Tag: Debt


Which Bank Has The Best Overdraft Limit?

By Kim Ogletree
October 2, 2018

The Pew Charitable Trusts reported that the overdraft practices of multinational and small retail banks in the United States have contributed to the 66 percent of domestic deposits in the country since 2013. The organization documented the research in the Checks and Balances report which showed that several U.S. banks partake in debit overdraft fees. Many account holders stated that overdraft fees reduce their access to lower-cost financial services and put them at loss, while also claiming that the practice is a theft of their funds.

What is an Overdraft?

An overdraft occurs when the account balance of a consumer drops to zero or negative and cannot cover a transaction. Many banks give a credit extension to their checking account holders, up to a certain limit. However, some banks also charge their consumers an overdraft fee for every settlement which differs from one financial institution to another.

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Types of Overdrafts

Overdrafts are short-term debt or emergency fund that banks provide for their account holders. Consumers can also choose to opt-in for overdraft as long as they meet the requirements of the bank. Today, there are two types of overdrafts that consumers can choose from — authorized overdraft and unauthorized overdraft.

Authorized Overdrafts

In an authorized overdraft, the bank and the account holder have an agreement upon opening an account that there will be a corresponding amount limit that the latter can use on standard payment methods. For instance, a company has an overdraft limit of $5,000, which means that they can spend an added $5000 after their account balance reaches zero.

However, an authorized overdraft usually comes with a fixed interest rate which varies from one banking system to another and the amount withdrawn. Some financial institutions charge their account holders with a monthly or daily fee or a 15-20% equivalent annual rate (EAR).

Unauthorized Overdrafts

An unauthorized overdraft may occur in two scenarios:

1. If consumers spend more than what they have in their accounts without acknowledging it in advance

2. If the bank agreed for an overdraft, but the consumers exceeded the arranged overdraft limit

Unauthorized overdrafts have several fees which include a more expensive monthly fee, daily fee, and transaction fees for cash withdrawal, direct debit, and check or card payment.

6 Reasons for Overdrafts

Overdrafts occur due to a variety of reasons such as the following:

1. Intraday Overdraft

An intraday overdraft, also called daylight overdraft, occurs when a particular bank transfers more money than it has in its reserve account. The Federal Reserve Banks operate on Fedwire, a reserve which enables fund settlement for numerous banks. For example, a bank has an asset of $100 million, and the Federal Reserve requires a ten percent or $10 million reserve maintenance. If the bank covers a transaction of approximately $11 million to several accounts, it will create a $1 million daylight overdraft since the bank will borrow from the Federal Reserve to cover the deficit. Daylight overdrafts can destabilize the financial services if several banks engage in such a practice.

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2. Bank Fees

Several banks have hidden charges that create an insufficient balance to its consumers if subsequent deductions occur.

3. Merchant overdraft

Financial institutions offer unsecured overdraft services to merchants to address their amount overdrawn within the authorized overdraft limit.

4. ATM Overdraft

An automated teller machine (ATM) may allow cardholders to withdraw cash despite an insufficient balance. Although it can be intentional or unintentional, the consumers may acquire an overdraft if the ATM authorizes a withdrawal even when it is unable to communicate with the consumer’s bank.

5. Merchant Error

A merchant error is the unintentional human error that occurs if the consumer swipes their card twice or if they incorrectly input their pin. For instance, the purchaser authorizes a transaction of $10.00 which posts to the account as $1,000.

6. Authorization Holds

Another circumstance that pushes an account holders into overdraft is Authorization Holds. It is a banking industry system where the institution verifies a debit or credit card transaction until the handler settles the acquisition. In this scenario, the bank holds the amount of purchase without cash withdrawal from the account of the consumer. The transaction process can take up to five business days before the handler allows the settlement.

What is an Overdraft Fee?

Banks penalize account holders a hefty amount if they withdraw or make purchases with a negative or zero balance. This penalty fee is called an overdraft fee, and it is essentially a attributed to consumers when banks cover for their transactions.

According to an article from CNN Money, three of the biggest banks from the United States, Bank of America, JPMorgan Chase, and Wells Fargo, gained approximately $6.4 billion in 2016 from ATM fees and overdraft fees. This amount was $300 million more than their collated revenue in 2015, yet, no bank shows a hint of minimizing unnecessary charges to customers.

Multinational bank institutions impose an expensive overdraft fee that ranges from an average of $30 to $36. Wells Fargo, Chase, and U.S. Bank have overdraft fees of $35, $34, $36, respectively.

The 4 Types of Overdraft Fees

An overdraft fee is a general term for the charges that banks impose for every transaction they cover for a consumer. Banks may deduct a different amount of overdraft fees from the checking accounts of consumers depending on the type of overdraft fee. There are four types of overdraft fee that consumers may encounter on their settlements: Overdraft Fee, Non-sufficient Funds (NSF) Fee, Overdraft Protection Fee, and Extended Overdraft Fee.

1.    Overdraft Fee

An overdraft fee is the most common bank fee to occur when account holders purchase a product that exceeds their account balance. The overdraft fee for financial entities in the United States varies by institution. Moreover, banks limit the number of transactions per day for consumers. Typical overdraft fees are between $34 and $35.

2.    Non-sufficient Funds Fee (NSF)

Insufficient funds occur when account holders make a transaction with their debit card when their checking account has a zero or negative balance. Most banks penalize similar amounts for NSF and overdraft fees. Chase Bank, Wells Fargo, and PNC Bank charge a non-sufficient funds fee of $34, $35, and $36, respectively, to their account holders.

3.    Overdraft Protection Fee

Financial institutions charge a significant amount of Overdraft Protection Fees for every fund transfer transaction made from a credit card or savings account to a checking account to cover insufficient funds. Some bank retailers also consider a credit card settlement as a form of cash advance, so they charge an added fee of $10 or 3% of the transaction amount.

4.    Extended Overdraft Fee

The Extended Overdraft Fee, or sometimes called an “extended overdrawn balance fee” or “sustained overdraft,” is the penalty that banks impose on top of the standard overdraft fees when consumers leave their checking account with a negative or zero balance for a number of consecutive days.

For instance, the U.S. Bank has an additional extended overdraft fee of $25 to account holders which starts on the eighth calendar day and each week afterward. On the other hand, JPMorgan Chase charges a $15 extended overdraft fee (even if the account is overdrawn by $5 and below) if a particular statement has $0.00 balance for five or more consecutive days.

Are Overdraft Fees Illegal? Your Consumer Rights & The Overdraft Protection Law

The Federal Reserve implemented a federal law in 2010 which altered the overdraft practices of credit unions and financial institutions. They stated that banks should decline transactions if the consumer has an insufficient balance. The Overdraft Protection Law prohibits banks from automatically charging their account holders overdraft fees from ATM withdrawals and one-time debit charges. Consumers can opt-in to an overdraft coverage and service if the bank offers overdraft protection.

The Overdraft Protection Law only covers pre-authorized transactions which are not authorized.  These include ATM cash withdrawals and debit card settlements. Meanwhile, the federal law does not apply to automated bill payments, checks, and money transfers. Banks can still charge an overdraft fee to such transactions.

Four Ways to Avoid Overdraft Fees

Listed below are useful tips to limit and avoid overdraft fees and overdraft programs.

1.  Link Your Checking Account to a Secondary, Credit Card, or Line of Credit Account

Financial analysts and experts advise account holders to connect their primary checking account to their savings or credit card account to cover the deficiency of the transaction. This allows customers to avoid overdraft fees.

2.  Set Up a Daily Account Balance Notifications and Alerts

An alert from the bank will aid the account holders to track their balance and transactions. If consumers are conscious of their available balance, they can transfer funds or refrain from purchasing products to avoid unintended overdrafts. Online and mobile banking systems allow their users to set up an email or receive text alerts and notifications when their account balance reaches the maintaining threshold or has low cash.

