Paying Down Debt Takes Discipline

This page may include affiliate links. Please see the disclosure page for more information. This blog post is part of the Pay Down My Debt (PDMD) blog tour, sponsored by US Equity Advantage. PDMD is a solution that accelerates debt payoff and helps consumers monitor their credit …

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Paying Down Debt Takes Discipline was first posted on May 24, 2019 at 6:04 am.
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Can a Debt Collector Garnish Your Wages?

Creditors and debt collectors use wage garnishment to recover money owed to them. In most cases, the debt collector will require a court judgment against you before they can take money from you. However, wage…

The post Can a Debt Collector Garnish Your Wages? appeared first on Crediful.

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How Many Credit Cards Is Too Many?

After a big spending spree you might ask yourself, “Do I have too many credit cards?”

Like most things, the answer isn’t cut and dry. And although having multiple credit cards isn’t necessarily bad, there is such a thing as having too many, especially depending on how you’re using them and which ones you have.

We spoke to several finance experts to find out just how many credit cards you should keep in your wallet, which ones, and how to manage them for the best results. Here’s what they had to say.

How Many Credit Cards Is Too Many?

Ever hear the expression “too much of a good thing?” Well the same can be said for the number of credit cards in your wallet.

Brian Dechesare, founder and CEO of Breaking Into Wall Street explains: “In 2020 the average number of credit cards per adult in America was three, according to an Experian report. While it’s not a bad thing in and of itself to have multiple credit cards, it’s certainly possible to have too many — and it all depends on how well you can manage your credit.”

Although some people might be able to comfortably juggle payments on multiple credit cards (while also making good use of those cash-back and rewards deals), others might be struggling to meet their minimum payments.

Founder and CEO Nate Tsang of WallStreetZen says that most banks expect people to have anywhere from three to five credit cards. “At that amount you can reasonably capitalize on your expenses through perks and rewards points without losing track of what you spend,” he explains.

Rather than wondering how many credit cards is too many, ask yourself how well you’re managing them.

Pro Tip

When you count your credit cards, don’t overlook the cards from department stores, big box retailers or even home improvement warehouses that you took out to get the initial sign-up bonus.

“If you struggle to comfortably pay off one line of credit, then two is definitely too many for you,” says Dechesare. “In general, anything over four is potentially excessive, and anything over six is more than likely too many, even for the most disciplined and organized spender.”

The bottom line isn’t so much how many credit cards you have. It’s more about ensuring you use your credit cards responsibly. One of the best measurements of this? Whether or not you’re paying off the balance every month.

The Risk of Too Many Credit Cards

The biggest piece of advice we heard from our experts was this: No matter how many cards you have, paying them off in full (every month) should be a top priority.

“What matters most is that you’re not overextending yourself by taking on too much debt,” says Jonathan Svensson, co-founder of Almvest. “You should make sure that you’re always paying your bills on time and keeping your credit utilization ratio low, so that you maintain a good credit score.”

Also called your credit utilization rate, your credit utilization ratio is the amount of available credit you’ve used. Credit utilization rates that are too high can negatively impact credit scores.

“The issue is more about utilization than number of cards,” says Freddie Huynh, VP of data optimization with Freedom Financial Network. “Utilization is how much of your available balance you use. Credit score calculations look at utilization in a variety of ways. Overall credit card utilization, the sum of all credit card balances divided by the sum of all credit limits, is the most common.”

But Huynh cautions that there’s also another way banks and credit bureaus can calculate your utilization — and that’s by looking at the greatest credit utilization on an individual card. Say you’re consistently using 40% of your available credit on one card and 70% on another. In this case a bank might only care about that 70%. As a rule, anything over 30% is seen as a red flag by banks.

“If you use less than 10% on each card and are diligent in paying your bills on time each month, then you can improve your credit score,” says Anthony Martin, CEO and founder of Choice Mutual. “But if you surpass 30%, your credit utilization ratio will be too high — and if you mix that with missed payments, it can significantly harm your score.”

Which Kinds of Credit Card Accounts Should You Have?

