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Apache is functioning normally

June 8, 2023 by Brett Tams

Real estate has the power to change your life for the better, but it can do so much more than that. Today’s guest, Jen McConnell, used her commissions to fight pediatric cancer, and she later created a foundation to help further the cause. On this podcast, Jen shares how real estate changed her life and has given her the ability to impact the lives of countless others. Jen also covers the advantages of running your own brokerage, ways to deliver five-star customer service, and more.

Listen to today’s show and learn:

  • Jen McConnell’s start in real estate [1:34]
  • What agents learn selling homes for builders [5:31]
  • The Charleston real estate market [6:47]
  • McConnell Real Estate Partners’ sales and team structure [8:04]
  • The advantages of running your own brokerage [13:32]
  • Social media as a tool for real estate agents [15:20]
  • The financial crisis compared to this correction [17:17]
  • About The McConnell Foundation and donating to causes that matter [18:33]
  • Restarting in real estate after major life challenges [22:18]
  • Advice on starting a non-profit foundation [26:53]
  • Advice for agents on giving five-star service to get referrals [27:29]
  • Jen’s favorite CRM: Follow-Up Boss [30:19]
  • The post-closing checklist: When to follow up with buyers [31:13]
  • Transitioning from paid leads to referrals [34:42]
  • Where to find and follow Jen McConnell [36:25]

Jen McConnell

Jen was fortunate enough to start her real estate career when she was a junior in college.  Now with over 17 years of experience in the industry, she has a particular expertise in luxury real estate and custom home building. She moved to Charleston in 2006 after receiving her B.A. in Marketing from Ashland University. In 2022 Jen was awarded the South Carolina Women in Business Award, and chosen as a Top 40 Under 40 Real Estate Agent in Charleston.  Jen has also been featured on Charleston Home Showcase & Lowcountry Live and has been featured in Charleston Real Producers Magazine, Charleston Style & Design Magazine, Southern Living Magazine, The Post & Courier, Charleston City Paper, Charleston Regional Business Journal, Charleston Daily, Greenville Business Journal, Columbia Business Journal and many others. She is a Certified Luxury Home Marketing Specialist through the Institute for Luxury Home Marketing where she has been awarded the prestigious Million Dollar Guild award. Jen has also earned the coveted Realtor of Distinction Award achieving the highest rank possible as a Platinum Award winner through the Charleston Trident Association of Realtors. The Platinum Award places Jen in the Top 2% of agents in Charleston.

Jen is the Co-Founder of King Tide Investment Group and Blue Ocean Investments, both residential real estate investment companies based in Charleston, SC and Greenville, SC respectively. In 2021 Jen and her husband Josh opened their own brokerage on Isle of Palms and formed McConnell Real Estate Partners where she is the broker-in-charge.

Jen met her husband, Josh, in Charleston and was married at Wild Dunes on Isle of Palms in 2010. They now live on Isle of Palms and welcomed their daughter Bennett in 2016 and their son Bodhi in 2017. They have embraced all Charleston has to offer but most especially the outdoor living, the amazing restaurants and long summer days at the beach. The McConnell’s are avid Clemson Tigers, strong supporters of MUSC Children’s Hospital, the South Carolina Aquarium, Pet Helpers Adoption Center and are members of First United Methodist Church on Isle of Palms.

Jen prides herself on being persistent, utilizing her experience to always find the most advantageous terms for her clients, and providing unparalleled professionalism and expertise for her clients in each and every transaction. Whether you’re looking to buy, sell or invest in real estate throughout the Charleston area, Jen would love to share her passion and market knowledge with you.

Related Links and Resources:

Thank You Rockstars!

It might go without saying, but I’m going to say it anyway: We really value listeners like you. We’re constantly working to improve the show, so why not leave us a review? If you love the content and can’t stand the thought of missing the nuggets our Rockstar guests share every week, please subscribe; it’ll get you instant access to our latest episodes and is the best way to support your favorite real estate podcast. Have questions? Suggestions? Want to say hi? Shoot me a message via Twitter, Instagram, Facebook, or Email.

-Aaron Amuchastegui

Source: realestaterockstarsnetwork.com

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Apache is functioning normally

June 8, 2023 by Brett Tams

By Contributing Author 5 Comments – The content of this website often contains affiliate links and I may be compensated if you buy through those links (at no cost to you!). Learn more about how we make money. Last edited August 28, 2017.

One day the stock market is down 300 points, the next it’s up 300; it’s a hard time to invest in the stock market isn’t?

It’s like seeing a swarm of sharks in the water and trying to convince yourself it’s OK to jump in.

I totally understand because I feel the exact same way. When you have the government threatening to change the rules of the game, it’s difficult to remain confident in the time tested approach of wealth accumulation through investing. That’s why, outside of my retirement investments, I haven’t invested a single dollar in the stock market. I’m not equipped to fight off sharks. 🙂

So what have I done with our savings? Well, our emergency fund is laddered into twelve year-long CDs. Outside of our emergency fund, we’ve been in lockdown mode, much to the chagrin of the economy, and have been putting into ultra-safe, principal-protected “investments.” If you’re looking for something that’s 100% safe, defined as being backed by the full faith and credit of the United States Government, here are a few options:

High Yield Savings Accounts

I’m sure you’re all familiar with online banks and their savings account offerings. The yields aren’t as good as they once were, most are in the 2-3% APY range, but they are all FDIC insured. Some may be in a more perilous financial situation than others but when you are FDIC insured, your assets are protected up to $250,000 or more, depending on your account type. 2-3% may not seem like a lot, but it’s greater than zero and you have no risk of losing your principal! How can these banks offer yields that are much higher than their brick and mortar counter parts? A leaner operation. They don’t run branches, they don’t hire tellers or branch managers, they don’t mail out statements, and they can outsource their call centers. All these cost cutting measures mean you get a higher interest rate.

Reward Checking Accounts

Reward checking accounts are a special type of checking account that give high yields as long as you satisfy certain conditions. Today, the best reward checking rates are around 5% if you satisfy the conditions, less than 1% if you fail to meet them. The conditions are usually not difficult to achieve. The first common requirement is to have 10+ debit transactions a month. The second requirement is to have at least one direct deposit, such as a paycheck. A third, less common, requirement is that the customer must log into their online account a specified number of times a month. They are able to pay such high yields because they earn transaction fees off the debit transactions.

Certificates of Deposit

If you want to do better, you’ll have to take a look at a certificates of deposit. They are less flexible than a savings account but require less work than a reward checking account. The best CD rates for 12- or 18- month CDs is just under 4% and the highest short-term CD rate is under 2.50% APY. They’re not incredible rates but they are guaranteed, unlike checking and savings accounts. When the CD matures, you get your funds back. The funds are locked in but if you need your money before maturity, you can get it after paying a small penalty.

Treasury Securities & Bonds

This is often called “public debt,” because the government borrows money through the sale of Treasury Securities and Bonds. The Treasury products come in two types, securities which you can buy and sell on the secondary market; and bonds, which you can only buy and sell to the Treasury through Treasury Direct. You’ll have to do some research yourself on the current rates, because they change from week to week, but this debt is backed by the full faith and Credit of the United States Government. In addition to that high level of safety, many have special tax considerations that may make them more appealing than a CD, depending on what your tax bracket is.

If you’re looking for safety, I think you cannot go wrong with one of these four options. They may not have the most attractive of yields but you’ll be hard pressed to find an alternative that is as safe and so easy to get in and out of.

This is an article from Jim over at WalletHacks.com. Jim runs a tight ship over there and if you’re looking for some good sound financial advice, his site is a great place to go. 

Related Posts

Source: biblemoneymatters.com

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Apache is functioning normally

June 8, 2023 by Brett Tams

Back in the day, if you wanted a loan to pay off your car or credit cards, you’d go to a bank or a credit union, sit down with a loan officer, and wait for them to tell you yes or no as they “crunched the numbers.”

But now peer-to-peer (P2P) lending has come onto the market, offering loans to borrowers directly from individuals — and usually carrying more favorable terms for those without a great credit profile. Borrowers can access up to $50,000 (or more) from lenders, with fixed term repayment scheduled and reasonable interest rates. Investors can also become lenders on P2P platforms, earning interest collected on loans as a passive form of investment income.

Let’s break down some of the best peer-to-peer lending sites for both borrowers and investors, so you can determine which option is best for you.

What’s Ahead:

Overview of the best peer-to-peer lending sites

  • Best for those with high credit scores: Prosper
  • Best for crypto-backed loans: BlockFi
  • Best for young people: Upstart
  • Best for a payday loan alternative: SoLo Funds
  • Best for small businesses: FundingCircle
  • Best for first-time borrowers: Kiva

Prosper: Best for those with high credit scores

Prosper 210

  • APR: 6.99% to 35.99%
  • Term: 2 to 5 years

Prosper is the OG peer-to-peer lender in the market. It was founded in 2005 as the very first peer-to-peer lending marketplace in the U.S. According to their website, they’ve coordinated over $22 billion in loans.

Borrowing with Prosper

If you’re a borrower, you can get personal loans up to $50,000 with a fixed rate and a fixed term from two to five years in length. Your monthly payment is fixed for the duration of the loan. There are no prepayment penalties, either, so if you can pay it off early, you won’t be penalized.

You can get an instant look at what your rate would be and, once approved, the money gets deposited directly into your bank account.

Investing with Prosper

As an investor, you have many options on loans to choose from. There are seven different “risk” categories that you can select from, each with their own estimated return and level of risk. Here’s a look at the risk levels and the estimated potential loss, according to Prosper:

  • AA – 0.00 – 1.99%
  • A – 2.00 – 3.99%
  • B – 4.00 – 5.99%
  • C – 6.00 – 8.99%
  • D – 9.00 – 11.99%
  • E – 12.00 – 14.99%
  • HR (High Risk) – ≥ 15.00%

As you can see, the lower the letter, the greater the risk of default, hence a higher estimated potential loss. With just a $25 minimum investment, you can spread your risk out across all seven categories to provide your portfolio some balance.

The borrowers that you’re lending to are also above U.S. averages regarding their FICO score and average annual income.

Learn more about Prosper or read our full review.

BlockFi: Best for crypto-backed loans

  • APR: 4.5% – 9.75%
  • Term: 12 months

BlockFi is a popular crypto lending platform that offers crypto-backed loans to borrowers and pays out interest to lenders. BlockFi offers instant loans and requires no credit checks for borrowers. All loans are collateralized, meaning borrowers will need to lock in their crypto to borrow against it.

Borrowing with BlockFi

If you’re a borrower, you can get a crypto loan for up to 50% of the value of your crypto, with rates ranging from 4.5% to 9.75% APR, depending on the amount of collateral. Payments are made monthly and are fixed for the duration of the loan.

Interest rates are determined by the amount of collateral deposited and the loan-to-value (LTV) of the overall loan. There is a 2% origination fee on all loans.

  • Loan rate – 9.75% (50% LTV)
  • Loan rate – 7.9% (35% LTV)
  • Loan rate – 4.5% (20% LTV)

Bitcoin (BTC), Ether (ETH), Paxos Gold (PAXG), or Litecoin (LTC) can be used as collateral for the loan, and can be liquidated if the LTV goes above the original LTV of the loan.

Investing with BlockFi

BlockFi offers interest accounts for users who deposit crypto. The funds are used for crypto lending, and interest is paid out in the native crypto deposited. Interest rates vary by cryptocurrency, and range from 0.10% APY up to 7.50% APY. Stablecoins (such as USDC) pay out the highest rates.

Crypto interest accounts are not available to U.S. investors, as BlockFi was sued by the SEC for violating securities laws.

Read our full review.

BlockFi Bankruptcy Notice -On November 10, 2022, BlockFi announced that it had to suspend withdrawals from its platform due to the FTX liquidity crisis. As a result, consumers should not be using the BlockFi platform. As of November 28, 2022, BlockFi officially declared bankruptcy.

Upstart: Best for young people

Upstart 210

  • APR: 5.6% – 35.99%
  • Term: 3 or 5 years

Upstart is an innovative peer-to-peer lending company that was founded by three ex-Google employees. In addition to being a P2P lending platform, they’ve also created intuitive software for banks and financial institutions.

What’s unique about Upstart is the way they determine risk. Where most creditors will look at a lender’s FICO score, Upstart has created a system that uses AI/ML (artificial intelligence/machine learning) to assess the risk of a borrower. This has led to significantly lower loss rates than some of its peer companies. Combine that with an excellent TrustPilot rating, and this company is certainly making waves in the P2P marketplace.

