payday loans

Unless you are super wealthy or an excellent money manager, you have likely had a time where you ran out of money before your next paycheck and considered a payday loan. These loans, sometimes called small-dollar loans, are given to consumers who agree to pay them back by their next payday, or when they receive another form of payment like a retirement check. Payday loans have grown in popularity over the years and millions of Americans have considered these loans.

The Plus Side of Payday Loans

Payday lenders target people who may have bad or less-than-perfect credit. These consumers cannot get a traditional bank loan and don’t have family or friends to lend them the money. Usually, a payday loan is their only option. When things go right, the consumer borrows the money, gets through the emergency, and pays it back on time.

The Downside of Payday Loans

Payday lenders charge extremely high interest rates, in some cases as much as 400%. Consumers usually pay a finance charge on top of the interest rate. So, a consumer who borrows $200 could end up spending more than twice that much to pay the loan back.

Sadly, many borrowers who take out payday loans are not the best money managers. Often, they need to extend the loans. While the principle remains unpaid, the interest keeps accruing. That $200 can turn into thousands of dollars.

Payday Lending Rules

The government is seeking to regulate the payday lending industry. The Consumer Financial Protection Bureau (CFPB) in October 2017 proposed rules that would require payday lenders to determine if borrowers had the ability to repay the loans. The rule also capped the number of times a borrower could take out loans. The changes would have taken effect in August 2019 but the rule was delayed by a judge in November of 2018. The CFPB is expected to announce a revision early next years.

States also have payday lending regulations. These laws cap the interest rate and the amount of money you can borrow. Twelve states ban payday loans altogether. Colorado voters passed a measure during the midterm elections that would cap interest rates charged by payday lenders at 36%.

Banks do not traditionally offer payday loans, but are now adding them. Regulators are encouraging banks to offer more of these products, and some banks have obliged.

Alternatives to Payday Lending

You won’t need a payday loan if you manage your money well and save for unexpected expenses. But if an emergency comes up, you might be better off if you apply for a traditional loan with your bank or credit union. You might also apply for a credit card before you need the emergency cash, so it is there if you do need it. Although not ideal, credit cards usually have better payment terms and a much lower interest rate than a payday loan. Family and friends are another option, if the bank turns you down and you are unable to get a credit card.

Have you taken out a payday loan? Tell us about it in the comments.

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Today’s Banking Humor: Interest Free Checking
Is Using a Cardless ATM Safe?

interest free checking

Is a cardless atm safe?

The number of cardless ATMs are increasing as most people now have some kind of cellular phone. These ATMs have been around for about five years, but the concept is still new to many people. A regional Midwestern bank, Wintrust Financial, was one of the first banks to offer a cardless ATM to its customers.

How Does a Cardless ATM Work?

While it’s hard for some to imagine getting cash without inserting your card, it’s actually a very simple process. You must have mobile banking on your phone to complete the process. First, you indicate on your mobile app that you want to withdraw money from your account. You click the wireless ATM icon and then scan the QR code when prompted. Before you are given your money, you will be reminded of any fees. Once you accept, you get your cash.

Cyber Security and Cardless ATMs

Like most banking products, cyberthieves are figuring out ways to use cardless ATMs to steal. Just recently four men were arrested, and are facing charges in connection with a scheme that would use cardless ATMs to take customer’s money. The crime began with a phishing text sent to  Fifth Third Bank account holders that said the customer’s account was locked. The customer was sent to a website that asked them to add their personal banking information. Once the thieves had the information, they went to ATMs and withdrew the money using the mobile banking app. More than $106,000 was stolen from 125 Fifth Third Bank customers.

How to Keep Your Money Safe

The thought of not having to use a card every time you want to withdraw money from the ATM sounds good, especially if you and your spouse share a card. But how can you keep your money safe?

First, be aware of phishing emails. This is usually how thieves first get your information. Call your bank if you are not sure if the email is legitimate. Don’t send any information over if you have any doubts.

Second, add a security feature to your cell phone. An unlocked cell phone with financial apps is a gold mine for a criminal. Make your password something hard for a thief to guess, but not too hard that you forget it.

Third, keep an eye on your bank account for suspicious activity. The sooner you report problems with your account, the faster you can recover the funds.

Make sure you understand your financial institution’s policies in case you are hacked. Policies can differ from credit card to debit card and some banks may have different policies.

Finally, sign up for identity theft protection. These companies can help you recover any lost assets on your behalf so you don’t spend your workday on the phone with your financial institution.

What To Do If You Are Hacked

When you notice missing money in your account, contact your bank immediately, before contacting any identity theft protection companies. Check all of your accounts to see if any of the others are affected. Change all of your passwords – even ones for your social media – to something that is not even remotely similar to your old passwords. Finally, file a police report. You may find that you are one of many other victims.

What do you think of cardless ATMs? Share your thoughts in the comment section below.

