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College Students and Recent Grads

4 Lessons We Learned From Hosting a Financial Literacy Workshop

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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The MagnifyMoney team took a field trip from our Manhattan office and traveled to Brooklyn College to present a workshop on how to handle money with confidence. Even though classes have yet to officially start, over 30 students joined us for nearly two hours. Barely 10 minutes into our presentation and suddenly hands started waving around in the air.

We spent our time overviewing what we considered the important financial basics: understanding credit scores and reports, grasping the importance of compound interest, how to budget, paying yourself first, saving for retirement, and picking the right financial products.

The team could barely get through a slide without stopping to answer questions.

We were thrilled to talk about money with such a group so engaged in the topic, but the experience also emphasized how imperative it is to integrate financial literacy into our education system.

All of the Brooklyn College students were there on their own initiative. They weren’t required to attend as part of a class, nor did they receive any type of extra credit. Everyone in the room was simply there to learn and fill in knowledge gaps they may have in their financial lives.

MagnifyMoney Team’s Takeaways

1. Students desperately need financial education

The simple fact that a bunch of college students gave up part of their afternoon during the final days of summer shows just how desperate they are for financial education.

We watched them furiously scribble down notes for two hours and had about half the students stayed back to ask more questions after we’d wrapped up our seminar.

They are undoubtedly interested in getting financial education, but unsure of where to turn. The world of personal finance can be incredibly intimidating without guidance and a way to turn potentially complex topics in laymen’s terms.

2. People need to know you don’t need to be rich to have a good credit score

We noticed this being a problem during our trip to the Chambliss Center, and it was reiterated during our presentation: people believe your financial assets factor into your credit score.

False.

Your credit score doesn’t reflect how much you have in the bank, and people even have high credit scores with thousands of dollars of debt.

The credit score simply reflects your responsibility when handling money from your lenders.

We want everyone to understand this so they can proactively build better credit and therefore set themselves up for protection against high interest rates and predatory lending.

Emergencies will happen. We advocate people build healthy credit so they can acquire protection in the form of a line of credit with a low interest rate (ie: a credit card with a flat 9.99% interest rate). This way they have a place to turn when an emergency happens and won’t be subjected to painfully high interest rates from banks, payday lenders or title loans.

3. Credit can be difficult to understand without proper instruction 

Between the fine print, understanding credit scores and figuring out whether or not to pay just the minimum due or the bill in full (the latter) – people get quite perplexed about handling credit.

We empathize, but our biggest tips are:

  • Don’t close credit card accounts – length of credit history plays into your score and having no credit cards will mean you lose/never create a credit score.
  • Always pay your balance on time– failing to pay on time can be one of the biggest hits to your credit score.
  • Always pay in full – don’t believe the myth that paying just the minimum due can help your credit. It doesn’t boost your score and just leaves you paying money in interest to your lender.
  • Don’t spend more than you can afford to pay off – lenders want you trapped in a debt cycle. Don’t let them get you there!

4. People feel trapped with their banking products

It doesn’t take much for a bank to make you feel pretty helpless, especially when they’re housing your money. We want to make sure people feel empowered to make the switch from a bank that charges ridiculous fees (looking at you Bank of America) to a more consumer-friendly version like Ally or Simple.

It isn’t just us thinking all these things:

This kind comment on our Facebook page from an attendee really sums up the importance of financial literacy being taught in schools:

“Really enjoyed the workshop yesterday at Brooklyn College. Thank you guys for coming out and I hope the team over at the Magner Center invites you back. It was an invaluable experience for someone like me who didn't grow up in a household where money matters were frequently discussed. I learned a lot and will continue you visit your site to improve and expand of my financial literacy! Thank you so much!...University's make us take all of these other courses that make us well rounded academically but rarely are we required to take anything that could help us with the "real world" and a lot of students complain about that. So thanks again!”

Have questions for us? Get in touch via TwitterFacebook, email info@magnifymoney.com or in the comment section below!

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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Fine Print Alert

Fine Print Alert: August 22, 2014

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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In our weekly Fine Print Alert newsletter we call out good news from the financial community and shine a spotlight on any sneaky changes or less than favorable strategies employed by financial institutions.  We also wrap up MagnifyMoney news and share our favorite reads from the week.

Fine Print Alert

Fines, Fines, Fines

Bank of America will be paying nearly $17 billion – yes, billion with a ‘B’ – to settle the investigations into their crisis-era mortgage business. This is a landmark settlement, higher than any other if its kind. So, how does this settlement impact consumers? Several states will be receiving a portion of the fine money and some have directed the money to refunding public pensions that suffered losses on mortgage securities. Other states have decided to put the funds towards consumer relief or the state’s general budget.

First Investors, an auto loan company, will pay $2,75 million in CFPB fines as a result of knowingly reporting inaccurate information to the three credit bureaus: TransUnion, Equifax and Experian. First Investors were charged with reporting misinformation about wrong payments and overdue amounts, distorted dates and inflated delinquencies.

Thank You No More

At MagnifyMoney, we don’t believe you should be looking to make money from checking accounts. Your goal is to keep as little money in a checking account as possible, and to make your checking account and ATM usage completely free. To entice you to keep too much money in a checking account, banks often offer rewards. At Citibank, this was the Thank You program. If you had direct deposit and used bill pay, you could earn Thank You points. They are changing that. From December 16, only Private Bank, Citigold and Citibank Account Packages can earn Thank You points. We won’t talk about Private Bank and Citigold (those are big balance accounts). To have an Account Packages checking account, you need to keep at least $15,000 in the account. If you have a direct deposit and bill pay along with your account, you will earn 650 Thank You points. That is $65 of value. If you put that money into an online savings account, you would earn over $140 of interest. Basic, Access and Student accounts will no longer earn Thank You points. Even more reason to avoid traditional bank checking accounts!