For instance, the U.S. Bank automatically alerts their account holders via text or email about their current balance, transfers, and transactions. They also allow consumers to choose and customize their account alerts for credit cards, ATM withdrawals and checking and savings account.

3.  Choose a Checking Account with No Overdraft Fees

Although most banks have an average overdraft fee of $34 for each transaction, some banks do not charge an overdraft fee. Chime offers accounts with no fees and several added features.

Chime does not charge its account holders unnecessary fees such as monthly maintenance fees, service charges, minimum balance fees, foreign transaction fees, and overdraft fees. The founders of Chime ensure their members that there are no hidden charges for a transaction, and they also guarantee account holders up to $250,000 FDIC insurance through The Bancorp Bank or Stride Bank.

Chime also offers a service where account holders can link their external accounts to their Chime Spending Account. Chime extends a $200 transfer each day and $1,000 per month which will be available within five business days. It also allows numerous external accounts such as PNC Bank, Capital One 360, Wells Fargo, and U.S. Bank to name a few.

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4.  Avoid Spending More Than the Available Account Balance

The most effective and convenient way to steer clear of overdraft fees from banks is to minimize expenditure especially if the account balance is below the maintaining balance or if the transaction costs more than the available cash on the account.

What is an Overdraft Protection?

The miscalculation of budget or oversight in expenses often leads to a shortage of funds. An Overdraft Protection, also called bounce protection or courtesy overdraft, is a convenient feature that consumers may avail from their respective financial institutions to cover their transactions.

Moreover, it is a service that several banks offer their account holders to protect their accounts from reaching a negative or zero balance. Banks automatically transfer funds from their secondary accounts, credit card, or money market savings to their checking accounts.

Benefits of Overdraft Protection

The primary advantage of an Overdraft Protection is the access to quick cash. Although banks impose an interest rate for an Overdraft Protection service, the fees for bounced checks are higher. Furthermore, it reflects positively on the credit score of an account holder compared to unacceptable checks that influence the credit score of the purchaser and limits their access to other forms of credit.

What is an Overdraft Limit?

An overdraft limit or overdraft protection is the maximum amount that banks allow its consumers to withdraw in their accounts aside from their existing debt. For example, an organization has a checking account balance of $5,000 with an overdraft limit of $500. It means that they can make settlements of up to $5,500, but they cannot withdraw or request for an added money if the payment exceeds the limit.

However, account holders should pay the interest on the amount they withdraw. Banks calculate interest based on the daily balance overdrawn, and this is debited to the account every month. They add outstanding credits to the overdrawn amount for the next month.

Banks With The Best Overdraft Limit

Small and big banks usually offer an overdraft limit which ranges from $100-$1,000 depending on the income of the account holder. Below is brief information on some financial institutions about their overdraft protection services, limits, and fees.

Chime Bank: No Overdraft Fees. Ever.

Unlike traditional financial institutions, Chime has no unnecessary fees including hidden fees, monthly fees, overdraft fees, service fees, minimum balance requirements or fees, card replacement fees, transfer fee, or in-network ATM fees.

Furthermore, consumers can transfer funds from their Savings Account to their Spending Account with Chime’s online experience or with the Chime App. Chime does not have its own ATM system, but it uses the 24,000 MoneyPass networks nationwide with a fee-free cashback for 30,000 locations.

Chase Bank

Chase Bank or JPMorgan Chase & Co. is a global financial firm based in New York City. It is the largest bank in the United States and sixth in the world with total assets of approximately $2.534 trillion. Chase has an overdraft fee of $34 per transaction and an overdraft limit of three settlements per day. This means that account holders can acquire a total of $102 in overdraft fees per day. Chase offers overdraft protection that allows its account holders to link their savings account to their checking accounts in case the latter lacks fund. However, it does not apply its standard overdraft protection services for a purchase which costs $5 or less or for an overdraft of $5 or less.

Wells Fargo

Wells Fargo is a California-based financial institution with several offices throughout the United States. It offers an economical mobile banking experience and ample access on ATMs to its account holders. Wells Fargo charges its account holders a standard overdraft fee of $35 per transaction with a maximum of four settlements daily that can reach up to $140. Account holders can connect two backup accounts to their chief checking account with a regular charge fee for transfer fees.

U.S. Bank

U.S. Bank is one of the largest in the United States and also offers overdraft protection which covers the purchases of the consumers when they have insufficient funds.

If the consumer has overdrawn their account by $5, U.S. Bank will not charge an overdraft fee. However, for an overdrawn amount of $5.01 and above, U.S. Bank has an overdraft fee of $36 for every transaction with a maximum of four settlements daily. This means that the purchaser can incur up to $144 in overdraft fees each day. Account holders can connect their secondary saving account to their checking account with a transfer fee of $12.50 and $7.50 for Standard and Gold accounts, respectively.

BBVA Compass

BBVA Compass provides numerous overdraft management solutions with tools to notify its account holders and monitor their accounts through Online and Mobile Banking. The Overdraft Payment and Protection Programs feature of BBVA Compass includes the Linked Account Overdraft Sweep Service, Overdraft Protection Line of Credit, and Courtesy Overdraft Option.

PNC Bank

PNC offers its eligible account holders overdraft protection where they link their checking account to their secondary savings, checking, money market account, personal line of credit, or credit card.

The overdraft protection is less expensive as compared to the standard overdraft fee of PNC which costs $36 for each purchase. PNC also limits the purchasers to only four settlements daily that can reach up to $144 overdraft fee. Meanwhile, PNC declines ATM and one-time debit card transactions with no charge if the account balance of the purchaser is low.

SunTrust Banks

SunTrust Bank provides overdraft assistance, Overdraft Coverage and Overdraft Protection, to its account holders to ensure that they can supply funds when needed.

In Overdraft Coverage, SunTrust allows the consumers to make ATM or debit card transactions daily even with insufficient funds in their accounts. However, the bank will charge an overdraft fee of $36 for each purchase with a maximum of six settlements a day. SunTrust will not penalize the consumer if the overdraft and returned item fees are below $5.

Overdraft Protection service guarantees the consumers that no overdraft or declined transactions will occur once they set up their Overdraft Protection accounts. The account holders are required to link their SunTrust checking account to their SunTrust savings, money market, credit card, or line of credit account to transfer funds in case of transaction deficiency. There is a $12.50 fee for each transfer transactions, but consumers can avoid the charge if they deposit funds to cover the overdraft on the same business day.

Bank of America

According to the overdraft scheme of Bank of America, they will not approve ATM withdrawals or debit card purchases if there are inadequate funds in the account of the consumer. Additionally, the bank offers two overdraft options on how the account holders prefer them to process their check payments. The first option is the standard overdraft setting with a $35 fee for every overdraft or declined transaction with a limit of four settlements per day. On the other hand, the Decline-All option is also a $35 fee per item, but the bank will not authorize purchases that will lead to an overdraft.

The Verdict: Switch to Chime Bank to Avoid Overdraft Fees

Based on the overdraft limit of some financial institutions, multinational banks such as PNC, Bank of America, Chase, U.S. Bank, and Wells Fargo have approximately $100 in overdraft limit each day. SunTrust Bank has the highest overdraft limit of seven settlements where account holders can incur up to $252 per day. These figures contribute to the $33 billion overdraft revenue of banks in 2016 according to the report of the Consumer Financial Protection Bureau. Meanwhile, there are great fee-free account options in the United States, such as Chime, which has no overdraft fees or hidden charges.

As a modern consumer, it may make sense to choose a less traditional option, such as a Chime account, in order to avoid overdraft fees. Chime offers online and mobile access along with the security of a traditional bank, but with none of the hassle.

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How to Pay Off Debt Fast: Two Methods You Need to Know

By Jackie Lam
September 19, 2018

Sad but true: if you have debt, you know that the balance in your savings account can be more of an illusion. It often seems like there’s an underwater glacier that’s pulling any net balance in your account to a negative.