Borrowing with Upstart

Borrowers can get loans from $1,000 up to $50,000 with rates as low as 5.6%. Terms are either three or five years, but there’s no prepayment penalty.

Using their AI/ML technology, Upstart looks at not only your FICO score and years of credit history, but also factors in your education, area of study, and job history before determining your creditworthiness. Their site claims that their borrowers save an estimated 43% compared to other credit card rates.

Investing with Upstart

Investing with Upstart is also pretty intuitive. Unlike other P2P platforms, you can set up a self-directed IRA using the investments from peer-to-peer lending. This is a unique feature that many investors should be attracted to.

Like other platforms, you can set up automated investing by choosing a specific strategy and automatically depositing funds.

Upstart claims to have tripled their growth in the last three years due heavily to their proprietary underwriting model, so it might be worth a shot to consider this option.

Learn more about Upstart or read our Upstart review.

SoLo Funds: Best for a payday loan alternative

  • APR: 0% (tipping optional)
  • Term: Up to 35 days

SoLo Funds is a peer-to-peer platform that functions as a short-term lender, similar to payday loans. With term lengths only lasting for up to 35 days, loans must be paid back in a narrow timeframe. But instead of charging fees, borrowers can leave an optional tip instead.

SoLo Funds is an affordable option for clients who are in a pinch and need an advance on payday, but there are hefty fees if loans are not paid back within 35 days. Users will need to pay a 10% penalty plus a third-party transaction fee if late.

Borrowing with SoLo Funds

Borrowers can take out loans up to $575 for a maximum of 35 days. Loans do not charge fees, but allow borrowers to select an optional tip amount to lenders.

Loan applications only take a few minutes, and while most loans post within a few days, some may be instantly approved, offering same-day funding with money transferred to borrowers within a few hours.

Loans must be paid back in full within 35 days, or there is a 10% penalty plus other transaction fees. There is no option to roll the loan over.

Investing with SoLo Funds

Lending is fairly straightforward, with a simple sign-up process and no pre-qualifications needed. Since the loans are smaller amounts (up to $575), there are no minimums required for lending.

SoLo Funds has a marketplace of loan requests from borrowers, with details specified on each. Each loan request shows the amount needed plus the tip given by the borrower for the loan. Each borrower also has a SoLo Score, on a scale from 40 to 99, with higher scores showing more “worthiness” for paying back a loan. Loans can go into default, and if needed, to collections through a third party. There is a risk of total loss with SoLo Funds investing, though the platform does offer insurance against loss for a fee.

Learn more about SoLo Funds.

FundingCircle: Best for small businesses

Best Peer-To-Peer Lending Sites For Borrowers And Investors REWRITE - FundingCircle

  • APR: 11.29% to 30.12%
  • Term: 6 months to 7 years

FundingCircle is a small business peer-to-peer platform. The company was founded with the goal of helping small business owners reach their dreams by providing them the funds necessary to grow.

So far, they’ve helped 130,000 small businesses across the world through investment funds by 71,000 investors across the globe. FundingCircle is different in that it focuses on more substantial dollar amounts for companies that are ready for massive growth. They also have an excellent TrustPilot rating.

Borrowing with FundingCircle

As a borrower, the minimum loan is $25,000 and can go all the way up to $500,000. Rates come as low as 5.99%, and terms can be anywhere from six months to seven years. There are no prepayment penalties, and you can use the funds however you deem necessary — as long as they are for your business.

You will pay an origination fee, but unlike other small business loans, funding is much quicker (you can be fully funded as quickly as 1 business day).

Investing with FundingCircle

As an investor, you’ll need to shell out a minimum of $25,000. If that didn’t knock you out of the race, then read on.

According to FundingCircle, you’ll “Invest in American small businesses (not start-ups) that have established operating history, cash flow, and a strategic plan for growth.” While the risk is still there, you’re funding established businesses looking for extra growth.

You can manage your investments and pick individual loans or set up an automated strategy, similar to Betterment, where you’ll set your investment criteria and get a portfolio designed for you.

Learn more about FundingCircle.

Kiva: Best for first-time borrowers

Best Peer-To-Peer Lending Sites For Borrowers And Investors REWRITE - Kiva

  • APR: 0%
  • Term: Up to 3 years

If you want to do some good in the world, you’ll find an entirely different experience in P2P with Kiva. Kiva is a San Francisco-based non-profit that helps people across the world fund their businesses at no interest. They were founded in 2005 with a “mission to connect people through lending to alleviate poverty.”

Borrowing with Kiva

If you’d like to borrow money to grow your business, you can get up to $15,000 with no interest. That’s right, no interest. After making an application and getting pre-qualified, you’ll have the option to invite friends and family to lend to you.

During that same time, you can take your loan public by making your loan visible to over 1.6 million people across the world. Like Kickstarter, you’ll tell a story about yourself and your business, and why you need the money. People can then contribute to your cause until your loan is 100% funded. After that, you can use the funds for business purposes and work on repaying your loan with terms up to three years.

Investing with Kiva

As a lender, you can choose to lend money to people in a variety of categories, including loans for single parents, people in conflict zones, or businesses that focus on food or health. Kiva has various filters set up so you can narrow down exactly the type of person and business you want to lend your money to. You can lend as little as $25, and remember, you won’t get anything but satisfaction in return — there’s no interest.

You can pick from a variety of loans and add them to your “basket,” then check out with one simple process. You’ll then receive payments over time, based on the repayment schedule chosen by the borrower and their ability to repay. The money will go right back into your Kiva account so you can use it again or withdraw it. There are risks to lending, of course, but Kiva claims to have a 96% repayment rate for their loans. Just remember, you’re not doing this as an investment, you’re doing it to help out another person.

Learn more about Kiva.

What is peer-to-peer lending?

As the name suggests, peer-to-peer lending involves private individuals making loans to other individuals. The system runs contrary to the traditional model of banks and credit unions providing financial services because it cuts out the middleman.

While peer-to-peer lending had a surge in users over the past decade, in the past few years, some P2P lending companies have shuttered their services, including StreetShares, Peerform, and LendingClub.

How does peer-to-peer lending work?

Peer-to-peer lending shares many similarities with traditional lending:

  1. You fill out an application with your financial and personal information, including the loan’s size, tax returns, and government-issued identification.
  2. The lender will review your application before posting it on the site for investors.
  3. Investors get to play the part of a loan officer, reviewing a list of applications and deciding where they might want to contribute.
  4. The platform will indicate how risky the loan is and the potential return on investment.
  5. Funding takes anywhere from one day up to two weeks.

Is peer-to-peer lending safe?

No one would say that peer-to-peer lending is 100% safe. No form of investing is. Many of the best peer-to-peer lending sites vet borrowers and investors to mitigate risk. The review process helps eliminate untrustworthy candidates, so borrowers can receive their loan and investors can earn interest.

Read more: Should you invest in peer-to-peer loans?

Pros & cons of P2P lending for investors

Pros

  • An attractive alternative to more traditional investments — You can round out your portfolio that might exclusively include stocks, bonds, and mutual funds. Some platforms merge private and public equities, so you can make all your investments in one place.
  • Most lending platforms let you select multiple loans at once — The variation enables you to reduce your risk exposure while potentially earning higher yields than a CD or savings account.
  • Feel good about your contribution — With sites like Kiva, you know that your money is going toward a humanitarian purpose.

Cons

  • Risk of default — When you lend money to individuals, you risk them defaulting. Peer-to-peer lending sites don’t come with FDIC insurance like a CD or savings account.
  • P2P loans lack the liquidity of stocks or bonds — Most loans are for three to five years, so you would have to wait until then to withdraw money.
  • Inequality — Some platforms, such as Funding Circle, only give access to accredited investors, so not everyone has equal access to lending opportunities.

Pros & cons of P2P lending for borrowers

Pros

  • You can circumvent the traditional bureaucracy of brick-and-mortar banks — Instead of waiting in line and negotiating with a loan officer, you have access to a fast, online experience. Because online platforms don’t have to worry about physical overhead, many can give borrowers competitive interest rates.
  • P2P loans typically aren’t as strict as banks or credit unions — The lax approach makes it easier to secure a loan if you have fair or poor credit history.
  • Often no prepayment penalties — You don’t have to worry about prepayment penalties in many cases.

Cons

  • Borrowers face more hurdles if they have a low credit score — Interest rates can go as high as 36% for those with lower scores, while some platforms don’t offer financial services to anyone with a credit score below 630.
  • Possibly high fees — Some sites have origination fees of 6%.
  • Impersonal — If you want the old-fashioned face-to-face borrowing experience, peer-to-peer lending isn’t for you. You don’t have a chance to sit down with your lender and hash out terms.
  • Loan caps around $50,000 — If you need more money, you’ll likely have to go to a bank or credit union.

Summary

Peer-to-peer lending is a great option for borrowers with less-than-stellar credit who want access to capital with reasonable terms and rates. P2P lending is ideal for small businesses and individuals who are looking for a personal loan that does not require mountains of paperwork, and that is funded quickly (usually within a few days).

But not all P2P lending platforms operate the same, and some can charge high origination fees and interest rates. Others require high minimum loan amounts to borrow as well, making them less accessible to some borrowers.

Investors can earn decent returns with P2P lending, but there is also the risk of default and the mess of going through collections agencies occasionally. Finding a solid platform with detailed risk mitigation strategies (such as borrower scores), and insurance against default can help alleviate these concerns, but it may eat into your profits.

While peer-to-peer lending is not seeing the massive growth of a few years ago, it is still a solid option for borrowers and investors alike.

Read more:

Source: moneyunder30.com

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Apache is functioning normally

June 8, 2023 by Brett Tams

If you have a savings account, how much interest does it earn? Probably not enough. And if you don’t have a savings account, why not?

A savings account isn’t meant to make you rich. It’s a safe, if not very sexy, way to plan for your future and protect your money. But things get more interesting when you choose a high-yield savings account instead of a traditional savings account. A traditional account will pay pennies on your balance, but a high-yield savings account can help you earn extra money you’ll actually notice.

But how do you choose a savings account when there are so many out there? We did the research for you. These are the top high-yield savings accounts with the best interest rates, features, and benefits.

What’s Ahead:

Best high-yield savings accounts

The Ally Online Savings Account is our top pick for the best high-yield savings account overall because it consistently offers a competitive interest rate and includes features to help you save. For beginners, the Discover Online Savings Account might be a better option thanks to its simple platform and above-average support. The CIT Savings Account is our second runner-up because it has the highest APY of the bunch but does come with a minimum deposit requirement.

We also considered the Axos Bank High-Yield Savings Account, High-Yield Chime® Savings Account, Capital One 360 Performance Savings Account, and Marcus Online Savings Account for our list. Even though these didn’t make our top three, they’re all good choices well worth checking out.

Best overall: Ally Online Savings Account

Ally Bank's logoPros

  • No fees
  • No minimums
  • Boosters to help you save faster

Cons

  • No branch locations

Features

  • Minimum balance: $0
  • Minimum deposit: $0
  • APY: 2.50%
  • Monthly fee: $0

The Ally Online Savings Account is the best high-yield savings account overall offering a generous interest rate and tons of free features to help you save. And speaking of free, this account really is. There are no monthly maintenance fees, overdraft fees, or transfer fees to deplete your earnings.

This high-yield savings account supports you to save by giving you the option to create buckets for different goals and use boosters to save faster. The boosters are:

  • Recurring Transfers – schedules automatic transfers from a linked account
  • Round Ups – rounds up your Ally debit card purchases to the nearest dollar and sends the extra to your savings
  • Surprise Savings – points out money in your checking account that isn’t being used for anything and moves it to your savings

This account is easy to open. There are no minimum balance requirements to earn interest and you can fund it with as little as $0.01. While Ally technically uses balance tiers (<$5,000, $5000 – $24,999.99, and >$25,000), all positive balances currently earn the same rate.

For help with any issues you might have, Ally offers 24/7 live customer support via chat or phone.

Learn more about the Ally Online Savings Account or read our full review.

Best for beginners: Discover Online Savings Account

Discover Bank logoPros

  • No fees
  • No minimums
  • Instant transfers between Discover accounts

Cons

  • Very few branch locations
  • No advanced savings features like buckets or round-ups

Features

  • Minimum balance: $0
  • Minimum deposit: $0
  • APY: 4.00%
  • Monthly fee: $0

The Discover Online Savings Account gets pretty much everything right, from the competitive interest rate to the lack of account fees. We love this high-yield savings account for beginners because it’s easy to use and doesn’t have minimums.