Special Shout-out: FeeX

I [Nick] pride myself on low-cost investing. For example, I rolled over my 401k into an IRA. The IRA is exclusively populated with Vanguard index funds and Fidelity Spartan Index Funds. I was feeling good about myself, and then I read about Feex.com. I decided to let their program crawl my IRA, and I was shocked about what I found. For every one of my holdings, they were able to find an alternative mutual fund or ETF with a dramatically lower cost. For example, I am invested in a Vanguard Mid Cap Index Fund. The expense ratio is 0.24%. But, Schwab offers a US Mid-Cap ETF with a  fee of 0.07%. In the last 90 days, FeeX  found $28 worth of fees that I had paid. If I switched to their recommendations, the cost would have found $11 worth of savings. That may not sound like a lot, but you need to think about compounding interest. Over the next 30 years, I could save $10,619 in fees by taking their recommendations. This was a really cool service, and I highly recommend doing a check-up. Compounding interest is great when it is on your side, and terrifying when it isn’t. At MagnifyMoney, we want to get people to slash the cost of their credit card debt. But, we are equally passionate about getting people to pay less for their investment products. And hats off to FeeX, for creating a great tool that helps with investments. And, if you are like the majority of Americans without assets sitting at Vanguard, you will find that the absolute savings will be even more shocking. Give it a try!

MagnifyMoney around the web

Our favorite personal finance stories this week

Should I Contribute To A 401k, Roth IRA, Or Health Savings Account? – “While, ideally, we’d max out all those accounts every year, realistically, many people have to choose where to put their money. All of that depends on your age, tax bracket, and how much you have to invest.” Analyze where to put your money with Kim on Eyes on the Dollar.

Why Saving for Our Kids’ Education Is Not Our Top Priority – “What tugs on parents' heartstrings is the nagging feeling that prioritizing retirement saving ahead of saving for a child's college education equates to loving your children less than yourself. I understand that feeling, on one level, but it shows a misplaced priority, in my opinion. There are loans and scholarships for college. Nobody is going to give you a scholarship for retirement.” Read John of Frugal Rules full argument over on DailyFinance.

Steps To Get out of MASSIVE Credit Card Debt Due to Lifestyle Inflation – “It’s embarrassing to admit, but I tell this tale as a warning to all people like me who are on the bandwagon of lifestyle inflation, “I deserve” and family struggles that may cause you to take your eyes off the ball and wake up one day to say “How did I get here?” … The grand total was $393,500. I was 52 years old and my husband was 59. It was a personal debt disaster story. “ Find out how Debs is working her way out of debt in her guest post on Financial Samurai.

How I Graduated College With $100k…. in Savings – “At age 21 I graduated college with $100,000 sitting in the bank. Scratch that – most of it was invested elsewhere… but you get the point. I’m not writing this post because I think I’m cool (beatboxing skills, aside ;)). I didn’t earn $100k before even getting a “real job” because I’m special – I was just intentional.” By Will of First Quarter Finance on Budgets Are $exy.

Stylist gives free haircuts to the homeless – A heart warming story which proves you don’t need a lot of cash in order to help others. By Blake Ellis on CNN Money

Have questions or a fine print alert tip for us? Get in touch via TwitterFacebook, email info@magnifymoney.com or in the comment section below!

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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College Students and Recent Grads

MagnifyMoney.com Study: College Students Face High Interest Rates on Student Credit Cards

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Paying with credit card

It is that time of year: millions of students will be heading to college. For many students, this will be the first time that they will be the targets of banks’ marketing departments.

While the CARD Act changed how lenders can offer college students credit cards, young adults are still able to acquire these potentially expensive products. A study of college student credit cards by MagnifyMoney.com shows that a student new to credit is likely to pay an average APR of 21.40%. And taking out cash is even more expensive, with an average APR of 24.10%.

  • We reviewed the Top 50 banks in the U.S. by deposits
  • We reviewed credit cards specifically targeting students and actively marketed on the banks’ websites
  • All credit cards, with the exception of Journey® Student Rewards from Capital One®, offer a range of Purchase APRs. The Journey® Student Rewards from Capital One® offers a variable APR of 24.99%.
  • For credit cards that offer a range of APRs, the average range is nine percentage points
  • The lowest possible APR is 13.24 - 23.24% variable, offered by Bank of America on the BankAmericard® Credit Card for Students
  • The highest possible APR is 15.74%-25.74% variable, offered by Citi ThankYou® Preferred Card for College Students
  • If your student credit card is your first credit product, then you will likely have no score. No score means you are the highest risk, and it is highly likely that you will receive the highest price point.

If a student charges $1,000 on a credit card and only pays the minimum due at the average rate of 21.40%, it will take 7.6 years to pay back the debt. And the total amount repaid would be $1,941.

Noticeably absent from the list of banks offering credit cards that target students are American Express and Chase. Chase recently exited the business, recognizing that earning interest rates more than 20% on students still in college didn’t feel right.

The CARD Act restricted, but certainly did not eliminate, credit cards that target students. In 2012, applications for student credit cards were at 43.5% of 2007 levels. The CARD Act put the following restrictions into place:

  • No pre-approved offers to people under 21, without consent
  • If you are under 21, you need to prove that you have income (a part-time job, for example), or have a cosigner older than 21
  • Credit card companies can no longer give out free gifts on campus to induce people into signing up for a credit card. No more frisbees or beer mugs

However, there are still plenty of student credit card offers out there. While they don’t give out frisbees, they do offer sign-on bonuses. Citi, for example, gives you 2,500 Thank You points if you spend $500 within 3 months of opening the card. We find that worse than the free frisbee. Before, they would incent you to open a card. Now they are incenting you to spend on the card!

While credit cards can be a great way to build your credit while in college, they can turn into expensive traps that send you down a dangerous path.

The only reason you should apply for a student credit card is to build your credit score. And follow these three tips:

1.Your statement balance should never be more than 30% of your limit. High utilization, early in your credit history, can have a meaningful negative impact. So, just make one to two purchases a month on the card.

2.Pay your balance in full. Credit cards are expensive, and you should not use them to borrow.