But no need to despair. There are some tactics to help you methodically pay off money owed.

For instance, you may have heard the terms “avalanche” and “snowball” debt repayment methods tossed about. No, it doesn’t involve hiding out in a snowy mountain range until your debt load magically disappears, although that would be pretty awesome. Instead, these are two common tactics to pay off your debt, whether you have student loans, credit card debt, personal loans, car loans, and so forth.

As September is the Month of Budgeting here at Chime, we are taking a deeper dive into these two popular debt repayment strategies. Read on to learn more about  the pros and cons of both, and from there you can figure out which budgeting method is best for you.

Avalanche Debt Repayment Method

With the avalanche debt repayment method, you will first make the minimum payments on all your debts. You will then focus on tackling the debt with the highest interest rate, paying the minimum payment plus extra payments each month. After you’ve crushed the first one, you then take the money you would use to pay off that debt and move onto the debt with the next-highest interest rate. (Note: we highly recommend setting up automatic savings, so you don’t spend the money you need to pay off your debt.)

To keep things simple, let’s just focus on credit card debt. Let’s say you have three credit cards, each with varying balances and interest rates:

Card A – Balance: $800, Minimum Payment: $50; Interest Rate: 25%

Card B – Balance: $2,000, Minimum Payment: $45: Interest Rate: 22%

Card C – Balance: $500, Minimum Payment: $40: Interest Rate: 20%

Because you’re doing the avalanche debt method, you’ll first make minimum payments on all three cards. In this scenario, you’d then also throw down $200 each month toward the credit card with the highest interest rate (in this case Card A with an interest rate of 25%).

After you’ve finished paying off Card A, or “mother lode interest rate (25% APR)” card, (congrats, btw), you put the minimum payment on Card B ($45) and Card C ($40), plus an extra $200 toward Card B (with the second highest interest rate of 22%.) Once you’ve paid off Card B, you’re left with Card C to pay off.


  • Pay off your debts faster. Because you’re throwing down larger chunks of cash toward your debt, you’ll make faster headway.
  • You save more money on interest. Because you’re tackling debt that costs you more in pesky interest rates (they add up quickly, trust me), you’ll be saving more moola.


  • Depending on your situation, you may not be able to afford to make the minimum payments, plus extra every month. If you do, it may not feel like you’re making much of a dent.
  • If the balance with the highest interest rate happens to have the largest amount of debt, it could it could take months to pay it off.

Snowball Debt Repayment Method

With the snowball debt repayment method, you will also make the minimum payments on all your debts. But there are two major differences between the snowball and avalanche repayment methods.

1. Instead of focusing on interest, you make payments based on your balances.

2. Instead of first paying off the debt with the highest interest rate, you start with the one with the lowest balance.

So, to illustrate this, let’s use the same three cards as we did with our Avalanche Debt Repayment example:

Card A – Balance: $800, Minimum Payment: $50; Interest Rate: 25%

Card B – Balance: $2,000, Minimum Payment: $45: Interest Rate: 22%

Card C – Balance: $500, Minimum Payment: $40: Interest Rate: 20%

In this case, you’d start with making extra payments on Card C (balance of $500) until it’s completely paid off. Next, you’d take the extra monthly payments you were making on Card C and put them toward Card A, which is the card with the next-highest balance (balance of $800). Once Card A is paid off, you then put all your efforts into Card B (balance of $2,000).


  • You enjoy wins early in the game. It’s quite motivating to knock out your first debt.
  • Because you’re focusing on the debt with the smallest balance, you can make greater strides with less money.


  • The biggest downside of the snowball method is you don’t save as much in interest. In other words, you’ll be paying more.

So which method is best? In the realm of social science and human behavior, research reveals that even though rationally we may want to save more, most people stay more motivated by taking care of the debts with the smaller balances.

That being said, it’s still ultimately up to you to decide. We’re not here to sway you one way or the other. Like all things in personal finance, there’s no one-size-fits-all solution. It really depends on what motivates you the most. Would you rather save more in interest, or knock out the smaller debts first?

Tips on Getting Started

Ready to nip your debt in the bud? Here are some pointers on kick-starting the process: 

  • Add up all your debts. Once you’ve decided which repayment debt plan you’d like to go with, tally up all your debts so you can see your balances, interest rates, terms, and fees. Pro tip: there are lots of money management and money-saving apps that allow you to view your debts at-a-glance. The key here is to figure out which debt to tackle first. If it’s been a while since you’ve paid close attention to a particular account, reach out to a representative and get the deets. This will help you make an informed decision.
  • Track your progress. There are a ton of creative ways to track your progress, including a debt payoff thermometer, a Pac-Man style board game where each square or circle represents a certain amount of cash, and you color in each square as it gets paid off.
  • Open a savings account once your debt is paid off. Once your debt is paid off, you can take your money and throw it toward whatever you like—vacation, splurge fund, a car, and what have you. Just make sure you open a savings account for your new goal. This way you can ensure you’re making steady headway.

You Got This

No matter which debt repayment method you choose, here’s the thing: the fact that you’re making it a priority is king. And by keeping debt payoff top of mind, you’ll be on your merry way to crushing it.

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10 Years After the Financial Crisis – How Fintech Is Helping

By Susan Shain
September 18, 2018

“Too big to fail.” If reading that brings a little bit of red to your eyes, you’re not alone.

Though originally popularized in the 1980s during the bailout of Continental Illinois National Bank, this phrase once again became common parlance during the 2008 financial crisis. According to the Federal Reserve Bank of Cleveland, this saying became synonymous with the unwillingness of regulators to close a large troubled bank because they believed the short-term costs of a bank failure were too high.

So, it’s no surprise that nearly half (49 percent) of Americans still have negative associations with the term “too big to fail,” according to a recent Chime survey. The generations who had the strongest negative connotations included boomers (55 percent), many of whom lost their retirement savings in 2008, and millennials (50 percent), who graduated to a nonexistent job market.

In the decade since that phrase was splashed across newspapers and discussed at every dinner table, the United States has slowly clawed its way back from the financial crisis. This brings up the question: Has anything really changed?

How banks are doing

Following the Great Recession, the American people bailed out banks, investors, and shareholders. The Federal Reserve slashed interest rates and pumped trillions of dollars into the American economy.

Ten years later, the same big banks are still at the top of the game: JP Morgan, Bank of America, Wells Fargo, Citibank, and US Bank. Across the U.S., banks had record profits of $56 billion in the first quarter of 2018. Although CEOs earn less than before, they’re still killing it. The stock market has sustained one of its longest bull runs in history, with the S&P 500 growing more than 300 percent since the crisis.

“This is not an industry that has examined itself and remade itself in the wake of the crisis,” stated Phil Angelides, chairman of the Financial Crisis Inquiry Commission, in The Wall Street Journal.

That’s despite Dodd-Frank, a 2010 bill that aimed to protect consumers by placing more controls on banks, including their lending requirements. While the bill did result in increased accountability and oversight, the current administration has begun to roll back some of its provisions. Even if the remainder of the consumer protections stay intact, the WSJ points out that many of the regulators have backgrounds in the very industry they’re supposed to be monitoring.

In other words, banks are doing well, executives and stocks are flying high…but how about the American people?

How Americans are doing

Every year since 2013, the Federal Reserve Board has asked 12,000 adults about their financial lives for the Survey of Household Economics and Decisionmaking (SHED).

According to the 2017 report, only 7 percent of adults say it’s “difficult to get by financially” —  about half the number who said so in 2013. And nearly three-quarters say they’re either “living comfortably” (33 percent) or “doing okay” (40 percent).

Although things have improved, that doesn’t mean everything is OK. Here’s a deeper look at the numbers.