Now that you know a bit about how to maintain your collection of credit cards, let’s chat about the types of accounts and credit card issuers you have in the mix.

Although store cards are often a popular choice (who doesn’t want those extra deals at their favorite store?) you’ll want to be sure you’re getting a worthwhile deal before opening one.

“I usually avoid store credit cards because their interest rates tend to be high,” says Svensson. “They’re also limiting because they can only be used at that one store.”

Other things you’ll want to check before opting in for a new card include the annual fee, rules surrounding rewards and cash back, and any additional perks. There are a lot of great rewards cards out there that will help you earn cash or points on certain purchases (like gas) or on more generic purchases. As for those additional “perks” associated with store cards: keep in mind that many are in fact available without the card.

When deciding what cards deserve a spot in your wallet, it’s helpful to start by looking at your spending. Would you be more likely to use your card to shop at one particular store or to fill your tank with gas? If it’s gas, then maybe the store card isn’t for you.

Pick your cards based on your spending habits and you’ll be sure to have the best rewards in your wallet, as well.

The same rule of thumb can apply if you feel you have too many credit cards and want to winnow them down. Just be sure to follow these precautions whenever you cancel credit cards.

The Bottom Line on Credit Card Accounts: Choose Wisely

In order to get the most out of your credit cards you’ll want to take the time to carefully pick the best rewards cards and make a plan for using them wisely.

When in doubt, start small with just one or two credit card accounts until you get the hang of paying them and making use of those rewards. Then you’ll be able to iterate on your spending plan and find the perfect balance of credit cards for your lifestyle.

Contributor Larissa Runkle frequently writes on finance, real estate, and lifestyle topics for The Penny Hoarder.

Source: thepennyhoarder.com

5 Ways Thrifty-Frugal Fun Made Paying Off Our Mortgage a BLAST!

Today we have a guest post from Lindsey Ralston of Big House in the Woods. She’s sharing her personal story of how she paid off her mortgage early and had fun while doing it. Hope you enjoy it! We paid…

The post 5 Ways Thrifty-Frugal Fun Made Paying Off Our Mortgage a BLAST! appeared first on Modern Frugality.

Source: modernfrugality.com

Debt In The United States

This page may include affiliate links. Please see the disclosure page for more information. Let’s face it, debt in the United States is a problem. From our national debt, student loan debt, and consumer debt. Debt in the United States is a problem on all levels. Why …

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Debt In The United States was first posted on November 18, 2019 at 6:00 am.
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Statute of Limitation on Debt Collection

Debt collectors are well known for the way they do business. They’re much more concerned with getting paid than with how they go about collecting the debt. As long as they can get a consumer…

The post Statute of Limitation on Debt Collection appeared first on Crediful.

Source: crediful.com

Best Personal Loans for 2020

Maybe it was an unexpected dental procedure, or a tax bill you didn’t plan for, or a car repair that came out of nowhere.

Whatever the reason, if you need money quickly, a personal loan can deliver it.

As you shop for a personal loan to solve your short-term problem, look for loan terms that won’t hurt your long-term financial life.

7 Best Personal Loans & Lenders for 2020

Online lending has opened a new world of personal loan options. 

Not that long ago we had just a couple of legitimate choices:

  • Your Local Bank or Credit Union: You can usually borrow money at a decent fixed interest rate at your neighborhood bank or credit union. The downside: You’d need to make an appointment or at least spend an hour or two on the phone.
  • A Credit Card: It’s hard to beat the convenience of a credit card, but the interest rates, late fees, and over-the-limit charges can make this option too volatile.

We still have these two options, and sometimes they can get the job done. But we also have scores of online lenders that compete to give you installment loans with more competitive interest rates. You can also finalize loans and receive money more quickly online.

Here are some of the best personal loan choices:

  • Credible
  • LendingClub
  • Payoff
  • PersonalLoans.com
  • Prosper
  • SoFi
  • LendingTree

Credible Personal Loans

I’m starting here because Credible isn’t a lender. It’s a way to connect with and compare a variety of lenders, including several from lower on this list. To start the process, you’ll submit Credible’s initial application which generates up to six loan offers.

