Ask The Experts: Evaluating the CFPB’s Final Rule for Stay-at-Home Parents & Credit Cards

CFPBSay what you will about the NRA and the AARP, the most powerful lobby around might be that of motherhood.  Just think:  public pressure from women’s groups in the interest of stay-at-home mothers actually led the Consumer Financial Protection Bureau to go back and tweak the landmark CARD Act of 2009 – legislation enacted to reform the personal finance landscape.

The Change That Sparked a Movement

You see, the CARD Act contained a so-called “ability-to-pay” clause which required banks to abandon the long-held practice of evaluating household income and personal debts in making credit card approval decisions.  In order to help issuers better gauge applicants’ disposable income, issuers were to start considering both debts and liabilities on the individual level.

Ask the Experts: If I Could Make One Change to the Tax Code, I Would…

Experts Ideal Tax Code ChangesIn this edition of our “Ask the Experts” series, we at Card Hub surveyed authorities on tax policy from around the country about how they would choose to alter the tax code in an ideal world.

With tax season in full swing, the economy still floundering, and the federal government’s budget mess yet unresolved, it seems that no one is immune to money woes these days.  That’s not likely to change anytime soon either, what with Congress acting like kids on a cross-country road trip and the economic recovery doing its best impression of the University of Maryland mascot.

Ask the Experts: How Can We Improve Financial Literacy in the U.S.?

Financial Literacy EducationDespite signs of economic recovery, it seems like the list of problems standing in the way of a secure financial future for the U.S. is getting longer by the day. From out-of-control student loan debt and habitual consumer overleveraging to Medicare insolvency and an overcomplicated tax code, we clearly have a lot to figure out in a political landscape that’s far from conducive to progress.

Underpinning, and perhaps exacerbating, all of these problems is the disturbing lack of financial literacy in this country. Far too many people know far too little about personal finance, and our poor overall performance in that area simply puts undue pressure on already flawed programs.

CardHub Review: Hawaiian Airlines World Elite MasterCard

Hawaiian Airlines World Elite MasterCardTalk of the “islands” has a definitively affluent connotation to us mainlanders.  And it makes sense when you think about it, given all that money and islands – particularly the Hawaiian ones – have in common. 

For example, Larry Ellison, CEO of the $175 billion cloud computing company Oracle actually owns 98% of Lana’i, Hawaii.  Thinking about your financial needs as a chain of islands also enables you to tailor financial products to specific types of transactions and thereby gather a collection of account terms vastly superior to what any one product could provide.  It’s called the Island Approach.

Ask The Experts: Will New Mortgage Lending Rules Help Prevent Foreclosures?

Will-New-Mortgage-Lending-Rules-Help-Prevent-Foreclosures

The Consumer Financial Protection Bureau (CFPB) has adopted a final rule giving lenders more guidance about making mortgage loans and giving consumers – especially lower income consumers – additional protection against predatory lending.

At least, that’s the objective. The new regulation, which took effect in January, bars lenders from offering those low “teaser” rates that prompted a lot of buyers to purchase homes they couldn’t afford. When the rates on these subprime mortgages reset to double-digit levels in some cases, the monthly payments were unaffordable.

Tale of the Taper: What Reduced Fed Bond Buying Means for the Economy & Consumer Interest Rates

Bernanke-YellenLast May, former Federal Reserve Chairman Ben Bernanke told Congress that the Fed might, in the future, begin to reduce its massive bond purchases under its Quantitative Easing (QE) program. Almost immediately, the financial markets became obsessed with when this “taper” of bond purchases, which was seen as holding down interest rates, would happen.

It finally happened in December when the Fed announced it would reduce its monthly bond purchases from $85 billion to $75 billion beginning in January 2014. But by then the financial markets had almost no reaction. The stock market hit a series of record highs during the month of December and has been erratic thus far through 2014.

Ask The Experts: If I Could Make One Policy Change to Fix the Federal Deficit, I Would…

DeficitOne of the most pressing issues facing our nation these days is the federal government’s massive budget deficit.  The deficit and its implications for the already prodigious national debt have been front and center in the national discourse as a $315 billion surplus in 2001 has gradually transformed into an $885 billion deficit in 2013 under the weight of tax cuts, healthcare policy changes, and spending tied to the War on Terror, Wall Street “bailouts,” the 2009 economic stimulus, and the oft-forgotten interest continuing to accrue on amounts already owed.  With each looming debt ceiling, fiscal cliff, and sequester, the unfortunately partisan debate gains vigor, begging the question of whether we’ll find a solution before we run out of nifty nicknames for the various kick-the-can crises encouraged by our infighting and indecision.