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Separate or Joint Bank Account?
Last Minute Tax Planning for Couples
Benefits of Online Banking

tax plan tips for couplesAs the end of the year approaches, our minds turn to the holidays and a less than pleasant thought – taxes. Parents get a child tax credit for each dependent under the age of 17. Last year’s tax reform package increased the deduction from $1,000 to $2,000. Couples without any children don’t get the big tax break, but you still have some ways to decrease your tax liability for 2018 before the year ends. These tax breaks are only eligible to couples that itemize their taxes and don’t take the standard deduction. Make sure you have all of your receipts and documentation and start looking for ways to reduce your 2018 tax debt and stay out of trouble with the Internal Revenue Service.

Be Charitable In Your Tax Plan

Charitable contributions, including donations made to your place of worship, are tax deductible. You should get a statement from your church or synagogue. You can donate to charities in several ways – you don’t always have to give money. You can also donate old clothes or furniture. Make sure you get a receipt. One tip – don’t overestimate the value. Giving away an old couch and saying it’s worth $1,000 may raise a red flag with the IRS. You can also attend charitable events that are tax deductible. Again, remember to hold on to your receipts.

Sock Some Away for Retirement

Some companies still provide 401K accounts to their employees. You get an additional bonus if your employer matches your contribution. Putting some of your money in a retirement account can keep it tax-free. You don’t need a 401K to take advantage of tax savings. Open up an individual retirement account, also known as an IRA. Just remember when you put the money in, plan on keeping it there unless you want a penalty for early withdrawal.

Check Your Health Savings Accounts

Health savings accounts (HSA) are great ways to save money for unexpected health expenses, especially if you have a high deductible insurance plan or a chronic illness. You may also set aside some funds to help offset childcare expenses. These accounts have a good and bad element: You must use them at a certain point for them to remain tax deductible. Check these accounts and find out how you can spend the money.

Do You Need That Christmas Bonus?

Are you expecting a Christmas bonus from your boss? Are you a small business owner that receives payments? You can choose to receive those payments in January so you won’t have to pay 2018 taxes on them. This is a good option if you realize you have a good amount of tax debt in 2018. The downside – you will have to pay taxes on the money in 2019.

Don’t Do It Alone

Unless you are a tax expert, an accountant, or are willing to risk it, consult a professional about your taxes. With the new tax reform law taking effect, you need to make sure you take all of your deductions and don’t leave money on the table, or in this case, with the IRS. Even if you use income tax software, it’s always a good idea to have someone else take a look at your returns before your file.

Do you have any tax tips for couples with no children? Share them with us in the comments below!

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Find the Right Health Plan for You
How to File a CFPB Complaint

health care options

Your health is important, but the cost of taking care of yourself has risen dramatically in the past few years. Even without children, you could spend hundreds on insurance and health care costs. The enrollment period for next year’s health insurance plans begins next month. The change in leadership has led to changes in healthcare that could affect those who are self-employed or don’t receive insurance through the workplace.

Changes In Health Care Options

Here are two changes that may affect your finances:

  1. The restrictions on short-term health plans were lifted. Under the Affordable Care Act, only consumers under 30 could purchase these plans, but they are now open to everyone. The plans may cost you, less but you will have fewer options for care, including wellness screenings and drug benefits. If you and your spouse are relatively healthy, you may consider a plan to save money.
  2. There is no penalty for not having health insurance in 2019. It is totally up to you as to whether or not you have a plan that helps you pay for medical expenses.

Options If You Don’t Have Health Care at Work

Open enrollment runs through December 15. Here are your options if you don’t have employer-sponsored health insurance.

  • The Affordable Care Act’s website lists the insurance plans available in your county. You have four options from bronze to platinum, based on your needs. The platinum plans will cost more, but provide better coverage, while the bronze plans may have high deductibles and fewer benefits. Depending on your household income, you may qualify for discounts that can help you pay for the plan.
  • Medical cost-sharing plans require you to pay a certain amount each month, and others who participate in the plan share your medical expenses. Some of these plans do not include annual screenings or a prescription plan. Also, some plans are faith-based and require you to sign a statement of faith before you are eligible to join. This is not insurance and most plans have a disclaimer stating there is no guarantee you’ll receive payment for your medical costs. However, you will likely pay less per month than you will for a traditional insurance plan.
  • Discount cards. Most of these cards are for dental and prescription costs, but you can find some that will help you offset doctor’s visits and hospital stays. Some of them are free.

Ways to Save On Healthcare

  • Supplemental insurance. Aflac is probably the most well-known supplemental insurance company, but other companies offer supplemental plans that pay you more money in case of hospitalization, serious illness, or accident. You can specify the type of illness you want to cover, such as cancer. The money you receive helps to pay bills and expenses.
  • Saving accounts. Couples have two options to save for medical insurance. A Health Savings Plan is for people with coverage under a high deductible health plan. You cannot have coverage under other plans, be on Medicare, or qualify as someone’s dependent. Self-employed individuals under a high deductible plan can invest in a medical savings account. Contributions to both plans are tax-exempt.

How have you dealt with rising healthcare costs? Let us know in the comment section.