This initial process will run a soft check of your credit score which shouldn’t hurt your score the way a hard check can. If you like one of the offers, you can complete the next steps to apply for the loan which will, of course, result in a hard credit check.

Pros & Cons of Credible Personal Loans

Pros:

  • An efficient way to compare loan offers
  • Fast and easy application process
  • Many quality participating lenders

Cons:

  • Not for people with credit scores below 640
  • Could result in unwanted phone calls from lenders

LendingClub Personal Loans

I was an early fan of LendingClub back in 2007, and I still recommend this trailblazer in the peer-to-peer (P2P) lending market.

Rather than using bank funds, P2P lenders finance your loan with money from investors. You’ll still have to go through an application process, but LendingClub has opened new doors to people who don’t want to borrow from a bank.

  • Loan Amount: LendingClub’s maximum loan amount is $40,000. You can repay the money in terms ranging from three to five years. 
  • Costs: Interest rates typically range from 7 to 36 percent depending on your qualifications. The higher your qualifications, the lower your rate.

LendingClub continues to evolve. It now has debt consolidation loans and allows for co-signers which lets more people borrow.

Pros & Cons of LendingClub Personal Loans

Pros:

  • Credit scores of 600 can get approval
  • New co-sign option lets more people borrow
  • Debt consolidation loans available
  • No prepayment fee

Cons:

  • Loan origination fees (1% of loan)
  • Check processing fee ($7)

Payoff Personal Loans

As the name indicates, Payoff Personal Loans specializes in debt consolidation, helping you pay off other debts. You can potentially save money by having fewer loans and paying a lower interest rate.

The payoff isn’t a good option for people with shaky credit, though. 

You’d need a score of 650 to 660 — and a few years of credit history on your report — to get approval at a decent interest rate. So don’t wait until you’ve already fallen behind on your other debts to consolidate with Payoff.

  • Loan Amounts: Eligible borrowers can get up to $35,000 to pay off other lenders such as credit cards, auto loans, or other personal loans.
  • Interest Rates: Loans range from about 6 to 25 percent depending on your borrowing credentials.

Pros & Cons of Payoff Personal Loans

Pros:

  • No late or check processing fees
  • No prepayment penalty
  • See interest rate without a hard credit check

Cons:

  • Not for people with shaky credit
  • A loan origination fee of 2% to 5%

PersonalLoans.com

Applicants with rocky credit histories appreciate PersonalLoans.com because the site lends to people with credit scores as low as 580.

  • Loan Amount: You could borrow up to $35,000 on a six-year (72-month) payback plan through PersonalLoans.com. Spreading money across six years can lead to lower monthly payments.
  • Interest Rates: This sounds like a friendly situation, but remember you’ll pay higher interest — up to 36 percent — if you have a lower credit score, and the interest can increase your monthly loan payment significantly.

Pros & Cons of PersonalLoans.com

Pros:

  • Available to credit scores 580+
  • Easy-to-use online application
  • Up to 72-month term loans
  • Access money within a day

Cons:

  • Wide range of interest rates (5.9%-35.99%)
  • Uses a third-party lender

Prosper Personal Loans

Many borrowers like the way Prosper Personal Loans gives them a platform to share why they need to borrow money. This opportunity comes during the application process to this P2P lender. You can use this platform to appeal directly to the investors who would be funding your loan.

Of course, the numbers will tell their story, too: You’d need at least a 640 credit score to get funding, and Prosper’s rates range from 6.9 to 35.99 percent APR.

  • Loan Amount: If you qualify, you could borrow up to $40,000 with payments spread over three to five years.
  • Interest Rates: Prosper also offers a wide range of rates, from 6.9 to 35.99 percent.

Pros & Cons of Prosper Personal Loans

Pros:

  • Soft credit check to see terms
  • No prepayment penalties
  • Fast and efficient service

Cons:

  • Higher interest for lower credit scores
  • Origination fee can reach 5%
  • Late fee is steep ($15 or 5% of payment, whichever is higher)

SoFi Personal Loans

SoFi has become a standard in student loan consolidation, but the lender also has personal, unsecured loans for non-academic borrowing.

