Credit card debt may be revolving debt, but you don’t want it revolving around you for the rest of your life. The only way to get out of debt quickly is to pay more than the minimum balance. It’s really easy to look at your budget and think it can’t get any lighter than it is. But it can and will. How? The same ways we all get stronger and shed extra fat: Exercise. This a workout for your budget, and it WILL work as long as you do it. Let’s get started. (more…)
Loans & Borrowing
The CARD Act of 2009 put significant barriers up for lenders who wanted to market college students with credit card offers. Now, the bill requires that students show enough income to repay the debt before they can obtain a card. In many cases, they also need a co-sponsor to get a credit card. Due to these changes, the percentage of college students with credit cards has decreased steadily from 42 percent in 2010 to just 35 percent in 2012. (more…)
Payday lending demographics have changed as the recession hit, and now they are being used more than just for emergency loans, according to a new Pew study released July, 2012. The study is part of a series titled “Payday Lending in America” that wants to uncover the specifics of payday lending in America. According to the study there are 12 million borrowers using payday loans and that amounts to a total of $7.4 billion for the industry. Now, there is evidence that at least seven out of 10 people use them for more than just emergency lending.
When the credit crisis hit the middle class, many experienced some of the same credit crunches that low income and those in other demographics have dealt with for ages. Losing a job can also quickly ruin a credit score with late payments and or repossessions and bankruptcy, making conventional forms of lending like credit cards no longer available. While middle class America may just be discovering payday loans as a way to regain some credit, those in other demographics known as “the underbanked” have long made use of them to help find sources of emergency cash when no other avenue was open to them.
Immigrants or Low Income
Banks have understood that many immigrants come into the country with a distrust of banking. They may choose to do their transactions in cash to avoid the necessity of using a bank account. While it may work for them during good times, it keeps them from establishing the bare minimum of credentials to get a loan someday. Even those with bank accounts can be considered underbanked if they do not have enough history with lending to provide some idea of what type of borrower they might be. While it may seem strange to someone who has used credit cards and unsecured debt as part of a middle class lifestyle, there are plenty of people who don’t want to have any debt at all. However, they do want the ability to borrow on the short-term and for them payday loans have been a high demand product.
Some Banks Step In
Rather than fight the tidal wave, some banks like Regions Financial in San Francisco have opted to provide services like payday lending to their customers, along with check cashing services or prepaid credit cards. Since banks are not the prime lenders for payday loans, they are coming up against a lot of criticism for offering the service at all. While some banks see it as a natural outgrowth to other types of low income services, others are worried that it could be a step in the wrong direction for traditional bankers.
Forum on the Underbanked
More debate was heard on the merits of payday lending and whether banks should provide the service or not during the Underbanked Financial Services Forum. It is estimated that there are 60 million Americans who are not tied into traditional banking that might be able to use the service. Whereas the payday lending industry is heavily regulated for payday lenders, there appears to be some question as to how those regulations apply to banks. In addition, some banks fear that if they start offering payday lending services they risk losing their reputations. Payday lenders usually only deal with payday loans and no other type of service, making them specialists in this form of lending and the types of regulations they must meet to satisfy federal guidelines, whereas for traditional banks it is completely new. The questions still remain whether offering a payday lending service through a traditional bank is a community service or will be abused. For now, many banks choose not to go into this area of lending and leave it up to payday lenders to navigate the complex set of regulations that govern their industry.
You often hear people talk about “knowing a guy, who knows a guy.”
Now that’s not a terrible thing. “Guys” in this context are often very useful. But let’s think here.
You know a guy, who knows a guy.
Wouldn’t you rather just know that second guy?
Then you can just say, “It’s ok, I know a guy.”
The idea of carrying debt may be under fire due to the recession, but it does have some perks. For one, if you avoid all forms of debt, you fail to start a credit history that will affect your ability to borrow later on. (more…)
While prices are dropping on single family homes, the cost of actually housing your family is rising. The reasons for this are many: tight mortgage lending regulations, unemployment or underemployment, rising rental costs, and adjustable rate mortgages with underwater homes that increased payments. (more…)
Some actions that you take may seem totally unrelated to your credit history until you end up turned down for a loan. Forgetting to pay a parking ticket may not seem like something that would eventually end up on a credit report, but it can. (more…)
The recession has made it clear that if you can’t pay your mortgage for 30 years straight, you’re at risk of foreclosure. This has caused a backlash of people refinancing to lower terms, like 15 years, or buying houses with cash and avoiding banks all together. The 30-year mortgage was never meant to be part of an American nightmare, however, and most experts still believe in it and here’s why. (more…)
Everyone knows that paying bills on time is the major factor in keeping a good credit score. However, there are a few little known items that can swiftly undo all your hard work and have a very negative impact on your credit score if ignored. You may not even know what damage has been done unless you keep up with your credit profile. (more…)