3.Never use a credit card for a cash advance. It may seem like easy money, but you will be paying for it.

Have questions for us? Get in touch via TwitterFacebook, email info@magnifymoney.com or in the comment section below!

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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College Students and Recent Grads

Why It’s Important to Have a Job in College

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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For some students, working in college is a necessity; for others, it fulfills a major requirement while padding a resume. Whatever the reason, working in college provides both a financial and practical foundation for life after graduation.

I’ve managed to work a number of jobs and internships during my academic career, and found the experience to be challenging, yet extremely rewarding.

I started off as an Administrative Assistant for a local alarm company, then moved onto internships at CNN and NBC in positions closely related to my major. On top of getting compensated while attending college, I broadened my network and learned new skills while simultaneously keeping an arm’s length away from borrowing money for school.

Although it does take extra effort to hold down a job and keep grades up to par, the choice to work during college can be very beneficial.

Working in college can help avoid debt.

Many students struggle with student loan payments, and I was determined to graduate debt free.  I chose to attend a city college where tuition is affordable and scholarships were plentiful. So even if I made minimum wage, I could still afford to attend college full time and cover miscellaneous expenses such as books, travel and food. Unfortunately, this isn’t the norm for many college students today.

Student loans are a burden to pay back, and can slow down progress when it comes to buying a home or starting a family.  According to a recent survey conducted by American Student Assistance (ASA), 73% of students said they have put off saving for retirement or other investments. The vast majority of students—75%—indicated that student loan debt affected their decision or ability to purchase a home.

Even with jobs, it’s difficult for many students to pay today’s tuition costs without the assistance of loans. However, holding down a steady job through college will enable students to graduate with fewer financial obligations, by reducing the amount of money they need to borrow for tuition and living expenses.

Working in college can make your resume stand out.

Every time I go out on a job interview, employers are impressed by the amount of work experience and skills I possess. When I interviewed for a Production Assistant internship at CNN, the employer skimmed through my resume in amazement and even referred to me as an overachiever. Later on that day, I received an email stating I got the job.

CNN is a large and well-known network, so you can only imagine the amount of people I had to compete with for that position. Thankfully, the fact that I was able to work fulltime and attend school fulltime while maintaining a GPA above a 3.5 made me stand out. With that information alone, employers can automatically conclude that you’re hard working and focused and that’s often enough for you get hired.

Throughout your college career, you should find jobs or internships related to your major. Relevant job experience not only enables a college graduate to become competitive in the job market, it also provides a network to reach out to when searching for employment.

In fact, even if the job isn’t directly related to your specific field of study, the fact that you possess prior job experience will work in your favor. Just figure out how to make the skills you acquired at a previous position fit into the requirements of the job you’re interviewing for.

Working in college teaches time management skills.

I used to struggle with effective time management, but when I started working in high school, my window to study and get homework done became fairly small. It took a lot self-discipline to ensure I could get my studying done, and put in time at work after spending a full day at school. This new busy schedule took a lot of getting used to, but over the course of time it became second nature.

Learning to balance time with classes and work will help students adapt to post college life. It will also teach students how to deal with people at work. There is a difference between working with people at school and collaborating with colleagues. These skills will make adjusting to the real world, much easier.

Working in college can improve academics.

I must say, working through school definitely motivated me to stay diligent with my schoolwork and time management skills. I was surprised to see that my grades actually improved when I started working. This is a result of learning how to organize and plan study time effectively. The added focus made the difference between an A and B.

It’s up to you to find a point where it’s most effective. Some people can handle forty hours a week; some people can handle twenty hours a week. Stress levels should not be so great that it is a distraction, and you should still be able to stay on top of all projects.

Working in college can provide employee benefits.

When I worked as an administrative assistant during high school I had all the great benefits and perks. I was particularly excited about contributing to a 401(k) at such an early age.

Many companies, such as Starbucks, Home Depot., and Whole Foods offer full-time benefits to employees if they work a minimum of twenty-five hours a week. This means students can begin a 401(k), qualify for health insurance, or better yet, a tuition assistance program, all while still attending college.

Working in college allows students to save for an emergency.

During my sophomore year of college, my father, the primary bread winner of my family suffered severe injuries to his back while on the job. He stayed out of work for almost a month, and without his income my family was afraid that our home will fall apart. Luckily, my brother and I both had an emergency stash and was able to maintain some bills until my father’s recovery.

Regardless of how many expenses you’re facing, or how little you’re is able to put aside; it’s imperative that you have an emergency fund. In life, especially as a college student, you should always expect the unexpected. An emergency fund is one way to financially prepare for the unknown. Financial emergencies can come in the form of job loss, significant medical expenses, home or auto repairs or something you’d never even dream of.

Working in college will enhance networking skills.

There is truth in the saying:  “it’s not what you know, but who you know.” Working during college not only develops your networking skills, but expands your network of people to turn to for a job after graduation. All you have to do is connect with that person and ask to chat over a cup of coffee. It’s that simple.

Networking is exactly how I ended up in the office of CNN’s Director of Business News. I knew someone that knew someone who worked there, and was able get my resume on that director’s desk.

Networking isn’t just a job search strategy; it is a critical professional career development enrichment strategy. Working in college can enhance networking skills, and broaden your horizons well beyond the college campus. More importantly, networking with the right people in your industry can open doors and help your career flourish.

Moral of the story: get a job in college

It doesn’t matter if you’re bussing tables, bartending or fetching coffee for a network executive – working in college helps both financially and professionally. Okay, maybe fetching coffee for a network executive helps more for networking purposes, but working in college provides a foundation to build on post-graduation. From a monetary perspective, any paid job will help college students learn how to budget and pay for some of their lifestyle to prevent sinking (often deeper) into debt. The skills of communication, time management, collaboration and conflict resolution are useful in almost any job interview – even if you developed those talents cleaning plates or mixing drinks. Ultimately, it is always good to be self-sufficient, regardless of your present financial situation and future employment outlook.