SoFi stands out because the lender does not focus exclusively on an applicant’s credit score. This can be misleading because you’d still need a 680 or higher to get a loan.

But SoFi will not deny a loan if you have a short credit history as many lenders do. Instead, this P2P lender will consider your career and earning potential. In this way, SoFi can be a good fit for young professionals starting new careers.

SoFi calls its borrowers “members” and hosts social gatherings in major cities for members which can lead to networking opportunities.

  • Loan Amounts: SoFi will lend up to $100,000 which is significantly higher than most online lenders.
  • Interest Rates: SoFi’s rates range from 5.75 to about 17 percent.

Pros & Cons of SoFi Personal Loans

Pros:

  • Larger loan amounts (up to $100,000)
  • Good for someone with a short or thin credit history
  • Flexibility to change due dates
  • No loan origination fee

Cons:

  • Funding can take up to 7 business days
  • 680 or higher credit score required

LendingTree Personal Loans

I started this list with Credible, an aggregator, and I’ll conclude it with a nod to another aggregator.  LendingTree helped establish one-stop shopping for loans back in 1998, and the service has continued to lead the industry.

Like Credible, LendingTree turns one application into loan offers from a variety of lenders. You’ll still need to assess each offer on its own merits, but LendingTree can save you a lot of legwork.

Pros & Cons of LendingTree Personal Loans

Pros:

  • Efficient way to shop
  • Trusted leader in the field

Cons:

  • Can send too many loan solicitations 

Other Personal Loan Options to Consider

My list of best personal loan providers above includes most well-known lenders. You’ve probably heard of most of them already.

Below I’m including a list of lesser-known options that have gotten my attention for various reasons. Most of these are loan matching services with P2P funding sources.

AmOne

AmOne has been around 20 years and has about a million customers. I like the company’s versatility. It can handle all sorts of borrowing needs, including personal loans.

  • Amounts: Loans range from $1,000 to $100,000.
  • Interest rates: You’ll find a wide range, but highly qualified borrowers should get competitive rates. 

Fiona

Fiona provides another loan-matching service similar to Credible or LendingTree. The service hasn’t been around long, but it’s growing quickly by partnering with a lot of the lenders on this list.

Fiona works quickly — many applicants have funds within a business day.

Monevo

Yet another loan shopping service, Monevo stands out because of its speed and its high loan amounts. You could borrow $100,000 through the site.

I like the site’s simplicity and its large volume of partnering lenders which means a wider variety of borrowers can benefit.

Federal Trust

Federal Trust partners with Fiona, which I listed above, to match loan shoppers with potential lenders. 

You could borrow up to $100,000, and with such a wide variety of lenders in their network, Federal Trust can find competitive rates for eligible borrowers.

I also like Federal Trust’s option of a seven-year installment loan for someone who needs to keep loan payments as low as possible.

Will A Personal Loan Work For You?

Yes, personal loans can help get you out of a tough financial spot. But they’ll also cost you money for months or years, depending on how long you need to pay back the loan. 

It goes without saying: You should always look for the lowest, fixed interest rates when borrowing. 

Here are some other ways to save money when you borrow:

  • Look for Shorter-Term Loans: Monthly payments will be higher with shorter-term loans, but you’ll pay less money over the life of the loan. If you can afford the higher payments, go with a shorter-term loan.
  • Avoid Fees: Even if you’re getting a lower interest rate, be sure the lender isn’t compensating by charging high origination fees or punitive late fees that could eclipse your savings on interest. 
  • Pay it Off Early: Look for a loan with no prepayment penalty, but even if you would incur a prepayment fee, consider whether this fee would exceed the interest you’d be paying over the life of your loan. 
  • Avoid Borrowing: Maybe this isn’t the time or place, but as a financial advisor I have to say it: If you can save up an emergency fund, you may be able to avoid borrowing in the first place. I recommend having at least three months of income in reserve. Then you can borrow from yourself in an emergency. Maybe it’s too late to save for the current emergency, but this is something to think about when life gets back under control.

