Consolidating Your Debt? Consider These 6 Downsides First

Your next debt collector may never say a harassing thing to you at all. That debt collector might also not be human.

Credit card debt among Americans is at an all-time high.

In June, it increased to $1.02 trillion, according to a report from the Federal Reserve. In other words, Americans now have more credit card debt than just before the 2008 financial crisis.

When facing such massive amounts of debt, it may be tempting to consider consolidation, one of the most popular ways for consumers to cope with mountains of bills. But before making such a move, it’s important to think about the potential downsides and drawbacks—and there are quite a few.

“Debt consolidation is rarely a good option,” says Holly Morphew, a certified financial health counselor. “Those looking to consolidate debt usually don’t understand what it is and are simply stressed about unmanageable debt and looking for a way out of it.”

Among the nuances to understand is how consolidation impacts your credit score, what your new interest rate will be, and what the repayment terms are—particularly when consolidating student loan debt, which can be dangerous, says Morphew.

Here are six of the biggest drawbacks to keep in mind when considering debt consolidation.

1. Transfer Fees

Consolidating credit card debt via a balance transfer to a new card can seem enticing, especially when there are so many 0% APR offers being presented to you at every turn. But Han Chang, cofounder of InvestmentZen.com, warns that nothing is ever free.

“Offers like this usually come with a one-time balance transfer fee ranging from 3% to 10% of the total balance transfer,” says Chang. “That can really add up and, if you’re not careful, completely negate any savings that 0% APR offers.”

2. Government-Backed Program Losses

Another often-overlooked drawback of debt consolidation is the potential loss of government-backed programs, primarily pertaining to student loans. While there can definitely be some advantages to combining all of your student loans, be sure to read the fine print of your new agreement carefully.

In particular, determine whether you’ll still be eligible for common federal government perks.

Morphew says student debt consolidation is actually one of the most risky things to do.

“If you don’t choose the right company, or decide to consolidate federal subsidized loans into a private loan, you can lose those repayment benefits such as deferment, forbearance, and loan forgiveness,” she says.

3. Credit Score Dings

If you are working with a debt consolidation company or a financial institution to combine your bills, the company will likely conduct a hard credit inquiry. While the effects of this inquiry are temporary, says Chang, be prepared to see your credit score drop in the short term.

“If multiple creditors pull reports, your score could drop significantly,” he adds. You can keep an eye on your credit score by reviewing your credit report for free on Credit.com.

4. Unchanged or Increased Interest Rates

Often the goal of debt consolidation is to secure a lower overall interest rate. But that’s not always what happens, says Morphew. You can actually end up paying more because the company giving you the new consolidated loan will average the rates on your debt and round up based on its terms, she says.

In addition, if you have poor credit to begin with, you may not qualify for a lower interest rate, says Amber Westover of BestCompany.com.

“You may end up paying more for your debt over the course of your consolidation loan,” Westover says.

5. Expensive Debt Consolidation Costs

Debt consolidation companies don’t work for free. Many national companies offering this type of service charge a fee of 15% of the total debt, says Richard Symmes, a consumer bankruptcy attorney.

“This leads the consumer to pay much more than if they had negotiated with the creditor on their own. Many of these fees may even be fraudulent under individual state laws, which cap how much a company can charge for debt consolidation services,” he says. He instead suggests conducting such negotiations with the help of an attorney, who simply charges a flat fee.

6. Increased Overall Loan Costs

One last drawback worth noting: just because your monthly payments may go down under a debt consolidation program doesn’t necessarily mean your overall debt is going down.

“If you consolidate high-interest short-term debt for very long-term debt, then you may actually be paying more,” says financial analyst Jeff White. “For instance, paying $500 per month for one year (which translates into $6,000) is less than paying $75 per month for 10 years (which is $9,000).”

Consolidating could be a smart financial move, or it may just sound like it. To find out if consolidation or another debt management strategy is right for you, visit our Managing Debt Learning Center.

Image: Geber86

The post Consolidating Your Debt? Consider These 6 Downsides First appeared first on Credit.com.

5 Gig Economy Websites That Help You Make More Money

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In the United States, the way people work is dramatically changing.

The proliferation of the gig economy is shifting the American worker’s view of nine-to-five employment and creating endless possibilities for earning extra cash to help pay the bills and make ends meet.