Have questions for us? Get in touch via TwitterFacebook, email info@magnifymoney.com or in the comment section below!

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Kelly Harry
Kelly Harry |

Kelly Harry is a writer at MagnifyMoney. You can email Kelly at kelly@magnifymoney.com

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Consumer Watchdog

Consumer Watchdog: Buyer Beware When Offered Credit Insurance With a Personal Loan

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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If you are looking to pay a lower interest rate on your debt, or avoid the temptation of credit cards, then personal loans may be the solution. Unlike with credit cards, you will not have the temptation of using your card to buy things you don’t need with money you don’t have. And, unlike credit cards, most personal loans have a fixed interest rate (can’t go up) and a fixed term of five years (or less). Paying the minimum due on a credit card would take you over 30 years to pay off your debt.

On our personal loan page, we have listed some of the best providers. And you can even see if you will be approved without having a hard credit inquiry on your credit bureau.

But as much as we love personal loans, you do need to be careful about some of the insurance products that are often sold with personal loans. This insurance is called “credit insurance,” and there are four basic types:

  1. Life Insurance: if you die during the term of coverage, the remaining balance of your loan would be paid off
  2. Disability insurance: it would pay a limited number of monthly payments on a loan if you become ill or injured and cannot work during the term of the coverage
  3. Unemployment Insurance: it would pay a limited number of monthly payments if you lose your job due to no fault of your own (for example, a layoff)
  4. Property Insurance: if you provide collateral for the loan, this insurance protects the property if it is lost, stolen or damaged

As a general rule, credit insurance sold with a loan is incredibly expensive. And it can become even more expensive if it’s single-premium. With a single-premium insurance policy, you are given a single (large) bill for insurance at the time of the loan. That premium is financed (added to the loan). That means you will be paying interest on the insurance premium, which is a terrible deal. Dodd-Frank eliminated single premium insurance from the mortgage business, but it can still be sold on personal loans.

Here are four red flags for credit insurance:

  1. It is sold to you at the end of the loan process. And the language often sounds like this: “for less than the cost of a soda per day, you can make sure your family is protected.”
  2. You have to make a decision in an instant. You don’t have the chance to comparison shop.
  3. Credit insurance is an incredibly profitable business for the insurance companies and finance companies. That means for every $1 of premium you pay, a very low percent of that payment comes back in the form of claims paid.
  4. Aggressive incentive structures are often given to staff, encouraging them to sell the product.

Whenever you have little time to make a decision, limited product transparency and a strong sales incentive, the consumer usually loses.

My general recommendation is to avoid insurance products sold at the time of the loan. And for each of the insurance types:

  1. You should have a strategy for your overall life insurance needs, and not buy life insurance just for your personal loan. For most people, a good term life insurance policy is the best and cheapest option. One of the best price comparison tools for term life is www.term4sale.com.
  2. Disability insurance: if you are concerned about disability, then you should consider a policy that covers all of your needs, and not just your loan payment. If you do become disabled, then you would need more than your personal loan to be paid. Unfortunately we have not yet found a good disability comparison service. We recommend finding a reputable local insurance agent to compare products and pricing.
  3. Unemployment insurance: the best form of unemployment insurance is building an emergency fund to cover six months of expenses. Rather than buying an expensive policy that would only cover some of your loan payments, use that money to self-insure, by accumulating an emergency fund.
  4. Never ever buy property insurance on a personal loan. Even people in the industry don’t understand why people do this! If you want an insurance policy to protect your personal property, then you should think about an umbrella policy or homeowners/renters insurance that protects everything, not just the items used as collateral on your loan.

In Conclusion

Personal loans can be great. Shop around to get the best deal. But don’t feel pressured to take insurance with the loan. You don’t have to buy the insurance in order to get approved. And, you would be much better finding the best insurance solution for all of your needs, rather than over-paying for insurance that only protects this loan.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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College Students and Recent Grads

A Beginner’s Guide to Using a Credit Card

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

howtobuildcredithistory-lg1

So, you want to open a credit card? It’s a good idea – most of the time.

Opening and using a credit card provides a simple way to establish and build credit history. Yes, certain credit cards can earn users rewards for cash back, travel miles, and redemption points, but the road to reward chasing is littered with people who slipped into credit card debt. Beware of your budget and your personality if you elect to pursue the path of reward chasing.

If you have trouble paying bills on time, saying no to purchases you can’t afford or just sense a credit card may not be a good idea for you – then trust your gut. While a credit card is a great tool to build financial health, it can also lead to painful consumer debt when used improperly.

Still think you’re ready to take on the responsibility of owning a credit card? Then let’s walk through how to select, understand, apply and manage your credit card.

Step One: Select your type of credit card

Credit cards were not made equal and we’re not just talking in terms of interest rates and rewards. Your unique situation will determine which credit card you should (and could) apply for.

Student card

Lenders understand college students aren’t flushed with cash. In fact, college students’ debt-to-income ratios are commonly skewed in the wrong direction. But lenders still make it possible for young adults to acquire credit cards through student card programs.

(Yes – they’re hopefully you’ll fall into debt.)

College students with an established bank account or credit union can likely get a credit card from their current financial institution. Other options include:

Fine Print Alert: these cards often come with high interest rates – so be sure to read the tips in step four and mind your spending.

Secured card

The secured card offers an option for anyone looking to build (or rebuild) his or her credit history.

With a secured card, a potential borrower puts down a deposit in exchange for a credit card from a lender. Often the borrower’s credit limit is the same amount as the deposit, but this isn’t always the case. In the instance of the Capital One® Secured Mastercard®, a borrower puts down a minimum deposit of $49, $99, or $200 for a $200 credit limit.

The deposit works as collateral for the lender. If the borrower cannot make payments, he or she will forfeit the deposit. If the borrower proves to be dependable over time, he or she will receive the deposit back after closing the secured card for a regular, unsecured credit card.

