Vital Financial Updates Credit – Is it good or bad?

OG&E ignores real money-saving options

OGamp;E’s own expert was quoted saying other utilities are considering carbon pricing while planning for the future. Sadly, OGamp;E isn’t following suit. Despite the clear advantages, OGamp;E is ignoring real money-saving options for Oklahomans and doubling down on a bad bet. Wind power is saving money for Oklahomans who are lucky enough to be customers of more forward-thinking utilities. Shouldn’t OGamp;E be required to employ the cheapest option for complying with health and environmental protections?

OGamp;E is betting against history, the energy market and the wishes of many Oklahomans. Who pays if OGamp;E is wrong? Customers are being asked to foot the bill ($500 million of the $1.1 billion) for retrofits to keep a 35-year-old coal plant running by subsidizing updates to an outdated resource while taking the sizeable risk of assuming that a market for it will even exist in another decade. Instead of replacing this plant with energy resources that would be insulated from potential carbon regulations, OGamp;E is asking customers to sink their hard-earned dollars into a coal plant that could be obsolete before we’re finished paying off the upgrades. While OGamp;E management and shareholders will pay zero, they stand to make nice profits for themselves.

Ann Bornholdt, Oklahoma City

Credit card debt approaches record high

Consumers are building up large amounts of credit card debt and the average balance neared a record high last year, according to a new report. 

Figures published by PricewaterhouseCoopers indicate that credit card spending rose by £4.2 billion in 2014, accounting for more than a fifth of unsecured borrowing.

The report also said that the average credit card balance stood at £1,021, which is just £39 below its all-time high. 

It put the rise down to greater confidence in the economy, but also warned that consumers needed to be careful to manage debts built up on credit cards. 

The cost of borrowing on credit cards has also risen over the past three years. Which? research shows the average representative APR has increased from 18.6% to 20.4%. 

So it makes sense to take advantage of one of the many deals that offer you 0% interest for a set period of time.

Here, we suggest how to find the best credit card for you and manage any credit card debt without letting spending spiral out of control. 

Find out more: How to find the best credit card – apply for the card that best suits you

Make the most of 0% purchases credit cards

Its possible to buy large-ticket items or make a series of everyday purchases using a credit card without paying any interest.

There are currently hundreds of credit cards on the market that offer introductory 0% interest deals on all purchases. The longest deal currently available lasts for 23 months.

However, the APR typically skyrockets once this promotional period ends, so you need to be disciplined enough to steadily repay the debt, over the 0% period. 

Wed suggest setting up a monthly direct debit transferring money from another bank account onto your credit card to pay off the debt. 

Remember all credit cards require you to make the minimum monthly repayment. If you miss a repayment you may lose any promotional 0% deals and the card could revert to its headline interest rate.     

Which? Money Compare table – 0% purchases credit cards – hundreds of deals compared

Avoid interest using 0% balance transfer cards

If youre already paying interest on credit card debt, its possible to give yourself a break from interest payments by transferring to a 0% balance transfer credit card. 

Some 0% balance transfer credit cards will give you up to 36 months to repay the debt without paying interest. However, these will typically be the more expensive deals with balance transfer fees of up to 3.49% of the balance transferred. 

If the length of deal is less important, finding a compromise between the length of deal and a lower balance transfer fee can help you save further on your credit card debt. 

A few providers such as Tesco Bank and Santander currently offer deals which charge no transfer fees to transfer a balance to its 0% deal for 12 and 23 months respectively.   

Once again, its important to either pay off the debt before this promotional period finishes or transfer it to another 0% deal, as the APR will return to the cards headline rate or in some cases to a higher interest rate. 

Which? Money Compare table – 0% balance transfer credit cards – hundreds of deals compared

More on this…

  • How to find the best credit card – apply for the card that best suits you
  • How to deal with debt – our tips to keep you in control 
  • Subscribe to Which? Money – for unrivalled financial coverage every month

Which Ltd is an Introducer Appointed Representative of Which? Financial Services Ltd, which is authorised and regulated by the Financial Conduct Authority. Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

13 Investigates: Equifax files security breach notice in Maine; cites …

PORTLAND (WGME) – CBS 13 is digging up new details after hundreds of confidential credit reports were sent in the mail to a woman in southern Maine. CBS 13 first reported the story last week of a security breach involving Equifax – one of the major credit reporting agencies. Now weve discovered the company admitted its responsible for making a mistake.

