliance charges or capping the rates charged for the service provided would have a disproportionate impact on the ability of credit unions to offer card services. At least 15% of credit unions would be forced to reduce or eliminate their credit card programs.

The Durbin Amendment was enacted to allow merchants to lower their prices and encourage customers to spend more; however, an analysis by the Federal Reserve Bank of Richmond found that only about 1% of merchants passed their savings on to consumers through reduced prices.

Expanding exchange regulations and adding routing mandates at a time when the economy is struggling to recover from a global pandemic will only further damage community financial institutions and limit their ability to serve the small businesses and individuals who need it most.

The West Virginia Credit Union League, which represents more than 380,000 members, strongly opposes expanding credit card trading restrictions because it is clear that it is failing government policy, which should not be implemented.

***

Rich Schaffer is the president and CEO of the West Virginia Credit Union League in Parkersburg, WV.




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Why Gen Z is falling into the buy-it-now, pay-later trap https://fastpaths.com/why-gen-z-is-falling-into-the-buy-it-now-pay-later-trap/ Thu, 02 Jun 2022 13:04:24 +0000 https://fastpaths.com/why-gen-z-is-falling-into-the-buy-it-now-pay-later-trap/ “Besties, I don’t know who needs to hear this, but: just because you pay on Afterpay doesn’t mean you don’t pay”, TikToker Maddie White warns his 2.5 million followers by looking directly at the camera. “Four hundred dollars is still $400, and if you can’t afford it all at once, you probably can’t afford it […]]]>

“Besties, I don’t know who needs to hear this, but: just because you pay on Afterpay doesn’t mean you don’t pay”, TikToker Maddie White warns his 2.5 million followers by looking directly at the camera. “Four hundred dollars is still $400, and if you can’t afford it all at once, you probably can’t afford it at all.

Video caption: “Afterpay is the only reason none of us 20 something dogs have savings.” This content, which the 26-year-old Los Angeles-based influencer filmed last year (and has since amassed over 300,000 views, over 52,000 likes and around 500 comments), strikes a surprisingly different chord than her rate. usual fun fashion shopping and outfit fittings. But the message, she said, was badly needed: a lesson in the impact of buy-now-pay-later (BNPL) services that she personally had to learn the hard way.

“I was broke all through my early 20s, so when I wanted to buy clothes, I found them on a site that had Afterpay or Klarna,” White, who first met BNPL on Boohoo and Nasty Gal after it was announced to him. as an option to pay in installments rather than the full amount, says ELLE.com. “I couldn’t afford anything, but I could afford this small payment. This is how you find yourself in a tricky situation, because when you have several purchases at once, all of a sudden you have payments that are in the hundreds or thousands of dollars. It definitely allowed me to make more irresponsible purchases.

For the uninitiated, BNPL is essentially a payment plan – a type of installment loan – which divides the total sum of your purchase into equal payments (usually one payment every two weeks, spread over six weeks), often without incurring interest. The most important are Affirm, Afterpay, Klarna, PayPal, Sezzle and Zip. And what makes using the BNPL so irresistible and more appealing than, say, a credit card, is that virtually anyone (with a bank account, that is) can take advantage of it. , whether you have bad credit or just plain credit. So it’s easy to see why Gen Z, a demographic that may not have access to credit cards but, for the first time in their lives, has purchasing power, is a natural target. .

“Gen Z includes some of the top users of BNPL apps, but it’s not always clear how the platforms work, and they often differ from each other,” says Cassandra Napoli, senior strategist at Trend Forecasting Company. WGSN Insight, which notes that a person can use BNPL in two ways: 1) to buy necessities and 2) to buy non-essential items that help them maintain their social status and influence, even if they don’t. can’t afford to pay them. “Young and impressionable consumers might not be aware of the financial commitment they are making when they first use these services.”

“Afterpay is the only reason none of us 20 bitches have savings.”

Napoli adds: “Despite rising inflation, BNPL platforms could help consumers access trending pieces seen on TikTok, but there may be a knowledge gap at play here. They may just see the possibility of accessing an expensive item or several viral pieces without having to pay for them right away…and they may not understand the long-term impact of not paying.

Already, this pattern of missing payments – and therefore, going into debt – is beginning to emerge. According a survey conducted by Piplsay43% of Gen Zers missed at least one payment in 2021. A study by Qualtrics on behalf of Credit Karma found that more than half of Gen Z and Millennials respondents have missed at least one payment, compared to Gen Xers (22%) and Baby Boomers (10%). NYU marketing professor Scott Galloway called the BNPL “equivalent to the subprime mortgage crisis” for Millennials and Gen Z in a Pivot podcast episode.