There are plenty of proposed solutions out there – both practical and inane – coming from a variety of sources – from the Brookings Institute to Esquire Magazine’s Commission to Balance the Federal Budget.  But evaluating the efficacy of a potential remedy, of course, necessitates making a proper diagnosis first.

The CARD Act: What It Is, New Rules & More

The CARD ActThe credit card market once resembled the Wild West. Not only were banks basically allowed to advertise one thing and charge another, but a host of other predatory policies designed to maximize profits regardless of the negative impact on cardholders were all too common as well. Then came the CARD Act.

While controversial at the time of its passage in May 2009, the CARD Act quickly gained esteem after its February 2010 enactment.  In short, the law overhauled consumer rights in the credit card space and implemented a new code of conduct for issuers, particularly in terms of their account communications, fees, and rate changes. Credit cards weren’t the only plastic affected by the new law, however, as it also made gift cards more user-friendly by extending expiration dates and cracking down on fees.

Valentine’s Day Credit Card Savings

For many of us, the countdown to February 14 brings with it an increasing level of stress as we struggle to find a great present, make a reservation at the right restaurant and, most importantly, find a way to pay for it all.

In support of your plight, CardHub has identified a number of ways to ease the pain that love inflicts on your wallet.  From seasonal discounts for existing cardholders to new cards offering the kinds of low rates and lucrative initial rewards bonuses you need to cure Cupid’s hangover, we’ve got you covered!

Ask the Experts: Should Small Business Owners Seek Venture Capital Financing?

VC MoneyThe Great Recession has reinvigorated America’s entrepreneurial spirit.  As the job market soured during the housing market crisis and ensuing economic swoon, business creation rates soared to record heights.  We averaged fewer than 29 new start-ups per 100,000 people each month from 2000 to 2007 – when the unemployment rate averaged 5.0% – and that number rose to 33 start-ups per month from 2008 to 2011 – when joblessness climbed as high as 9.6%, according to data from the Bureau of Labor Statistics as well as the Kauffman Foundation.

When jobs weren’t as abundant, we took it upon ourselves to create our own.  That’s certainly admirable, but the fact of the matter is that starting a business is the easy part.  What’s hard is not only staying in business, but also growing and becoming profitable.  Of all the businesses founded in 2008, only 74.4% survived two years, and even fewer – 62.4% – made it three, according to the Bureau of Labor Statistics.

2013 Credit Card Landscape Report

CardHub-2013-Credit-Card-Landscape-StudyWe called Q3 2013 the calm before the storm, as credit card rates, rewards, and fees generally plateaued, causing us to wonder if the third-quarter landscape was the new norm or not long for this world. The year’s fourth quarter provided more evidence, with general stabilization characterizing the market.

Neither the government shutdown nor the Federal Reserve’s decision to taper its bond-buying program proved enough to rattle the credit card landscape in any significant fashion. And it appears that with the exception of a few credit categories and card terms, the steadfast landscape offers a lot of value for the consumer. We just need to harness that value for good — building an emergency fund and paying off debt, for example — rather than using it to perpetuate bad habits.

CardHub’s 2014 Money-Saving Resolutions

2014 ResolutionsNew Year’s isn’t just a time for revelry and midnight kissing; it’s also a landmark for new beginnings.  Before the confetti from New Year’s Eve even gets swept up, folks around the world will be busy making promises to themselves and loved ones about how they plan to change their lives for the better in the coming months.  That’s why the gym always seems so crowded in January, while the job market gets flooded with new applicants and fledgling teetotalers lock their liquor cabinets and hide the keys.  New Year’s Resolutions aren’t limited to one’s physical health and career prospects, however.  Financial well-being is a common theme as well, with people often pledging to finally pay off their debt and/or do a better job of budgeting.

With that in mind, we at Card Hub came up with 5 Resolutions for Your Finances in 2013.  Committing to these changes – some of which might surprise you – will help improve your financial situation in the short-term and keep you out of trouble moving forward.  Don’t worry if you’ve had problems adhering to resolutions in the past either; we’ve provided a roadmap of sorts to ensure that you don’t get lost along the path from resolution to end result.  Good luck!

Ask The Experts: Starting a Business in Retirement

Starting a business in retirementIt’s becoming increasingly common for people to start their own businesses when they reach retirement age, either because they are financially unable to put work aside completely or because they want to explore long-neglected hobbies now that they have some free time.