Unemployment and income

Unemployment has dropped to 3.9 percent, lower than it was before the recession. Even the “real” unemployment rate — which includes people who’ve stopped looking for work and people working part-time because they haven’t found full-time opportunities — is only 7.4 percent.

Not counted in that percentage, though, are the people who aren’t looking for work because they can’t find childcare, are addicted to opiates, or are turned off by low wages. Of the Americans who are employed, more than one-fifth (23.3 percent) are in jobs where the median wages fall below the federal poverty line, reports the WSJ. Nearly 40 percent of adults, according to SHED, have family incomes of less than $40,000. Overall, the WSJ says median household income has only risen 5.3 percent since 2008.

Chime’s survey underscores this: 54 percent of Americans are living paycheck-to-paycheck.

More people, SHED learned, are working on the side, too: 31 percent of adults engaged in gig work in 2017, up from 28 percent in 2016.

Wealth and inequality

Chime’s survey asked people how the recession had affected their financial habits. This is what we found:

  • 72 percent became more inclined to save money
  • 62 percent feel their savings are “in a better place” compared to 10 years ago

Despite these promising signs, the wealth gap continues to grow. One report by the Federal Reserve Bank of St. Louis went so far as to say millennials may become a “lost generation” for wealth accumulation.

“Wealth in 2016 of the median family headed by someone born in the 1980s remained 34 percent below the level we predicted based on the experience of earlier generations at the same age,” stated the report.

Those with exposure to the stock market — just half of the American population — have bounded ahead, while everyone else has been left behind. In the New York Times, Nelson D. Schwartz reports the “proportion of family income from wages” has fallen from 70 percent to just under 61 percent. The rest, he says, is largely from investments.

“The people who possess tradable assets, especially stocks, have enjoyed a recovery that Americans dependent on savings or income from their weekly paycheck have yet to see,” wrote Schwartz in the New York Times. “Ten years after the financial crisis, getting ahead by going to work every day seems quaint, akin to using the phone book to find a number or renting a video at Blockbuster.”

When the recession hit, Americans lost $16 trillion in net worth. Today, the wealth of the median American household is still 34 percent lower than it was in 2007, according to the New York Times. Why? Because for families without large investments, their wealth was wrapped up in home value.


Although housing prices have fully recovered — with the average house price 1 percent higher than the peak in 2006 — there aren’t as many homeowners as there were before the recession.

In what The Penny Hoarder calls “The American Nightmare,” 9 million people lost their homes during the housing crash. According to CNN, the overall homeownership rate dropped from 69.4 percent in 2004 to 63.1 percent in 2016. And, of the Americans who rent, nearly half of them are cost-burdened, according to Harvard University. This means they spend more than 30 percent of their income on rent.

Debt and savings

Debt also remains a common struggle. In fact, Chime’s survey found that 65 percent of Americans have some sort of debt, with 40 percent carrying more than $10,000 and 14 percent carrying more than $50,000.

Here are some staggering stats:

  • Student debt, in particular, has crippled millennials. Today’s students graduate with nearly $40,000 of loans, according to Student Loan Hero.
  • When faced with an unexpected expense of $400, 40 percent of adults can’t pay for it, reports SHED. While that figure has decreased from 50 percent in 2013, it still isn’t good.
  • Twenty percent of Americans are behind on their debt payments, according to SHED; a slight increase from 18 percent in 2015.

In addition, SHED found 22 percent of adults expected to forgo payment on some of their bills in November or December 2017 — mostly credit cards. (That may be why 64 percent of the people we surveyed prefer debit cards over credit cards.)

When it comes to retirement, the picture is also bleak. SHED reports less than two-fifths of non-retired adults think their retirement savings are on track. One-fourth have no retirement savings or pension whatsoever.

The rise of fintech

Though the traditional financial industry may not have learned much from the Great Recession, entrepreneurs did.

They immediately saw a need for a new breed of financial businesses. They realized banking and financial services should no longer be exclusive, confusing and predatorial. Instead, entrepreneurs thought financial institutions should be helpful, transparent and free.

So, in the years after the crash, fintech companies started sprouting up left and right.

While the streak of new companies began to slow in 2015 — perhaps, Deloitte posits, because other technologies like bots and blockchain have attracted entrepreneurs — investments into fintech are still robust.

In 2017, according to SHED:

  • 62 percent of adults auto-paid some bills
  • 52 percent received electronic account alerts
  • 46 percent used automatic saving

And, when it comes to mobile banking, those customers are more satisfied. Fifty-nine percent of the millennials we surveyed would recommend their online or mobile bank to a friend. Of those who used national banks, only 22 percent would do the same.

How fintech is helping

Although the financial crisis has had a lasting impact on Americans, it’s also created a landscape in which fintech can thrive.

So, if there’s been one benefit of the Great Recession, it’s the growth of new financial companies that value transparency and put consumers first.

New fintech startups are indeed helping today’s consumers close tomorrow’s wealth gap. For example, Chime offers comprehensive, modern banking with zero fees. With services like Early Direct Deposit, you can avoid predatory payday lenders. And, with automatic savings features, you can build your emergency fund without thinking about it.

In other words: we’ve got your back as you achieve your financial goals.

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Credit Score Money Tips: 3 Tips to Fix Your Credit Asap

By Due.com
September 18, 2018

Your credit score is an essential part of your finances. If you are interested in buying a home or a new vehicle with a loan, you may need to fix your credit score ASAP. The difference between an excellent credit score and a poor one can be worth tens of thousands of dollars over the life of a mortgage if you can get approved at all. While fixing a credit score can take up to a decade, there are some steps you can take today to get your credit score on the mend. If you want to fix your credit score ASAP, follow along to learn more.

Fix your credit tip #1: 100% on-time payments

The biggest factor in your credit score is your on-time payment history. If you have a series of late or missed payments, your first step to fix your credit score is to turn that trend around. Late payments stay on your credit for seven years, and there is no quick fix to get them removed. But you can start the clock to remove them all for good this month with your first of a lifetime of perfect on-time payments going forward.

If you have trouble keeping up with the bills, stop using your credit cards and set the payments to automatic. This way, you never have a late payment to worry about! Even if you don’t have a monthly payment due, many credit cards report an on-time payment. Whatever you have to do to keep a 100% on-time rate going forward, do it!

Fix your credit tip #2: Pay down balances

The fastest way to fix your credit score in a hurry is to pay off revolving credit balances. A revolving credit account is an account where you can add to your balance in the future. This means credit cards and other lines of credit need to be paid down as quickly as possible to raise your score. While it is easier said than done, if you can pay your credit cards down to zero, you should see your score increase if you carried a balance in the past.

If you need help putting together a credit card payoff strategy, consider the debt snowball or debt avalanche. This is a method of focusing on paying off one account at a time while making minimum payments on the others. As you pay off each account, your focus payment gets bigger and bigger and has a snowball effect of paying off your debt accounts.

Fix your credit tip #3: Be patient

If you follow tip #1 and tip #2 and don’t do anything else, you should see your credit score go up in the long-run. If you want to fix your credit permanently, however, it takes time. Those previous late payments hurt your score less and less over time, but it will take the whole seven years for them to go away for good. There is no quick answer to that part of fixing your credit. You have to be patient.

But if you build the right credit habits and hold to them for years, your credit will improve. While you are at it, don’t mess with your credit too much. Adding new accounts, increased credit limits, and even applying for a new credit card can temporarily lower your credit score. The more you can keep your hands off and just let your credit accounts age with perfect payment records, the better off your credit will be.

Your credit score is in your hands

It’s easy to blame credit card companies, debt collectors, and banks for a bad credit score, but in reality, your credit score is in your control. If you take charge and make your credit a focus, you should be able to fix your credit over time. When you want to borrow with the best terms or use the best credit cards for miles and points rewards, you’ll be thrilled you have excellent credit. You can also get back on your feet and open a bank account online with no deposit even with bad credit through a mobile bank like Chime. They can help you restablish good financial habits.