Having unlimited access to inventory has a powerful psychological pull. “You buy something, but you don’t pay for it right away, and that gets people in trouble because it delays the inevitable,” says psychologist Susan Weiss. “You end up thinking you have more money than you have because you really owe that money – and you use that money to buy other things, and it can get out of hand. It’s a slippery slope and a truly painful lesson for young people to learn.

White, for her part, is not at all surprised that many fell victim to the BNPL’s trap, as she was “absolutely that girl”, missing payments herself after buying several items and losing track of what ‘she had to. But she’s quick to say that she’s never racked up thousands of dollars in debt – she’s managed to change her spending habits, which she attributes to getting older, having more disposable income (she no longer uses BNPL for this reason) and to be more thoughtful with its purchases. But she no doubt understands why the buying pattern has such a firm grip on Gen Z, especially with the increasingly truncated trend cycles on TikTok.

“When I was 18, I was definitely buying new outfits for every weekend, and that was before TikTok — a lot of it was peer pressure,” says White, who uses her 19-year-old sister. as an example of how Gen Z stores. “It’s cool to have new things instead of wearing the same looks over and over again. And TikTok has made it 10 times worse because micro-trends last about a month. [My sister] tells me that all the girls in her sorority buy new clothes on Shein every week: they order it Thursday, pay shipping the next day, it arrives in time so they can wear it to a sorority or frat party on Saturday night, then they throw it away.

Courtesy/Design Leah Romero

Fast fashion is by no means a new concept, but ultra-fast and cheap fashion brands, like Shein (the biggest on the market, $15.7 billion in sales in 2021) with its two-week turnaround, Boohoo and Fashion Nova have only exacerbated the problem, turning TikTok into a breeding ground for this type of buy-it-now behavior and making Gen Z more susceptible to BNPL.

“TikTok works like a library of viral aesthetics and micro-trends, with new ones popping up seemingly every day; much like other visual platforms, it has ignited FOMO and attached social status to these trends, making young and impressionable consumers want to join, ultimately creating an endless appetite for newness and driving consumerism,” says Napoli, citing a 2018 WGSN report. titled The Generation Z Equation, which analyzed the two opposite polar sides of the generation. There’s ‘Gen Me’, those who are driven by trends (and the group most likely to be swept up in viral TikTok fashion trends) and ‘Gen We’, the group forcing brands to rethink their strategies around issues such as sustainability. “Of course, buying in trends costs money, and with Gen Z strapped for cash and facing economic uncertainties and rising inflation, it only makes sense that they turn to BNPL apps. to help fund their trending ambitions.”

It also doesn’t help that there are TikTok videos dedicated to glorifying the use of BNPL (some are also paid ads, with Gen Z influencers selling BNPL services to other Gen Zers) . Indeed, the hashtag #BuyNowPayLater reports nearly 45 million views on the social networking service – an endless scroll of videos that show users bragging about how little they paid for a purchase.

“The moment you click check-out, you feel like you’re only spending $10 instead of $50,” White says. “But I don’t fundamentally believe there’s anything wrong with [BNPL], because it boosts sales for all companies that use them and makes the products more accessible to the younger Gen Z market, who lives paycheck to paycheck. It is more acceptable to pay for part of something rather than all at once. »

“It’s more acceptable to pay for part of something rather than all at once.”

This is precisely why Rebecca Minkoffthe designer behind her eponymous ready-to-wear and accessories line has chosen to partner with Swedish fintech Klarna (his brand is one of Klarna’s 400,000 global business partners). “We want to give our customers the easiest, smoothest way to buy something,” she says. “For many of our customers, this is their luxury purchase, so it’s a no-brainer for those who can meet minimum payments and not feel the burden in a single pay cycle. If it had been available when I was young I would have used it in a heartbeat.

The problem is that BNPL’s convenience makes it extremely easy to overspend. And there is nothing stopping someone from jumping from one BNPL platform to another because unlike the credit card industry, the BNPL industry still lacks oversight. In response to Gen Z’s late payment, a Klarna spokesperson said safeguards were in place to prevent this from happening, including carrying out eligibility checks, reassessing loan criteria, providing spending limits, sending reminder notifications before an upcoming payment and restricting usage. services until all missed payments are made. (On average, an outstanding balance on Klarna is around $70, which is significantly lower than $5,525, the average outstanding credit card balance in the United States)

“We believe people should pay with the money they have first, but where it makes sense to use credit, our interest-free products offer a fairer and more sustainable alternative,” a doorman said. -word by Klarna, who asked to remain anonymous. “Our products are not designed to encourage people to borrow as much as possible at the highest possible rate, like credit card providers. Financial wellness is built into our products and everything we do, from our short-term repayment plans to in-app budgeting tools to help encourage healthy financial habits.

