As featured in The Wall Street Journal, Money Magazine, and more!

Consumer

Unless you’ve been living under a rock, you’ve probably heard whisperings of the Federal Reserve’s rate hike last month. This is only the third time since the Great Recession that the Fed has increased rates… and, well, it’s both a good thing and a bad thing.

A Fed rate increase means that the economy is on the upswing. The Fed will only raise the benchmark rate when the economy no longer needs stimulus. Janet Yellen, chairwoman of the Fed, said that her organization plans to go slowly with such rate increases. So, it’s best to assume that the Federal Reserve is cautiously optimistic about the economy and where we stand today.

The most recent benchmark increase was only a bump from .75 to 1 percent. It doesn’t seem like much, but even a tiny change in the benchmark rate can spell major changes for your personal financial situation. Let’s take a look at what the latest increase may mean for you.

How the Fed changes interest rates

The Federal Reserve doesn’t directly affect interest rates. Instead, its benchmark rate affects the federal funds rate — the rate that banks charge each other. The banks then pass those costs (or savings) on to consumers by changing the rates of short-term loans. Then, when short-term rates increase, long-term rates increase, as well.

In short, when the Fed increases its benchmark rate, you’ll first feel the pinch with your credit cards and other adjustable-rate or new shorter-term loans. But you’ll eventually feel the pinch if also you try to take out a longer-term loan, like a mortgage.

Here’s how the current rate increase is most likely going to impact your wallet:

If you have adjustable-rate debt

Variable- or adjustable-rate debts — like credit cards, HELOCs, and variable-rate mortgages — will likely be the first place to feel the difference, post-rate hike. A quarter-percentage interest hike doesn’t seem like much, but it can really add up over time. This is especially true if you’re carrying around a lot of credit card debt.

Let’s assume that you’re holding the average American family’s $16,000 worth of credit card debt. Depending on your terms, the rate increase could potentially cost you several hundred dollars per year.

Learn More: How Is the Nation REALLY Doing With Credit Card Debt?

Just how much more can you expect to pay on your variable rate loan? Dig into your statements to ensure you always know your rates, even as they change. Then, use an online calculator to see how much you’re going to pay in interest when your rate increases.

The best way to deal with this particular issue? Just pay off that debt as soon as you can. Right now, you may only be looking at a difference of $100 a year or less. But if the Fed continues to increase their benchmark rates, the interest rates on your already higher-interest debts are only going to increase.

Need a boost to get you started? Consider transferring some of your debt to a card with a 0% APR introductory period. Paying no interest for even 12 or 15 months can make it much easier to get that principal paid down before you end up paying through the nose because of rate increases.

If you have, or are in the market for, a mortgage

Fixed-rate mortgages, which remain the most popular option, may not skyrocket immediately. But the pinch will come.

According to Freddie Mac, the average 30-year, fixed-rate mortgage in January charged 4.15% interest. In March, that increased to 4.2%. That’s a fairly large increase from this time last year, when rates were more like 3.69%. But from February to March, that much of an increase would probably only make a few dollars’ worth of difference in your monthly payments.

With that said, even a point’s difference on a 30-year mortgage can have a big impact on your finances over time. That’s because you’re paying interest on this loan for so long. Even a few bucks a month will add up over the course of 30 years!

Read More: Can This Simple App Get You Out of Debt?

So, what should you do with all of this in mind? Well, if you’re in the market for a mortgage, you might try to buy sooner rather than later. But only if you have a sufficient down payment and good credit. It doesn’t make sense to pay more for a mortgage, simply because you’ve rushed in before you’re financially ready.

With the Fed’s cautious outlook, it doesn’t seem that interest rates are going to skyrocket any time soon. So, it doesn’t make sense to lock in a lower rate if you’re not financially prepared to buy yet.

What about those who already own a home? If you’re still paying pre-Great Recession interest rates of 5% or more, you might want to consider refinancing while the rates are still low. This is especially true if you’re also in a better credit and all-around financial situation now than you were last time you bought or refinanced your mortgage. If nothing else, it’s worth looking into your refinance options now, before rates increase any more.

In the Know: Can You Refinance Your Mortgage With Bad Credit?

If you have savings and investments

Just as interest rates on consumer debt are rising slowly, so will rates on savings products. Chances are you’ll see a slight increase on the rate on your interest-bearing accounts, including savings accounts. Other interest rates — like those on CDs — will also rise, albeit slowly.

Bottom line: now could be a good time to shop around, Make sure that you’re getting the best interest rate on your high-yield savings accounts and, if you’re not, think about switching.

What about your longer-term investments, including those in your retirement account? It’s much harder to predict a rate hike’s impact on savings vehicles like these. When it comes to long-term investing, just stay the course and keep paying attention to the basics, like asset allocation.

Related: The Perfect Asset Allocation Plan

So, what exact impact will the Fed’s rate increase have on you? It really depends on your current financial situation, especially your debt and savings account mix. Just be sure to pay attention to interest rates on both debt products and savings products, so you can take advantage of the best deals around.