Following these habits, I’ve been able to build my own 800+ credit score. That helped me buy my home and earn hundreds of thousands of travel rewards points for free trips around the world It couldn’t have happened without my excellent credit score. If you want to join me in the 800+ club, follow these key tips to fix your credit score starting today.

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Here’s What You Need to Know About Your Student Loans After Graduation

By Rachel Slifka
August 31, 2018

If you’re a new college graduate, you’re likely in a transitional stage.

You may be searching for or starting a job, moving to a new city, or unsure of your next steps. Graduation also means you need to re-evaluate your finances, especially if this is the first time you’ve had a significant income. With that higher income, you’ll need to budget for rent, groceries, and other expenses. You’ll also want to get a jump-start on saving as much money as you can.

While you have time to figure out the details, there’s one thing you can’t ignore: your student loans. Making student loan mistakes early on can cost you in the long-run. So, don’t wait – here’s everything you need to know about your student loans after graduation.

Learn how to access your student loans

If you don’t already know where your loans are, the first step is to find them. You can’t create a plan to get out of debt if you don’t know exactly how much debt you have. Hopefully you have received some correspondence from your student loan providers with information on how to access your accounts. But, this isn’t always the case.

If you have private student loans through a bank or other source, you will need to contact them directly to find out more information regarding your balance. If you have federal student loans, there is a step-by-step process for how to find them.

To find your federal student loans, you will need to access the National Student Loan Data System, or NSLDS for short. This is a central database which keeps track of all your federal student loan debt. You can log in at anytime to find out about your accounts, including whether your loans are subsidized or unsubsidized and what the interest rate is on each loan.

To get started, visit the NSLDS website and have your social security number on hand to log in. Once you’re on the website, click “Financial Aid Review” and then click on the link that says “Create an FSA ID.” This is a unique identifier you will need to remember, so write it down and store in a secure place.

Once you are logged in, you should be able to see a snapshot of all your student loans. You can set up automatic payments and create a plan after seeing your loan information. Your account will update with every payment you make, so you will want to check it frequently to keep track of your progress.

Understand when your grace period ends

If you have federal student loans, you will have a six month grace period after you graduate to start making payments.

Just be aware: graduates with unsubsidized federal student loans accrue interest during the grace period. In fact, unsubsidized loans accrue interest throughout your college career, and will continue to do so until they are paid off.

On unsubsidized student loans, the interest is added to the principal balance of your loan. Not only does this mean your principal balance is getting larger, but you have to pay more in interest because your principal balance is increasing. Ouch – that’s a double whammy.

On the other hand, if you have subsidized loans from the federal government, your loans will not accrue interest while you are in school or when you enter your grace period after graduation. Uncle Sam sets the interest rates on Direct Subsidized Loans, and those rates are fixed.

In order to qualify for a Direct Subsidized Loan, students must submit the Free Application for Student Aid, otherwise known as FAFSA. Eligibility is determined based on each individual student’s financial needs. While Direct Unsubsidized Loans don’t accrue interest during your grace period, it’s still a good idea to make payments during this time frame before interest starts accruing.

Know your repayment options

With federal student loans, you have a few repayment options. You will automatically be put on the Standard Repayment Plan, which assumes you will be able to pay back your student loans over a 10-year repayment period.

Even if you can afford to pay the monthly payment on the Standard Repayment Plan, it is worth considering other options that may be a better fit for your needs. Depending on your situation, you may be eligible to change to one of the following repayment plans:

Income-Based Repayment Plan (IBR) keeps your monthly student loan payment at 10 to 15 percent of your discretionary income at the maximum. To qualify for the IBR plan, you need to submit an application. Typically, you need to owe more on your student loans than what you are making in a year.

Pay As You Earn (PAYE) extends your repayment period, but it keeps your monthly payments at 10 percent of your discretionary income. If your income increases, your monthly payment will also increase, but it won’t ever be more than it would have been on the Standard Repayment Plan.

Revised Pay As You Earn (REPAYE) is similar to PAYE, but it allows more eligibility. Payments are capped at 10 percent of your discretionary income, but unlike the PAYE, your payments can increase past the amount it would have been on the Standard Repayment Plan if your income increases.

Income-Contingent Repayment (ICR) allows borrowers to cap their student loan payments at the lesser of two options: either a fixed 12-year payment plan based on your income or 20 percent of your discretionary income.

Graduated Repayment starts you off with a low monthly payment, but as time goes on, your monthly payment will increase. This is a great option for someone who expects an increasing income or someone with high earning potential.

Extended Repayment allows borrowers to extend their repayment schedule for up to 25 years. During that time, you can make either fixed or graduated payments. The pitfall of this plan is that you will pay significantly more in interest over the lifetime of the loan due to the extended repayment period.

With so many options, you can work with your student loan provider to find the best fit for you and your financial situation. The worst thing you can do is simply not pay your student loans because of financial struggles.

Know what happens if you miss a payment

Missing or being late on a student loan payment may not seem like a big deal, but it can have serious consequences in the long-run.

After you miss a payment, your loan is officially considered delinquent and will remain that way until you make a payment or until you request deferment or forbearance. You may also receive a late fee and see a mark on your credit. After 270 days of a missed payment, your loan is then considered to be in default.

One of the easiest ways to avoid missing a scheduled student loan payment is to set up automatic withdrawals from your savings account. This way, you don’t have to worry about paying yet another bill – it will be taken care of without a second thought.

All in all

No matter what your financial situation is, you have options to figure out how to repay your student loans. The important thing is to create a financial plan so you can ensure you are making as much progress as possible on repaying your debt.

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What is Paid Off?

By Ben Luthi
August 29, 2018

You know the student loan debt crisis has reached a new level of insanity when a new television game show is designed to help borrowers pay off their college debt.

TruTV’s “Paid Off,” airing on Tuesdays at 10/9 central, aims to help contestants win money to pay down their student loan debt faster. Perhaps this is a good time for the new game show as, according to Student Loan Hero, the average student loan balance for Class of 2017 graduates hit $39,400.

Read on to learn more about the show and find out how you can better manage your own student debt.

How “Paid Off” Works

The trailer for the first season of “Paid Off” includes hopeful contestants sharing their student loan balances and answering Family Feud-style questions. Other episodes feature other questions of different styles.

There are four total rounds, three of which pit contestants against each other. The final round offers one contestant a chance to eliminate his student loan debt entirely. In that round, the contestant must answer eight questions correctly in under a minute. However, it isn’t an all-or-nothing prize. Instead, the contestant gets credit for each correct answer.

Those who don’t make it to the final round don’t leave empty-handed, though. The first and second contestant eliminated receives $1,000 and $2,000, respectively. According to Forbes, the makers of the game show hope to give away roughly $500,000 during its inaugural season to over 60 student loan borrowers.

As with any game show, contestants are required to pay taxes on their winnings, even if they use the earnings to repay debt.

How Effective Will “Paid Off” Be?

Handing out half a million dollars to help student loan borrowers will undoubtedly make a difference for each person who wins money on the show.

But, unfortunately, that amount barely scratches the surface. Americans carry more than $1.5 trillion in student loan debt, according to March 2018 data from the Federal Reserve. So, while the game show does some good, college students and graduates need other solutions to fix the growing problem.

What’s more, incoming freshmen typically don’t get a crash course in student loans or how to use them wisely. The idea of getting what they need today and putting off payment for later is appealing. And, once you graduate, it’s not always easy to get relief. For instance, it’s virtually impossible to discharge student loans in a bankruptcy.

Three Smart Tips on Taking out Student Loans

When planning for college, it’s important to reduce your reliance on student debt. You can do this by looking at ways to graduate without borrowing a ton of money. Read on for three smart options.