There is no minimum deposit to open or minimum balance required to earn interest or avoid having your account shut down, making this the perfect option for you even if you only have a few bucks to put away right now. You can even open an account with nothing and come back later to fund it.

Although this is a pretty basic account with few bells and whistles, there’s no monthly maintenance fee to worry about and you’ll earn interest on any balance. Plus, the Discover mobile app is notoriously solid, and ditto for customer service.

Interest is compounded daily and credited monthly into your account. If you have a Discover checking account and debit card, you can easily transfer money between this and your savings account. You can also schedule automatic recurring transfers to put your saving on autopilot.

Discover does have some branch locations, but they’re really limited, so you might not have the option to manage your account in person. This account also lacks features to help organize and simplify your saving such as buckets and round-ups.

Learn more about the Discover Online Savings Account or read our full review.

Best for long-term saving: CIT Savings Connect Account

CIT Bank logoPros

  • No fees
  • No minimum balance

Cons

  • Minimum deposit required
  • No branch locations

Features

  • Minimum balance: $0
  • Minimum deposit: $100
  • APY: 4.50%
  • Monthly fee: $0

For high-interest saving, the CIT Savings Connect Account is an excellent choice. This is a newer account with a really competitive APY of 4.50%. There are no minimum balance requirements to earn this rate and you only need to deposit $100 to open. Plus, there are no monthly fees. See details here.

CIT Bank also reimburses up to $30 in third-party ATM fees per statement period and supports free mobile check deposits and external transfers.

The CIT Savings Connect account currently pays the same interest rate on all balance tiers, so you don’t have to worry about maintaining a certain balance or making regular deposits to avoid fees and earn more (although automating your saving is never a bad idea).

This basic account would be a good fit for most people, especially those looking for a fee-free option with no balance requirements. It has one of the best rates and is one of the most straightforward to open and use, so it could make a great primary or secondary savings bucket. Choose the CIT Savings Connect account if getting the best interest rate is your top priority.

CIT Bank offers a number of other savings products including stand-out money market accounts and CDs, so keep this bank in mind if you have a few different savings goals and want to make sure you’re getting the highest rates.

Learn more about the CIT Savings Connect account.

CIT Bank. Member FDIC.

CIT Savings Builder Account

And if you’re looking for another option from this online bank, you can do worse than the CIT Savings Builder Account. This high-yield savings account offers an interest rate of up to 1.00% with a low minimum initial deposit requirement of $100. There is no minimum balance required to keep your account, but your balance will determine your interest rate. See details here.

The CIT Savings Builder Account uses a tiered rate structure with a loophole. The balance tiers and interest rates are:

  • <$25,000 – 0.40% APY
  • <$25,000 – 1.00% APY if you make a monthly deposit of $100 or more
  • >$25,000 – 1.00% APY

If you can’t afford to put away more than $25,000, no worries. Just schedule an automatic transfer of at least $100 from a linked bank account to get yourself into the higher tier. This can also help you make saving a priority.

Because of the tiered interest rate structure, this high-yield savings account is ideal for people who plan to keep high balances and/or make regular contributions to their savings.

Learn more about the CIT Savings Builder Account or read our full review.

CIT Bank. Member FDIC.

Great alternatives

These accounts didn’t make our top three, but they still have a lot to offer, especially if you’re looking for an online savings account.

Axos Bank High-Yield Savings Account

Axos Bank logoFeatures

  • Minimum balance: $0
  • Minimum deposit: $250
  • APY: Up to 0.61%
  • Monthly fees: None

An Axos Bank High-Yield Savings Account is the right high-yield savings account for anyone looking to keep a low balance. There is a minimum deposit requirement of $250 to open an account, but any amount you save will earn interest. Axos uses a tiered rate structure but actually pays the highest rates on the lowest balances. You’ll earn 0.61% as long as your account stays below $24,999.99.

Each account comes with a free ATM card upon request for easy withdrawals. Plus, you can earn a referral bonus of $20 for every friend who opens an Essential Checking account using your unique link.

Open an Axos savings account or read our full review.

High-Yield Chime® Savings Account

Chime logoFeatures

  • Minimum balance: $0
  • Minimum deposit: $0
  • APY: 2.00%7
  • Monthly fees: None2

The High-Yield Chime Savings Account is a great online savings account that does your saving for you. With the Round Up Transfer and Save When I Get Paid features, you can completely forget about your saving and still make progress toward your goals. Round Ups will send the spare change from your purchases right to your savings^ and Save When I Get Paid lets you transfer up to 10% of each direct deposit of $500 or more to your savings account 1. A Chime Checking Account is required to be eligible for a Savings Account. 

This account charges no maintenance fees and has no minimum deposit or balance requirements. Check out Chime checking if you like the idea of saving and banking in one place with a platform that’s easy to use*.

Read our full review.

* Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.
^ Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account.
1 Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more from your Checking Account into your savings account.
2 There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account.
7 The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is effective as of November 17, 2022. No minimum balance required. Must have $0.01 in savings to earn interest.

Capital One 360 Performance Savings Account

Capital One logoFeatures

  • Minimum balance: $0
  • Minimum deposit: $0
  • APY: 3.00%
  • Monthly fees: None

Opening a Capital One 360 Performance Savings account might be the way to go if you’re looking to automate your saving with a familiar consumer bank. This account pays the same interest rate of 3.00% on all balances and doesn’t cost anything to open. To stay on track with your saving, you can schedule recurring transfers from a Capital One or external account.

If you already have an account with Capital One, you’ll be able to make quick transfers from the app. Finally, there are Capital One branches and ATMs all over the country if you like the option of banking in person.

Open a Capital One savings account or read our full review.

Marcus Online Savings Account

Marcus by Goldman Sachs logoFeatures

  • Minimum balance: $0
  • Minimum deposit: $0
  • APY: 2.50%
  • Monthly fees: None

Marcus by Goldman Sachs is an online-only bank owned by investment company Goldman Sachs. A Marcus Online Savings Account is ideal for people who want control over their savings and like to strategize different ways to grow their money. This account offers a variety of tools and extensive research to help you make informed decisions with your savings and track your progress. You can even see exactly how much interest you’ve earned from the app.

You’ll earn 2.50% regardless of your balance and there’s no minimum deposit.

Open a Marcus savings account or read our full review.

What is a high-yield savings account?

A high-yield savings account offers a higher yield than traditional savings accounts. How much higher completely depends on the market and the institution, but may be as much as ten or fifteen times the average. You might also hear the term high-interest savings account used — this is the same thing.

Right now, the national average interest rate on a savings account is 0.37%, according to the Federal Deposit Insurance Corporation or FDIC. The FDIC determines rate caps each month using the average interest rates for savings accounts, checking accounts, money market accounts, and certificates of deposit across all banks and credit unions.

How savings account interest works

There are two different ways interest can work with high-yield accounts. The first is to earn a variable interest rate and the second is to earn a tiered interest rate.

A high-yield savings account with a variable rate will pay the same interest rate on any balance. A savings account that uses a tiered interest structure will determine your rate based on your average balance and pay you according to which balance tier you fall into.

With a tiered interest rate, you often earn more interest the higher your balance is. This is to incentivize people to keep more money in their accounts. With a variable interest rate, it doesn’t matter what your balance is as long as you meet the minimum balance requirements (if there are any).

To make things a little more confusing, sometimes a bank or credit union will use a tiered interest rate structure but make the interest rate the same for every balance tier. All interest rates for online savings accounts are subject to change at any time.

Before you apply for an account, find out what rate you’ll qualify for with your balance and activity. Don’t get tricked into opening a high-yield savings account for the great interest rate unless you know you’ll actually earn that rate.

For example, a bank may advertise a high-yield savings account with an interest rate of 3.00% APY, but this rate only applies to balances over $15,000. The difference between the highest and lowest interest rates can be significant, so make sure you don’t get stuck with a lousy rate.

Read more: How to get the best savings account interest rate

What is the annual percentage yield (APY)?

Annual percentage yield is the rate of return you will earn calculated as a percentage of your savings account balance. You’ve probably noticed that the APY on an account is very slightly different from the interest rate. This is because the interest rate only shows simple interest.

The annual percentage yield or APY shows how much interest you can earn each year if you don’t take any of your money out. We like to look at the annual percentage yield rather than just the interest rate because it factors in compounding interest.

To estimate how much you can earn on a high-interest savings account, multiply the APY by your balance to see how much your account will grow if you don’t touch it.

When is interest calculated?

Interest may be calculated daily, weekly, or monthly for a savings account. This is how often your balance is used to determine how much interest you’ve earned.

This frequency can affect your earnings, and daily calculation is the best-case scenario. This is because the more frequently interest is calculated, the higher your balance will be each time it happens thanks to the interest you’ve already been paid. Interest you earn on interest is referred to as compound interest.

For example, a $1,000 balance earning a 1% interest rate pays you $10 in simple interest over a year. If interest is calculated daily, that $10 becomes $10.05 a year.

Read more: Savings interest calculator

Is interest taxed?

Yes, the interest you earn from your savings account will be taxed alongside your income, no matter how much money you bring in.

How to open a high-yield savings account

The basic process for opening a savings account is pretty much the same anywhere you go.

First, you’re going to provide some personal details including your basic contact information. Once your account has been approved, you’ll choose a funding option. Your options might be:

  • ACH transfer
  • Wire transfer
  • Direct deposit
  • Check deposit (paper or mobile)
  • Cash deposit

You need to meet minimum opening deposit requirements for your account when funding. Some banks will let you open a savings account without making a deposit right away. Just make sure you know the rules for your chosen account.

If you already have an account with the bank or credit union you’ve chosen, you can link this with your new savings account either before or after funding. This will allow for easy transfers in the future.

How to use a high-yield savings account

There’s a difference between just having a high-yield savings account and using it for all its worth. Here are some ways to make the most of high-interest savings.

Emergency fund

A high-yield savings account is the perfect place to keep your emergency fund. We recommend you have one savings account where you keep at least six months of your monthly living expenses, completely separate from the rest of your cash. You can take the money out if you get sick, lose your income, or face a large unexpected expense, and your balance will grow until then.

Short-term saving

A high-interest savings account is also a great place to save for short-term goals when you don’t want to put your money on the line with higher-risk investments. These accounts are safe and liquid, so your money is there when you’re ready for it and earning interest when you’re not.

For example, if you’re saving money to buy a new car or for your wedding in the next couple of years, you may be able to get a higher rate of return by investing in a mutual fund or other securities. But in such a short period of time, you may lose money. Investments are best for savings goals more than a few years away. For shorter-term goals, savings accounts are safer.

No matter what you’re saving for, a good rule of thumb is to save as often as possible and think about it as little as possible. If you rely on yourself to remember or feel like putting away money to save, you might have more trouble meeting your goals and start feeling frustrated when you don’t see your balance go up. Instead, take advantage of features that do the work for you. To save automatically, you can:

  • Set recurring transfers
  • Split your paycheck
  • Use booster features like roundups

Read more: The best place for short-term savings

What is the withdrawal limit for savings accounts?

Most savings accounts limit the number of withdrawals you’re allowed to make. This started with Federal Regulation D.

Federal Regulation D was a rule that limited the number of withdrawals or transfers that could be made from a savings account to six per month. This included withdrawals made in person, by phone, online, or through any other type of electronic transfer. If you made more than six transfers or withdrawals in a month, your bank might have charged you an excessive withdrawal fee or closed your account. 

In April 2020, Regulation D was suspended, but many banks still choose to restrict transactions and enforce the same penalties.

What to look for in a high-yield savings account

There are certain standout features that can immediately make or break a high-yield savings account.

Here are the main things to pay attention to when shopping for a savings account.

Minimum balance requirements

How much do you realistically plan to save? This is the first question you should ask yourself before signing up for an account. Many savings accounts have minimum balance requirements, and you won’t be doing yourself any favors if you open an account and can’t meet these.

If your account does have balance requirements, you must meet them in order to:

  1. Avoid monthly maintenance fees
  2. Earn interest
  3. Keep your account

Your balance at the end of each day is used to determine if you’re meeting requirements. If you’re not, you might be penalized.