A secured card gives a lender a sense of assurance, while the borrower proves his or her responsibility. The borrower will see his or her credit score improving over six months to a year and can eventually leave behind the secured card for a traditional credit card.

Fine Print Alert: Be sure to take a secured card from an FDIC-insured organization, like your bank or local credit union. It’s important not to spend much on the card because your credit limit is likely to be quite low. Read more about secured cards here.

Store credit card

Odds are high you’ve been offered a store credit card at least once in your life. Store cashiers inquire if you’d like to open a store credit card, often in exchange for a certain percent off your purchases.

In general, a store card can be a trap into consumer debt. Just one round of missing a payment in full can lead to painful interest rates and leave consumers struggling to pay down their bill.

However, store cards often accept lower credit scores than traditional cards. Someone looking to rebuild credit, but carrying a score in the low 600s, could apply and feasibly get approved for a store card when they’d likely get rejected for a card from another lender.

Naturally, the bank hopes said person will have trouble paying off his bill – but the diligent borrower can use a store card to help rebuild a credit score.

Fine Print Alert: Store credit cards often have incredibly high APRs (annual percentage rate). For example, the Gap Visa starts at 25.74%. While a traditional card, like Capital One® Quicksilver® Cash Rewards Credit Card has a variable interest range of 14.24% - 24.24%. Read more about store credit cards here.

Traditional credit card

If you have a good to excellent credit score (often 680 or higher) then you’ll likely qualify for most credit cards. There is no need to deal with a store card and their monstrous APRs or secured cards with their low credit limits.

Do some research to see what type of credit card best suits your needs. You can use our cashback tool to input your spending habits and find a card to maximize your rewards.

Step Two: Understand the details of your card

Once you decide the type of card to apply for, it’s time to do your research.

You need to understand the details of your card, before signing on the dotted line.

Evaluate the APR (interest rate) on the card. It’s ideal to have a credit card with a low interest rate, like PenFed Power Cash Rewards Visa Signature® Card's 9.74%- 17.99% variable APR. You want to avoid ever paying interest, but in the case you do end up not being able to pay your bill in full, you need to understand the rate you’ll be charged.

Is there an annual fee associated with your card? With the exception of needing to get a secured card, don’t bother spending money on an annual fee when you’re starting out with a credit card. There are plenty of great cards with no annual fee – so why spend the extra $50 to $100?

What’s your credit limit? You likely won’t find out until after you’ve applied and been approved for a credit card. It’s imperative you remember your credit limit to avoid maxing out your card. In fact, you will want to stay well below your limit, but we’ll get to that in step four.

While we don’t recommend beginners focus on credit card rewards, it is good to understand the perks (if any) associated with your card. Be careful not to increase or change your spending habits simply to churn points.

Step Three: Apply for your card (and read the fine print)

The simplest step, apply for your card.

You can often apply online, but if you’d prefer to go in person then head down to your local bank or credit union.

Be sure to give that fine print one last look while you’re in the application process.

Step Four: Properly handle your credit card

Now that you have a credit card at your disposal, it’s time to use it properly.

  • Understand the difference between borrowing and spending

Credit cards are structured to create debt. It’s a simple, not often discussed, truth. To avoid debt, it’s important you understand the difference between borrowing and spending. Do you set a strict budget and only spend what you can afford to pay off each month? Check for spending. If you eye a purchase you know you can’t afford and whip out your credit card, well that’s borrowing. Credit cards are often not the best route to go if you need to borrow money. However, if you are going to turn to a card for borrowing, then have the lowest interest rate you possibly can. Borrowing at a 15% to 26% interest rate (common on many cards) will do major harm to your bank account.

  • Ignore “minimum due” and pay your bill in full

Credit card companies like to offer a “minimum due” in hopes customers will just pay a fraction of their total bill, so interest will start accruing. For credit card rookies, this can be incredibly confusing when they see minimum due on the first billing statement. The simplest thing to do is act as if the minimum due doesn’t exist. Always pay your bill in full. Paying the minimum just means you’ll end up paying more to your lender in the form of interest.

  • Pay your bill on time

Paying your bill on time is possibly more important than paying your bill in full. Being just one day late on your credit card bill could crush your credit score. If the bill is due Tuesday, but you won’t have the money to pay in full until Wednesday, then pay as much as you can (at least the minimum) on Tuesday and pay off the remainder on Wednesday. In your mind, it might seem that paying it off in full a day later makes more sense than just paying part by the due date – but that isn’t how your lender will see the situation. They’ll see you as irresponsible for missing your payment deadline.

  • Keep your utilization rate low

Your utilization rate (or ratio) is the amount of your overall credit limit you spend. Ideally, you should try to keep your credit used below 30% of your available credit (ie: if your available credit is $1,000 then only spend $300). A low utilization rate will show responsibility to lenders and help improve your credit score.

  • Don’t do a cash advance

Don’t use your credit card like a debit card. Just don’t do it. You’ll be paying high interest rates (typically higher than store cards – around 25%) for withdrawing cash from an ATM.

  • Careful where you share your card information

In the end, you need to protect your credit card. Odds are high you’ll experience fraud at one point in your life, but it’s best to be proactive and be careful where you share your credit card information.

Don’t forget to use your card, because a lender can discontinue an inactive card. If you feel a little uncomfortable using your card, but need to build your credit then buy one small item a month (perhaps a cup of coffee) and set up an automatic payment, so you know you’ll never be tardy with your bill.

Still have questions? Explore our Building Credit section or get in touch with us via TwitterFacebook, email info@magnifymoney.com or in the comment section below!

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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Fine Print Alert

Fine Print Alert: August 15, 2014

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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In our weekly Fine Print Alert newsletter we call out good news from the financial community and shine a spotlight on any sneaky changes or less than favorable strategies employed by financial institutions.  We also wrap up MagnifyMoney news and share our favorite reads from the week.

Fine Print Alert

The good

Payday loans aren’t good. In fact, they’re horrible. But shining a spotlight on the issue that is payday lending, now that’s a cause we can get behind. Thanks to John Oliver for featuring a 16-minute segment on his show “Last Week Tonight with John Oliver” devoted to taking payday lenders down a peg.