According to a recent analysis of gig economy and workforce data conducted by Nation 1099, about one-third of all US workers did at least some freelance work last year. What’s more, about 11% of all workers are full-time freelancers and about 22% have embraced side hustling or moonlighting.

Giant gig economy platforms such as Fiverr and Upwork may be well known, but there are quite literally hundreds of similar sites, with more popping up every day. A growing number of these sites specialize in offering niche services—ranging from voiceover work to dog walking, engineering, financial consulting, and website development.

“When it comes to freelancing and the gig economy, all signals show it’s growing even larger,” said trends expert and public speaker Daniel Levine, founding director of Avant-Guide Institute. “What’s so great about these sites is they’re bringing together people from around the world. Borders are disappearing. Before you had to be in the same country for an employee and employer to meet.”

Here are five gig economy sites that can help you earn a few extra dollars or provide a springboard to a full-time freelance career.

1. Rover.com

Phoenix resident Melanie Lewis works at home while she pursues a career in writing. About two years ago, she searched for a way to supplement her writing income and a friend helped her find Rover.com.

Through the site, she makes anywhere from $500 to $1,000 extra each month, by either boarding dogs or offering dog-walking and drop-in services.

“One of my favorite things about Rover is that you set your own rates for the services you offer, so you control what you charge and how much you earn,” said Lewis.

The site, which operates in dozens of cities across the US and Canada, connects dog owners with a variety of services—dog walking, doggy day care, dog boarding, drop-in visits, and house sitting. Note that background checks are required for those seeking to work through the site.

2. Fiverr

Launched in 2010, Fiverr has become one of the gig economy giants. The site has tens of thousands of users who generate steady secondary incomes by offering creative and professional services—everything from graphic design to writing, translation, illustration, and marketing.

Fiverr’s global community of freelancers now includes more than 100 service categories and people doing business in 190 countries.

The site is named Fiverr because the starting price for services is a mere $5, but that’s just a starting point. Advanced sellers can augment their services, charging more money for additional tasks. For example, a copyeditor might charge $5 for editing, but add higher fees for formatting, layout, or rush turnaround.

In addition, the site just introduced FiverrPro, a higher-end initiative that matches curated, talented professionals with those seeking services.

3. Upwork

Previously known as Elance-oDesk, Upwork enables businesses and independent professionals from around the globe to connect and collaborate. It’s another giant in the gig economy. The range of work available through the site is mind boggling—everything from web, mobile, and software development to writing, administrative support, customer service, sales and marketing, and accounting and consulting.

Hourly and fixed-price jobs are available through Upwork. And the beauty of the site is that Upwork processes all payments and invoicing, eliminating the hassle of chasing down clients to get paid through a third-party platform. For hourly jobs, Upwork even offers payment protection, ensuring you don’t get stiffed for any work completed.

4. Babierge

If you have piles of baby gear and toddler toys sitting unused around the house, Babierge is made for you.

Babierge (a combination of baby and concierge) is a sharing economy platform for baby gear. Think of it as the Airbnb for baby gear. The site’s baby gear entrepreneurs rent, deliver, and set up baby gear, games, and toys at hotels and vacation rentals, and then return to pick it up on departure day.

Though you may not have heard of Babierge, don’t underestimate it. It has workers in 82 markets, with new locations added each week.

“When you look at the money you can make at Babierge based on the hours you put in, the pay is about $40 per hour,” said Trish McDermott, vice president of community and communications for Babierge. “Not bad for gig work.”

Some of the site’s most active workers make as much as $700 per month.

5. Efynch

One last up-and-coming site worth noting is Efynch, a platform designed to connect professional and freelance contractors and maintenance workers with jobs.

Operating in Washington, DC, Baltimore, and northern Virginia, Efynch currently has about 3,000 users and plans to expand to at least ten more cities on the East Coast by spring.

“In addition to skilled workers, anyone with a truck is basically a valuable commodity and can easily make $50 or more per hour on our site,” said cofounder Teris Pantazes. “I’ve had some people make more than $5,000 per month on my site as full-timers. Freelance or side workers probably average between $500 and $1,000 if they work a few evenings or a couple Saturdays.”

Modeled after Upwork but tailored to the contractor and maintenance crowd, the site offers a range of gigs, from simple manual labor tasks such as mowing a lawn to far more complex jobs such as carpentry.