Not all high-yield savings accounts have minimum balance requirements. Especially for online savings accounts, it’s becoming more common to not have any.

Read more: How much money should you save each month?

Minimum deposit requirements

Some banks may require you to make a certain minimum deposit when signing up for your account. Failure to do so may disqualify you from opening an account or result in a fee.

A minimum deposit requirement could be anywhere from $5 to $500. Sometimes minimum deposit and minimum balance requirements are the same, and sometimes not. It’s not uncommon for a bank to have a minimum deposit requirement but no minimum balance requirement or vice versa.

Many high-yield online savings accounts have very low or no minimum deposit requirements.

Interest and APY

You’re naturally going to gravitate toward accounts with the highest interest rates, right? That’s free money that you don’t have to work for. But be sure to pay attention to the requirements to earn interest too, not just the annual percentage yield.

For example, if a bank requires you to maintain a balance you can’t maintain to earn interest, it’s probably not the right bank for you. For your first savings account, you might prefer a variable interest rate over a tiered interest rate so you don’t have to worry about if your balance is high enough to earn interest.

Some banks also reserve their best interest rates for preferred customers. This might mean you need to have another account such as a checking account or loan to qualify for the highest APY, and that might be more trouble than it’s worth.

Monthly fees

Some banks still charge monthly maintenance fees on savings accounts, but many don’t. When your goal is to earn money on your savings, monthly fees you get charged just for having an account can really get in the way.

While you should generally look for accounts that don’t charge fees, you might make an exception if a bank offers a waiver. For example, the fee may be waived if you maintain a certain minimum balance in your account for each statement cycle or make a recurring transfer from another account.

If you feel like you can easily meet the requirements to waive a fee and an account is otherwise a perfect fit, go for it.

Cash access

Most people try to ignore the money in their high-yield savings account when they can to take advantage of compound interest.

But life happens, and sometimes you need to dip into your savings. When that happens, you should have convenient access to your money. You might be able to make a withdrawal via:

  • ACH transfer
  • Cash withdrawal
  • ATM withdrawal

Most savings accounts give you the option to make a transfer from your savings to a linked checking account. This checking account can either be with the same bank or another one entirely. If with the same bank, transfers may be instant.

Some banks also offer ATM cards with high-yield savings accounts, though you may incur a fee for ATM transactions. You can also make cash withdrawals at branch locations.

Any transfers or withdrawals you make will count toward your monthly transaction limit.

Mobile apps

Almost every bank out there offers a mobile app today, but some are far better than others. As you’re researching the features of an account, always look into the app too.

Saving from your phone only works when an app does what it’s supposed to, so functionality and convenience are important. You should be able to easily access your savings account, initiate transfers, and see your balance at any time. Those are the basics. You might also want an app that will let you make mobile check deposits, create savings goals, and chat with customer support when there’s an issue.

As a rule, online banks and larger institutions tend to have the best mobile apps. But while you might be looking for an app that’s simple and straightforward to use, someone else might prefer a robust app with educational resources, features, and a variety of notifications. Check out some customer reviews to see what real users have to say about their experiences.

Sign-up bonus

Many banks and credit unions offer sign-up bonuses when you open a high-yield savings account. These offers change all the time and can be quite enticing. For example, bonuses up to $200 are not uncommon. But while sign-up bonuses are nice, they’re not more important than interest rates, fees, and minimums.

Also, be aware that sign-up bonuses come with restrictions. Typically, you’ll need to maintain a certain minimum balance for a set amount of time to qualify. This may be six months or even longer. If your account balance drops below the minimum requirement at any time during the first six months, you may forfeit the bonus. Many bonuses also come with direct deposit requirements.

If you do qualify, you probably won’t get the bonus right away and may have to wait several weeks. All this to say that sign-up bonuses aren’t a good option for getting quick cash. Consider these after all of the other features we’ve outlined.

Are high-yield savings accounts safe?

Your money can’t get a lot safer than it is when it’s in a savings account.

Almost all savings accounts with banks are protected by the Federal Deposit Insurance Corporation (FDIC) and insured for up to $250,000 per depositor. This insurance coverage protects your money in the event that your bank loses money and is unable to repay its deposits. Almost all savings accounts with credit unions are protected by the National Credit Union Administration (NCUA) for up to $250,000 per depositor. This provides the same protections.

If a bank or credit union is not FDIC- or NCUA-insured, you may qualify for private deposit insurance.

Benefits of online savings accounts

High-yield savings accounts and online savings accounts are often one and the same. Here are some of the top benefits you can expect from an online savings account.

Higher interest

A traditional savings account with your bank or credit union might seem like the best choice, but you can do a lot better. Compared to traditional accounts, online savings accounts tend to offer much better interest rates, plus benefits like fewer fees, extra savings features, and the convenience of opening and managing your account completely online (or from your phone).

Online savings accounts can pay higher interest rates because digital accounts are cheaper to operate, lowering a bank’s costs and passing on the savings to you in the form of better interest.

Fewer fees

Online savings accounts almost always have lower fees than traditional savings accounts for the same reasons they can offer better rates. Many charge no monthly fees at all.

Avoiding monthly fees like maintenance fees, low balance fees, and inactivity fees can save you serious money in the long run. Plus, let you actually keep the interest you’ve earned.

Convenience

Online savings accounts are much more convenient to open and use. You can open your account online and fund it by just transferring the money from another account. Usually, all of this takes less than five minutes.

An online account lets you make deposits, transfer money, pay bills, and see your account activity at any time without the need for a phone call or visit to the bank. You can even view your account statements and track your progress. If you’re not a fan of brick-and-mortar branches, an online savings account either with a fully-digital bank or a hybrid bank could be perfect for you.

Perks and benefits

Online savings accounts tend to come with a lot of great, free features. Automatic transfers into your savings account from your checking account, mobile check deposit, and account alerts are just a few common ones.

Some online savings accounts go above and beyond this. They might offer savings support like boosters and automated tools, help you create a saving strategy with resources and insights, or the option to organize your savings into separate buckets or categories.

Read more: Best online savings accounts

Disadvantages of savings accounts

Although a great tool for saving for your future and protecting your finances, savings accounts in general do have limitations. Let’s talk about some of those here.

Limited withdrawals

One of the main disadvantages of high-yield savings accounts is limited cash access. A lot of this has to do with withdrawal restrictions.

Remember, you’re often restricted to just six transactions per statement period with a savings account. This is a limit that was originally set by the federal government that many accounts still stick to. You shouldn’t use your savings account as a secondary spending account because when you hit that limit, you risk losing the account. This is why savings accounts should be for money you don’t immediately need.

If you’re looking for a place to set aside some extra money you do plan to dip into regularly, consider a high-yield checking account instead of a savings account. While the rates for high-yield checking accounts aren’t usually as good as the rates for high-yield savings accounts, you’ll have more flexibility to spend your money.

Read more: Best high-yield checking accounts compared

Rates can change at any time

Another downside to savings accounts is that the interest rates are always variable. This means the rate you earn on your balance can change at any time, and it definitely will as the market fluctuates. It’s important to remember that you’re not locked into the annual percentage yield you sign up for when you open a high-yield savings account.

And if the rate does change, your bank doesn’t have to give you any sort of warning. Although competitive high-yield savings accounts will, for the most part, stay competitive and continue offering the highest yields compared to other accounts, there’s no telling how much you’ll earn in dividends a year from now.

You should choose a high interest rate but know that it can change and don’t rely on the dividends for income.

Security risks

With any type of financial account, there are going to be certain safety concerns. While these are really minimal with an insured savings account, you can take steps to maximize your personal security.

If an account offers multi-factor authentication, set it up (it’s free anyway). If you have the option to enroll in fraud protection, do it. Set up account alerts to notify you about suspicious activity and check your balance often to make sure everything looks good.

FDIC and NCUA protection will keep you safe from losing all of your money if your bank goes bankrupt, but it’s your responsibility to make sure your account is as safe as it can be from hackers.

Read more: How to make online banking more secure

Are high-yield savings accounts worth it?

The answer to this question is probably, but it really depends on what kind of account you choose. We’ll say it again, we always prefer an online savings account with no minimums and no fees. Even if you can’t yet afford to set much money aside, you can start earning a small amount of interest on your balance and setting those good savings habits with free accounts.

But if you open a savings account that charges monthly maintenance fees, overdraft fees, low balance fees, etc., you’re going to have to work harder to make the account worth it. Keep in mind that all of these fees can eat into and even exceed your interest earnings, causing you to lose money in the long run.

So basically, as long as you don’t make the mistake of choosing the wrong account and letting it drain your earnings, you have nothing to lose.

High-yield savings accounts vs. money market accounts (MMAs)

Which is the better option for your money right now: a high-yield savings account or a money market account?

A money market account or MMA is a special type of savings account. They typically have higher balance requirements to earn interest but may offer better interest rates than high-yield savings accounts. Usually, MMAs pay tiered variable interest rates so the more you save, the more you earn.

MMAs often come with higher fees, higher deposit requirements, and higher balance requirements than savings accounts. While they can earn more depending on the interest rate environment, right now the best rates are really comparable between high-yield savings accounts and MMAs.

Savings accounts and money market accounts have the same transaction limit of six per statement period.

Read more: 9 best money market accounts

High-yield savings accounts vs. certificates of deposit (CDs)

A certificate of deposit or CD is a type of deposit account that usually offers a fixed interest rate for a fixed term. This means that the amount of money you earn on your deposits is guaranteed for the length of the CD term.

CD terms can range from as little as one month to as much as 10 or even 20 years. During the term of the CD, you agree not to withdraw any of the money you’ve deposited. If you do need to access your money before the end of the term, you’ll pay an early withdrawal penalty fee.

Early withdrawal fees are equal to the interest you earn for a set number of days or months. For example, you may pay three months’ interest for taking money out of a one-year CD early.

Because of early withdrawal fees, you risk losing your interest in a CD, so you should only deposit money you’re absolutely certain you won’t need until the term is up.

Stick with a savings account until you have an emergency fund built up before you consider a CD. CDs can be better vehicles for long-term saving but they should not replace your emergency savings account.

Read more: Best CD rates of 2023

Source: moneyunder30.com

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Apache is functioning normally

June 7, 2023 by Brett Tams

Loyalty? Not in the mortgage business. That is, if you actually want to save money on your home loan.

A few years back, an HSBC survey revealed that 52% of U.S. homeowners “switched providers” (sorry, they’re British) when obtaining subsequent mortgages.

This was mainly driven (53%) by the desire to get a better deal, aka a lower mortgage rate with fewer closing costs.

That survey also found that 46% of consumers investigated a mortgage switcheroo, again either to save money or to lock in a new low rate due to rising interest rates.

Other reasons homeowners decided to go with another mortgage company were because they moved and purchased a new property.

Or due to their current mortgage deal was expiring. I think they mean an adjustable-rate mortgage resetting.

Is It Bad to Switch Mortgage Lenders?

mortgage retention

A new report from Black Knight claims that loan servicers retained just 18% of the estimated 2.8 million homeowners who refinanced a mortgage in the fourth quarter of 2020, the lowest share on record.

Interestingly, those who refinanced to improve their rate and/or term were retained at a higher rate (23%) versus those pulling cash out as part of the transaction (11%).

This could be due to cash out refinances being harder to come by lately, and thus offered by fewer lenders. Or it just feeling more complex to the homeowner.

But here’s the biggie – among higher-credit quality rate and term refinances, borrowers who switched mortgage lenders received more than an eighth of a percent lower rate than those who refinanced and remained with their current lender/servicer.

In other words, you might get a lower mortgage rate if you switch mortgage lenders, instead of remaining loyal.

So is it bad to switch mortgage lenders? Not if you want to save money! Of course, your old lender might not feel the same way.

Mortgages Are Mostly a Commodity

  • Home loans aren’t all that different from one another
  • This is why lenders are increasingly coming up with unique ways to sell you one
  • The vast majority are 30-year fixed products whose only difference might be the interest rate or fees involved
  • And the majority just follow the underwriting guidelines of Fannie Mae, Freddie Mac, or HUD

It’s really no surprise that a lot of consumers don’t stay with their original mortgage lenders and/or loan servicers.

Aside from some existing lenders sometimes talking borrowers out of a refinance, the product is mostly the same no matter where you get it.

That makes customer retention difficult, especially when other lenders are aggressively marketing to homeowners.

These days, the majority of home loans are backed by the agency guidelines of Fannie Mae, Freddie Mac, or the government via FHA loans and VA loans. I think it’s something like 90% of mortgages.