Wherever you borrow — online or at a neighborhood bank — try to look out for your future as well as your present financial situation.

The post Best Personal Loans for 2020 appeared first on Good Financial Cents®.

Source: goodfinancialcents.com

Dear Penny: Will My Husband’s Bad Health Choices Drain My Life’s Savings?

Dear Penny,

My spouse suffered from a stroke three years ago. He is unable to work and is receiving Social Security and is very noncompliant about his health. I am currently and have been the breadwinner for this family. 

My concern is that he is going to financially take everything I have saved and worked hard for with his consistent medical expenses. I fear he could end up in a nursing home. 

I have thought about divorce, but I know he would take half of my retirement. I am 62, and I hope to be able to retire at 65. How can I protect my retirement from the possible nursing home and medical expenses? 

-T.

Dear T.,

Watching your spouse jeopardize his health and risk your future in the process has got to be agonizing. Unfortunately, the threat of unmanageable medical bills is far too common since Medicare only covers the first 100 days of skilled nursing care.

Paying for a nursing home can quickly erase a lifetime’s worth of savings. The average cost of a semi-private room in a skilled nursing facility is over $7,700 per month, according to Genworth’s 2020 Cost of Care survey. Eventually, Medicaid will kick in — but only after someone has depleted almost all of what’s called countable assets, which include things like retirement accounts and other investments, cash, bank accounts and homes that aren’t used as a primary residence.



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When one spouse needs Medicaid but the other doesn’t, the non-applicant spouse can typically keep no more than $137,400 of countable assets. That’s not much if you’re expecting a long retirement.

But you do have options for preserving the money you’ve worked hard for over the years. It’s essential that you consult with an elder care attorney. Medicaid planning is extraordinarily complex, and the laws vary significantly by state. You can use the National Academy of Elder Law Attorneys database to search for an attorney near you.

You’re correct in that if you divorced, your husband would probably be entitled to part of your retirement. But most attorneys don’t recommend getting divorced solely to qualify one spouse for Medicaid for a host of reasons that are too complicated to delve into here.

One option you should discuss with an attorney is a Medicaid-compliant annuity. In a nutshell, Medicaid considers the income of the spouse who’s applying for coverage, but the other spouse’s income is off-limits. A Medicaid-compliant annuity takes part of your assets and converts it into a fixed income stream. The payments are based on your life expectancy, calculated according to Social Security’s life expectancy table.

For simplicity’s sake, let’s say you have $257,400 in countable assets, which would put you $120,000 above Medicaid’s threshold. You use that $120,000 to buy an annuity. If your life expectancy is 10 years, you’d immediately start to get payments of $1,000 a month, or $12,000 annually, for the next 10 years.

The insurance company makes its money by investing your principal. It’s a good tool for married couples when only one spouse needs care because, remember, the income of the other spouse isn’t used for Medicaid eligibility.

There are many rules an annuity has to follow to be considered Medicaid compliant. For example, it has to be a single premium immediate annuity, meaning you buy it in a lump sum and the payments start right away. If you’d opt to go this route, it’s important to look specifically for a Medicaid compliant annuity. Annuities advertised as “Medicaid-friendly” often don’t meet all the rules.

If you have debt, you could also use part of your assets to pay it off so you can keep your expenses minimal in retirement. Paying off a mortgage balance, a personal car loan or a credit card balance generally won’t violate Medicaid’s rules. If the two of you own your home, there’s no limit on your home equity as long as you continue to reside there.

You could have other options depending on your state. For instance, if you live in Florida or New York, you may be able to use a spousal refusal strategy, where you essentially sign a written statement refusing to contribute to the cost of your husband’s care.

These are just a few strategies that may be possible in the event that your husband needs long-term care. However, I can’t stress how important it is to consult with an experienced attorney about how to protect your assets. You may not need to take any action right away. But just knowing what options you have will set your mind at ease.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Source: thepennyhoarder.com

Here’s What to Include in a Winter Emergency Car Kit

Living in a region with blisteringly cold winters tends to make you somewhat of an expert on winter driving.