{ 0 comments }

Banks continue to pay bonuses to attract new customers. The latest offer comes in the form of a CIT Bank bonus of up to $400. If you’re looking for a safe place to tuck away your emergency fund or vacation savings,

Everybody needs a safe place to tuck away their emergency fund or vacation savings. A high yield savings account is a great option. Considering that the average savings accounts earn a measly 0.06%, however, you’ll want to make sure to find the absolute highest rate that you can.

This is where CiT Bank comes in. You may not have even heard of them before. The small bank was founded in 2009 and has only 71 branch locations (all clustered in California). However, they are hanging with the likes of GS Bank and Ally by offering an excellent online savings account rate: 1.15%. While one percent doesn’t sound like a whole lot, this is the top of the line right now, folks. But that’s not all.

There’s also a bonus of up to $400.

Why CiT?

CiT Bank’s high-yield online savings accounts offer competitive perks, including the obvious – a great APY – as well as $0 maintenance fees on your account. There aren’t any fees to open the account, either, and there’s only a small $100 opening deposit minimum.

Other banks offering the same impressive rate of 1.15% include GS Bank and Barclays Bank. However, if you’re looking to park your money somewhere with a great rate that will also put a little extra cash in your pocket, CiT Bank’s bonus promotion is an excellent opportunity.

How to Get Your Bonus, Up to $400

All you have to do is open and fully fund an account by June 30, 2017. This need to be new funds, not simply moving those that are already on deposit through CiT or OneWest banks. The bonus itself is tiered, based on the amount you deposit and your average monthly balance for the first three months.

The bonus amounts are $100 (for a monthly average between $15,000 and $99,999), $250 (average balance of $100,000 to $299,999), and an impressive $400 (for balances of $300,000 or more). Again, you have to hold this average monthly balance for three full months after you open the account, or the bonus is forfeited.

cit bank bonus

Is It Right For You?

If you have some savings that you’d like to tuck away in a high yield, online savings account – such as your emergency fund – CiT Bank is worth a look. This is particularly true if your savings is greater than $15,000 and you can take advantage of the bonus being offered through June 30, 2017.

No promo code is needed, simply visit their website (or, if you’re located in central CA, find one of their 75 branches) and sign up.

{ 0 comments }

National averages for credit card and other consumer debt can be a good barometer of consumers’ financial capacity and goals. For instance, when debt decreases, Americans, as a whole, may be spending less and saving more. Of course, that’s a good thing.

So, when SmartAsset released its average credit card debt study recently, we took notice. The survey looked at median individual income and credit card data from 2006 to 2016. It even broke down the data by state!

trend

What did the survey find? Here are some of the topline results and what they might mean for consumers like you:

Americans were dropping credit card debt… but now they’re reversing that trend.

The data show that from 2006 to 2015, the average total credit card debt went from about $3,175 per person to $2,800 per person. Total credit card debt dropped — in every region except Virginia, Maryland, and Washington, D.C. — during this time period.

What does that 11.6% decrease mean? It’s hard to say exactly. But it could have been a result of the financial crisis, and people understanding how dangerous credit card debt can be during a time of personal financial upheaval.

During this time, though, there was a peak in the average credit card debt. In 2008, the average debt was $3,670, and the average American had debt equal to about 14% of their annual income! From that high point, we started cutting back on credit card debt quickly and efficiently. This is definitely a good thing.

So for several years, Americans were dropping debt at a significant rate. But then, a new trend happened.

The average credit card debt bottomed out at $2,730 in 2014, bouncing back up to $2,800 in 2015. Over this same time period, the total national credit card debt rose from $733 billion to $799 billion. So, is this the new normal?

It’s hard to say. But the report speculates that the Great Recession incentivized Americans to lower their credit card debt. But once the recession turned around, Americans seem to have forgotten the struggle and gone back to their old ways… taking on significant amounts of credit card debt.

What does it mean for consumers?

Boiling complex statistics, in a survey like this one, down to a few talking points is risky. The challenge is to avoid reading too much into the results. With that said, I think there are a few lessons that financially savvy consumers could take away from this study.

 

It’s all too easy to go back to bad habits.

What we see here in these trends is that, when given a big enough push, Americans are capable of buckling down and paying off debt. In some states, credit card debt levels shrunk by 30% or more, during and right after the Great Recession!

Necessity tends to breed discipline, in finances as in everything else. But when that necessity is no longer spurring you on, what happens? It’s way too easy to go back to former bad habits.

Time will tell whether the recent uptick in debt levels is a trend that will continue. But it does show that once the worst of the crisis is over, people may be willing to slide back to where they were before.

If you really want to change your habits, whether in the realm of personal finance, your health, or elsewhere, you have to keep going. And that means even after the crisis that spurred your change has passed!

 

We should all be prepared for the worst, at any time.

If consumers had known beforehand that the Great Recession was coming, do you think they would have had thousands of dollars in credit card debt lying around? For many, probably not!

It’s easy to live large when things are good, and not to worry too much about things like credit card debt. After all, you can afford the payments, so what’s the big deal? The problem is that you never know what’s just around the bend.