Anyone can join the freelance movement. It just takes a little paperwork and planning. If the lifestyle speaks to you, you should fill out a 1099 and be ready to navigate the financial ins and outs of self-employment. Start by getting your free credit report and gain insights into how you can build your credit while you freelance. Embrace the hustle while maintaining a handle on your finances, and you’ll be set up for success.

Image: istock

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5 Things to Consider Before Paying Off Your Student Loan Debt

Credit cards are a super convenient financial tool, but they can often be confusing.

Paying off debt is often a top priority. Not only can too much debt hurt your credit score, it can impact your ability to achieve other important milestones in life, such as buying a home.

But when it comes to student loan debt, obsessing over repayment and devoting every spare penny to paying down balances can actually have negative consequences, particularly when you become so focused on repayment that you ignore all other elements of a sound personal financial plan.

“I’ve seen a number of individuals who have devoted unhealthy amounts of time and money towards paying down their student debt, people who are pinching every penny,” says Michael Lux, founder of The Student Loan Sherpa, a website focused on student loan education, strategy, and borrower advocacy. “You can’t just look at your student loan debt in isolation. You need to consider all of the things that paint the complete financial picture.”

As Lux indicated, there’s a variety of reasons why devoting too much of your hard-earned income to repaying student loans can be an unwise approach. Here are the top five.

1. It’s Not Sustainable in the Long Run

Denying yourself all of the day-to-day extras that you enjoy in order to pay off your student loan is not likely to work forever, says Lux.

“The key to success is making it sustainable for years,” he explains. “First, you have to know yourself. When you make a budget, you have to make a realistic budget. If you’re someone who loves the movies, you have to budget money to go to the movies.”

Another tactic that helps create a more balanced and manageable approach is to create milestone repayment goals for yourself and then reward yourself in small ways when attaining those goals, says Lux. For example, when a loan is half paid off, treat yourself to a fancy dinner. Or, when one loan is completely paid off, find another affordable and meaningful way to indulge in some positive reinforcement. 

2. Retirement Savings Should Also Be a Top Priority

Paying off student loan debt should not come at the expense of getting started on a retirement plan. But unfortunately for some, that’s exactly what’s happening.

“Many people put paying off student loans ahead of retirement saving,” says Ryan Farnung of New York–based GPS Financial. “So while they are saving some interest on student loans, and ultimately freeing up some monthly cash flow, they may also be . . . missing out on the potential to tap into the power of compounding interest.”

Carrying some student debt is all right, says Farnung, if it means using your money elsewhere in ways that will provide a greater long-term benefit.

3. Establishing an Emergency Fund Is Also an Important Part of a Healthy Financial Plan

A sound personal financial plan also includes establishing emergency savings accounts, ideally two separate accounts—one with six months of living expenses and a separate liquid emergency fund.

“Student loan rates are so low right now, under 4 or 4.5%,” says Oliver Lee, owner of Michigan-based The Strategic Planning Group. “So I always recommend my clients pay the very bare minimum. Then, create a six-month or one-year living expense shelter so if something goes wrong when you get out of school or you can’t find a job, you have the money you need. And once you have that, you also need a liquid emergency fund—in case the tires go bad on the car or the transmission goes. This account should have $1,000 to $3,000.”

Those who don’t have such emergency funds are likely to rack up costly credit card debt in order to pay for life’s unexpected expenses. And the interest on a credit card is almost always far more than the interest on a student loan.

“You could have your student loans completely paid off and yet have $10,000 to $15,000 in credit card debt because you had no emergency funds,” says Lee. Making savings a priority can help prevent unnecessary credit card debt.

4. Real Estate Is a Better Investment

Devoting too much money to student loan repayment often leads people to put off other investments that come with valuable rewards of their own. Home purchases are a prime example.

Real estate has historically given returns far above the interest rate of student loans, says Lyn Alden, founder of Lyn Alden Investment Strategy. So it’s beneficial to prioritize building these sorts of investment assets, even if it means keeping low-interest student loan debt around for a while. 

5. Missed Life Experiences

There are many variables to consider when deciding how much money to devote to student loan repayment, but according to Farnung, they revolve around one primary question: what are you giving up today in order to improve cash flow tomorrow?

It’s easy to measure how much it costs to carry student loans by determining how much interest you pay annually and what that looks like after taxes. But what’s far more difficult to measure is the experiences you may miss out on or the opportunities for real financial growth you may be overlooking when focusing solely on student loan repayment.