This means mortgage loans are pretty homogeneous, despite what channel they’re originated in, or which institution provides the financing.

You could get the same exact home loan from a local credit union, a big bank, an online mortgage banker, or a mortgage broker.

And who really cares where you get your mortgage as long as the company is competent enough to close the thing, and honest in terms of rate and fees?

It’s not like you’re going to walk around and brag about your cool mortgage from X bank after the fact. It’s certainly not a status symbol, or a conspicuous transaction.

I’m pretty sure I’ve never had a conversation about someone’s branded mortgage before.

And I doubt an “influencer” is going to post about theirs on Instagram. Well, I take that back, they might…because someone paid them.

Mortgage Advertising Is Following the Insurance Model

  • Like mortgages, most forms of insurance are similarly boring and unoriginal
  • But that doesn’t stop mega insurers like Geico from advertising to you 24/7
  • Other insurers create catchy new names for run-of-the-mill coverage that isn’t really unique
  • Mortgage lenders are beginning to do that too in a bid to separate themselves from the crowd

This is exactly why insurance companies use celebrity endorsements and smart marketing gimmicks to get you to switch, or conversely, to stick around.

Car insurance isn’t cool or exciting and never will be, nor are mortgages, as much as I want them to be.

Ultimately, we’re all being sold the same thing, it’s just that some companies try to differentiate themselves by slapping clever names onto their products.

For example, Quicken Loan’s Rocket Mortgage is about reinventing the mortgage process, not the mortgage itself.

You’re still probably going to get a 30-year fixed home loan or some other ordinary mortgage that you would get anywhere else.

It’s just the way you get it that might change. Instead of meeting face-to-face with a banker, you might upload documents on your smartphone and authorize the release of documents electronically.

This could make the experience a lot easier and more pleasant, but it doesn’t mean you’re necessarily getting anything different.

Because everyone is basically offering their customers same thing, it comes down to price, customer service, and now perhaps clever marketing.

The one exception is portfolio home loan programs, which are actually unique to the mortgage lender providing them. These are loans kept on the originating bank’s books that contain distinct underwriting guidelines.

We’re starting to see more of them, though most lenders remain fairly cautious with the mortgage crisis still a not-too-distant memory, despite taking place a decade ago.

For example, a lot of the zero down mortgages you see are unique to the companies offering them, the latest one I came across from Ideal Credit Union.

And some of the so-called fintech disruptors like SoFi Mortgage are actually providing unique offerings like a 5/1 ARM with an interest-only option and jumbo loans as high as $3 million with just 10% down.

Be Careful Not to Pay More for the Same Exact Mortgage

  • While it’s important to use a mortgage lender you can trust
  • Such as one that can actually close your home loan competently without major delays
  • It doesn’t really matter what “brand” the mortgage it is after it funds
  • And there’s a good chance it’ll be resold to a different company shortly after closing anyway

Those exceptions aside, many of us have very similar mortgages that are only unique in terms of where they originated from.

As noted, most of today’s mortgages are conforming loans, meaning they meet the guidelines of Fannie and Freddie. Or they’re simply backed by the government via the FHA, VA, or USDA.

And just about all of them are 30-year fixed-rate loans that function exactly the same.

That’s why you have to ask yourself – if the company isn’t offering anything different, why pay more?

Might as well bargain shop and find the best mortgage rate with the lowest closing costs, instead of simply going with a household name because of a funny commercial.

At the end of the day, as long as they get you to the finish line, you’ll probably never think about your mortgage company again. Just make sure they’re reputable first…

Chances are your mortgage will be sold off in a matter of months anyway, so the company you get it from likely won’t even service it.

In fact, your final correspondence might be a notice of your home loan changing hands…

(photo: lamdogjunkie)

Source: thetruthaboutmortgage.com

Posted in: Mortgage Rates, Mortgage Tips, Refinance, Renting Tagged: 2, 30-year, About, Advertising, All, ARM, ask, Bank, before, best, big, black, Black Knight, Books, boring, borrowers, Broker, business, car, Car Insurance, chance, closing, closing costs, Commercial, companies, company, Consumers, Credit, credit union, Crisis, customer service, existing, experience, Fannie Mae, Fees, FHA, FHA loans, Financial Wize, FinancialWize, financing, Fintech, fixed, Freddie Mac, funny, good, government, home, home loan, Home Loan Programs, home loans, Homeowner, homeowners, household, HSBC, in, Instagram, Insurance, interest, interest rate, interest rates, Jumbo loans, lenders, loan, loan programs, Loans, Local, low, LOWER, Make, Marketing, money, More, Mortgage, Mortgage Broker, mortgage lender, mortgage lenders, mortgage loans, MORTGAGE RATE, Mortgage Rates, Mortgage Tips, Mortgages, new, or, Original, Other, percent, place, portfolio, pretty, price, products, programs, property, quality, rate, Rates, Refinance, save, Save Money, Sell, smart, sofi, survey, Transaction, Underwriting, unique, USDA, VA, VA loans, versus, will

Apache is functioning normally

June 7, 2023 by Brett Tams

In the world of personal finance, a checking account has often been viewed as the cornerstone of financial management. These accounts are the hub from which we pay bills, make debit card purchases, and handle the routine transactions of our everyday lives.

Yet, with technological advancements and a diversification of financial institutions, many individuals are seeking alternatives to traditional banks and their checking accounts.

This demand for diversity is fueled by various factors, from the inconvenience of monthly fees associated with some checking accounts to the desire for better interest rates or improved money management tools.

woman using mobile app

Understanding the Basics of Checking Accounts

Checking accounts offered by traditional banks have been around for many years, providing banking services that have become integral to our daily lives. Yet, despite their popularity, it’s essential to understand their limitations and consider why an alternative might be more suitable for your needs.

These accounts often serve as the primary tool for individuals to manage their money. You can use them to direct deposit your paycheck, withdraw cash from ATMs, and transfer funds to pay your bills. However, many traditional banking services, like checking accounts, come with a host of challenges.

For instance, many bank accounts from national banks may have minimum opening deposit requirements, monthly fees, and limitations on the number of transactions you can make within a certain period.

10 Best Alternatives to Checking Accounts

1. Cash Management Accounts

Cash management accounts, an increasingly popular alternative to traditional checking accounts, are offered by financial technology companies and brokerages. They function as a hybrid of checking and savings accounts, offering the versatility of both under a single roof.

Not being banks themselves, these companies partner with FDIC insured banks, often multiple ones, to provide these services. This partnership ensures that your money is safe and insured, a critical element to consider in personal finance.

Cash management accounts offer checking-like features, including debit cards, direct deposit capabilities, and the ability to pay bills online. They also boast savings-like features, typically offering higher interest rates compared to checking accounts at traditional banks. This dual functionality makes them an attractive option for people who want to streamline their finances and get more out of their everyday banking product.

2. Money Market Accounts

Money market accounts are offered by a wide array of financial institutions and are a kind of savings account with some checking account features. They usually come with a debit card and check-writing capabilities, allowing more accessibility to your funds compared to a regular savings account.

Although they may require a higher minimum balance compared to a checking account, they generally offer interest rates that are more competitive than those on regular savings accounts. This unique blend of features makes them a versatile option for those who can afford to maintain a higher balance.

Check out the most competitive money market accounts of 2023.

3. Savings Accounts

Savings accounts, offered by local banks, national banks, and online-only banks, are a secure alternative to checking accounts. Though they have been around for a long time, their importance in financial planning and wealth accumulation cannot be overstated.

While savings accounts do not typically offer as many transaction options as checking accounts, they often provide higher interest rates, helping your money grow over time. Some online banks offer high-yield savings accounts that offer even higher interest rates, much higher than the national average. The primary purpose of a savings account is to help you save money while earning a modest amount of interest.

Discover the best high-yield savings accounts of 2023.

5. Online-Only and Mobile Banks

In an increasingly digital world, online-only and mobile banks offer a fully digital banking experience, making them an attractive alternative to traditional banks. Without the overhead costs associated with maintaining physical branches, many online banks offer competitive interest rates on their checking and savings accounts, often significantly higher than the national average.

These banks also shine in their online and mobile banking offerings. They typically provide comprehensive app experiences, allowing you to deposit checks, transfer money, pay bills, and manage your accounts directly from your smartphone. Despite operating exclusively online, many also offer excellent customer service through various digital channels.

Find the best online-only banks and neobanks of 2023 here.

5. Credit Unions

Credit unions provide a community-oriented alternative to traditional banks. Unlike big banks, which are profit-driven, credit unions are not-for-profit organizations owned by their members. This business model allows credit unions to often offer better interest rates on savings and checking accounts.

In addition to potentially lower costs, credit unions also offer a sense of community that big banks can’t match. The services are similar to those offered by traditional banks, including savings and checking accounts, loans, and even mobile banking in many cases. Despite having fewer branches, many credit unions are part of nationwide ATM networks, providing their members with broad access to their money.

Learn about the highest-rated credit unions that anyone can join.

6. Peer-to-Peer Payment Platforms

Peer-to-peer payment platforms are not banks but offer a unique way to manage money digitally. These platforms, provided by financial technology companies, allow you to send and receive money instantly, often for free. Some even offer “bank-like” features, such as direct deposit and debit cards.

While peer-to-peer platforms might not replace a bank account for all your financial needs, they provide a convenient way to split bills, pay friends, and manage casual financial transactions.

Below are a few examples of popular peer-to-peer payment platforms:

  • Venmo: Owned by PayPal, Venmo is one of the most widely used P2P platforms. It’s well-known for its social media-like feed where users can share (or make private) their transaction descriptions. With Venmo, users can send money to anyone with a Venmo account using just their phone number or email.
  • PayPal: As one of the oldest digital payment platforms, PayPal is a widely accepted form of payment online and offers its own P2P service. PayPal users can send and receive money from other users, and the platform offers protection for many types of purchases.
  • Cash App: Developed by Square, Cash App allows users to send and receive money. It also includes unique features like the ability to invest in stocks or bitcoin and a free debit card that provides discounts at certain retailers.
  • Zelle: Zelle differs slightly in that it’s not just an app, but a service integrated into many existing bank apps. Money sent via Zelle can often be transferred directly into the recipient’s bank account instantly or within minutes.

7. Digital Wallets and Cryptocurrencies

With the rise of blockchain technology and cryptocurrencies, digital wallets are becoming a more prominent player in the financial landscape. They offer a new way to store and manage money beyond the traditional bank account.

Digital wallets can store digital currencies, such as Bitcoin and Ethereum, and also manage traditional currencies in some cases. They enable users to make online purchases, transfer funds, and even invest in various cryptocurrencies. These wallets can be accessed through a smartphone or computer, providing high convenience for the user.

However, cryptocurrencies can be volatile and come with their own set of risks, including security threats and regulatory uncertainties. Therefore, while digital wallets and cryptocurrencies offer an exciting alternative, they should be used with caution and understanding.

8. Prepaid Debit Cards

Prepaid debit cards are another practical alternative to a traditional bank account. They work similarly to a regular debit card, but instead of drawing funds from a bank account, they use the money that has been pre-loaded onto the card.

These cards can be used for purchases anywhere debit cards are accepted, and they are often reloadable. Some even allow for direct deposits from an employer or government benefits. While they may come with various fees, they offer the advantage of not requiring a bank account and providing a way to manage money with built-in spending limits.

Take a look at the top prepaid debit cards of 2023.

9. Investment Accounts

Some brokerages and financial companies now offer banking services along with investment accounts. These firms, traditionally centered around investing, have begun to venture into the personal banking space, offering services such as debit cards, check writing, and bill pay.

While not suitable for everyone, an investment account can be a viable alternative for those comfortable with a slightly more complex financial product. Moreover, some of these accounts may offer cash management features or other benefits like interest or cashback on uninvested balances, potentially giving more value than a traditional checking account.

10. Check-Cashing Services

Check-cashing services offer another alternative to a checking account, especially for those who deal primarily in cash and have fewer banking needs. These services are often provided by financial businesses that operate outside the traditional banking system.

These providers cash checks for a fee, usually a percentage of the check’s total value. While this fee can be high compared to depositing a check into a bank account, these services offer immediate access to funds, which can be beneficial for those living paycheck to paycheck.

Some check-cashing providers also offer additional financial services, such as money orders, bill payment services, and prepaid debit cards. It’s essential to understand the fee structure associated with these services, as they can be more expensive than traditional or online banking alternatives.