Even so, it does not address the current beer crisis. And while it’s easy to single out BNPL companies, the most glaring problem is the lack of financial literacy in the United States. in doing so, they “democratize education to the masses, which is key to encouraging responsible consumer behavior”. She continues, “The reality is that these platforms can pose a long-term risk to those who cannot make their payments. There must be warnings communicated to the public that tell them that in addition to positives, there are also dangers and downsides for BNPL.

White believes a high school financial literacy course should be mandatory. “It’s basically impossible to get a credit card without having already established credit,” she says. “Nobody teaches you how to establish good credit and stay on top – and that makes it very difficult for the younger generation.” Only time will tell if this will help Gen Z resist the temptation of one-tap TikTok-fueled fashion trends.

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Millennial Money: Don’t let your first car be a $30,000 mistake https://fastpaths.com/millennial-money-dont-let-your-first-car-be-a-30000-mistake/ Tue, 31 May 2022 13:15:30 +0000 https://fastpaths.com/millennial-money-dont-let-your-first-car-be-a-30000-mistake/ Buying your first car is already a daunting experience; amid historic supply shortages, it’s easy to feel overwhelmed. In March this year, the average price of a used car was $27,246, according to Cox Automotive – an auto market and data company – up 28% from a year ago. With these price increases, the monthly […]]]>

Buying your first car is already a daunting experience; amid historic supply shortages, it’s easy to feel overwhelmed.

In March this year, the average price of a used car was $27,246, according to Cox Automotive – an auto market and data company – up 28% from a year ago. With these price increases, the monthly payments have also swelled. Average payments for used cars reached $488 in the last quarter of 2021, according to Experian. In addition, the average loan term for used vehicles was just over 67 months, or more than five years.

For many, cars are a necessity. If you have little or no credit, no cosigner, or just a limited budget, it can be easy to accept a loan that stretches your budget or ties you to a car for six or even seven years.

Not being ready before pulling into a parking lot can open the door to a purchase you’ll regret later. Set your limits before stopping at a dealership; with the right preparation, you can prevent your purchase from becoming a burden.

GET A LOAN

Your first step is to calculate the loan repayments you can afford and the total loan amount that is within your budget.

Try to keep your monthly loan payment below 10% of your take-home pay, and if you’re buying a used car, keep your loan term below 36 months. If you are looking for a new vehicle, keep the term under 60 months. Limiting the term of your loan will save you money on interest and reduce the risk of your loan becoming upside down – owing more than the value of the car.

Numbers in hand, start looking for a lender who will give you a loan. Getting pre-approved for a loan before visiting dealer lots can put you in a better negotiating position, prevent you from going over budget and lower your interest.

With little or no credit history — especially since you’ve never had a car loan before — your best chance of being approved for a loan at the lowest possible interest rate is to apply with a co-signer. But if that’s not a possibility for you, there are always financing alternatives available:

— One of the first places to look are banks and credit unions, especially institutions with which you have an established relationship.

– Look in your area for lenders with first-time buyer programs that place conditions on how much you can borrow and what vehicles you can buy, but waive some of the credit requirements.

— You can also search for loans from online lenders who offer bad credit car loans, as they will often have low or no minimum credit scores. These loans can carry interest rates of over 25%, so a year after taking out one, you can try refinancing at lower rates.

CHOOSE THE RIGHT CAR

Finding a cheap car was easy – or at least easier than today. If you have a budget of $10,000, your options are limited, but that doesn’t mean there aren’t options.

With a limited budget, most choices will be older used cars, which increases the annual cost of maintaining your car. A 2021 Consumer Reports study found that 2016 model year vehicles cost $205 to maintain in the previous 12 months, while 2011 model year vehicles cost $430.

In addition to maintenance costs, there are also fuel, insurance, registration and taxes that add to the cost of owning a vehicle. When looking for a car, look at the cost of ownership as it differs from car to car.

The total cost of owning your vehicle, including paying off your loan, should not exceed 20% of your take home pay. While some costs can’t be reduced significantly, you can minimize others, such as future maintenance, repairs, and fuel, with the right car.

“The most important thing to look for is a car with a good service history,” Car and Driver editor Joey Capparella said in an email. “If the previous owner took good care of the car and can provide maintenance receipts, that outweighs other attributes such as mileage or brand. Single-owner cars are desirable for this same reason.