Reconsider Your School Choice

You don’t need to attend a college with a household name to enjoy a long and lucrative career. Once you’re a few years into your career, your work record will likely speak louder than your degree. As such, you may be better off attending a less expensive school with a good track record than spending more for a degree that might not offer much more value in the long-run.

Learn About How Student Loans Work

There’s no college class that explores the ins and outs of student loans, but you can find out more about them on your own.

There’s a wealth of information online about student loans, including federal and private student loan options. If you still have questions, set up an appointment with a school’s financial aid office to get the answers you need.

Remember, you may be making student loan payments for as long as 30 years after you graduate, so it’s imperative that you understand what you’re getting yourself into from the start.

Consider Student Loans as a Last Resort

Instead of looking to student loans first, consider other ways you can pay for college. Here are just a few ideas:

Scholarships: Websites like Scholarships.com and Cappex.com can match you with thousands of scholarship opportunities. If you apply for a bunch of scholarships, you may get some cash that you won’t have to pay back.

Grants: Fill out the Free Application for Federal Student Aid (FAFSA) each year before the school year starts. This form helps the U.S. Department of Education determine how much financial aid your family is eligible for.

Also, check to see if the schools you’re interested in offer grants for your major.

Part- or full-time work: By working just 15 hours a week and earning nine dollars an hour, you can earn more than $28,000 in a four year period.

Even after taxes, this can make a huge difference in your need for student loans. If you can manage to work more hours or get a better-paying job, you could reduce your dependence on student loans even more.

Paying Off Your Student Loans Without the Help of a Game Show

If you’ve already graduated and are trying to figure out how to pay down your student loans, winning a game show sounds like an easy solution. But unless you’re fortunate enough to get on the show and win the cash, you’re on your own. Here are some ideas to pay off your loans faster:

Look Into Loan Forgiveness Programs

If you have federal student loans, you may qualify for one or more loan forgiveness programs. The Public Service Loan Forgiveness program, for example, requires you to work for 10 years for a government agency or eligible nonprofit organization.

Keep in mind that these programs have strict requirements and you typically need to commit to a specific number of years of service. But if that’s already part of your career plan, you could be well on your way.

Consider Refinancing Your Student Loans

The lower your interest rate, the more you can save on interest over the life of your loans. Several student loan refinancing companies offer low fixed and variable interest rates that can make it easier to pay down your debt.

Just keep in mind that if you refinance federal student loans, you lose access to income-driven repayment plans and loan forgiveness options.

Boost Your Cash Flow

Whether or not you choose one of the other options we’ve discussed, cutting back on other expenses and earning more income is a straightforward way to save money to eliminate your student loan debt.

If you have a hard time saving, consider getting help from an app or savings tool. Chime’s automatic savings program works by rounding up every transaction you make with your Chime Visa debit card to the nearest dollar. The round up amount is transferred to your Chime savings account. This kind of savings tool can help you set aside more money for debt repayment without even thinking about it.

Next Steps

Depending on where you are in your student journey, there are ways to reduce how much student loan debt you take on or to eliminate that debt more quickly.

As you consider these tips, the important thing is that you have a plan. The sooner you get rid of student loan debt in your life, the easier it will be to achieve your other financial goals. That’s what we call winning the game.

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Student Loan Help: 8 Student Loan Mistakes To Avoid

By Ben Luthi
August 27, 2018

Student loans can certainly help you pay for college. But if you’re not careful, they can also haunt you long after you graduate.

In fact, the average student loan debt for Class of 2017 graduates is $39,400, according to Student Loan Hero. That debt burden can feel crushing, even if you manage to land a great first job out of school. So, while you are figuring out how to open a bank account and be fiscally responsible while in college, it’s also critical to learn how to use student loans responsibly.

To help you out, here are 8 mistakes you can learn from.

1. Using your student loans to pay for a vacation

By the time I graduated in 2012, I had $9,133 in student loan debt. But if I had used my loan funds more wisely, I would have been in much better financial shape. That’s because I paid for not one, but two vacations using my student loans. My wife and I went on a cruise to the Bahamas in 2011 and took a trip to Disneyland the year after that.

The cost of the two trips made up roughly a third of my total student loan debt, and I paid interest on those vacations up until July 2018 when I finally paid off my loans. Not only was this a poor choice from a financial standpoint, but I also violated my loan terms. According to the Higher Education Act of 1965, federal student loans must be used for eligible education expenses, including:

  • Tuition and fees
  • Room and board
  • Textbooks and supplies
  • Transportation to and from school

Take it from me: to keep your loan balance down, stick to your loan agreement by using your student loans for eligible expenses only.

2. Taking out loans without researching other options first

Student loans are just one way to pay for college, and they can be the most expensive. As such, it’s essential that you consider student loans as a last resort.

Other ways to pay for college include:

  • Applying for scholarships: Websites like Scholarships.com and Cappex.com match students with thousands of scholarship opportunities. While you likely won’t get approved for every one you apply for, you’ll increase your chances of getting cash by applying for as many as you qualify for.
  • Filling out the FAFSA: The Free Application for Federal Student Aid (FAFSA) helps the U.S. Department of Education determine if you need aid from the federal government. If you qualify, you may get access to Pell grants, which you don’t need to repay.
  • Getting a job: While you may not feel like you can fit in a job between your school work and your social life, even a part-time job can make a difference in your need for student loans. It can also help you pay for expenses that federal student loans don’t cover.

Keep in mind that you may still need student loans after considering these options, but hopefully, you will have reduced the amount you need to borrow.

3. Picking the wrong loans when taking out student loans

There are two main types of student loans: federal and private. Federal student loans are provided by the Department of Education, while private student loans are offered by private lenders.

If you’re an undergraduate student, federal student loans are almost always the better option. They don’t require a credit check, offer income-driven repayment plans and loan forgiveness programs, and typically charge lower interest rates.

Private student loans, on the other hand, require a credit check. You’ll also typically need a co-signer to improve your chances of getting the best rates lenders offer. At the same time, if you’re a graduate student or parent trying to help your child, private student loans can provide competitive terms compared with what the Department of Education offers.

So, compare federal and private loan options before you apply.

4. Not filling out the FAFSA

We’ve already discussed how filling out the FAFSA can help you potentially get a Pell grant. But another reason to fill it out is that you may qualify for subsidized federal loans.

With subsidized loans, the federal government pays the interest that accrues while you’re still in school. This means that once you graduate, your principal balance is the same as when you first got your loan. If you don’t fill out the FAFSA or don’t qualify for subsidized loans, your unsubsidized loans will accrue interest while you’re in school. That amount will then added to your principal amount when you graduate.

5. Paying for student loan help

If you have federal student loans, you may qualify for loan forgiveness or an income-driven repayment plan, which can reduce your monthly payments to 10% to 20% of your discretionary income. Also, if you have several federal loans, you can consolidate them into one loan to avoid having multiple monthly payments.

Several companies offer to help you “qualify” for these programs for a fee, but you can do the work yourself through the Department of Education – for free. So, if someone tells you they can help you get your loans forgiven or reduce your monthly payment, don’t take the bait.

6. Not refinancing your loans when you can

Once you’ve graduated, one way to pay down your student loans more quickly is by refinancing them. Refinancing is the process of replacing one or more student loans with a single loan, preferably with a lower interest rate.

The caveat is that student loan refinancing companies typically require a credit check and a decent income. This means that even if you qualify to refinance your student loans, you may not get favorable terms.

If you want to improve your chances of getting approved with a low interest rate, you can ask a co-signer with great credit and income to apply with you. But even then, there’s no guarantee. It’s up to you to research your refinancing options to find out if you can refinance your student loans at a better rate.

7. Paying your monthly bill manually

Many student loan services offer an interest rate reduction if you sign up for automatic payments. This is because borrowers with automatic payments are more likely to make their payments on time and in full every month than those who make payments manually.