Key Considerations When Choosing an Alternative to a Checking Account

When looking for alternatives to traditional banks, several factors should be considered.

Fees

One of the most significant considerations is the costs associated with the account. While many online banks offer fewer fees than traditional banks, other alternatives such as cash management accounts and peer-to-peer platforms might have different fee structures. It’s essential to understand these before committing to a new financial service.

Accessibility

Consider how easy it is to access your money. If ATM access is crucial for you, make sure to understand whether your alternative choice offers this, and if there might be associated fees.

Security

Security is a crucial factor, especially with online banking services. Ensure the financial institution is FDIC insured or has equivalent protections in place. For digital wallets and cryptocurrencies, consider how to secure your digital assets properly.

Customer Service

With many online banks operating exclusively online, you might not be able to visit a branch for help. Therefore, it’s essential to consider the level of customer service provided by these alternatives.

Additional Services and Benefits

Some banking alternatives may offer additional benefits, such as high yield savings, cash back on debit card purchases, or other rewards. Assess these benefits in light of your personal finance goals and habits.

Bottom Line

The financial landscape is continually changing, with an increasing number of alternatives to traditional banks emerging. Whether you’re looking for a new place to manage your money, pay bills, or save for the future, there’s likely an alternative that suits your needs better than a checking account.

Source: crediful.com

Posted in: Credit 101 Tagged: 2, 2023, About, accessibility, All, Alternatives, app, Apps, assets, ATM, average, balance, Bank, bank account, bank accounts, Banking, banks, basics, before, Benefits, best, big, Bill Pay, bills, bitcoin, Blend, blockchain, blockchain technology, brokerages, Built, business, cash back, Checking Account, Checking Accounts, choice, companies, Convenience, Credit, Credit unions, cryptocurrencies, customer service, Debit Card, debit cards, deposit, Deposits, Digital, digital world, Direct Deposit, Discounts, discover, diversification, diversity, earning, employer, ethereum, existing, expensive, experience, FDIC, FDIC insured, Features, Fees, Finance, finances, financial management, Financial Planning, Financial Services, Financial Wize, FinancialWize, Free, funds, future, Giving, goals, government, Grow, habits, high yield, high yield savings, How To, in, interest, interest rates, Invest, Investing, investment, Learn, list, Living, Loans, Local, LOWER, Make, making, manage, Manage Money, market, Media, mobile, Mobile Banking, model, money, Money Management, money market, money market accounts, More, needs, new, offer, offers, oldest, Online Banking, online purchases, or, Other, pay bills, paycheck, paycheck to paycheck, paypal, Personal, personal banking, personal finance, place, Planning, Popular, prepaid debit cards, protection, Rates, Regulatory, rewards, rise, routine, safe, save, Save Money, savings, Savings Account, Savings Accounts, security, single, social, Social Media, space, Spending, square, stocks, Technology, time, tools, traditional, traditional banks, Transaction, transfer money, under, unique, value, venmo, wealth, work

Apache is functioning normally

June 7, 2023 by Brett Tams

We may primarily focus on airline loyalty programmes and air miles here at TPG but there are a ton of other money-saving loyalty programmes that we also love and help us save money and maximise our travel adventures.

There are dozens of U.K. loyalty schemes out there – of which the Tesco Clubcard and the cross-retailer Nectar card are among the best known.

Both of the above work for travellers who use points and miles, albeit in different ways (their points earned from the loyalty programmes can be converted to Virgin Points and Avios respectively) – but there are other loyalty cards and programmes out there that have similar potential, if sometimes small, benefits for holidaymakers. The key thing to remember is that everything is cumulative, and even the smallest reward can eventually add up.

Here are a handful of loyalty programmes that may be worth signing up for, helping you earn on everyday spending, such as grocery shopping, buying toiletries, or even filling up your car with a tank of petrol.

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Tesco Clubcard

(Photo by Jason Alden/Bloomberg/Getty Images)

Good for: Collecting Virgin Points, earning points on everyday spending, and getting discounts on select items in your weekly food shop
Sign up here: Tesco

Tesco Clubcard is perhaps one of the best-known loyalty schemes in Britain– you can read TPG U.K.’s full guide here.

Though you can no longer transfer Clubcard points into Avios (its partnership with BA ended in early 2021), you can turn £1.50 of Clubcard vouchers into 375 Virgin Points, to boost your Virgin Atlantic Flying Club total. Essentially, you can get 2.5 Virgin points for every one Clubcard point.

So, how do you earn Clubcard points? Once you’ve got the card (or have it attached to your online account), you just do your usual grocery shopping at Tesco, picking up one Clubcard point for every £1 you spend. If you drive, fill up your car with fuel at Tesco and earn one point for every £2 spent. Once you’ve earned a certain amount of points, they’ll be collected into Clubcard vouchers, which you can then transfer into Virgin Points. Simple, really.

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Another benefit for Clubcard holders is that it can help save cash on shopping if they keep an eagle eye out for Clubcard Prices (reductions in prices) and various offers, both in-store and online.

Finally, if you’re keen to rack up even more Clubcard points, there is the Tesco Clubcard Credit Card –a no-fee Mastercard (alas with no signing bonus) that offers points for every transaction over a certain amount. Namely, you’ll get five points per £4 spent at Tesco supermarkets, five points for every £4 spent on fuel at Tesco, plus one point per £8 you spend at other shops and retailers. This is on top of the one point per £1 you’ll get from scanning your card, or shopping online.

Say you spend £100 a week (or £400 a month) at Tesco on your family’s food shopping, that’s 400 points (from your loyalty card) and 500 (from your credit card), totalling 900 Tesco Clubcard points, a £9 voucher or 2,250 Virgin Points per month.

Nectar

Good for: Collecting Avios, earning points on everyday purchases and regular food shopping.
Sign up here: Nectar

If you’re an Avios collector, then it’s definitely worth also getting a Nectar account. If you’re yet to sign up, you can read TPG U.K.’s full guide here.

Similar to the Tescon Clubcard you can earn Nectar points on everyday transactions. 400 Nectar points can be transferred into 250 Avios, meaning your everyday shopping can contribute to your points-funded dream trip. Until 16 November you can also transfer Avios back to Nectar points at this same rate (250 Avios to 400 Nectar points), after this date this conversion rate will change so you need to convert 300 Avios to get 400 Nectar points. The Nectar to Avios conversion however will remain (for now) set at 400 Nectar points for 250 Avios.

The easiest ways to collect Nectar are to shop at Sainsbury’s (where many purchases, including fuel, will earn you one Nectar point for every £1 spent), as well as at Sainsbury’s Bank, Esso, Argos, Very, even eBay on eligible items. You can also earn by spending with Booking.com, British Airways, DFDS, Expedia and Nectar Hotels (plus more brands, listed on the Nectar website).

To amplify your Nectar-collecting ability, there’s also the Nectar American Express Credit Card, which has a £0 annual fee in the first year (£25 from year two), offers a bonus of 20,000 Nectar points (when you spend £2,000 in the first three months) and a friend referral bonus of 5,000 Nectar points.

Spending on this card gives you two Nectar points per £1 spent on virtually all purchases, but you’ll earn three points per £1 on purchases at Sainsbury’s, Argos and other Nectar partners — as you can double dip for that third point with your loyalty card. Say you spend £100 a week (or £400 a month) at Sainsbury’s on your family’s shopping, that’s around 4,800 Nectar points or 3,000 Avios earned per month.

Related: The ultimate guide to British Airways Avios

Boots Advantage Card

Good for: Buying travel essentials, earning points on regular purchases
Sign up here: Boots

With Boots Advantage Card, you collect four points for every £1 you spend in shops, online or via their app, meaning you’ll be racking up points every time you pick up toiletries, make-up, skincare or even a Boots meal deal.

Every point is worth 1p, meaning 1,000 points is £10 to spend. They quickly add up, and though you can’t use your points to get money off a purchase (only to wipe out the full amount), they may well come in handy for frequent travellers. Whether you travel by plane or train, you might find yourself in an airport or station Boots picking up some forgotten sunscreen, travel minis, flight socks, travel adapters, eye masks, or a disposable camera to document your trip… the list could go on.

A range of offers and discounts will be available to holders, too, potentially saving you a bit of money in the long run… though only if you aren’t tempted by sales prices, and only buy what you actually need.

Heathrow Rewards

Good for: Collecting Virgin Points, Avios or other airline rewards
Sign up here: Heathrow

In a nutshell: if you spend a lot of time (and money) at London Heathrow Airport (LHR), then you’d be daft not to consider joining Heathrow Rewards.

Generally speaking, you get one point per £1 spent at the airport, as well as one point for every £10 spent at Travelex exchanging money, with a sign-up bonus of 100 points. You’ll even get extra points when you splash out on expensive items from the airport’s designer shops.

You can transfer your points (at a 1:1 rate) to either Virgin Atlantic Flying Club, into Avios points for use with British Airways, as well as Singapore Airlines KrisFlyer and Emirates Skywards, among others. Check out our guide to Heathrow Rewards for the full list.

Related: The best points and miles promotions running right now

Superdrug Health & Beautycard

Good for: Buying travel essentials, earning points on regular purchases
Sign up here: Superdrug

Similarly to Boots’ Advantage Card, Superdrug has its own rewards scheme called the Health & Beautycard, which could be useful for travellers in need of a few essentials such as travel toiletries, skincare products, vitamins, etc.

You’ll earn one point per £1 spent, with 100 points equating to £1 to spend in-store – though crucially you can use your points to pay for part of a purchase if you prefer. You’ll also have the chance to earn extra points as you shop, with periods where quadruple points are on offer, as well as receive various offers and discounts.

BPme Rewards

Good for: Collecting Avios, getting money off travel products such as luggage and tech, and earning points on regular fuel top-ups
Sign up here: BPme Rewards

Previously, petrol station BP’s rewards scheme was linked to Nectar, but it now runs its own programme called BPme Rewards.

Essentially, you can earn every time you top up your vehicle, wash your car or by nipping into a BP garage for a snack – snapping up two points for every one litre of Ultimate fuel, one point for every litre of regular fuel, and one point for every £1 spent in a BP shop or car wash.

So, how does this help holidaymakers? Well, you can convert 40 BPme points into 25 Avios (though note you can’t turn Avios into BPme points), with an upper limit of 30,000 BPme points being turned into Avios per day. An alternative might be saving them up for Amazon or Marks & Spencer gift cards, to be used for big travel-related purchases such as new luggage, camping gear, clothing, cameras or other handy tech.

Related: British Airways is launching a new wine club where you can earn up to 15 Avios for every £1 spent

Airtime Rewards

Good for: Saving money on your phone bill, earning cashback on everyday spending (even at stores without their own loyalty schemes).
Sign up to the app: Airtime Rewards

Airtime Rewards is a bit of an outlier in this list, as though its app rewards you for shopping at around 150 retailers like a traditional loyalty scheme, the reward comes not in point form but as cashback — which can only be used for the specific, immovable purpose of knocking some money off your monthly phone bill.

All you need to do is check if your phone provider will actually let you get the money off your bill (O2, 3, EE, GiffGaff and Vodafone are signed up) and be willing to download the Airtime Rewards app and submit your debit or credit card details, allowing them to track your spending and automatically apply the discount to your account’s wallet when relevant (but P.S. it won’t work for American Express cards).

Retailers signed up to Airtime Rewards offer varying percentages of cashback on your purchases, which could be anything from 1% to as much as 8%. Popular retailers the app lists include Boots (5% back), Argos (2%), Wilko (3%), New Look (2%), Halfords (4%), Currys (1%) and Waterstones (6%). Foodies can get money back from Wagamama, Zizzi, YO! Sushi and Ocado, while people who utilise public transport can get 8% cashback on LNER Trains.

How much you save depends on how often you shop at retailers like these, but it all adds up – and could knock the odd £5 or £10 off your phone bill, perhaps even monthly, meaning more to save for your next getaway. Or to help with any unexpected roaming charges.

Red by Dufry

Good for: Discounts on duty-free shopping, lounge access and even hotels
Sign up for the app here: Red by Dufry

Red by Dufry is the loyalty scheme for duty-free shopping at the airport, earning you points when you buy from Dufry shops – such as WorldDutyFree (which we have in the U.K.), ExpressDutyFree, Nuance (Asia, Europe and North America) and Hudson (U.S. and Canada), though tobacco purchases don’t count. You can use the discount and earn points at airport Michael Kors, Gap, Superdry, and Victoria’s Secret stores, too.