For the past week, weve been trying to get answers from Equifax about how a Biddeford woman ended up with more than 300 credit reports that arent hers, but the Atlanta based company isnt responding to phone calls and emails from CBS 13. However, documents filed with the state, by lawyers for Equifax, are filling in some of the blanks.

This comes after 13 Investigates told you last week about the hundreds of credit reports Katie Manning got in the mail, all addressed to her, but belonging to strangers across the country. Envelopes on her kitchen table were stuffed with full names, social security numbers, birthdays, and credit card account information.

We obtained a document filed with the Office of the Maine Attorney General and the Bureau of Consumer Credit Protection.

The inadvertent disclosure of information was the result of a technical error, Phyllis Sumner, a lawyer for Equifax, wrote.

We have no evidence of any criminal access, Sumner added.

Portland Attorney Sigmund Shutz isnt representing Equifax in this case but has advised many companies on what to do after a security breach and says it appears Equifax is taking the proper steps. Shutz says Equifax should also be working to get to the root cause of that technical error.

Sending 300 separate letters to the same address, one random individual, you would hope that would send off a red flag somewhere for some checking, Shutz said.

Multiple calls and emails to Equifax Vice President of Communications and Public Relations Tim Klein over several days were not returned, but the letter to the state indicates Equifax continues to investigate this incident and will mail notification to anyone whos impacted.

One hopes this experience then makes it even more unlikely someone will have the same experience, Shutz said.

The Bureau of Consumer Credit Protection says all the credit reports were given back to Equifax on Monday. The state continues to investigate and regulators say Equifax could face state and federal fines.

13 Investigates: Equifax files security breach notice in Maine; cites technical error

Loans for All Credit Scores: The Meaning of the OneMain Sale

Shutterstock

Citibank (C) this week announced the sale of OneMain Financial to Springleaf Financial (LEAF) for $4.25 billion. The combined business will be a subprime giant, with over 2,000 branches offering loans to people with less-than-perfect credit. Just a few years ago, Citi was trying to sell OneMain for $1 billion, and no one wanted to buy. Yet in 2015, Springleaf buys the business for much more money, and its shares jump 26 percent on the news. What does this acquisition mean? Quite simply: Americans are borrowing again, and lenders are looking forward to the earnings growth that will come from this expansion of lending.

We are seeing increased activity across all credit scores, with both old business models and new. This can be a good thing: too many people are paying far too much for their credit card debt. Finding new opportunities to refinance that debt at a lower interest rate would be prudent. If you are a small business, you may have found growth difficult after the financial crisis due to restricted lending from big banks, and these new providers are enabling you to grow your business.

However, there is also a risk that the availability of credit leads us down a path of excessive borrowing once again. I hope for the former, but fear the latter.

Here is a quick overview of some new (and old) entrants that are trying to grow their loan portfolios. If you are trying to find a smart way to cut your interest rate or grow your business, keep reading. If you are just looking for some instant money to buy that next flat-screen TV, please dont.

Super-Prime Customers

For people with excellent credit (a FICO score of 700 or higher), there are now plenty of options to borrow. And interest rates are racing towards historic lows, with incentives being piled on top. It really is a borrowers market.

SoFi is a new online lender that can help people refinance their student loans, with rates starting as low as 3.50 percent. It has just expended into personal loans, and it is bringing its low-rate swagger with them. Interest rates start at 5.50 percent, and only go up to 8.99 percent. Even better, there is no origination fee and no prepayment penalty.

If you have $10,000 of credit card debt at an 18 percent rate (which, believe it or not, is close to the national average), you could save nearly $2,000 of interest by paying off your debt at SoFi. To qualify, you need a score of 700 or higher. And, if you apply via MagnifyMoney (we do not receive any payments from SoFi) during March, it is paying a $100 bonus to customers after the loan closes. For super-prime customers, it will be hard to find a better deal. SoFi is widely regarded as the next Internet lender to go public.