“If you’re postponing funding and maintaining an emergency fund, contributing to your retirement savings, getting married, buying a home, or any number of other life goals and aspirations, you need to take a step back and really think about what the interest on your student loans is costing you,” says Farnung.

To learn more about smart strategies for managing debt, visit our Managing Debt Learning Center.

Image: Peopleimages

The post 5 Things to Consider Before Paying Off Your Student Loan Debt appeared first on Credit.com.

How Changing Due Dates on Your Bills Can Help Shore Up Your Monthly Finances

Student loans are a huge burden but they don't necessarily have to be. It's possible to lower your monthly student loan payment with the right tips.

Nearly every financial adviser stresses the importance of creating a household budget, a practice that helps curtail spending and often prevents expenses from spiraling out of control.

If you’ve already taken this step and continue to struggle with the balancing act between monthly income and expenditures, it can start to feel hopeless. But there’s still hope: another approach to consider is changing the due dates of your bills.

It’s a tactic few people think to implement, but one that can help steady the monthly financial rollercoaster.

“Simply lining up bills with your income allows you to have a lot more control over your finances and where your money is going and when,” said Kyle Whipple, of Michigan-based C. Curtis Financial Group.

All you have to do is call up creditors, utility companies, or any other business in question and request a due date change. Most are willing to work with customers on this issue.

Still not convinced? Here are five ways that taking such action can improve your monthly finances.

1. Spread Big Expenses throughout the Month

Having multiple major bills (like mortgage or rent, car payments, daycare costs, and utilities) due at the same time of the month can translate into a serious cash flow problem.

Rather than be tapped out by paying several hefty bills all around the same time, try shifting the due dates for one or two bills to later in the month, after you’ve received another paycheck or two.

“Sometimes pushing one of those bills to the other part of the month allows you to have more cash flow on both sides of the month,” said Whipple.

2. Clarify Exactly How Much Free Cash You Have

Some people spend blindly—and when bills come due have little money left to pay them. To avoid such a scenario, arrange to have your bills due as close as possible to your payday. This also helps make it clear exactly how much free cash you’ll have to use for other things throughout the month.

“Lining up bills with your payday allows you to get that money out of your bank account as soon as possible, so you know how much money you have left for the rest of the month,” said Whipple.

In addition, rearranging your bills this way, especially when you’re living on a tight budget, ensures that the bills are a top priority, says Dawn-Marie Joseph, founder of Estate Planning & Preservation.

“The closer you can pay the bill to when you receive your paycheck, the better chance the bill will get paid,” said Joseph. “It’s just great discipline for yourself.”

3. Avoid Late Fees, Excessive Interest, and Lower Credit Scores

A 2017 study from the National Foundation for Credit Counseling reported that about one in five people (22%) do not pay their bills on time. And it’s no secret that paying a bill past its due date often involves a penalty in one form or another—whether it’s a late payment fee, an increased interest rate, or a lowered credit score. (You can check your credit score for free on Credit.com.)

“When people miss a bill, over time those overage charges or the interest adds up,” said Whipple. “Between that and overdraft fees on your bank account when you don’t have enough money there to cover a bill payment, it can be dangerous.”

Adjusting your bill due dates so that you know exactly when they’re due can help avoid overlooked payments or payments missed due to a lack of sufficient funds.

4. Eliminate Uncertainty about Monthly Due Dates

According to Whipple, most people pay bills when they get a notice that the due date is approaching and have no clue what the actual due dates are each month.

Requesting a specific date that you have decided upon, such as the first or the 15th of the month, eliminates such uncertainty. This helps you remember your due dates and pay those bills on time.

5. Prevent Unnecessary Credit Card Spending

It’s not unusual to reach for a credit card as a stopgap when living on a limited income or when your cash flow has run dry after paying bills. But it’s not a good long-term approach to balancing your monthly budget.

Rearranging due dates can help spread your bills out or align with paydays so that you have adequate cash flow to get by without relying on credit cards.

“If you’re on a single income or a tight budget, making sure you know when you need to pay bills is huge so that you don’t overspend and end up using a credit card,” said Whipple.

How to Request a Due Date Change

Most companies make it fairly simple to change a bill’s due date, even allowing customers to do it online. Many utility companies even call it out as an option on their websites.