Sign up for the app and you’ll immediately get a Silver card (and QR code), which is scanned at checkout to earn five points per €1 EUR spent and get up to 5% off the price of your purchases. Other potential benefits, such as discounts on airport lounge access, various hotels, restaurants, museums and car rentals, are also worth exploring.

Over time, you can increase your discount. Once you’ve spent €400, you’ll have 2,000 and reach Gold status, giving you up to 7% discount – while spending €1,000 EUR gets you 5,000 points and up to 10% off your shopping with the Platinum card. A big bonus is that if your airport of choice is Heathrow, Dufry has confirmed you can also double dip and earn Heathrow Rewards at the same time as Red points – as well as redeem Heathrow Rewards as WorldDutyFree vouchers.

Related: Virgin Red vs BA Shopping: which one is most worth your time?

Waterstones Plus

Good for: Earning point on book purchases, and getting money off your travel guidebooks and holiday reads
Sign up here: Waterstones

As far as rewards go, Waterstones Plus is relatively low stakes, but when it comes to maximising your travel, every pound saved is worth the effort. Particularly if you’re an avid reader, who can’t survive a long-haul plane journey without (at least) one book to delve into, need the latest holiday read for a day at the beach, or prefer exploring a new destination with a trusty guidebook in hand.

Simply, you get one Plus stamp for every £10 you spent in Waterstones shops, on the website or in its cafés. When you have 10 Plus stamps, you’ve got £10 to spend in-store. You might also get some useful offers. There’s an option for students, too, which offers the same stamps-to-cash scenario but adds a bumper 5% discount on most purchases.

Texaco Star Rewards

Good for: Earning points on regular fuel top-ups, and getting money off travel purchases such as luggage and tech
Sign up here: Texaco Star Rewards

Another rewards scheme for drivers, petrol station Texaco’s offering – called Star Rewards – has another straightforward premise, with one litre of fuel purchased equaling one point. When you have 500 points, you’ve got £5 to spend, either with Texaco or by converting your points into vouchers that can be used with various retailers – plus you get a 200-point sign-up bonus.

Most notably for travellers, Texaco points can be converted into a Love2Shop voucher, which can pay for or be put towards online purchases at Argos, Currys PC World, John Lewis, Marks & Spencer and Sports Direct – potentially saving you money on travel purchases such as luggage, cameras, or even just some new shoes. You can also use a certain value of voucher towards purchases with the National Trust, boosting any U.K. trips you might take.

Costa Club

One for tea drinks and coffee addicts (Photo by Allina Rosanova/Getty Images)

Good for: Coffee lovers who want regular freebies while in transit
Sign up here: Costa Coffee

If you frequently find yourself drawn to the unmistakable mauve exterior of Costa Coffee when at any British train station or airport, then joining Costa Club – the brand’s loyalty scheme – is a no-brainer.

To be fair, there isn’t loads to think about here. When you buy eight (hot or cold) drinks, you’ll get the ninth free, or if you get your beverage in an environmentally-friendly reusable cup, you’ll only need to buy four to get your next freebie. A bonus is a free piece of cake on your birthday, too.

Costs can quickly add up as you wander the airport or while dipping into train station shops to buy snacks for your rail journey, so you might as well make the most of any savings.

Source: thepointsguy.com

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Apache is functioning normally

June 7, 2023 by Brett Tams

HomeServices of America, Berkshire Hathaway’s real estate brokerage business, has increased its ownership stake in Title Resources Group, an underwriter currently partially owned by Anywhere Real Estate.

Terms of the deal were not disclosed.

Anywhere, a competing real estate franchisor formerly known as Realogy, sold 70% of TRG to Centerbridge Partners in October 2021 for $210 million in cash.

Then in May 2022, HomeServices purchased its first stake in TRG, but the size and price were not disclosed. However, Anywhere reported it made a sale that quarter of a 4% share of its portion of the title company to an unnamed purchaser for a $4 million gain in a Securities and Exchange Commission filing.

More recently, iBuyer Opendoor Technologies took an ownership interest during March in the title insurance underwriter, but again, details were not provided. But in the SEC filing, Anywhere reported a further 1% reduction of its stake for a $1 million gain during the first quarter.

Title Resources Guaranty, TRG’s business unit, finished 2022 as the eighth largest underwriter by market share, with 2.5% of the premiums generated according to American Land Title Association data.

Industry-wide, title insurance premiums generated totaled $21 billion last year. Among the independent underwriters — those not affiliated with Fidelity National, First American, Old Republic and Stewart — TRG only trailed Westcor, which had a 4.4% share.

During 2021, TRG had a 2.4% share of the $26.2 billion of total title insurance premiums written.

“The team and I are thrilled about HomeServices of America’s decision to increase its ownership stake in our company,” Scott McCall, TRG’s president and CEO, said in a press release.” Our expanded relationship with HomeServices of America speaks volumes to the value we create for our customers and our best-in-class solutions.”

Muncie - Circa November 2021: Berkshire Hathaway HomeServices sign. HomeServices is subsidiary of Berkshire Hathaway Energy.

Muncie – Circa November 2021: Berkshire Hathaway HomeServices sign. HomeServices is subsidiary of Berkshire Hathaway Energy.

Jonathan Weiss/jetcityimage – stock.adobe.com

Messages were left with TRG and HomeServices to get further specifics about the transaction but not returned by press time.

“Our partnership has already created value for our operations,” Gino Blefari, CEO, HomeServices of America, in the same press release. “We look forward to continuing our collaboration and the positive impact we will have on the industry over the years to come.”

Source: nationalmortgagenews.com

Posted in: Refinance, Renting Tagged: 2, 2021, 2022, About, American Land Title Association, best, brokerage, business, CEO, collaboration, commission, company, data, decision, energy, estate, fidelity, Financial Wize, FinancialWize, First American, HomeServices of America, impact, in, industry, Insurance, insurance premiums, interest, Land, M&A, market, More, november, Old Republic, Opendoor, Operations, Originations, ownership, president, Press Release, price, Real Estate, real estate brokerage, sale, SEC, securities, stake, Stewart, stock, time, title, Title Insurance, Transaction, value, will

Apache is functioning normally

June 7, 2023 by Brett Tams

Mortgage lending is largely about the numbers. The process of originating a mortgage is logical, mathematical and should, therefore, be predictable.

From a homeseeker perspective, the process of searching for and purchasing a home is both logical and emotional. The logical side of the process often means a long list of requirements like square footage, number of bedrooms and baths, school quality, proximity to work and shopping, etc.

But for those searching for a home, there is a fair deal of emotion that factors into their decision to make an offer. Who hasn’t fallen in love with a property and conjured up visions of what life could be in a new home? This is likely one of the reasons real estate agents are known to say, “Marry the home, date the rate.”    

Once the homeseeker has found that dream home, it’s now time for them to figure out how they are going to pay for it. And while you might think that this is when the homeseeker flips the switch from emotion to logic, our recent research suggests that there is a strong emotional component to the financing of a home. Keep in mind that, for most, going through the mortgage application is something that happens a small handful of times in their lives. 

Earlier this year, CreditXpert fielded a national survey of those that had recently purchased a home, refinanced a mortgage or anticipated being in the market for a home in 2023. Through this survey we wanted to better understand how consumers think about their credit, the process of applying for a mortgage and what they thought about CreditXpert’s predictive analytics tool that gives them the precise steps they need to take to reach a target credit score.

After showing the participants the tool, we asked them to share the top three reasons they would use CreditXpert to improve their credit score. The number one reason (“will help me save money over the life of the loan”) was clearly logical and not much of a surprise to our team. But subsequent reasons caught us by surprise and clearly pointed to the emotional side of the mortgage application process.

The pink bars in the chart below clearly spell it out. Homeseekers cited more confidence that they were getting the best interest rate (28%), felt empowered to work with their lender (25%), took the mystery (fear) out of the process (21%), gave them more confidence (there’s the confidence word again!) they could qualify (20%) and took some of the stress out of the process (18%).

Picture-1

The mortgage application process is stressful, meet your borrowers where they are

All borrowers start out hopeful and get excited when they see a home that’s nearly perfect. As the deal gets closer to the closing table, applicant anxiety begins to enter the red zone. There are always one or two reasons for the applicant to panic before it’s all signed and then, when it’s all over, they swiftly go from elation to exhaustion, as they realize how much this process took out of them.

For the loan originator, the mortgage is a transaction. For the borrower, the mortgage makes a life-changing event possible.

Not to put too fine a point on it, the chart makes clear that for the mortgage borrower the housing/mortgage transaction is much more emotional than logical.

Building empathy to build applicant trust

The perfect example of by-the-numbers mortgage lending is the refinance transaction. If it makes sense, it’s clearly visible in the numbers for everyone to see. There is little emotion for the homeowners either, as they are only in the deal to get a better rate and term.

A purchase mortgage transaction is different.

New homebuyers are strapped into an emotional roller coaster and once they make the offer, they are in a desperate rush to the closing table.

Demonstrating empathy and understanding towards your borrowers is crucial for building trust. When people feel genuinely heard, understood and cared for, trust builds.

The simple act of helping your borrowers improve their credit score helps build that trust by empowering them, building their confidence, taking the mystery out of the transaction and overall reducing their stress. In a highly competitive market, that’s a recipe for closing more loans.

For those that need help qualifying for a mortgage, improving their score can be lifechanging. For those that are well qualified, improving their score could help you make a more competitive offer and lower their cost of homeownership. And for those where an improved score would not result in a better outcome, the simple act of showing them that you are shaking the trees and working hard for them will increase transparency, build trust and help you close more loans.   

To learn more about CreditXpert, click here.

Source: housingwire.com

Posted in: Mortgage, Refinance Tagged: 2023, About, agents, All, applying for a mortgage, Bedrooms, before, best, borrowers, build, building, clear, closing, confidence, Consumers, cost, Credit, credit score, CreditXpert, decision, dream, dream home, emotion, estate, event, Financial Wize, FinancialWize, financing, flips, home, Homebuyers, homeowners, homeownership, Housing, in, interest, interest rate, Learn, lending, Life, list, loan, Loans, LOWER, Make, market, money, More, Mortgage, mortgage lending, new, new home, offer, or, Origination, panic, pink, property, Purchase, purchasing a home, quality, rate, reach, Real Estate, Real Estate Agents, Refinance, Research, save, Save Money, School, searching, shopping, Side, simple, Sponsored Content, square, square footage, stress, survey, target, time, Transaction, trust, will, work, working

Apache is functioning normally

June 7, 2023 by Brett Tams

.kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-table-of-content-wrappadding:23px 23px 23px 23px;background-color:#f9fafa;border-color:#cacaca;border-width:1px 1px 1px 1px;.kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-table-of-contents-titlefont-size:14px;line-height:18px;letter-spacing:0.06px;font-family:-apple-system,BlinkMacSystemFont,”Segoe UI”,Roboto,Oxygen-Sans,Ubuntu,Cantarell,”Helvetica Neue”,sans-serif, “Apple Color Emoji”, “Segoe UI Emoji”, “Segoe UI Symbol”;font-weight:700;text-transform:uppercase;.kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-table-of-content-wrap .kb-table-of-content-listcolor:#001c29;font-size:14px;line-height:21px;letter-spacing:0.01px;font-family:-apple-system,BlinkMacSystemFont,”Segoe UI”,Roboto,Oxygen-Sans,Ubuntu,Cantarell,”Helvetica Neue”,sans-serif, “Apple Color Emoji”, “Segoe UI Emoji”, “Segoe UI Symbol”;font-weight:inherit;.kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-table-of-content-wrap .kb-table-of-content-list .kb-table-of-contents__entry:hovercolor:#16928d;.kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-table-of-content-list limargin-bottom:7px;.kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-table-of-content-list li .kb-table-of-contents-list-submargin-top:7px;.kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-toggle-icon-style-basiccircle .kb-table-of-contents-icon-trigger:after, .kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-toggle-icon-style-basiccircle .kb-table-of-contents-icon-trigger:before, .kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-toggle-icon-style-arrowcircle .kb-table-of-contents-icon-trigger:after, .kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-toggle-icon-style-arrowcircle .kb-table-of-contents-icon-trigger:before, .kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-toggle-icon-style-xclosecircle .kb-table-of-contents-icon-trigger:after, .kb-table-of-content-nav.kb-table-of-content-id_88a319-9a .kb-toggle-icon-style-xclosecircle .kb-table-of-contents-icon-trigger:beforebackground-color:#f9fafa;

Get a $500 Cash Bonus.