Watch the full segment here (but be warned: there is some explicit language)

The not so good

Alert One
Federal Reserve data shows that there are now more car loans than mortgages in the US. In the aftermath of the 2008 crisis, mortgage-lending standards have tightened significantly. They are starting to be relaxed now, but still remain much tighter than pre-crisis levels. Investors are searching for yield, and the sub-prime auto lending market has been expanding rapidly. This data indicates that this growth has been accelerating dramatically.

Like sub-prime mortgages, sub-prime auto loans raise a lot of red flags. Dealers recommend sub-prime auto loans (and receive payment from the financial institutions providing the loan). The dealers have huge incentives to get you to borrow as much as possible (earn more on the car sale), from the lender that pays the highest origination fee (dealers receive payments from banks).

Consumers need to be very careful. If they can’t qualify for the 0% financing offered by the manufacturer, then they need to avoid the traps of the sub-prime auto loan market. Don’t buy a car you can’t afford. And do some homework before you go to the dealer. Apply for auto financing before shopping, and see if the dealer can beat that deal. We wrote a guide on how to handle borrowing before you buy here.

Alert Two

Balance transfers, slashing interest rates to 0%, reducing debt repayment – these are a few of our favorite things.

After completing a balance transfer, a key factor to success is putting the card in the metaphorical freezer. Do. Not. Spend. On. The. Card

We can’t emphasize this point enough. The biggest fine print trap of a balance transfer is what happens to new purchases you make on your new card.

You’ll get hit with the regular (not 0%) interest rate on them, so you don’t want to use it for any new purchases.

So, you can imagine our dismay when we came across this trickster ad placement from TD Bank.

Putting a zero percent balance transfer offer side-by-side with a 5x points on purchases and $200 cash back offer seems underhanded and misleading to us.  If someone applies for a balance transfer and uses it to spend for 5x points they’re in for a terrible surprise. Every purchase will get dinged with 9% - 20%+ in interest, wiping out the 5% cash back and costing you even more.

Remember: spending on top of a balance transfer to earn points will get dinged at the full APR.

MagnifyMoney around the web

Our favorite personal finance stories this week

The Unspoken Problem with Early Retirement -  “It’s simply not enough to focus on building financial assets. Many of those people who retire just don’t know what to do with their time, and the whole experience is one giant ugly surprise. After all, there is only so much reading, watching TV, shopping, traveling, and visiting friends that one person can handle.” Read how the Cash Cow Couple plan to combat the issues of early retirement.

Think Compounded Interest Is Always Good? Think Again. – “Unfortunately, I was filled with dread, as I realized I was on the wrong side of compounded interest. My $40,000 in loans were actively earning interest for banks and the federal government — ranging from 3.5 to 6.8% APR. Money was working for someone else. I was fighting against a sinking ship of debt, which compounded every day.” Find out how Sam clawed his way out to get on the right side of compound interest at Frugaling.org.

Ignore This Savings Plan at Your Peril – “Call them victims of inertia. These are folks who are slow to sign up for their employer-sponsored savings plan or who, once enrolled, don’t check back for years. Their numbers are legion, and new research paints a grim picture for their financial future.”  Make sure you aren’t messing up your retirement fund by reading Dan Kadlec’s article on TIME.

Sometimes You Do Not Want to Know – “This morning, I went to the bathroom and stared down at my scale and thought about stepping on to get the official confirmation of my bad behavior, but then I realized that I just didn’t want to know how bad it was. Actually seeing the number on the scale may make my weight gain even worse. I think that many of us feel this exact same way with our finances.” Unearth Shannon’s tips for handling the fear of a bank account (or the scale) on her site Financially Blonde.

Got questions? Get in touch via TwitterFacebook, email info@magnifymoney.com or let us know in the comment section below!

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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College Students and Recent Grads

College Students: Employers Check Your Credit Report, Not Credit Score

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Female Woman Sitting At Interview

The summer after my college graduation I came face-to-face with the reality of needing a good credit report and strong credit score. As a naïve co-ed, I’d never truly pondered the consequences of using a credit card. All I knew is that utilizing it properly would help build something called credit history. A fact I became familiar with after my father insisted I get a credit card my freshman year of college.

Pushing a credit card on an 18-year-old college kid may sound like bad form to some, but my father’s strategy was sound.

I entered college with no student loans thanks to a combination of parental support and scholarships. With this in mind, my father suggested I get a credit card in order to start establishing credit history.

He took the time to walk me through the important points of credit card use:

  1. Don’t max it out
  2. Pay it off in full each month (aka only buy what you can afford)
  3. If you only pay the minimum then you’re just throwing away money in the form of interest to the banks

Thanks to his foresight, I graduated college with no debt and a 720 credit score from the responsible use of one credit card. At the time, I only recognized the no debt part; I never thought to check out my credit report and score (rookie mistake).

Fast-forward three weeks and my new roommate and I were pounding the streets of New York City looking for suitable housing. We hit up Craigslist, tried referrals from friends and ultimately succumbed to using a broker to help us find an apartment. When we finally found a roach-and-rodent-free apartment in our price range, we scurried back to the broker’s office to submit the paper work. She looked up at us and said, “And we’ll need $50 to run your credit check?”

“Huh?” I thought to myself while wondering how much an unexpected $50 would damage my budget.

“Your landlord will need to see your credit report and score to determine if you’re a responsible tenant,” she emphasized.

“What is she talking about?” I thought (probably aloud).

This is when I realized my Dad’s advice to get a credit card was some of the best he’d ever given me. Thanks to him, I had a 720 credit score (instead of no credit score) and was able to get my first apartment with minimal stress.

So, why does this matter for the average college kid?

Landlords aren’t the only ones using your credit report to see if you’re responsible: employers do too.