“Most people don’t realize you have leverage to call up and ask to change the date,” said Whipple. “It doesn’t hurt to ask. The worst-case scenario is they say no.”

All that’s left now is to implement these tips and take control over your bill payments. Your wallet will thank you.

Image: Jacob Ammentorp Lund

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5 Sites for Affordable Fashion

Finding affordable and stylish fashions can be easy when you know the right places to look.

There’s a revolution quietly taking place in the fashion industry. In case you haven’t been paying close attention, it’s now easier than ever to look like a well-heeled fashionista without spending like a Kardashian.

We can thank the internet, the booming sharing economy and a growing group of savvy entrepreneurs, for this development. These sites, which range from high-end fashion resellers to rental companies, have dramatically changed the way consumers shop and the way they think about fashion.

“I think both rental and resale sites are speaking to a trend in which people value the experience of wearing something over the experience of owning it,” said Tracy Dinunzio, CEO of Tradesy, one of the largest peer-to-peer marketplaces for women’s fashion. “We no longer have just one option when shopping — going to the mall to buy things. I think it’s liberating.”

The key theme among all the sites is the substantial savings they deliver, sometimes as high as 90% off original prices. Here are five sites that allow you to maintain your style game without dropping serious cash.

1. Tradesy

With about five million users, and investors as well known as Richard Branson, Tradesy is a booming site that any self-respecting fashion maven should know about.

Tradesy showcases new and preowned fashion sold by users — everything from Marc Jacobs shoes to Dior bags and David Yurman jewelry. Items from well-known brands are listed for up to 90 percent off and Tradesy offers an authenticity guarantee.

“One of the reasons I started Tradesy was I wanted better quality fashion but didn’t have the budget,” said Dinunzio, who would frequent consignment stores in pursuit of scoring deals. Tradesy is the one-stop solution for those who don’t have time to hunt through brick and mortar consignment stores. It’s Dinunzio’s attempt to bring all of those consignment shopping possibilities and the unused fashions sitting in women’s closets, to one place.

2. ThredUp.com

ThredUp.com offers another spin on the reused fashions theme. This massive online consignment and thrift store offers items for up to 90% off.

The site has also conveniently broken down offerings into categories such as “Top Designer Labels from $6,” “Summer Must-Haves Under $10” and “Dresses for under $15.” Just in case you’re skeptical of such affordable price-tags, the dresses in the under $15 category include makers such as Bebe, Calvin Klein, BCBG Max Azaria and more.

“ThredUp is my favorite way to get brand name clothes for less,” said personal finance expert and blogger Kayla Sloan. “I’ve gotten work clothes, dress clothes, active wear, and handbags on ThredUp — brands like Kate Spade, Coach, Michael Kors, Lululemon, Under Armour, Jessica Simpson, and some non-designer items.”

In addition, if you’d like to make extra cash (to do more shopping), ThreadUp will send you a “Clean Out Bag,” which you can fill up with your like-new women’s and kids’ clothing and send back to be sold on the site. Sellers earn cash or credit to shop on ThredUp. For even more extra cash, use a solid cash back credit card while shopping. There are a lot of great ones out there — be sure to check your credit score before applying to see if you qualify. You can check two credit scores for free with Credit.com.

3. Bag Borrow or Steal

If investing a chunk of money in a pricey handbag is something you’re loath to do, but you still have serious designer bag envy, then Bag Borrow or Steal may be the solution.

The site allows users to rent some of the most luxurious bags on the planet — Louis Vuitton, Chanel, Gucci, Tory Burch and more. Bags can be borrowed in 30-day increments. If you love the bag, you can continue renting it.

At the time of publishing, rental prices range from as little as $45 per month for a large Michael Kors satchel to $600 for a Chanel Boy Bag.

4. Eleven James

Many people opt to admire expensive watches from afar due to not having the budget to dabble themselves. Thanks to Eleven James, a tight budget won’t hold you back from this accessory.

Luxury watch rental membership program Eleven James allows members to wear designer watches worth thousands of dollars, brands such as Bell & Ross, Cartier, Breitling, Rolex, Tudor, and more.

Those who sign up receive a new watch aligning with their style preferences every few months. Each watch can be worn for three months and then returned.

Membership costs vary based on the category of watches you’d like to have access to, but start between $149 to $169 per month. For that entry-level price, you’re able to sample two to four watches over the course of six to 12 months.

