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MagnifyMoney Awards First A+ Transparency Score to PenFed Promise Visa® Card

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Update: As of November 1, 2014, the PenFed Promise Visa® Card balance transfer is no longer for 48 months. It’s new promo is 4.99% promotional balance transfer rate for 12 Months on transfers made between now and September 30, 2019. After the promo, a 11.99% to 17.99% variable APR applies. While the simplicity and transparency is still great, there are other balance transfer offers that are longer and offering a lower rate. Go to our balance transfer table to review offers

Today, we announced the creation of a new grade in our MagnifyMoney Transparency Score for Balance Transfers: an A+.

MagnifyA+When we created MagnifyMoney, our goal was to help people save money, by making it easy to compare, ditch and switch financial products. But we also had a bigger goal. We wanted to reward simpler, more transparent products. So, we designed the Magnify Transparency Score.

Sometimes banks offer a great deal, but if you make just one mistake, a tsunami of fees, charges and penalties can wipe out any previous benefits that you enjoyed. Those fees and conditions are usually buried in the fine print. So, our Transparency Score is very simple: we reward credit cards that have fewer penalty fees and ambiguity.

When we created the site, we had reviewed hundreds of credit cards. And one credit card stood out from the rest. In fact, I couldn’t believe the simplicity of the card when I read the terms and conditions. It was the PenFed Promise Visa® Card.

PenFed Promise Visa® Card
They don’t just choose one fee to waive, and advertise it. With this card, PenFed has waived almost every fee imaginable, and has removed the ambiguity. Here is the summary:

  • There is a 11.99% to 17.99% variable APR on purchases. You know the interest rate before applying.
  • There is no foreign transaction fee
  • There is a $0 annual fee
  • There is no late fee, returned payment fee or risk-based re-pricing

When I started the product review many months ago, I never imagined we would find a card like PenFed Promise Visa® Card, which had literally removed all of the worst gotchas. But, given that PenFed is a credit union, we shouldn’t be surprised.

So, we decided to create a new category: an A+. Any credit card that waives all penalty fees and discloses your interest rate up-front can also receive an A+ rating. But, for now, we have only found PenFed.

If you think we have missed a card, please let us know. We continue to add products to our database every day, but none have come close.

Just a few bits of advice if you decide to apply for the card:

  1. You must have a good credit score. Based upon our conversations with PenFed, it sounds like 700 is the most likely minimum (although they will be testing lower).
  2. Your debt burden should be below 50%
  3. If you are not a member of the credit union, don’t worry. You can join as part of the credit card application process online. You just need to give a donation of about $15 (and you can give more!) to support our troops.

PenFed is very aggressive with low rates on other lending products. They have great deals on mortgages, auto loans and other personal loans. If you join the credit union for this credit card, then you will have access to their other market-leading offers.

PenFed has an ambition to reach $75 billion of assets. They really want to shake up the banking market in big ways. We will continue to watch their product set closely, but so far we are impressed. And we think a lot of Americans could save a lot of money if they joined that credit union and moved their debt.

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Advertiser Disclosure: The products that appear on this site may be 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 financial institutions or all products offered available in the marketplace.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at [email protected]

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Pay Down My Debt

The Reality of Six-Figure Debt on an Actor’s Salary

 

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By Stefanie O’Connell, TheBrokeAndBeautifulLife.com

Freddy Arsenault is a Broadway actor with six figures of student loan debt, thanks to the MFA acting program at NYU’s Tisch School of the Arts. Among actors, Arsenault is one of the “lucky ones”. According to Actors Equity Association, the professional theatre actors union, fewer than 15 percent of due paying members are able to secure work in any given week and only 17,000 of 40,000 members work in a given year. Of those jobs, only a select few carry the prestige and paycheck of a Broadway show.

Even with his success though, Arsenault doesn’t have the luxury of sitting back and “living the dream”. In fact, to keep up with the cost of New York City living and his student loan payments, Arsenault also works as a real estate agent. By continually supplementing his acting income, Arsenault has been able to contribute $800 a month to his $165,000 student loan bill since graduating in 2008. Thanks to interest, however, his monthly contributions haven’t even made a dent in the amount he owes, which still stands at $165,000.

Arsenault’s story is a powerful reality check for actors, artists, freelancers, and young people everywhere who suffer from the misconception that all of their financial woes will dissolve when they “make it”. Even the “dream job” can’t serve as a panacea for fiscal hardship or erase the need for a well-constructed financial plan.

What Happens When You Don’t Pay Up?

A 2014 poll by American Theatre Magazine revealed that 17 percent of artists are paying nothing towards their student loan bills each month- perhaps operating under the flawed assumption that the big career opportunity, should it ever arrive, will serve as the answer to their five or six figure debt. Unfortunately, this policy of postponement and willful ignorance can prove quite damaging.