Note that a credit report is different than a credit score. The score is merely a gauge of what is reflected on the report. The credit report is a thorough history of your life as a borrower and includes details on things like: loans, credit cards, mortgages and if any of your bills went to collections.

Why do employers want to see your credit report?

There are a variety of reasons an employer may run your credit report.

  • To see if you’re responsible
  • To verify you are who you claim to be
  • To determine if you could handle a company credit card
  • To see if you’re financially stable – even though your bank account information is not reflected in this report, they can see your loans and how you utilize credit cards

In fact, the use of pulling a credit report is two decades old, according to Experian spokeswoman, Kristine Snyder. (Experian is one of the three credit bureaus.)

“Some companies have been using them for 20 years, mostly when they hire people who will be dealing with money.  Traditionally, the biggest users of credit reports for employment purposes are companies in the defense, chemical, pharmaceutical and financial services industries because of the sensitive positions many of their employees hold,” wrote Snyder in an email.

Will you know if they run a credit report?

Yes.

“Federal law does prohibit anyone from accessing an employment report without first obtaining written permission from the consumer,” Synder emphasized.

What can employers see when they get a credit report?

Experian offers a report called Employment Insight, specifically for employers.

According to Synder, this report contains:

  • Consumer identification: including Social Security number
  • Address information: including length of time at current and previous addresses
  • Employment information: providing insight regarding an applicant's previous work history
  • Up to two places of employments
  • Other names used: such as maiden names and aliases
  • Public record information on bankruptcies: liens and judgments against the applicant
  • Credit history providing an objective overview of how financial obligations are handled
  • Demographics Band (including driver’s license and phone number verifications)
  • Profile Summary (including payment patterns)

What will be kept private from an employer?

  • Your credit score – but they can probably make an educated guess based on the information in your report.
  • Your year of birth
  • Information about a spouse
  • Account number information

What if you don’t get hired?

The credit bureaus don’t offer any sort of recommendation about whether or not to hire you with your credit report. It’s simply supplemental to other portions of the interview process: skills tests, in-person interview, references, etc.

However, if you aren’t hired based on information in your credit report, then federal law does require your potential employer to give you both a copy of the report and a written description of the consumer’s rights.

Why it won’t impact your credit score

Don’t fret about this damaging your credit score. Your employer performs what is known as a soft pull (or soft inquiry), which doesn’t cause any sort of drop in your credit score nor is it reflected on your credit report moving forward.

Moral of the story

Bad credit history can impact more than just your ability to get a credit card or a lower interest rate on a loan. It could actually prevent you from getting a job. If you have questions about building credit start here and then check out our Fine Print Blog for plenty of articles on ways to build and improve your credit history.

Got questions? Get in touch via TwitterFacebook, email info@magnifymoney.com or let us know in the comment section below!

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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Pay Down My Debt

Introducing FICO 9: What This Means for You

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Yesterday, FICO announced that it will be releasing FICO Score 9.  If you have unpaid medical bills or other collection items, this change will impact you.

What is FICO?

FICO is the most widely used credit score in the country. 90 percent of all credit decisions (mortgages, cards, credit cards, personal loans and more) use the FICO score in some way.

So, when FICO makes a change to its score, we should listen. This score has a big impact, because lenders use it and others (like CreditKarma) are trying to approximate it.

What are they changing?

This change is huge for people with unpaid medical bills and other collection items.

Unpaid medical bills

According to Experian, 64.3 million Americans have a medical collection record on their bureau. In the current world, this can significantly harm their credit score.

If you have an unpaid medical bill, it can be reported to a credit bureau in two ways:

  • The medical service provider can report to the bureau, or
  • A third party debt collection agency that has purchased the debt, or has been contracted to collect the debt, can report it

99.4 percent of cases have been reported by collection agencies. So, if your doctor is calling you to pay – it probably hasn’t been reported to an agency. But, once a collection agency starts calling you, you probably have a negative item on your credit bureau.

The purpose of a credit score is to help lenders understand the likelihood of someone being responsible and paying back on time. There has been a widespread belief that people have been unfairly punished for medical bills. In fact, the CFPB has proven that people have been unfairly punished, in a May 2014 report.

With the new score, FICO is agreeing with the CFPB. Medical collections will now be differentiated from non-medical collections. And people will be “punished less” for medical collections. This makes sense, for three reasons:

  1. The medical system is complex, and many people have been hit with small medical collections that they didn’t even realize they owed. For example, with a small co-pay that ended up with a collection agency.
  2. Historically, many responsible people could not get insurance because they had a pre-existing condition. And, when medical disaster struck, they had no way to pay the medical bills. They tried to be responsible, but couldn’t.
  3. Even with insurance, multiple emergencies in a family can lead to large deductible payments. Doctors and hospitals can quickly turn over bills to collection agencies, resulting in a negative remark on the credit bureau. Even people who are just paying back their medical bills, responsibly, over time can be punished.

This is a big win for the CFPB. Hats off. A government agency has done the math for the industry, and the industry has agreed. This should result in better access to credit, and lower rates on existing credit – once (and if) the changes are accepted by the industry.

Paid Collection Accounts will now be bypassed

Beyond medical bills, many other types of debt can end up on your credit bureau. For example, failure to pay your utility bill, your phone bill, your overdraft or any other type of debt can result in your account being sold to a collection agency. And the agency will usually report the collection account on your bureau. Having these accounts can seriously harm your score.

But, the older the collection item, the less impact it has on your score. I have regularly met people who felt confused. They have recovered and now had money. Should they pay back that five-year-old collection item, or just let it age. They wanted to pay it back, but would receive advice from some people not to do so. Why? Because activity on a collection item could make it appear more recent.

This change removes all ambiguity. If you pay back your collection items, your score will benefit. This is the way it should be.

When will I see the impact

Unfortunately it will take a while. FICO sells its credit score to banks. Whenever a new score is introduced, a bank has to decide whether or not to upgrade. In order to make this decision, they need to do a lot of analysis.