5. 260SampleSale

Ms. Fabulous.com creator Mariana Leung is a big fan of sample sales — events hosted by designers where you can purchase clothes for a significant discount. Long reserved for fashion insiders, these shopping extravaganzas are now being offered to the masses by such sites as 260samplesale.com and clothingline.com, said Leung.

For instance, 260SampleSale specializes in running sample sales for some of the biggest brands in fashion, including Diane Von Furstenberg, J Brand and Fivestory. The key is to sign up to be on the alert lists for these sites in order to score access to the sales.

In terms of the discount, “It’s at least 60 to 65% off.” said Leung. “I’m not even walking in if it isn’t that much. And on the last day of the sale, the prices drop even more.”

Image: Petar Chernaev

The post 5 Sites for Affordable Fashion appeared first on Credit.com.

Earn Frequent Flyer Miles for Refinancing Your Student Loans? You Bet

Get a lower rate plus miles and get flying.

It used to be that rewards points and frequent flyer miles were primarily associated with credit cards. But those days went the way of the dinosaur long ago, and one of the most recent examples of that fact comes in the form of the new partnership between JetBlue and SoFi, a direct lender best known for student loan refinancing.

Members of JetBlue’s TrueBlue program can now earn one TrueBlue point for every $2 of student loan debt refinanced with SoFi. The offer, which caps at 50,000 points and is only available to new SoFi customers, was described by JetBlue as a first of its kind in the airline industry.

While airlines have long been creatively partnering with mortgage lenders, online retailers and others, the student loan market has remained largely untapped.

But with record levels of student loan debt, (the average 2016 graduate has about $37,172 in debt) and millennials putting off travel in some cases because of that debt, this partnership addresses a growing market opportunity.

“Members of the global legacy programs like United and American have been able to earn points for mortgages and other loans for decades, but their rosters of partners do not specifically include an education loan specialist like SoFi,” said Kate Hogenson, who designed loyalty programs for United Airlines and now works as a strategic loyalty consultant at Kobie Marketing. “Airlines have flirted with college and young adult programs in years past, but they’ve been shuttered; United closed down their College Plus program in 2010.”

For its part, JetBlue has been dipping its toe in the financial product space more and more over the past year, beginning with offering points for personal loans through Best Egg. And when looking at the demographics of their customers, moving into the student loan arena made sense, said JetBlue’s Director of Loyalty, Scott Resnick.

“We see this as a great opportunity for customers who have student loans to refinance them while doing something that benefits them in another part of their life,” said Resnick. “Any time there’s an opportunity for customers to earn points doing something they would be doing otherwise in life, there’s natural tendency to look for partnerships there.”

The other part of your life that benefits of course, is your travel habit. Here’s what you need to know about the offer.

The Fine Print

The program doesn’t have a lot of hidden details. There are no blackout dates for using the miles earned through the refinancing offer, and no expiration date either.

In addition, there’s no application or origination fee for refinancing through SoFi, officials said.

“You can apply for free in fewer than 20 minutes,” said SoFi’s Catesby Perrin, vice-president of business development. “Our borrowers save an average of $22,000 over the life of their loan.”

SoFi offers various refinancing options, including both fixed and variable rate interest and loan terms of five, seven, 10, 15 and 20 years.

The Drawbacks

There seem to be few downsides to the JetBlue offer. But there are some basic considerations to keep in mind.

“JetBlue’s route system is limited to the U.S., the Caribbean, and select destinations in Latin America,” said Hogenson. “You have to be in a major JetBlue city for this to make sense.”

Hogenson suggested visiting JetBlue’s website and researching the number of points needed to travel to a city you’re interested in visiting, to help determine whether this offer makes sense for you. And while perusing the site, spend some time reviewing the route you may have to travel on JetBlue to get to where you want to go.

“To get from New York to Las Vegas, you might find yourself routed through Fort Lauderdale,” she said.

Should You Refinance Student Loan Debt in Pursuit of Frequent Flyer Miles?

Obviously, you should never make student loan refinancing decisions based solely on earning frequent flyer miles. A serious financial decision like this should still be approached with the same amount of research, caution and common sense you would use otherwise.

“You should make your refinancing decision based on saving the most money, meaning finding the lowest interest rate,” said Brandon Yahn, founder of the website Student Loans Guy. “Additional perks like miles are great, but shouldn’t be the driving factor in which lender you ultimately choose, unless all else is equal.”