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Here’s How to File a CFPB Complaint
Ways to Save On Health Care Costs

cfpb complaint

Life is not like Monopoly. Sometimes a bank’s error is not in your favor, such as suddenly your bank account is empty and no one will listen. But you do have recourse – you can file a CFPB complaint.

Origin of the CFPB

The Consumer Financial Protection Bureau, which was established in 2011, takes complaints from consumers who have disputes with a bank, credit card company, payday lender, automobile lender, or other financial entity. Congress established the CFPB after the 2008 financial crisis. The CFPB hears complaints from consumers but also writes rules and regulations for financial institutions. More than $1 million complaints have been filed in the CFPB’s seven-year history.

The bureau has been a political football in recent years as some have challenged its single-director structure. The CFPB seems to be here to stay for now, and consumers can submit their problems for consideration. Filing a complaint is easy, and could result in getting back some of your money.

Preparing to File Your Complaint

Before you file a complaint, gather all of the documents and information, including all communications you’ve had with your financial institution. Write down everything as you best remember it if you did not take notes or document every call. Take pictures of the information and save it on your mobile device or computer.

Contacting the CFPB

The CFPB makes it easy for consumers to file a complaint with step-by-step instructions. You’ll need to answer questions like what type of complaint you are filing and the type of financial product. They will provide an opportunity to write about your complaint in detail. If you choose, you can include your complaint in the CFPB’s public database to warn others.

Further, you’ll have a chance to tell the CFPB how you want the complaint resolved. The resolution could be anything from returning the money you think is missing from your account to resolving a dispute over the interest rate for a loan. Once you have completed the steps, you will create an account that will allow you to keep up with what is happening to your complaint.

What Happens After You File the Complaint?

According to the CFPB, most complaints receive a response from the financial institution in about 15 days. The financial institution can dispute the complaint or offer a resolution. You have 60 days to review the resolution and decide if you will accept the terms.

Sometimes you are not the only one who has an issue with a financial entity. Filing your complaint and listing it on the public database may reveal a problem with the company and encourage others to come forward. Also, you have nothing to lose by filing a complaint. It’s free and your personal information is not revealed in the database.

Have you had to file a CFPB complaint? Let us know in the comments below!

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Why Aren’t Millennials Having Kids?
What Dave Ramsey’s Take On Marriage Is Missing
How to Become a Millionaire in Three Years

According to the National Association of Realtors, 52% of home buyers cited finding the right property as the most difficult part of buying a home. But don’t be mistaken, the process doesn’t end when you’ve found the picture perfect property — in fact, that’s where it’s just beginning. Buying a home requires due diligence and financial responsibility. Here’s what you may not know about the real estate purchasing process:

It’s helpful to hire a contractor, even if you aren’t planning immediate renovations.

Even though the vast majority of homes are built with structural integrity in mind. You never know when something may be out of place or cause for unsafe conditions. About 93% of American homeowners have at least basic homeowners insurance.  Experts say it’s still a good idea to hire a contractor to provide some professional insight about what might need to be repaired.

After the home inspector looks to see what needs to be repaired, you’ll want to bring in a home building/maintenance contractor. This person will provide you witha realistic estimate of what it will cost to fix those repairs. The seller’s agent typically offers credits for repairs.  Hold off on accepting them though — they usually don’t cover the actual cost. Having a quote from a contractor will help you negotiate the cost of the house or repair credits,” writes Hillary Hoffower on Business Insider.

It’s worth it to take the time to find the lowest mortgage rate possible.

Bankruptcies in the U.S. increased to 25,227 companies in the second quarter of 2016, from 24,797 companies in the first quarter of 2016. That being said, personal bankruptcies are still relatively common as well. You can save thousands over the years by taking some extra time to dig deep and find the lowest mortgage rate you possibly can. This may seem like an obvious piece of advice. Yet far too many buyers simply take the first offer they get. The truth is, even a half of a percentage point can make a big difference in monthly payments.

Consider renovations that save you money on utility costs.

Even if you don’t want to renovate as soon as you move in, you may want to after getting an unexpected utility bill. You can also be proactive by taking energy-saving measures right off the bat. For example, according to the U.S. Department of Housing and Urban Development, ICF (insulated concrete form) walls can save homeowners 20% to 25% on annual heating and cooling costs. You can also upgrade your home’s HVAC system. You could also install a programmable thermostat to preemptively cut back on energy usage.

Your school district matters, even if you don’t have children.

It’s true — even if you don’t have kids and aren’t planning on it anytime soon, the school district matters when it comes to selecting your future home. When it comes time to eventually resell your home, you may learn the hard way that school districts can play a major role in home values and trends.

“Even if you don’t have kids, buying a home in a top-notch school district will bode well in the long run come resell time. When you’re ready to move on to your next home, chances are your first house will have gone up in property value and will go off the market faster thanks to new homebuyers looking for a great school for their children,” writes Hoffower.

Again, buying a home is by no means a simple or overnight process. It helps to learn all you possibly can about real estate transactions and be prepared to ask your realtor for professional advice.