While it is easy to idealize such a scenario, assuming now to be the perfect time to start a company because you have built up a great deal of expertise and still have the energy to put in a full day working for yourself, the experts we consulted all advise a high degree of caution. Starting a business takes money and keeping it going takes time – lots of time.

Ask The Experts: Can Employers Screen Job Applicants Based on Criminal Records?

EEOC HiringAn employer’s use of a job applicant’s criminal history in making employment decisions may, in some instances, violate the prohibition against employment discrimination under Title VII of the Civil Rights Act of 1964.

The U.S. Equal Employment Opportunity Commission (EEOC) has issued new guidance, urging employers to review their hiring policies to make sure they are not engaging in racial discrimination when they screen applicants based on any previous criminal history.

Ask the Experts: Outlook for Holiday Shopping 2013

Holiday Shopping SeasonThe no. 1 item on CardHub’s 2013 holiday wish list was a gift-wrapped package full of expert insights on the holiday shopping season. We must have been very good this year because Santa delivered early. And we’re ready to share it all with you.

2013 has been a tumultuous year for many Americans, with sequestration, the government shutdown, and now the uncertainties associated with Obamacare casting a long shadow over the impulse to spend freely.

CardHub’s 8 Gift Card Tips for 2013

what you need to know about gift cards

There are a few things you can count on every year during the holidays: time off from school; an overweight, bearded out-of-towner breaking into numerous houses in the neighborhood via chimney; tone-deaf neighbors showing up unsolicited to sing at your doorstep; embarrassing antics at office holiday parties; eating a bit too much; and, of course, gift cards.

“Gift cards, whether plastic or electronic, will continue to gain market share at the expense of traditional gifts rather than at the expense of cash gifts,” says E.K. Valentin, professor of marketing and management at Weber State University.  “Gift cards are ideal gifts among younger friends because gift cards are easy to acquire; the risk that the recipient will find a gift card useless is low; and gift cards can convey thoughtfulness, much like a traditional gift, but without the risks inherent in giving traditional gifts.”

Do Prepaid Cards Build Credit? What About Debit Cards?

Do-Prepaid-Cards-Build-Credit
Consumers increasingly want to know if their debit-based financial products have any sort of bearing on their credit scores, and the short answers to the above questions are “No” and “No.”

But it’s understandable that many consumers are confused about this issue, given the Great Recession’s devastating impact on consumer credit, the emphasis currently being placed on financial literacy, and the mainstream adoption of new financial products, like prepaid cards.  Card issuers have also made an unfortunate habit out of using the words “prepaid,” “debit,” and “credit” almost interchangeably in their marketing materials, further intensifying consumer confusion.

CardHub’s 2014 Credit Predictions

2014 Credit PredictionsThe holiday season tends to be a time for nostalgia and reflection.  But as the calendar turns from 2013 to 2014, we will undoubtedly begin looking to the future, making resolutions and pondering the potential for new beginnings that always accompanies a New Year.  But why wait to see what 2014 has in store?  Foresight is important in finance, so let’s make some predictions for what awaits our wallets in 2014.

Armed with an ability to see into the future, most consumers, analysts and even politicians would all be interested in many of the same things.  For example, will the federal government ultimately default on its debt and send consumer interest rates soaring?  Will the economy continue its painstaking recovery from the Great Recession or tank once again?  Can we expect lucrative rewards and 0% financing offers to stay on the table?

Investing in Precious Metals: Fool’s Gold or Hidden Gem?

gold-barsAll investors hope to strike gold at some point.  But while the cliché applies figuratively to most people’s investment strategies – hitting it big on a speculative play or IPO, for example – others are literally seeking to make money off of gold and other precious metals.

Perhaps their interest in commodities investing stems from some sort of innate patriotism, harkening back to the California Gold Rush of the mid-1800s, or maybe we’ve simply gotten too engrossed in popular reality television programs like Discovery’s “Gold Rush” and A&E’s “Storage Wars.”  But regardless of the underlying rationale, it’s fair to wonder if the shimmering appeal of the commodities markets belies reliable profit potential for the average investor or is merely a fool’s errand?

Ask The Experts: Are Stock Market Glitches Something to Worry About?

stock-market-integrityOn August 22, trading in more than 2,700 NASDAQ stocks came to a screeching halt. A glitch in the system halted trading for several hours.

Rewind to May 18, when Facebook launched its much-anticipated IPO. Again, a glitch on the NASDAQ stock exchange delayed the start of trading. Even after trading began some orders didn’t get through. Traders were outraged and the IPO was pretty much a flop.

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