Illness, stock market crashes, job loss, and other disasters can strike at any time. While you don’t want to live in a doom-and-gloom mindset, it’s best to be prepared. And, financially, this means being as debt-free as possible and having emergency savings available.

 

Focusing on staying out of credit card debt is still important.

Personal finance blogs like this one have been around for decades now, but many people still need to go back to the basics. One of those basics is the importance of paying off credit card debt.

Sure, sometimes taking on credit card debt can be justified. But it’s important to pay it off as quickly and efficiently as possible. Otherwise, you run the risk of trying to pay down such debt while you’re already in the middle of a crisis.

So, what’s your story from the Great Recession? Did your credit card debt go down? Are you letting it slide back up again? Tell us in the comments.

{ 0 comments }

Have you been looking for a new online checking account? Preferably one with a higher-than-average interest rate? Then the FNBO Direct checking account may be the answer.

FNBO Direct checking

I’m a bit particular when it comes to my checking accounts. I don’t like paying any monthly fees, regardless of how much money I keep in the account. I want to be able to easily withdraw my money; I want a debit card, and I want to be able to manage my funds (including paying my bills)… oh, and I want all of that for free.

Narrows the list down a bit, huh? Luckily, the FNBO Direct Checking with BillPay offers all of that and more. Here’s what you’ll get with this account:

  • A completely free online checking account with zero monthly service fees, no matter how much money is in your account
  • Interest earned on your balance – currently 0.65% APY (as of April 7, 2017)
  • Minimum opening balance of $1 – yes, one dollar
  • Free online banking, bill pay, and account alertsfnbo
  • Complimentary FNBO Direct Visa® Debit Card
  • One overdraft fee forgiveness every 12 months (typically a $33 fee)
  • Free incoming wires
  • Free stop payments (I’ve paid as much as $35 for this before, so it’s a great bonus in my book!)
  • 24/7 access to over 2 million ATMs worldwide (no fees charged by FNBO for using out-of-network ATMs, though the machine operator may charge their own fees)

BillPay

popmoney

Being able to automate my bills is one of the biggest perks. The FNBO Direct checking account allows you to not only pay your bills online, but also set up automatic, recurring payments. That way, you’ll never miss another electric bill or charitable donation.

Need to send money to a friend or pay your babysitter? You’ll also have access to the free person-to-person money transfer app, Popmoney®, which is conveniently linked directly to your checking account. It allows you to easily and quickly send (or receive) money via mobile and email.

Earn Interest

For me, one of the best perks of this account is the interest rate. While it is subject to change, of course, the APY currently sits at 0.65%. This is significantly higher than many online savings accounts… let alone checking accounts!

The high yield – and absence of any fees – make this account a must-have for anyone looking to earn as much as they possibly can off of their money.

If you’d like to learn more about FNBO Direct checking with BillPay, or are interested in opening an account, check them out online here.

{ 1 comment }

How to Best Handle Old Credit Card Accounts

by Stephanie Colestock

One of the best things you can do to build awareness of your financial condition is to view your credit report. Your financial condition — as perceived by potential lenders — can cost or save you thousands of extra dollars throughout your credit repayments, such as the life of a mortgage, for instance. You can […]

21 comments Read the full article →

The Obamacare Mandate is Dead — Will There Be a Trumpcare Mandate?

by Michael Pruser

Former President Barack Obama signed an order into law back in March 2010, which later became known as Obamacare. He did so with the hope that it would revolutionize the way Americans handled their healthcare.  However, if Obamacare was to ever survive, it required a large number of healthy individuals to sign-up for healthcare. To […]

1 comment Read the full article →

Buy It Right or Buy It Twice: When It’s Worth Paying More for Quality

by Aliyyah Camp

Whether or not you should pay more for quality is a decision that comes up often when shopping. The answer varies depending on the product.For some purchases, paying more is a giant waste of money which would be better spent elsewhere. For other items, it’s well worth the additional investment up front to ensure a […]

0 comments Read the full article →

Humana: Yet Another Player Pulling Out of Obamacare

by Abby Hayes

After pulling out of a merger deal with Aetna, major insurance company Humana announced that it will drop out of the Affordable Care Act exchange in 2018. The company had already been scaling back its plans available on the exchange. For 2017, it was only selling policies in 11 states. Although Humana has been a […]

0 comments Read the full article →

A Sign of the Times: Amazon to Begin Accepting Food Stamps

by Stephanie Colestock

There are over 44 million Americans currently receiving SNAP benefits, better known as food stamps. This financial assistance was designed to provide nutritious food to qualifying citizens, and about 54 percent of beneficiaries are children and the elderly. However, there are a number of struggles that SNAP recipients can face as far as actually spending these […]

2 comments Read the full article →

Getting Out of Debt: Make That New Year’s Resolution Work

by Luke Landes

Along with losing weight, getting out of debt is the most popular New Year’s resolutions in the United States. This resolution, like all others, unfortunately tends to be forgotten within weeks. Well, if you resolved to get out of debt this year — and haven’t yet abandoned that idea now that we are at the […]

12 comments Read the full article →
Page 1 of 3312345···Last »