Open a BMO Harris Premier™ Account online and get a $500 cash bonus when you have a total of at least $7,500 in qualifying direct deposits within the first 90 days of account opening. Expires 9/15. Conditions Apply.

There are several businesses near me that either only take cash or highly encourage the use of cash via heavy discounts. One of them even takes pesos if that’s all you’ve got, but they prefer you don’t use credit cards. And it’s all about avoiding interchange fees.

That’s because every time you swipe, tap, or dip, the merchant has to pay for the privilege of accepting plastic payment methods. And that can add up fast for small businesses already operating on razor-thin margins. 

Even if businesses take debit and credit card payments, those interchange fees impact your shopping experience long before you check out in the form of higher prices. That’s why it’s important to understand interchange fees and how they impact the businesses you frequent.


What Are Interchange Fees?

Interchange fees are the fees card networks like Visa, Mastercard, and American Express charge for processing and settling payment transactions. These (usually) invisible costs help compensate the various parties involved in the payment card ecosystem. 

Card issuers like banks and credit unions collect these fees from the merchants who accept the card as a form of payment. They help facilitate the smooth transfer of funds between the merchant’s bank (the acquiring bank) and the bank that issued the payment card.

Interchange fees may seem like an additional burden, but they help keep the payment card system functioning smoothly. For example, the card networks and issuers use the revenue to cover the costs of maintaining the payment infrastructure, ensuring fraud-prevention measures, and providing customer support services.


How Interchange Fees Work

When it comes to interchange fees, there are a lot of moving parts and hands in the pot — which is only a mixed metaphor if you don’t consider how modern manufacturing works. Fortunately, they’re fairly straightforward to understand.

Structure & Calculation of Interchange Fees

Interchange fees aren’t arbitrary. Payment technology companies like Visa and Mastercard determine them through a structured process that takes various factors into account, such as: 

  • Transaction type. Online purchases, in-store payments, or international transactions may have varying fee structures. For example, you might pay a foreign transaction fee if you use your card overseas.
  • Card type.  Whether it’s a credit card, debit card, or rewards card can impact the interchange fee applied to a transaction. For instance, debit cards tend to have lower transaction fees than credit cards.
  • Merchant category. The industry or sector in which the business operates is also a consideration. For example, transactions made at a grocery store might have different interchange fees compared to those at a gas station or a restaurant.

Regardless of the factors involved, the calculation methods typically involve a percentage of the transaction amount, a flat fee, or a combination of both. 

The specific calculations depend on the card network and region. Card networks like Visa and Mastercard have intricate fee schedules that consider multiple factors to arrive at the appropriate interchange fee for each transaction. They update these schedules regularly.

Participants in the Interchange Fee Ecosystem

To understand interchange fees fully, you must take a closer look at the key stakeholders. These participants play crucial roles in determining and collecting interchange fees. 

  • Card issuers: Financial institutions like banks and credit unions issue payment cards, including credit, debit, or prepaid cards. They collect interchange fees from merchants on behalf of the payment networks they partner with.
  • Payment networks: Payment networks like Visa, Mastercard, American Express, and Discover act as intermediaries between merchants, card issuers, and acquiring banks (merchants’ banks). They facilitate transaction authorization, clearing, and settlement and establish fee rules and structures.
  • Merchants: Merchants are physical stores, online retailers, or service providers that accept payment cards. They have agreements with (acquiring) banks to process their card transactions and pay interchange fees to card issuers through those banks. 

How Interchange Fees Impact Consumers

Interchange fees are as important to consumers as they are invisible. That’s perhaps a bit strange in a country where retailers calculate tax at the register and have a line on the receipt for it (it’s included in the tag’s sale price in other countries). And it impacts everything from the cost of your rewards card to the cost of the products you buy.

Funds Secure & Ever-Larger Payment Card Systems 

Payment networks invest some interchange revenue in the technological infrastructure needed for seamless transactions, including secure processing, fraud-prevention, and data security. Those are vital to consumers’ trust in the network and the merchants who use them. 

The fees also provide crucial revenue that helps cover the costs associated with expanding, ensuring more options available to Americans nationwide (and potentially abroad).

Increases Prices

Interchange fees can impact the prices consumers pay, even if they don’t use payment cards for their transactions. 

To offset these fees, merchants factor them into their pricing strategies. That means that even if a consumer pays with cash or another non-card method, they still usually pay slightly higher prices for goods and services.

By incorporating interchange fees into their overall cost structure, merchants distribute the expenses across all customers, regardless of their payment method. That helps ensure the business can cover the fees without cutting into their desired profit margins. 

The extent of the price adjustment varies across businesses and industries. Small businesses with tighter profit margins may feel the impact of interchange fees more significantly and may adjust prices accordingly. Larger businesses with higher transaction volumes have more flexibility to absorb these fees without significant price adjustments.

Limit or Discourage Card Payments

A relatively small number of merchants and service providers have taken to charging the interchange fees directly to the customers who use plastic payment methods as a way to disincentivize them. For example, my local government services, such as the Department of Motor Vehicles, charge you for swiping.

Still others positively reward customers who pay in cash. I buy all my appliances from local secondhand appliance places, and they give you a discount that amounts to at least free delivery for paying in cash. And there used to be a pizza place near me that would even accept Mexican currency to avoid having a customer tap or dip. 

Some are even more forceful about it. The only plastic their employees will touch are bags — maybe utensils. A restaurant down the street, also a pizza place, only started taking credit or debit cards during the pandemic. And they’re not alone.

This type of avoidance keeps their prices in check, but it could also limit their foot traffic or growth to those willing to carry or go get cash. Government services can pull it off because they’ve cornered the market. Small-business owners are often compelled to comply or risk losing their livelihood.

Funding Rewards Programs

Controversially, interchange fees play a role in supporting cardholder benefits, such as rewards programs. Card issuers use them to fund incentives like cash-back rewards, travel miles, loyalty points, and exclusive discounts at partner merchants. 

To some, these benefits enhance the overall cardholder experience and incentivize card usage. They may have several cards in their wallets for various purposes, including cash-back credit cards, travel credit cards, and gas rewards cards.

To others, they’re at best an expensive nuisance. You spend your own time and money trying to earn rewards you already paid for via higher prices due to interchange fees that would be lower if there were no rewards cards.

Still others think they’re part of an overall trend of reallocating money from the have-nots to the haves. People with lower incomes often can’t afford rewards cards’ steep yearly fees if they even qualify in the first place. But nonetheless, they pay extra for products — even those they pay cash for — thanks to interchange fees. Yet they reap no rewards.


Interchange Fee Impacts on Small Business

Interchange fees can present significant challenges for merchants, especially small businesses, making it harder for them to compete effectively. These challenges ultimately become a problem for consumers too.

Creates a Financial Burden

Small businesses typically operate on thinner profit margins compared to larger enterprises. As such, interchange fees can significantly impact their bottom line, especially for businesses with high transaction volumes or lower average transaction values. 

They can make it more challenging for them to allocate resources to other essential areas of business growth.

Increases Pricing Pressure

To offset the interchange fees, small businesses must adjust their pricing strategies. That can result in slightly higher prices for their goods and services compared to cash-only businesses and larger competitors who can spread the costs over a higher volume of transactions — and may even pay lower fees because of that volume. 

Higher prices can potentially deter cost-conscious consumers and make it more challenging for small businesses to compete. This pricing pressure can affect customer acquisition and retention for small enterprises.

Limit Negotiating Power

Large merchants and national chains may have more leverage due to their higher transaction volumes, allowing them to negotiate more favorable terms.

In contrast, small businesses may face less favorable fee structures or have fewer options to negotiate better rates. That puts them at a disadvantage in terms of managing their interchange fee expenses.

Requires Technological Investment

Implementing payment card acceptance infrastructure and staying updated with evolving technologies can be costly for small businesses. They must invest in point-of-sale systems, security measures, and training to ensure smooth card transactions. 

Interchange fees further strain their financial resources, making it challenging for them to invest in the latest technology and stay competitive with larger, more financially equipped players in the market.

Causes Cash Preference

To avoid interchange fees altogether, some small businesses may prefer cash transactions or even incentivize cash payments. 

This preference for cash can limit their customer base and pose challenges in an increasingly cashless society. It can create inconveniences for consumers who prefer or rely on card payments, potentially leading them to choose competitors that offer more flexible payment options.

Those secondhand appliance places I told you about can get away with it because their closest national competitors are big-box retailers like Lowe’s and Best Buy. Those charge about three times as much for brand-new appliances, often only a year model or two newer (for better or worse) and with only a slightly better warranty. People are willing to run to an ATM for savings like that.

A mom-and-pop stationary or hardware store doesn’t have the same luxury. Only a select few people who want exactly what they have and nothing else are going to bother with that.


Interchange Fee Regulation & Evolution

Just as interchange fees haven’t always existed, they won’t always be the same as they are now. Regulations and new technologies are bound to change them somehow — if payment network and banking policies don’t get there first.

Regulatory Efforts & Policies

Payment networks have implemented voluntary initiatives aimed at increasing transparency and competition. For example, some networks have adopted standardized fee disclosure practices, enabling merchants to have better visibility. These initiatives also promote fair competition by ensuring that all participants in the payment card ecosystem have access to essential information regarding fee structures and terms.

But industry efforts seem to have fallen short if Congressional action is anything to go by. 

For instance, the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act, named for Sen. Dick Durbin (D-IL), introduced regulations on debit card interchange fees for issuers with over $10 billion in assets, aiming to provide relief to merchants.

In 2022, Durbin was at it again, this time taking aim at credit cards. The Credit Card Competition Act, which he introduced with Republican co-sponsor from Kansas Sen. Roger Marshall, would set similar limitations on credit card interchange fees. The bill has yet to pass, but they plan to reintroduce it. 

This is the bill everyone says would kill your credit card rewards. And maybe they’re right, though there are other revenue streams that can fund those — streams that come from bills only credit card users pay rather than costs everyone bears whether they pay with plastic or not. 

And if you’d still rather not pay extra for goods and services just to get those rewards, you’d also be forgiven. 

These regulatory actions, along with other measures implemented globally, demonstrate the ongoing efforts to address interchange fee practices and ensure fair and equitable outcomes for all participants in the payment card ecosystem.

Technological Advances & Future Trends

Technological advancements have significantly transformed the payment landscape, paving the way for new possibilities and potential changes in interchange fee structures. 

  • Digital payments, including mobile wallets, contactless payments, and peer-to-peer payment platforms, have brought increased convenience. Interchange fee models have to adapt and may have to accept getting cut out altogether.
  • Alternative payment methods like cryptocurrency have taken a big hit lately. But they’re not down for the count. Blockchain is (probably) the future. These innovative payment methods operate outside traditional card networks and will almost certainly challenge the traditional interchange fee models, given that they already charge interchange-like fees to keep them operational.
  • Open banking initiatives enable the integration of various financial services and promote increased competition within the payment ecosystem. That could drive the exploration of alternative fee models tailored to specific transaction types, consumer segments, or payment scenarios.
  • Artificial intelligence offers new opportunities for personalized pricing and risk assessment. That could lead to the development of dynamic interchange fee structures that consider individual consumer behavior, transaction history, and risk factors, resulting in more tailored and optimized fee models.

As the payment landscape continues to evolve, interchange fees are likely to adapt to accommodate technological advancements and emerging trends. The future of interchange fees may involve greater flexibility, transparency, and customization, allowing for a more dynamic and efficient payment ecosystem.


Final Word

Whether you’re all for interchange fee limits or you want them to keep their filthy paws off your rewards program, one thing’s for certain: We could use more transparency around interchange fees in the United States. 

By learning more, consumers gain valuable insights, allowing them to take practical steps to navigate their financial choices more effectively. At the very least, you know you might be able to get a better deal from small businesses on higher-dollar goods and services by offering to pay in cash.

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Heather Barnett has been an editor and writer for over 20 years, with over a decade committed to the financial services industry. She joined the Money Crashers team in 2020, covering banking and credit content for banking- and credit-weary readers. In her off time, she enjoys baking, binge-watching crime dramas, and doting on her beloved pets.

Source: moneycrashers.com

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