Just be sure that you have enough cash in your checking account on your due date. Otherwise, you may end up getting hit with a returned payment fee from the student loan servicer or an overdraft fee from your bank.

Alternatively, you can sign up with a bank with no fees.

8. Not having a plan

The standard repayment plan for federal student loans is 10 years. But if you consolidate your loans through the federal government or get on an income-driven repayment plan, you can end up spending up to 30 years repaying your loans.

The longer it takes you to pay off your student loans, the more interest you’ll pay over time. And, the sooner you create a repayment plan, the better.

While there’s no best strategy to repaying student loans, you may want to consider a combination of refinancing to potentially lower your interest rate and adding extra payments each month to eliminate your student debt faster.

Next steps

When I first took out student loans, they seemed harmless. But over time, I learned just how financially crippling they can be. My main takeaway: as you make your way through college, be wise about how you use student loans to fund your education.

As you consider these 8 mistakes, you can find ways to use student loans more responsibly. This will help you enter the real world with less financial stress.

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The Best Way To Pay Off Debt On A Budget

By Rachel Slifka
August 24, 2018

Links to external websites are not managed by Chime, The Bancorp Bank, or Stride Bank, N.A.
This page is for informational purposes only. Chime does not provide financial, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for financial, legal or accounting advice. The author is not a financial adviser. You should consult your own financial, legal and accounting advisors before engaging in any transaction.

If you aren’t earning a lot of money or you’re barely making ends meet, paying off your debt may seem impossible.

People fall into debt for a variety of reasons. Regardless of whether you have mounting credit card bills from past financial mistakes, student loans, medical bills, or something else, debt can feel all-consuming and completely overwhelming. Yet, did you know that it’s possible to pay off every last penny you owe? It’s not always easy, but with some determination and dedication, you can pay off your debt, save more money, and improve your entire financial situation.

Here are some tips on how to pay off debt when you have a small income.

1. Create an emergency fund first

While you may be eager to jump right in and start tackling your debt, if you don’t have an emergency fund, this is a good first goal.

Without an emergency fund or financial buffer, any unexpected costs can derail your debt repayment process. Maybe your car breaks down and needs repairs, or you had a larger heating bill than you budgeted for. Whatever the case, when emergencies come up, you need money – and fast.

So, start an emergency fund now with a separate savings account. This way you aren’t tempted to use it for your day-to-day spending. If this feels overwhelming, start small. Even $500 saved up can help you out in a stressful financial situation.

2. Develop a “minimum needs” budget

A “minimum needs” budget is a budget that covers just your most basic living expenses, such as rent, groceries, and debt-repayment. It should be pretty bare-bones and should eliminate all non-essential spending.

To start your budget, you first need to determine the cost of your everyday living expenses.

These are bills you can’t cut out – bills that need to be paid every single month, like rent, groceries, and utilities.

As you create your budget, see if there is any way you can work to lower your bills. For instance, if you have an extra bedroom, can you find a roommate to save money on rent or your mortgage? Can you lower your grocery budget by clipping coupons and signing up for your grocery store’s rewards program? Perhaps you can consider cutting out cable to save hundreds, if not thousands, of dollars every year. Every little bit can help. The point of a minimum needs budget is to free up as much cash as you can. Every dollar you have to spare can be put towards paying down your debt.

To help you get going, start budgeting on a spreadsheet or use a budget app. And remember: no matter how you choose to track your money, the most important thing is to set a budget and stick to it.

3. Consider refinancing

If you have debt, it’s a good idea to find out if you can save money by refinancing your loans.

Refinancing your debt essentially means another company buys out your debt. In return, you start making payments to your new debt servicer, and this new company then collects your interest payments.

Refinancing companies typically offer you a lower interest rate to gain your business. This helps you because over time, you won’t have to pay nearly as much money in interest and can make a bigger dent in your principal loan balance.

Take it from me: it’s worthwhile to do your research on refinancing if possible. A few years back, my husband and I refinanced some of our student loans and now pay a two percent lower interest rate than we were originally paying. This is saving us thousands of dollars in the long-run.

4. Set goals and find accountability

You can’t succeed on your own. Without solid goals and accountability, you’re much less likely to ever become debt-free.

In fact, in a study done by psychology professor Gail Matthews of Dominican University, it was found that sharing your goals with a friend is the key to accomplishing your goals. In her study, Matthews found that people who both wrote down their goals and had an accountability partner had a 76 percent success rate of accomplishing their goals. In comparison, there was another group in the study which was instructed to only think about individual goals. Only 43 percent of those people accomplished their goals.

So, practice writing down goals following the SMART method. With this method, your goals meet the following criteria – Specific, Measurable, Achievable, Relevant, and Timely. Once you’ve developed your SMART goals, share them with a friend or two. Ask a trusted friend or family member to check in with you and hold you accountable.

5. Focus on increasing your income

Cutting back on your spending certainly helps you pay off debt faster. But unfortunately, there is only so much you can cut out.

One way to pay off debt quickly is to trim your expenses and increase your income at the same time. Then, use your freed up cash to throw extra payments towards your debt. There are thousands of ways you can increase your income. For you, maybe that means finding a higher paying 9 to 5 job. Or, you can start side hustling to earn a few extra hundred dollars each month. These are just a few ideas to get you started:

  • Drive for Uber or Lyft
  • Babysit on the weekends
  • Start blogging or freelance writing
  • Have a garage sale
  • Mow laws
  • Pick up part-time or seasonal work

Once you start earning more money, put the entire amount of extra cash towards your debt. You’d be amazed at how much faster you can progress when you can put $100, $500, or even an extra $1,000 a month towards your debt.

6. Give yourself a guilt-free allowance

Even if you’re taking all the right steps, it can take years to pay off debt. In order to stay in the debt-repayment game for the long-haul, it can be imperative that you give yourself a little break once in a while.

The idea here is to give yourself a small, guilt-free allowance each month. Because it’s already in your budget, this is money you can freely spend without feeling regretful. The concept of a financial allowance is a lot like dieting. People are more successful when they allow themselves a rest day and a cheat meal once a week. It can keep them from feeling deprived and prevents large, impulsive purchases later.

So, factor a little free spending into your budget. Whether you give yourself $15 a month to go to the movies or $30 for a night out with friends, the choice is yours to enjoy…guilt-free of course.

Improving your financial situation

Paying off debt isn’t easy, especially on a small income. But with grit, hard work, and a whole lot of commitment, it is possible to live a life free from the burden of debt. Are you ready to follow these 6 steps and get started?

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Stop Wasting Money and Avoid Bank Fees: Here’s How

By Melanie Lockert
August 22, 2018

It’s nice to feel like your financial institution has your back. After all, you entrust a bank to hold your money and help you manage it. With this in mind, why do so many big banks charge unnecessary fees?

Citibank and Bank of America both charge a $12 monthly maintenance fee if you can’t keep a minimum balance of $1,500 in your account or if you don’t have direct deposit. Wells Fargo has a $10 account maintenance fee if you don’t meet its requirements. On top of these charges, many big banks also charge a $35 overdraft fee.  These bank fees take a bite out of your hard-earned money and who benefits from this? The big banks — many of which have not had the best reputation lately or taken consumers’ best interests to heart.

But you don’t have to accept this. You can stop wasting money. Read on to learn more about bank fees and how you can avoid them.

The truth about bank fees

For many traditional banks, bank fees have simply been the status quo. Many consumers may not even realize they’re paying a monthly maintenance fee on their checking account or recognize that they could be charged multiple overdraft fees if they overdraw their account.

Do you know how much you’re losing in fees?

In fact, BankFeeFinder.com, powered by Chime, found that the average household is paying $329 in bank fees. That’s a cross-country flight! And as of 2016, overdraft fees from big banks were an astonishing $33 billion. Not million, billion.

