Tag Archives: credit

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Revolving Credit Surges; Auto and Student Loans Slow

From ZeroHedge:

The most notable aspect was the $5.77 billion surge in revolving credit (e.g. credit cards) as Americans extended and pretended into the holidays – the biggest rise since April, and the second biggest monthly increase since the GFC…student and auto loans rose by the smallest amount since February 2012!

So student loans and auto loans are still increasing; they’re just growing at a slower rate.

I suspect this has something to do with the fact that so many loans have been made, they are reaching the saturation point. With student loan debt at all-time highs, there isn’t much room for more growth.

Still, lending standards are loose. If you have good financial habits and low debt, now is a great time to get a loan and move up the credit ladder.

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80 Million Anthem Customers Have Data Stolen

It seems like every day we hear about another massive data breach. Here’s the latest.

From USA Today:

SAN FRANCISCO – As many as 80 million customers of the nation’s second-largest health insurance company, Anthem Inc., have had their account information stolen, the company said in a statement…The hackers gained access to Anthem’s computer system and got information including names, birthdays, medical IDs, Social Security numbers, street addresses, e-mail addresses and employment information, including income data, Swedish said.

In other words, everything a hacker would need to steal your identity. 80 million people–and that’s just the latest. At this point, is there anyone in the country who hasn’t had his information compromised?

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Case Study: How to Do Absolutely Everything Wrong with Your Money

If you set out to do the EXACT OPPOSITE of what these people did, you’d be in good shape.

From WaPo:

A decade ago, Comfort and Kofi were at the apex of an astonishing journey they had made from Ghana in 1997, when they had won a visa lottery to come to America. They did not know it at the time, but they were also at the midpoint in their odyssey from American Dream to American Nightmare.

Today, they struggle under nearly $1 million in debt that they will never be able to repay on the 3,292-square-foot, six-bedroom, red-brick Colonial they bought for $617,055 in 2005. The Boatengs have not made a mortgage payment in 2,322 days — more than six years — according to their most recent mortgage statement. Their plight illustrates how some of the people swallowed up by the easy credit era of the previous decade have yet to reemerge years later.

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Infographic: Which States Allow You to Record Phone Calls with Debt Collectors

Credit Repair Infographic: Recording Debt Collectors' Phone Calls by State

Click image for full size infographic

One of my Credit Commandments is to never talk to debt collectors. However, people are prone to ignore this commandment, especially if they’ve already crossed that bridge, and so the next Credit Commandment is to record your phone calls with debt collectors for your own protection.

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How $50/Month Can Make You Richer than a Hedge Fund Manager

My line of work has given me inside access to the financial habits of many, many people. From starving college students to the rich and famous, I have had the opportunity to peer into what money habits really look like for a wide cross section of society.

If I could distill all that into just one observation, it would be that no one is doing as well as you think. I’m thinking specifically of a couple of very rich people I’ve met over the course of the past two years or so. Both worked in high finance. One was a former hedge fund manager.

Both of these guys were in serious financial trouble. They weren’t going to make it through the recession unscathed. They were looking at a major restructuring of their lifestyle. One was facing foreclosure. Think the job market is tough for ex-factory workers? Try being an ex-hedge fund manager.

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3% Down Payments on Mortgages

From Marketwatch:

More lenders are lowering down-payment requirements, allowing borrowers to commit 3%—or even less—of a home’s purchase price to get a mortgage. Many had been requiring down payments of at least 20% since the recession began.

Some lenders also are waiving mortgage-related fees, and more are allowing down payments to be made by other parties, such as the borrower’s family.

The deals are aimed at buyers with good credit scores and a steady income who have been unable to save enough for a sizable down payment. They are often targeted at buyers who live in expensive housing markets, where even a small down payment can equal tens of thousands of dollars.

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ID Thieves Will Steal Your Tax Refund

From CNN:

Identity thieves are stealing people’s Social Security numbers and other key pieces of personal information in order to file a fraudulent tax return and claim a refund, the IRS warned Monday.

The scammers typically file the fraudulent return early in the season, beating you to the punch. And when you file, that may be the first time you learn your identity has been stolen.

What’s disturbing about this is just how little information it takes to pull off this scam, and how difficult it is to detect. It seems like every day I’m hearing about a school, university, large corporation, or governmental agency that gets hacked and has to notify people that, oops, someone stole your SSN from us. Sorry!

I’m increasingly convinced that identity theft is just going to become a part of modern life that everyone will have to deal with at some point. It has happened to me and many people I know. Even the people I know who haven’t actually had their identity stolen, have had their personal information compromised. So, it may just be a matter of time.

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Banks Want to Robocall You

From Marketwatch:

According to the Telephone Consumer Protection Act, it’s illegal to robocall a mobile phone number without permission. The American Bankers Association wants to change that, arguing that robocalls will help fight identity theft and other kinds of fraud. Opponents say that’s an overreach, one that will erode an important consumer protection.

That’s one explanation. Another is that it allows them to repeatedly call people who owe them money, like this couple. If you’re between 3 days and 6 months late on your credit card payment, the debt hasn’t been charged off yet and the banks still consider it recoverable. This window is when they like to bombard people with debt collection calls. Changing the law to allow robocalls would facilitate this.

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What’s Better than Predicting the Future?

Benjamin Graham was the most successful investor the world has ever known. Over the twenty-year period from 1936 to 1956, he achieved a 20% annual return on his stock investments (vs a 12.2% return for the market overall). Legendary investor Warren Buffett was one of Graham’s proteges, and called him the most influential figure in his life after his own father.

Don’t worry, this post isn’t about investing or the stock market. It’s about a principle that Benjamin Graham wrote about in his magnum opus The Intelligent Investor that can be applied to virtually every area of your life (but most especially your financial life).

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Hiding Money from Your Spouse? You’re Not Alone.

From Yahoo! Finance:

One in five Americans have spent $500 or more on a purchase without their partner’s knowledge, according to a CreditCards.com report released Wednesday…It’s not just purchases that many are keeping secret. Approximately 7.2 million Americans (4.4 million men and 2.8 million women) have hidden a bank or credit card account from their live-in spouse or partner, the report found.

Look, marriage advice is beyond the scope of what I do here. I do NOT want to get in the middle of that one.