Put another way, student borrowers should look beyond the sparkle of free flights and focus on the student loan consolidation product itself, said Hogenson.

Qualifying for Refinancing

One last important point to keep in mind, in order to qualify for any refinancing program, it’s critical that you have a good credit score, have a history of paying your bills on time and have a solid, steady income. If you don’t know where your credit stands, you can get your two free credit scores on Credit.com.

Image: RobertoDavid

The post Earn Frequent Flyer Miles for Refinancing Your Student Loans? You Bet appeared first on Credit.com.

How Your Smartphone Can Help Pay for Itself

Turns out, there is a way to earn a small return for simply possessing and using a smartphone.

Wouldn’t it be nice if your phone could help pay for itself? Or at least help ease the burden of monthly bills and other expenses? Turns out, there is a way to earn a small return for simply possessing and using a smartphone.

A handful of companies pay you to install their market-research apps on your phone or other electronic device and pay you for every month the app remains installed. Some even kick in bonus loyalty payments along the way.

Some of the leading names in this arena are Verto Analytics, The Nielsen Company and Survey Savvy, each of which have their own research programs and associated apps that reward consumers for participation.

The payments and rewards are by no means gigantic — averaging around $5 per month — but in some cases there are sign-up bonuses and increased bonuses for remaining a participant over an extended period of time. For example, Smart Panel, the Verto Analytics program adds up to about $110 in 12 months, or $230 in 24 months, when you factor in loyalty payments.

Here’s a closer look at each program and what digital experts say to consider before installing market-research apps of any type on your devices. (Only Verto Analytics responded to our requests for comment.)

Smart Panel by Verto Analytics

Launched in 2012, Smart Panel is a research project run by Verto Analytics focused on collecting information about how people use the internet through computers, smartphones and tablets. The goal is to understand how people interact with each other, as well as with websites, apps and devices. The program relies on participants agreeing to install the Smart App.

“Smart App runs in the background while anonymously and securely collecting statistical data about how devices are used,” said Verto Analytics’ senior vice president of marketing, Alison Murdock. “The data collected relates to the general usage of devices, device features, apps and services.”

Since its creation, more than 1 million people have participated in Smart Panel, said Murdock.

Participants are paid $5 for signing up and $5 for every month of involvement. After 90 days, they receive a $5 loyalty bonus. After six months, the loyalty bonus increases to $10, and after nine months it becomes $15. Every quarter after that, there’s another $15 loyalty bonus. Payments are made via PayPal, or you can opt for Amazon gift cards.

Survey Savvy Software by Savvy Connect

Savvy Connect, founded in 1999, pays people for downloading its Survey Savvy software. The software monitors your internet habits to identify trends, particularly those tied to online shopping, searches and entertainment. (Here are some tips for better internet safety.)

The company pays $5 per month, per device, for installing its software on web-connected devices. (This is a departure from Smart Panel’s payment structure, which does not pay per device). Payments are made by check.

In addition to having an extensive privacy policy that must be reviewed before signing on, Survey Savvy’s website says participants can opt to occasionally use private browsing mode on their devices, which blocks data from being collected when in use. However, extensive private browsing can impact your participation status.

Nielsen Mobile Panel by The Nielsen Company

If you watch television, you’ve likely heard of The Nielsen Company and its ratings system. In addition to measuring how many people watch a particular television show, Nielsen measures your activity on your phone, tablet or other mobile device with Nielsen Mobile Panel. Participation in the program involves downloading the Nielsen Mobile app and then using your mobile device as you normally would.

All the data collected and transmitted as part of the Nielsen Mobile Panel program is encrypted and anonymous, according to Nielsen’s website. The program pays up to $50 annually. Payment is made in the form of Nielsen Mobile Rewards points that can be spent at the Nielsen Mobile Rewards online store, which sells gift cards from Amazon.com, Target and Starbucks. Participants can also opt to save rewards for bigger purchases such as flatscreen televisions and digital cameras.

A Few Words of Caution

“Before you install these types of apps, a consumer should really understand what data it is collecting,” said Thomas Fischer, global security advocate for Digital Guardian, a Massachusetts-based data-loss prevention software company. “Read the description and make sure you understand what will be sent back to the company.”

