The housing market downturn is different this time
Demographics, low delinquencies and healthier-than-normal household net worth could lead to a shorter downturn, according to a new Stratmor report.
banks
If You Want to Buy a Home, Adjust Your Max Purchase Price Filter a Lot Lower
If youâre a prospective home buyer, you need to prepare for the worst. And by worst, I mean a much higher-than-anticipated asking price. Maybe not everywhere, but in many major metros nationwide, the real estate market remains red hot. And thereâs really no sign of abating, even with mortgage rates back above 4% and the… Read More »If You Want to Buy a Home, Adjust Your Max Purchase Price Filter a Lot Lower
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Ally Invest Review â Affordable Online Stock Trading Platform
If youâve been thinking about moving your investments to a new broker, Ally Invest needs to be on your shortlist. Part of the Ally Bank family, itâs one of the top investment brokerages available, especially when you look at all the services they have for just about every area of your financial life. About Ally […]
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How to Cash Savings Bonds: A Guide for Gen Zers
Learn how to cash savings bonds and make the most out of your money with this guide for Gen Zers. Get tips on where to cash, tax implications, and more!Learn how to cash savings bonds and make the most out of your money with this guide for Gen Zers. Get tips on where to cash, tax implications, and more!
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KeyBank Mortgage Review
One of the principal subsidiaries of KeyCorp, KeyBank was created in 1994 after KeyCorp of Albany, New York merged with Society Corporation of Cleveland, Ohio. In many respects, the bank is much older, with a history dating back almost two hundred years to the 1800s. KeyBank’s mortgage options include conventional fixed-rate and adjustable-rate mortgages, FHA, […]
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How to use credit cards wisely: A definitive guide
It’s back to basics month at Get Rich Slowly! Today, we’re going to take a l-o-n-g look at how to use credit cards wisely. Believe it or not, credit cards can be a useful tool — so long as you don’t fall into debt.
For a long time, I thought credit cards were evil. Starting in college, I abused credit cards. As a result, I ended up deep in debt. Those two decades of debt sucked, and they led me to believe that credit cards were dangerous.
Well, credit cards are dangerous — but they’re not evil. Credit cards are a tool. Like any other tool, credit cards can be used to build or to destroy. Just as you’d treat a chainsaw with respect, you need to be careful with credit to avoid hurting yourself. If you use credit cards wisely, they can actually give you a financial edge!
Because this is a long article, I’ve create a table of contents so that you can jump to the section you need. (Or, you can read the entire thing, of course.)
Table of Contents
- How credit cards work
- Why use a credit card?
- Essential credit card skills
- How to use credit cards wisely
- How to choose a credit card
- How to dispute credit card charges
- How to cancel a credit card
Survey of Consumer Finances. The latest study, from 2016, found that:
- 43.9% of American families have credit card debt, and
- the average amount owed is $5700.
Clearly, lots of Americans continue to struggle to use credit cards wisely.
That said, not everybody who uses credit cards goes into debt. In fact, the Survey of Consumer Finances shows that over half of Americans use credit cards without going into debt. They treat them as a convenience.
True story: Last year, I went into a bank to apply for a new travel credit card. During the half-hour process, I chatted with the banker. “We banks don’t like people like you,” he told me. “I’m sure you’re a nice guy, but you pay your bill every month. We don’t make any money on you. Fortunately, 90% of people who use credit cards suck with money!” He told me banks are willing to lose money on the handful of folks who use credit cards wisely because they make so much money on the people who abuse them.
Fed Hikes Rates. Mortgage Rates Drop. Here’s How That Works
For some, this will be old hat. For others, there’s a mystifying dynamic that demands explanation. The confusion stems from years of being conditioned to believe that when the Fed “hikes” or “cuts” rates that mortgage rates move accordingly. That’s actually not exactly how it works. The Fed is currently in a rate hike cycle, so we’ll focus on that. Today was the latest installment with an as-expected 0.25% increase to the Fed Funds Rate. There are two important points in that last sentence. First off, the rate hike was entirely “as-expected.” That means the market was able to fully prepare for it in advance. One portion of the market in question is that of mortgage-backed securities (MBS). These are basically bonds that are guaranteed by pools of mortgage loans. As investor demand waxes/wanes for those securities, the value of a mortgage changes in the eyes of investors. This is what determines day to day mortgage rate movement above all else. The Fed only has 8 scheduled meetings to hike/cut rates per year whereas MBS can move as frequently as they want on any given business day. All that to say that if the market knew the Fed would hike 0.25%, it has long since been baked into MBS prices as well as the rest of the bond market. The second important point is that the Fed deals with the “Fed Funds Rate.” This is a target range for the shortest-term lending among large financial institutions. The easiest way to think of it is like the Fed setting the rate of return on a savings account. The higher it is, the more banks will park money there and the higher rates they must charge other banks and clients to borrow money (otherwise it makes more sense to just park the money in the bank and earn that interest).
High Efficiency Real Estate Investing with PeerStreet
This Mr. Money Mustache blog recently blew past its fifth birthday. In real life, things haven’t changed all that much: I live just a couple of blocks from where I lived in 2011. We are still retired and yet busily employed raising one boy. Still have the same cars and the same level of annual […]
House Flipping 101: The Complete Guide to Fix and Flips
House flipping can be an amazing business and I love it! I have been flipping for almost 20 years now and flipped over 200 houses. I have flipped more than 100 houses in the last five years and I don’t see myself ever stopping! However, it is not easy to fix and flip a house … Read more
What Percentage of Your Income Should Your Mortgage Be?
What percentage of your income can you afford for mortgage payments? Do you use gross monthly income or take-home pay? Learn how much house you can afford with simple rules based on your monthly income.Limit mortgage payments to less than 28% of your pretax income. Total debt payments, mortgage included, should be less than 40%.
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