If you become delinquent on your loan repayment for more than 90 days, your lender(s) will report your tardiness to the credit bureaus, nose-diving your credit score by as much as 100 points. Letting that delinquency fester will only result in further consequences- like default. At that point your loans are likely to be turned over to a collections agency and your entire balance will become due immediately. If you thought $800 monthly payments were rough, try coming up with 80 grand on the spot!

Taking Back Control

Rather than dealing with debt collectors and struggling to raise five or six figures overnight to repay your student loans like some kind of Mafioso, confront your bills head on by putting a realistic plan in place.

Start by calling each lender and negotiating. Asking for reduced interest rates or lower monthly payments is a far better strategy than letting the bills stack up in the corner and keeping fingers crossed for overnight stardom and millions.

The trouble many artists run into in the construction of a debt repayment plan is finding an amount to contribute towards their debt that will actually fit within their budget. The American Theatre Magazine poll found that 67 percent of the 500 artists surveyed made less than $25,000 (if anything) from theatrical endeavors in 2013. Without a livable or reliable source of income, it’s a struggle for these artists just to get through the month, let alone make a dent in six-figure debt.

For these individuals, the Income Based Repayment program might provide a sustainable solution. The IBR program limits monthly payments to 15 percent of disposable income and extends the repayment term to 20 or 25 years. To qualify for the program, individuals must prove “partial financial hardship”, i.e. evidence that minimum payments on federal loans are more than 15 percent of their income each month- not a problem for most artists. After 20 to 25 years of making payments using the IBR program, any remaining debt is forgiven (though taxes must be paid on that amount).

Unfortunately, the IBR plan is only available for Federal loans and the extended pay back period means paying a lot more in interest over the life of the loan. Artists using IBR payments are likely to find that their contributions barely cover the interest each month and don’t even touch the principal. In other words, despite their payback efforts, the total amount owed will continue to increase each month.

Diversifying Income Streams

As an alternative, artists and other low wage earners might want to consider implementing Arsenault’s approach- diversifying income streams to make more money.

That doesn’t just mean “survival jobbing” as a waiter to get to the next paycheck. It means establishing a substantial and reliable stream of additional income to cover basic living expenses, make significant contributions to debt payoff, and save for future financial goals.

Of 7,093 theatre graduates surveyed by the Strategic National Arts Alumni Project between 2011 and 2013, 10 percent said they left the field because of debt and 26.9 percent left because of higher pay in other fields.

Committing to earning enough money to fund expenses, debt pay off, and savings breaks artists free of the short-term, stress inducing cycle of living paycheck to paycheck and gives them long-term financial sustainability- making “burnout” significantly less likely.

People go into the arts to do what they love, but the strain of student loan debt addressed with short-term, band-aid strategies can quickly turn that joy into depression and resentment. Tackling debt head on with a viable long-term strategy is not only empowering financially, but also freeing artistically in that it allows for the continued pursuit of passion.

Advertiser Disclosure: The products that appear on this site may be 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 financial institutions or all products offered available in the marketplace.

Stefanie O
Stefanie O'Connell |

Stefanie O'Connell is a writer at MagnifyMoney. You can email Stefanie at [email protected]

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Consumer Watchdog, Fine Print Alert

Ocwen: Just When You Thought They Couldn’t Get Any Worse

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Today we have news that Ocwen Financial (a mortgage servicing company) backdated time-sensitive foreclosure letters to borrowers.

Why is this important?

There are restrictions on how much time a borrower has to appeal a letter. When Ocwen backdates the letter, they make it impossible for an individual to appeal. That speeds up the foreclosure process for Ocwen. And it is evil.

Ocwen has quickly become of the largest and most hated mortgage servicers in the country. They caught our attention when we analyzed the CFPB Complaint Data – and Ocwen stood out as a sore thumb. A company few people ever heard of received more complaints in mortgages than Bank of America.

This type of activity feels criminal, and people should be held accountable. When Ocwen was alerted of the problem, they did not rush to fix it. But today, with its stock crashing, they came out and said “We deeply regret the inconvenience to borrowers who received improperly dated letters as a result of errors in our correspondence systems.” This quote was in a release provided to CNBC.

What does this mean for me?

It means that Ocwen has consistently proved incapable of handling its mortgage servicing requirements. At best, they are incompetent. At worst, they are purposefully changing dates on letters to accelerate foreclosure. So, you need to be alert when dealing with them.

If you encounter any problems, you should complain directly to the CFPB at www.consumerfinance.gov. I recommend doing that without delay. You should not trust Ocwen to resolve any issue you might have with them: their track record speaks for itself.

And, if you are eligible for a claim from Ocwen, make sure you file. We have a guide on how to file here.

Advertiser Disclosure: The products that appear on this site may be 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 financial institutions or all products offered available in the marketplace.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at [email protected]

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