Not Quite Prime

If your score is below 700, you still have some amazing options. Payoff will lend to people with a score as low as 660, and its rates start at 10 percent. Payoff is focused on helping people get out of debt, and it has built a business around getting people debt-free. It does not want the Payoff loan to increase your total debt, because its primary goal is for you to have less debt in 12 months than you have today.

LendingClub (LC) is one of the original Internet lenders, and it is active all the way down to a 620 credit score. I poured through its investor prospectus and borrower data to get a good understand of its approval criteria, and thats share at MagnifyMoney. In summary, it is looking for people who have credit card debt, but almost always paid on time. It doesnt like collection items on your credit report or many missed payments. So, if you are responsibly paying but just want to get out of debt faster, it may be the right option for you. LendingClub generated a lot of headlines over its wildly successful December IPO.

The good news about SoFi, Payoff and LendingClub is that you can see if you are approved and what interest rate you could get without hurting your credit score. All use soft pulls on your credit report. The smartest move is to apply to all 3 lenderthree and go for the lowest interest rate.

Small Businesses

After 2008, it became incredibly difficult for small businesses to get access to affordable credit. Just as Internet lenders have been making it easier for people to borrow, the same innovation has come to the small business market.

FundingCircle is a leading small business marketplace lender, and it is on target to issue more than $1 billion of loans this year. It looks to make loans between $25,000 and $500,000 to profitable small businesses looking to grow or finance inventory. The process feels like the opposite of bank lending. You apply online, answering just a few key eligibility questions, including your time in business, your business revenue, profits and the FICO score of the owners (which must be higher than 620). It can close loans in a week.

I spoke with the owner of a wine shop in New York, who benefited from FundingCircle. Before 2008, the renewal of his credit facility was routine. But, in 2008, everything changed. Even though his business was doing better (people must have been drinking a lot of wine in those days), the big banks just wouldnt lend. When he Googled for an answer, he found FundingCircle and was able to get the loan arranged in a week.

Back to Where We Started, With OneMain

If you visit a OneMain branch, you can get a loan issued in under 30 minutes. It goes deep with FICO scores (as low as 550), but its prices are higher (up to 35 percent). OneMain is a much better alternative to payday and title lending, but it can also be a more expensive form of credit card borrowing.

The business has been booming over the last few years and was making hundreds of millions of dollars for Citi. Combined with Springleaf, we can expect further growth, including more aggressive online loan distribution alongside their branch network.

OneMain was a pioneer of subprime installment lending in 1912 (under its original name, Commercial Credit). And that should give us all a wakeup call. The business models and technology may be new, but the core business is as old as time. They are all money lenders. In the last crisis, we thought we had become so smart that we could use analytics and securitization to give people loans they couldnt afford. Right now, we dont see signs of excess. But as the competition for loans heats up, this new batch of lenders will be under pressure to relax lending criteria. Lets just hope that this time is different.

Nick Clements is the co-founder of MagnifyMoney, a price comparison website that helps you find the cheapest bank accounts, and the lowest interest rates on your savings and your debt. He spent nearly 15 years in consumer banking, and most recently he ran the largest credit card business in the UK You can follow him on Twitter @npclements

If saving money isn’t independence enough, try off-the-grid living

Moneywise

Compiled by
Matthew Jelalian


If saving money isnt independence enough, try off-the-grid living

National Debt Relief Shares Tips In Dealing With A Big Debt Amount

National Debt Relief recently shared in an article published March 7, 2015 how consumers can effectively deal with and manage a big debt amount. The article discuss some valuable tips to help people get over their financial burden of dealing with debt.

Miami, FL (PRWEB) March 19, 2015

National Debt Relief recently shared in an article published March 7, 2015 how consumers can effectively deal and manage a big debt amount. The article, titled “Best Strategies When Dealing With A Big Debt Amount,” discuss some valuable tips to help people get over their financial burden of dealing with debt.

The article starts off by explaining how debt is something a lot of consumers are already dealing with. The article points out that a lot of people who are burdened with debt do not see anything wrong with it. In a consumer-driven economy, people willingly put on debt to be able to buy things that they need. It has already been a way of life like how credit cards are used for the grocery or mortgage loans to buy a house and even student loans to afford higher education.