First, they will perform a “retro” analysis. This means they will look at the past few years of their portfolio history, and they will estimate how the portfolio would have performed if the new score was used.

They will then need to build strategies, which includes the cutoff (above what score will they approve accounts), the pricing and the extra rules that they want to build. In my experience, this takes 12 to 18 months (there are so many committees that need to approve this!).

Banks are very eager to “swap in” new customers. So, if previously rejected customers can now be approved, banks will be keen to proceed.

They are less keen to charge people lower interest rates. So, the CFPB needs to watch the banks closely. If people are truly lower risk, they should pay lower prices. But, banks are not eager to reduce pricing.

In Conclusion 

We fully support the changes. Medical bills are being severely punished. And people should not be afraid to pay off collection accounts.

We are realistic: it will be a while before we feel the impact.

And we are rightly skeptical: banks will be happy to approve more people and give more credit. They will be less excited to reduce interest rates.

Got questions? Get in touch via TwitterFacebook, email info@magnifymoney.com or let us know in the comment section below!

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Fine Print Alert

Fine Print Alert: August 8, 2014

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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In our weekly Fine Print Alert newsletter we call out good news from the financial community and shine a spotlight on any sneaky changes or less than favorable strategies employed by financial institutions.  We also wrap up MagnifyMoney news and share our favorite reads from the week.

Fine Print Alert

The good

Story One:

Last night, FICO announced a change to their scoring model. FICO Score 9 will usher in a more nuanced way to asses:

  • Consumer collection information
  • Bypassing paid collection agency accounts
  • Differentiating medical from non-medical collection agency accounts

What does this mean for consumers?

FICO’s change will make it easier for those plagued by medical debt to have their score increased and ultimately get access to loans with more competitive interest rates (or any loans at all). Medical collections will have less impact on the overall score and according to FICO’s press release,  “the median FICO Score for consumers whose only major derogatory references are unpaid medical debts is expected to increase by 25 points.”

It also means FICO will remove any record of a collections on a consumer’s account once it is paid in full. The history of being in collections will not count against someone as they move forward to improve their financial health and perhaps get a loan at a much lower interest rate.

Story Two:

Credit unions have grown to 100 million members.

Credit unions still only account for 7.4 percent of banking assets and barely scratches the surface of heavy hitters of commercial banking who hold $14.8 trillion in assets.

However, this news shows a positive trend in people finding financial institutions more interested in serving their customers than their shareholders. (Credit union members are the credit union owners).  Credit unions typically offer lower interest rates and waive a majority of fees charged by the big banks

The not so good

We’re big supporters of Internet-only banks here at MagnifyMoney, but a recent article from Consumer Reports made us feel a little peeved with some of our favorite financial institutions.

Consumer Reports outlined that Federal regulations require banks to make funds from checks available within three business days. More specifically: “In general, the first $200 of a deposit must be available for cash withdrawal or check writing the next business day. The rest should be available on the second day for check-writing purposes and on the third.”

These regulations were made prior to the rise of Internet-only banks, allowing for a loophole when it comes to these online banks making funds available to consumers.

According to Consumer Reports, Go Banks holds personal check funds for up to 10 days.

We’re currently investigating which Internet-only banks take advantage of this loophole and plan to integrate this information into our transparency scores of the banks.

The controversial

Owners of the Oasis Cafe in Minnesota have levied a $0.35 charge against their customers to help cover the cost of an increase in minimum wage. The small business says it will cost them $10,000 to pay 12 employees the increased wage, so they need a little help from their customers. Some customers have boycotted the establishment in outrage over paying 35 cents, while others see it as a small business just trying to stay afloat and keep their employees. Watch the full video from CNN Money here.

Let us know what you think in the comments!

MagnifyMoney around the web

Our favorite personal finance stories this week

Ending bank tricks would be music to my ears – “To find the scurrilous activity that really takes the cake in the category of “How is this thing STILL legal?” you’ve got to turn to banking and the little-known — but highly profitable — practice of “check ordering.” Brian O’ Connor of The Detroit News shares some ludicrous laws while making an impassioned plea to change the rules on overdraft fees.

Why the Finance Industry Needs to Earn Women’s Trust – Recent research from The Center for Talent Innovation found that, “American women, despite being among the most financially literate women in the world, are 44 percent less likely than American men to consider themselves knowledgeable.” Read tips on how woman can close the confidence and trust gap on Go Girl Finance.

Summer Job? Time to Start a Roth I.R.A. – “In some families, teenagers contribute to basic costs like housing. In others, parents expect summer earnings to replace a weekly allowance. Many teenagers save for their first car, and few among the college-bound escape the pressure to put money away for tuition….It’s rare, however, that families consider the possibility of giving a child a running start on retirement savings.” Ron Lieber of The New York Times elaborates on the benefits of starting a Roth I.R.A. before even heading to college.

Don’t Carry a Balance on Your Credit Cards – “As far as I’m concerned, there is no catch [with credit card churning]. For me. But I told him you really can’t carry a balance on those cards since the interest rate is so high. Then my clever, educated brother told me always carries a balance each month since it’s good for his credit score. Wrong.” We love Mel is helping dispel this awful rumor on her site Broke Girl Rich.

The 15 Questions of Debtors Anonymous – “I bet you didn’t know there was a Debtors Anonymous, huh? Indeed there is though, and it sounds like an awesome resource. Here’s a brief bio from their website (DebtorsAnonymous.org):

“Debtors Anonymous offers hope for people whose use of unsecured debt causes problems and suffering in their lives and the lives of others… For many it is a false crutch that feeds fantasy and magnifies obsession… In D.A., our purpose is threefold: to stop incurring unsecured debt, to share our experience with the newcomer, and to reach out to other debtors.” It makes sense the anonymous blogger J. Money from Budgets are $exy would bring this to our attention. We think it’s great a support group exists for those struggling with debt.

Got questions or tips for the Fine Print Alert? Get in touch via Twitter, Facebook, email info@magnifymoney.com or let us know in the comment section below!

 

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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