Here’s an unsettling number as you gear up for holiday shopping: consumer debt is on pace to hit $4 trillion by the end of 2018. In fact, in just the past five years, consumer debt has gone up by $1 trillion.
Taking a closer look at the breakdown for borrowers: $1.04 trillion is revolving or credit card debt, which has jumped 22% since 2013, and $2.9 trillion in non-revolving debt, which includes student and auto loans, jumping 30% in the past five years. (Mortgage debt is not included in this number.
Based on the rate of holiday spending reported in these past few weeks alone, LendingTree analysts expect credit card balances to grow by at ...
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Five Bad Financial Habits That Are Signs of Trouble
Good financial habits don't just happen. Like washboard abs, most people have to work to develop them.
Racking up monthly charges on your credit cards without paying off the balance is a common bad financial habit. Not reviewing credit card statements is another.
But other, more subtle behaviors can be tipoffs to a disorganized financial life.
Getting caught with a late fee because you lost or forgot about a bill points to a too-loose approach to finances. Avoiding financial decisions because you don't know enough is another warning bell.
Sometimes an otherwise good financial decision – such as making extra mortgage payments – ...
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Decrease in Real Estate Inventory Now Driving Home Prices
While many people still think that the last housing crisis in the United States was largely due to banks offering too many subprime mortgages, it's now clear that wasn't actually the case. Instead, recent research pins the blame on house flippers and speculators, who pumped markets up, then defaulted in large numbers when they were unable to turn a profit on their investment properties.
Now, however, a different set of circumstances entirely looks poised cause a different type of housing crisis.
Since the real estate market crash took the wind out of the construction boom of the 2000s, fewer homes are being built per U.S. household than ...
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Is the Student Loan Crisis A Civil Rights Issue?
Kudos to Wade Henderson, Founding Board Member, Center for Responsible Lending, for this insightful view of the student loan crisis...as published in the Los Angeles Sentinel.
"From attacks on voting rights to police killings of unarmed civilians and growing inequities in earnings and wealth, the civil rights gains of the past six decades are facing threat after threat. But one front in the fight for full equality—meaningful access to higher education—is particularly urgent. With 65 percent of jobs soon requiring more than a high school diploma, the need is greater than ever, especially for African Americans and other communities of ...
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Job Polarization Forcing More Baby Boomers Out of Job Market
Men in their prime working years have left the labor force at an astonishing rate and they may never return if the state of the U.S. job market holds, according to a new report from the Federal Reserve Bank of Kansas City. This does not bode well for those approaching retirement and still carrying debt obligations. This may cause bankruptcy filings to spike in the 55-64 age group.
A decline in demand for middle-skilled work — a phenomenon dubbed “job polarization,” because more positions are concentrated at the higher and lower ends — has played a role in keeping prime-age men out of the job market an economist at the Kansas City Fed, ...
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Don’t Ignore Your Credit Report
It pays to be familiar with your credit report. The information it contains determines your credit score, your ability to access credit and loans, and even your chances of landing a job or signing a lease. It's a good idea to check your credit report on at least an annual basis. In certain scenarios, however, you should closely monitor your credit report no matter when you last checked it. Here are six times you need to check your credit report.
Debt Collectors are Calling
If you're getting calls from debt collectors regarding unpaid bills, you may need to do some damage control. Whether the debt in question is valid or not, it could ...
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Have You Been Rejected for a Mortgage? Get a Grip and Fight Back
How many Americans are rejected for a mortgage loan on an annual basis?
Data are scarce on the topic, but a Federal Reserve study shows that one in eight Americans were turned down for a mortgage in 2015 -- and overextended credit was at the top of the list of reasons lenders used to reject mortgage applicants. The Federal Reserve study pointed out that a high debt-to-income ratio -- i.e., the amount of money you borrow against the amount of money you make -- was a top credit-based reason for mortgage rejections.
If you've been turned down on a mortgage loan due to bad credit, get a grip and fight back.
Sure, the bad news is that ...
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Trading Social Security Benefits for Student Loan Forgiveness? – An “E” For Effort
There's a debt crisis in America right now, and it centers on the cost of education. Roughly 45 million people owe a total of more than $1.4 trillion in student loan debt, working out to an average of about $30,000 per borrower. Starting from such a huge hole, it's hard for today's millennials to chart a reasonable course forward for their finances, and the impact throughout the U.S. economy has been apparent for years.
One lawmaker is seeking to address that crisis, introducing a revolutionary new program that would allow young people to trade Social Security benefits for student loan forgiveness. Unfortunately, the program comes at a ...
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Income Based Repayment of Student Loans Still Better Than Doing Nothing At All
There's a dangerous trend I've seen repeatedly with individuals in income-based repayment (IBR) plans for their student loans, and it's clear to me there's a critical piece of information missing from our general understanding of how these programs work.
Income-based repayment (IBR) plans are offered on federal subsidized and un-subsidized student loans in an attempt to make high student loan debt more manageable to pay off. They extend the repayment term from the standard 10 years to either 20 or 25 years, and cap monthly payments at 10% or 15% of discretionary income depending on the program. However, two other features of these plans ...
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Two Personal Finance Issues That Are Not Going Away in 2018
It's a new year and, unfortunately, many of us continue to grapple with financial issues that do not want to go away. Here are two to think about:
Not savings enough for retirement.
I have encountered countless clients who, although having worked for years, have accumulated little or no retirement savings. They have allowed debt to control their lives and have sacrificed savings opportunities in the process. This perspective must change.
Bankruptcy can be a first step toward achieving financial security. Did you know that retirement savings are fully protected from your creditors - even in bankruptcy? Whether you have one ...
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What Makes Me Different From the Others?