Even though debt is common in a person’s finances, it does not mean that it should remain there. One of the first things consumers must do is to face the problem rather than running away from it or just pretending it does not matter. Consumers need to know how much their debts are and see how their income can meet these payments.

Identifying the cause of the problem is another way to address the debt problem. It may be that the consumer is using their credit card too much and rolling the balance over to the next month. This increases the interest payment they make on their debts. It is also possible that a person is easily swayed by big red sale signs at the mall. Knowing these problem areas can help manage and prevent more debt.

The article also shares that there are debt relief plans such as debt consolidation loans, debt management, credit counseling and even debt settlement to manage the debt. To read the full article, click this link: http://www.nationaldebtrelief.com/best-strategies-when-dealing-with-a-big-debt-amount/

For the original version on PRWeb visit: http://www.prweb.com/releases/dealing_with/big_debt_amount/prweb12585426.htm

National Debt Relief Shares Some Credit Card Mistakes

National Debt Relief Shares Some Credit Card Mistakes
National Debt Relief recently shared some of the worst credit card mistakes that consumers are guilty of in an article published March 3, 2015. The article enumerates some of the worst and fairly common mistakes people commit when getting or using their plastic credit.

Cash caution 101: What every college kid should know

Q: What do you want college kids to take away from the book?

A: This has nothing to do with me saying that kids arent going to walk out of school with college loans. This is really making sure that we are not adding to the debt while they are in school.

Q: How much do parents contribute to their kids overspending in college?

A: Thats a whole other book. If parents are shipping them $100 and theyre living a very comfortable life, this book is not for them. It really applies to that average college student thats graduating with $28,400 in debt.

Q: What dont college students understand about money?

A: I think they are absolutely clueless how poor they are going to feel going into college if theyre not prepared. Theres a huge shock that occurs after that first semester, just the reality hitting them because they werent educated on how to manage their money. The second biggest shock is how quickly things can spiral out of control. Its pretty darn easy if you only need $10,000 of your student loan, but they give you $15,000, its pretty easy to take that extra couple thousand and have fun.

Q: Whats the biggest mistake college students make with their money?

A: Absolutely the biggest mistake is getting credit cards their freshman and sophomore year. The only credit card they should have in their hand is one linked to mom or dad for emergencies. I recommend it junior or senior year after theyve mastered managing their finances. Getting that credit card is where things can spiral out of control.

Ask Amy: Walmart Savings Catcher a no-stress solution to saving

Amy,

I seriously have no time, or energy really, to save money like I used to. I feel like I’m always in a rush and just don’t have time to ad match, clip coupons or save in general. My grocery bill keeps going up and up and my weekly salary just isn’t keeping on pace. Is it possible that there is something I can do to save money that requires very little time?

Sincerely,

Leslie R.

Dear Leslie -

I feel the same way. It seems like I barely have enough time to get my kids shuttled to their next practice, recital or extracurricular activity, let alone have the time to save money. For me, however, setting aside time to clip coupons and ad match are a serious habit and lifestyle choice, just not one that works for everyone. Saving money takes some effort if you are looking for big bucks paybacks. But, if you’re wanting to save a little money quick, there is a fairly new program which may be just what you’re looking for. The recently created Walmart Savings Catcher is a mobile or online program which allows you to purchase groceries without coupons or ad matching and still save money. Heres how easy it is.

#1. Enter or scan your receipt

Within 7 days after purchasing your groceries for full price at Walmart, simply enter your receipt number online via your personal computer or scan the barcode on your receipt by downloading the free Walmart app on your smart phone. You’ll find this number located near the bottom of your printed Walmart store receipt. You can submit up to seven receipts per week to the Savings Catcher.

#2. Walmart compares prices

Walmart will automatically match the price of local competitors printed ads for identical products based on your submitted receipt. The number of stores available to ad match depends on your zip code and competitor stores within your market area. To be a match, the advertised items must be of identical size, quantity, brand, flavor, and color to your Walmart items, and the ads must be valid at the time you made your purchase.

