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Card Demand At Record Levels; Crypto-Linked Cards Are Flourishing

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Borrowing Is Back as Sign-Ups for Auto Loans, Credit Cards Hit Records

Americans are borrowing again, in some cases at levels not seen in more than a decade. According to Equifax, consumer demand for auto loans and leases, general-purpose credit cards and personal loans was up 39% in April compared to year ago levels. It was also up 11% compared with April 2019. Equifax said lenders bumped up credit card originations, issuing more general-purpose credit cards than any other March on record since Equifax started tracking data in 2010. [The Wall Street Journal]

Visa Says Spending on Crypto-Linked Cards Topped $1 Billion in First Half This Year

Visa said its customers spent more than $1 billion on its crypto-linked cards in the first half of this year, as the payments processor takes steps to make crypto transactions smoother. The company said it was partnering with 50 cryptocurrency platforms to make it easier for customers to convert and spend digital currencies at 70 million merchants worldwide. In March, the company announced it will allow the use of the USD Coin to settle transactions on its payment network. [Reuters]

Visa and BlockFi Launch 2% Bitcoin Rewards Credit Card

BlockFi launched its first-ever crypto rewards credit card, in conjunction with Visa, to approved clients in the United States. BlockFi’s plans for a credit card were initially disclosed in December 2020 when the exchange released a waiting list for US-based clients, which is now over 400,000 people. The new offering provides clients with a simple way to acquire bitcoin without having to pay fees or navigate the sometimes-complicated onboarding processes at exchanges. [Forbes]

The Best Credit Card Combos: Maximize Rewards and Cash Back for Every Dollar You Spend

Most people would love to just use one credit card for all purchases. However, no credit card currently offers all of the perks and rewards needed to make it the one card to rule them all. Instead, the best way to maximize the return on your purchases is by curating a credit card portfolio. By using the right combination of cards, you can earn the highest amount of rewards on every type of purchase you make. Here are some of the best two- and three-card combos that can help you maximize the return on every dollar you spend. [CNBC]

Verizon Jumps into the Increasingly Crowded Teen Card Market

Verizon has launched Family Money, a prepaid card on the Galileo platform issued through Metropolitan Commercial Bank. The goal is to help provide a tool for parents to help their children learn financial management skills at an early age. Parents link their checking account to the Family Money app which creates the means to load funds onto their kids’ cards. The card comes with card controls that can block certain transaction types and establishes spending limits. A savings account is also a part of the service. The cost is $5.99 per month for up to five prepaid cards. [Payments Journal]

Wells Fargo Tells Customers It’s Shuttering All Personal Lines of Credit

Wells Fargo bank is shutting down all existing personal lines of credit in the coming weeks and no longer offers the product. The product, which typically gave users $3,000 to $100,000 in revolving credit lines, was pitched as a way to consolidate higher-interest credit card debt, pay for home renovations or avoid overdraft fees on linked checking accounts. [CNBC]

Emirates Rolls Out Instant Direct Payment Method for Travel Bypassing Credit Card Issuers

Emirates is rolling out a way for travelers to pay for tickets directly from their bank accounts into the airline’s bank account via an industry-run system. The move comes as many travel companies are eager to push consumers away from credit and debit card payments as cheaper options become commercially available. Emirates Pay lets consumers in Germany and the UK purchase tickets at the airline’s website by directly debiting their bank accounts. [Skift]

American Express Expands Digital Receipts with Increased Purchase Details

American Express has announced expanding the feature of Digital Receipts to provide card members who shop on Amazon increased purchase information about their recent orders with the retailer. With more people shopping online, Digital Receipts gives U.S. card members access to additional information about their purchases with specific merchants. Amex is enabling card members using the new Digital Receipts for Amazon purchases to see detailed information on their order including the specific items purchased, the order number and even delivery details. [IBS Intelligence]

East Bay Assemblymember’s Bill Would Regulate Booming Debt Settlement Industry

The booming debt settlement industry is composed largely of online companies that promise to reduce personal debt by negotiating with banks and credit card companies on the customer’s behalf. But consumer advocates point out that these companies often prey on financial desperation and fail to warn customers of the potential consequences, like ending up in court. California lawmakers are now considering legislation that would more tightly regulate the industry after largely overlooking personal debt from credit cards and loans in pandemic-era legislation focused on relieving rental and utility debt. The bill is reviving a perennial debate in the Capitol over whether alternative financial services—-like payday loans, debt settlement, and credit repair—-are financial predators or a needed lifeline for Californians with little or poor credit. [East Bay Times]

I’m Tired of Being Asked to Front Thousands in Business Expenses on my Personal Credit Card

Employers should not be floating operating expenses on their employees’ backs, no matter how much those employees earn, or how they spend it. Your paycheck is not a slush fund for your employer to dip into to keep its books balanced. No employee should be asked or even subtly pressured to do the same for management’s convenience. What if reimbursement is delayed and the employee has to pay interest? What if the expense isn’t approved for reimbursement, or the company suffers a catastrophic (cough-pandemic-cough) setback?  [The Washington Post]

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Are Sallie Mae Student Loans Federal or Private?

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When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances

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Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit

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Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.

 

 

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