But skilled winter driving means more than just knowing what to do if you slide on ice or how to properly clear your windshield. It means staying on top of important vehicle maintenance, like checking exterior lights, having your battery tested and regularly monitoring your tire pressure.

Just as importantly, it means packing a winter emergency kit to keep in your car throughout the season. The best way to guarantee your safety in the event you become stranded in your car during a winter snowstorm — besides not driving in said storm — is to pack a winter car emergency kit.

10 Items to Include in a Winter Emergency Car Kit

You likely have many items at home that you can use for your car’s winter emergency kit. The rest can be purchased relatively cheaply.

A GIF shows things needed for a winter car emergency kit such as a phone charger, tools, road salt, winter gear, blankets, snacks, water, a shovel, ice scraper and flashlight.
Tina Russell and Chris Zuppa/The Penny Hoarder

1. Phone Charger

Phones have become one of the most important resources in an emergency, so ensuring you can keep it powered is essential.

In addition to a charging cord, I also recommend purchasing a power bank (aka portable charger) in case your car cannot provide the power to charge your phone.

If you don’t have extras at home, you can order cheap chargers and power banks on Amazon that will work fine in an emergency.

Cost: $25

2. Flashlight and Batteries

While most phones include flashlights, it is handy to have a flashlight that you can use to look under the hood or car if you are attempting to repair an issue yourself. Just make sure it has fresh batteries.

Cost: $10

3. Multi-Purpose Radio

If your vehicle loses all power and you can’t charge your phone, a battery-powered or crank radio might be your only source of emergency information.

Radios come cheap these days, but you can also skip the cost of a flashlight and phone charging power bank with a multi-purpose hand crank radio on Amazon.

Cost: $20

4. Hats, Gloves and Blankets

A man holds a winter coat, gloves, a hat and socks in his hands.
Tina Russell/The Penny Hoarder

You should always bring a coat with you if traveling in the winter, but it can’t hurt to keep additional winter gear in the trunk.

If you have extra hats, gloves, scarves, socks and blankets at home, just grab those. If not, buy some secondhand at a thrift store, since these are meant to be for survival, not style.

Cost: $0 to $20

5. Foldable Shovel

If you lose control and drive off the road, you might find it challenging to get your vehicle out of the snow. Having a small shovel, preferably one that folds up, can be handy in such a scenario.

You can find them on Amazon, like this model which comes with a nylon carry case.

Cost: $20

6. Road Salt or Kitty Litter

Shovels aren’t your only saving grace if you get stuck in the snow. Road salt can provide much-needed traction.

You can purchase an affordable 5-pound bag to keep in the back of your car. Kitty litter or sand will also do the trick.

Cost: $10

7. Snacks and Water

If you are stranded for several hours or longer, it’s important to stay hydrated and keep your energy up. Pack a case of bottled water to store in the trunk if you can afford the space, and include a bag of high-protein snacks that don’t expire quickly, like nuts and protein bars.

Cost: $15

8. Flares and Jumper Cables

A woman uses jumper cables to start up a yellow Honda fit.
Tina Russell/The Penny Hoarder

You should have flares and jumper cables in your car year-round, but this is especially important in the winter when it gets dark earlier and when car batteries are more susceptible to dying. You can find a highway flare kit and jumper cables at your neighborhood auto store or online.

Cost: $25

9. First Aid Kit

Another year-round staple is a first aid kit, which should include bandages, tweezers, scissors, tape, antiseptic cream, painkillers, bug bite cream and burn cream. You can find compact first aid kits online that contain travel-sized essentials.

Cost: $15

10. Tools

A tight photo of a hammer is shown against an orange background.
Tina Russell/The Penny Hoarder

Having some basic tools, including an ice scraper, at your disposal can come in handy during a true winter emergency. A multi-tool, like a Swiss army knife, can be especially useful.

Cost: $25

Timothy Moore is a contributor for The Penny Hoarder.

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Source: thepennyhoarder.com