Maintenance and ownership history can sometimes be found through a service such as Carfax. Use this information, along with the total mileage and age of the car, to narrow your search. When looking at vehicles under $10,000, the car with fewer miles will often be the better choice, if all else is equal.

Once you’ve chosen a car, give it a thorough test drive, Capparella added, and pay attention to “seating position, window visibility and engine noise.”

If something in the car isn’t right for you, another vehicle is probably a better bet, and don’t be afraid to be picky. You might not buy the car of your dreams, but you could live with your choice – and make payments on it – for years to come.

_______________________________

This column was provided to The Associated Press by personal finance website NerdWallet. Colin Beresford is a writer at NerdWallet. Email: cberesford@nerdwallet.com. Twitter: @Colin_beresford.

RELATED LINK:

How to get a car loan with bad credit https://bit.ly/nerdwallet-how-to-get-a-car-loan-with-bad-credit

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5 money-saving measures to make this Memorial Day https://fastpaths.com/5-money-saving-measures-to-make-this-memorial-day/ Fri, 27 May 2022 11:42:59 +0000 https://fastpaths.com/5-money-saving-measures-to-make-this-memorial-day/ If you’re looking for new ways to save this Memorial Day, here are some places to start. (iStock) This Memorial Day, as the weather warms up and summer approaches, there are several steps Americans can take to save money over the holiday weekend. If you’re looking for new ways to save, here are five strategies […]]]>

If you’re looking for new ways to save this Memorial Day, here are some places to start. (iStock)

This Memorial Day, as the weather warms up and summer approaches, there are several steps Americans can take to save money over the holiday weekend. If you’re looking for new ways to save, here are five strategies you can take advantage of during downtime and focus on saving money.

  1. Refinance your private student loans
  2. Refinance your mortgage
  3. Consolidate your credit card debt
  4. Work to improve your credit score
  5. Find a new car insurance provider

1. Refinance your private student loans

By taking out a new student loan with better terms to pay off your current loan – known as a refinance – you could pay off your loans faster and reduce the amount you pay each month. The current pause on federal student loan payments is in effect until August 31.

Borrowers of these loans should carefully consider refinancing options, as this would disqualify them from the current payment pause, income-based repayment (IDR) plans, and forgiveness programs like Civil Service Loan Forgiveness ( PSLF).

However, private student borrowers can compare refinance rates and potentially lower their payments. Visit Credible to find your personalized interest rate without affecting your credit score.

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2. Refinance your mortgage

Similar to refinancing a student loan, refinancing your home loan could also save you money each month.

Although mortgage rates are rising, many homeowners could still benefit from refinancing their mortgage. In March, when mortgage rates hovered just below the 5% mark, data from Black Knight showed that two million homeowners could drop further their monthly payments by refinancing.

Estimated savings averaged $312 per borrower, but some could have realized savings of up to $500 or more.

If you want to refinance your mortgage, visit Credible to compare multiple mortgage lenders at once and choose the one with the best interest rate for you.

3. Consolidate your credit card debt

If you’re struggling to pay off credit card debt, consolidating that debt can help you do it faster and lower your monthly payments.

A balance transfer credit card, which typically offers 0% interest for the first six to 18 months, can help you achieve this goal and pay off your debts faster. These cards allow consumers to transfer outstanding debt from one credit card to another, consolidate your total debt into one monthly payment, and reduce your utilization rate.

If you are looking to pay off your debts and want to take out a personal loan or use a credit card with balance transfer, visit Credible to get started and get pre-approved in minutes.

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4. Work on improving your credit score

Your credit score is a major factor affecting your monthly budget because higher credit scores mean better interest rates for borrowers. In turn, having good credit has a huge impact when it comes to securing favorable terms for mortgages, credit cards, and other financial products. Bad credit, however, can make it difficult to get loans and new lines of credit.

Take advantage of this holiday weekend to implement a few strategies that could help boost your score, such as paying off debt, opening a secure credit card, or reviewing your free credit reports. .

Visit Credible to sign up for free credit monitoring to start improving your credit score today.

5. Find a new auto insurance provider

The costs associated with buying a new or used car continue to rise, and some low-income buyers are even being overpriced of the new vehicle market.

However, drivers can cut costs by looking for a new car insurance provider. Different companies offer discounts for different reasons, such as a safe driving history, being a good student, or grouping. As a driver’s life situation changes, a new insurance company might also offer them a better rate.

Go to Credible to compare car insurers and choose the one that suits you best.

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Do you have a financial question, but you don’t know who to contact? Email the Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.

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