#3. You get the difference

If the Walmart Savings Catcher finds a lower advertised price, you get the difference back within 72 hours on a Walmart Rewards eGift Card or a Bluebird by American Express Card. Amounts credited to these cards can be used to make purchases in-store or online at Walmart. With Savings Catcher, you can earn a up to $599.99 reward dollars per calendar year.

Savings Catcher currently applies to:

o Groceries such as pantry staples including cereal, chips, rice, yogurt, milk, and frozen foods.

o Consumable items such as paper towels, bleach, and trash bags

o Health and beauty items such as shampoo and makeup

If you’re looking for savings ease then this may just be your ticket to ad match freedom. One word of caution; I have tried the Savings Catcher on several occasions and can verify that it is not always accurate. I know what grocery prices are available and, more than once, I have not received ad match money that was due me. That being said, I have received money from using this free program and I know many others who frequently get money back. I prefer to ad match my deals from the get-go so I know I’ll be getting my full savings. But, if you’re in a hurry and looking for some quick savings, then the Savings Catcher is a great option.

(There are several exclusions to what the Walmart Savings Catcher will ad match. To see the full list visit: https://savingscatcher.walmart.com/faq.)

Negative CDS Prices? Surely Not

Imagine someone was going to insure your house against damage from fire, natural disasters and other mishaps, but you didn’t have to pay a penny.

Sounds a bit upside-down, right?

But that is exactly the type of debate taking place in the world of credit default swaps now that around a quarter of euro area government bonds trade with negative yields. If investors are prepared to pay to hold government bonds, how cheap can CDS be? Can it be free? Indeed, could investors even be paid to buy it?

CDS aren’t technically insurance, but the analogy is helpful to understand how these instruments are meant to work.

If you take a pessimistic view on the prospects for a particular country or company, you can buy CDS protection that is designed to pay out if the country in question defaults. CDS prices rise when investors en masse think the country is at a growing risk of default. Those taking a more favorable view can sell CDS protection – essentially placing the same bet as buying a government bond issued by that country’s treasury.

So far, CDS spreads on highly-rated government bonds have fallen, but are hovering above zero. One-year German CDS currently trade at 0.03%, according to Markit, meaning it will cost $3,000 for a year to buy credit protection against $10 million of German government bonds. This compares with $7,000 in February 2014. The yield on one-year German government bonds is -0.23% compared with 0.15% a year ago.

One senior bank trader, who asked not to be named, said he could imagine hedge funds paying to sell CDS so they can exploit arbitrage opportunities.

Wolfgang Kuhn, head of pan-European credit at Aberdeen Asset Management, said he recalls seeing negative CDS back at the height of the credit boom in 2007, though he suspects it was because the bank that quoted those prices just didn’t want the position on its books.

“If we go into a situation where it’s harder to make money, we could potentially see that happen [again],” he said.

If you pay someone to buy CDS off you, then you end up sending the buyer a chunk of cash every year. Some credit experts cant see this happening and are adamant that CDS wont follow government bonds below zero.

“The [CDS] spread represents a premium paid by a buyer of protection, so it can’t be negative,” said Gavan Nolan, director of credit research at Markit.

Moreover, Mr. Nolan noted that sovereign CDS nearly always trade above government bonds, as much of the activity is driven by banks hedging exposure they have to these countries through their derivatives and loan books.

In practical terms, some seasoned traders also believe negative CDS is a non-starter.

“Why would anyone pay for someone else’s insurance policy?” said Carl Norrey, co-head of European rates trading at J.P Morgan.

Investors such as pension funds are effectively forced into buying negative-yielding bonds because they have to park their money somewhere. But the same doesn’t hold true for CDS – no one is forced to sell protection, unless it is to unwind an earlier bet. As a result, Mr. Norrey said the CDS market is floored at zero.

Then again, bond supremos once voiced similar opinions about investors never buying negative-yielding bonds, and look where we are now.

In the meantime, if bond yields fall further than CDS is able to, the CDS market will likely drift further apart from the bond market.

This could make CDS a less useful reference point. Already, the market has taken some heavy blows. In 2011, the European Union banned speculative activity in sovereign CDS, which has already dented trading volumes substantially.

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