Bank fees are unfair to consumers who are getting nickeled and dimed by their own financial institution. It’s especially unfair for young consumers who are just starting their financial lives, many of whom are saddled with debt and dealing with stagnant wages.

 The Catch-22 of minimum balance requirements and overdraft protection fees

Many of these banks have minimum balance requirements in order to avoid the monthly maintenance fee. So, essentially, if you’re broke and don’t have much money, you end up paying a price. Doesn’t that seem counter-productive? Your bank should be helping you build wealth, not punishing you because you don’t have a certain amount in your account.

As the big banks continue to charge unnecessary bank fees like monthly maintenance fees and overdraft fees, there are new options on the market that allow you to just say “no” to fees.

The rise of no fee bank accounts

n a post-Recession world, I think all of us are a little more mindful of our money. We’ve started questioning many of the structures that were part of the economic downfall — and subsequently bailed out.

While many of the big banks have recovered, American consumers have not, which sets the stage for major change in the banking world.

Disrupting the status quo with banking alternatives

In the INC article “Why the Banking Industry is Ripe For Disruption,” author James Paine states: “To put it simply, the banking industry is ripe for disruption. The average consumer has little to no trust in their bank, they just use the cheapest option they can find. Combine that with a total lack of competition at the top-level of the industry and what you’re left with is an industry in desperate need of change.”

Because of this, there’s a new wave of startups looking to disrupt the status quo and shake things up in the banking industry. By doing things differently these new financial companies can put the power back in consumers’ hands and put money back in their pockets. These startups and online banking apps are providing a much-needed alternative to the old banking systems that no longer serve us. For example, the last several years have seen a rise in no fee bank accounts like Chime, Capital One 360 and Ally.

Chime checking account cares about consumers

At Chime, we’re committed to offering a no monthly fee checking account with the simplicity and accessibility of a mobile app. No fee bank accounts are becoming the new norm and we’re excited to be a part of this trend. Because seriously, fees suck.

Avoiding bank fees with Chime

Chime was created as an alternative to costly banks and fees. Our mission is to help consumers not only keep their money but get ahead with their money. We’re not profiting off you at every corner.

We’ve ditched the unruly bank fees that many traditional banks still charge. Instead, we offer:

  • No monthly fee checking accounts
  • No overdraft fees
  • No minimum balance requirements
  • No foreign transaction fees
  • No in-network ATM fees
  • No ACH bank transfer
  • No card replacement fee

Chime is committed to no fee banking

In fact, you don’t have to stress about having a certain amount in your account to avoid a monthly maintenance fee. If you lose your card, we’ve got you covered as well and won’t hit you with a fee. We won’t add insult to injury and charge an overdraft fee if you overdraw from your account. Even more, when you’re traveling you won’t be charged foreign transaction fees. We’re committed to being fee free and helping you hold onto your hard-earned dough.

Opening a no fee bank account

Not sure how much you’re losing to fees? Check out BankFeeFinder.com to see how much you may be paying in fees. Those fees can add up fast and it’s time to reclaim your money. It was yours to begin with and you can keep it that way by using online banking apps that don’t charge fees.

Try an alternative to traditional banking

Whether you are opening your first bank account or you’re ready to switch from a big bank, it’s easy to join Chime. In fact signing up for Chime will take less than two minutes. It’s totally free and won’t affect your credit score. So, if you’re looking to avoid bank fees, you can open an account with Chime and ditch your old bank for something better (if we do say so ourselves).

Final word

In this day and age, there’s absolutely no reason for you to pay bank fees. Why settle? You can opt for something better that won’t hit you up for a fee for every little thing. Using online banks like Chime, you can say goodbye to fees forever. Imagine if you had $329 a year back in your pocket. What would you do with it?

Sign up for a Chime Account today!

Chime’s mobile banking app enables you to manage all of your online banking on the go. With over 15,000+ five star reviews in app stores, our mobile app has everything you need with a simple, intuitive design.

What are you waiting for? Apply for a Chime Free Checking Account now.

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10 Quotes to Remember if You Want to Achieve Financial Freedom

By Melanie Lockert
August 15, 2018

Do you ever dream of spending your days doing what you want? Do you visualize spending your money how you please, without stress or worry?

Indeed, achieving financial freedom is a dream for many of us, but getting there can seem out of reach. Sometimes it’s hard to know where to start.

If your goal is to achieve financial independence, you’ve got to start taking steps to achieve your goal – right now. Here are 10 quotes to inspire you. Take a look:

1. “Rich people believe ‘I create my life.’ Poor people believe ‘Life happens to me.’” — T. Harv Eker, Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth

Financial freedom starts with having the right mindset to pursue wealth and all of your audacious goals. This quote reminds us that people who are rich have an active role in designing their dream life. They’re not passive players in the game of life or building wealth.

2. “Your assets are your employees. Invest more on those performing well. Let the non performers go.” ― Manoj Arora, From the Rat Race to Financial Freedom

Let your money work as hard as you do. Your assets include your hard-earned dough and you’ll want to invest that money in a place with high returns, like index funds. Don’t store all your cash in a savings account or in other assets that ultimately don’t serve your goal of financial freedom. Imagine you are the CEO of your money — your assets are your employees. Who should be fired? And who should be promoted?

3. “Money is something we choose to trade our life energy for.” ― Vicki Robin, Your Money or Your Life

Have you ever been at work and just wished you were at home with your kids or on the beach somewhere? The process of working and making money is something we trade for our life energy — energy that we want to use elsewhere. When we save money and pursue financial freedom, we can have some of our life energy back and choose to live life as we want, not as we have to.

4. “The secret to wealth is simple: Find a way to do more for others than anyone else does. Become more valuable. Do more. Give more. Be more. Serve more.” ― Tony Robbins, Money Master the Game: 7 Simple Steps to Financial Freedom

Pursuing financial freedom means breaking the status quo. You can no longer live in the ‘average’ but you have to go beyond. This quote reminds us that to build wealth and be successful we must give, serve, and be a cut above everyone else.

5. “Being rich is having money; being wealthy is having time.” — Margaret Bonnano

Money is an important part of financial freedom. But it’s simply a vehicle to pursue living your best life. You can always make more money but you can’t make more time. Knowing this distinction can help you build wealth in a way that frees up your time so you can be truly wealthy.

6. “To get rich, you have to be making money while you’re asleep.”  — David Bailey

I hate to break it to you but if you limit your money-earning abilities to eight hours a day, you’re not going to find financial freedom. In order to build wealth, you must make money when you’re sleeping. This means earning interest on your savings in a high-yield savings account. This means investing in retirement vehicles and the stock market. This means finding new passive income streams. The bottom line: figure out how to earn money ‘round the clock.

7. “Risk comes from not knowing what you’re doing.” — Warren Buffett

There’s some level of risk with almost everything we do, especially when it comes to the stock market and your money. You might be afraid to invest because it’s risky. But, if you understand how the stock market works, you will have more confidence to pursue financial freedom.

8. “A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.” — Suze Orman

The ‘what ifs’ of life can plague your mind. What if I get sick? What if I lose my job? It can be paralyzing. Financial freedom offers the ultimate antidote to life’s worries: peace of mind.

9. “Financial freedom is freedom from fear.” — Robert Kiyosaki

Have you ever felt stifled or stuck because you were fearful? You were scared to quit your job because of money. You were afraid to move because you weren’t sure about the opportunities you’d have in a new place. Fear can consume us and keep us stagnant. Financial freedom helps alleviate those fears so we can pursue action.

10. “It is not the man who has too little, but the man who craves more, that is poor.” —Seneca

When we think of people that are wealthy, we may think of people with nice houses and fancy cars. But that’s not necessarily what truly wealthy people look like. In fact, if we keep wanting more and more, we will be stuck in a limitless cycle that keeps us poor. But if we take an inventory of what we already have — and stay grateful — we can enjoy what we have and build a wealthy life around what is truly important.

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