Fischer, who had not specifically reviewed any of the apps in this story but offered general advice about the security of such programs, also noted the apps’ potential to invade your privacy. (You can check your free credit scores for signs of mischief on Credit.com.)

“One example might be capturing your contact data, which they could use to see who you contact on a regular basis and then begin building patterns of your contacts, or worse, taking those contacts and sending marketing messages that look like they’re coming from you,” said Fischer.

In response to such concerns, Murdock of Verto Analytics said the company only provides aggregated, projected, non-personal information to the market and fully protects consumers’ personal data. Further, she said, Verto secures all data with 256-bit encryption, and stores information in a siloed system that includes multiple physical parts. The result is that company employees cannot connect consumers to specific research data.

Image: Cecilie_Arcurs

The post How Your Smartphone Can Help Pay for Itself appeared first on Credit.com.

How to Get a Mortgage Without a Full-Time, Permanent Job

Here's how to keep your flexible work life from hurting your chances of getting a mortgage.

The growing number of gig economy workers in this country may have the freedom to work whenever they want, and sometimes from wherever they want, but when it comes to buying a home, all of that freedom has its price.

It turns out employees who have many part-time jobs, hop from one short-term contract or project to the next, or rely on freelance work as opposed to permanent jobs, don’t come packaged in the tidy financial box that mortgage lenders typically like.

“Historically the mortgage industry wants everything — residency, credit score and a two-year history of employment. And we’re also trying to predict the likelihood of that continuing for the next three years,” said Whitney Fite, senior vice president, strategic accounts for Atlanta-based Angel Oak Home Loans. “With the gig economy, we’re seeing less and less people fitting in that box.”

Gig economy workers don’t often have the requisite stack of W-2s to document wages. And predictions for future income can be murky. All of which can make obtaining a mortgage an uphill climb unless you, as the gig economy worker, do your homework and start preparing your finances and paperwork well in advance.

Here are six tips to help prepare you for the home loan application process.

1. Get Organized

The No. 1 piece of advice Fite has for gig economy workers who want to own a home is to spend time organizing all of your documentation, including proof of employment and income, the names and phone numbers of references, previous employers, landlords and more. You’ll also want to pull your credit scores so you know exactly where you stand. You can get your two free credit scores on Credit.com.

“Have all of your records, have all the dates of where you worked, who you worked for. It’s going to be onerous from a documentation standpoint, but you need to be prepared,” said Fite.

Gathering this information is more important for gig economy workers than typical borrowers, because you will have to work harder to convince a mortgage lender to approve a home loan.

2. Go the Extra Mile to Educate Your Mortgage Lender

You need to be able to explain to your mortgage lender what you do for a living.

Take the time to educate him or her about your job. Perhaps print out a news article or other information that will help a lender understand what you do.

“You need to prove that your past two years are normal. And that the likelihood of continuance is there,” said Fite. “Be prepared to supply a lot of documentation for that, such as articles about your industry. Things of that nature go a long way. The mortgage lender is not going to make a decision based on it, but it will help create a level of comfort.”

In addition, showing consistency in terms of the type of work you do will improve your chances of obtaining a mortgage, said John Moran, a mortgage professional who runs The Home Mortgage Pro.

A mortgage underwriter is looking for a stable history. Even if the gigs themselves start and stop frequently, gigs within the same industry or utilizing the same skill set will be considered more favorably.

3. Ease Up on the Deductions…

Self-employed individuals, as gig economy workers typically are, often use a Schedule C when filing taxes to report income and write off numerous expenses tied to working the way they do.

The downside of deducting a long list of expenses from your income is that it reduces your profits on paper. You may bring in $73,000 in a given year. But after deducting the cost of everything from internet and cell phone bills, to travel, business meals and professional memberships, your net income on paper may be far less.

“Use caution in how you’re deducting expenses as it’s the net income that’s used to qualify for a mortgage, not the gross pay,” said Kevin Hardin, a senior loan officer with HomeStreet Bank. “It’s tempting to use the full breadth of the IRS tax laws to reduce taxable income, but every dollar that is reduced from that taxable income reduces the income that can be used for qualifying for a mortgage.”

So, if you know you want to buy a home in the near future, consider forgoing some or all of the deductions for a year or two to increase the income you’re reporting.

4. …But First, Talk With a Mortgage Officer About Your Goals

Before completely doing away with claiming any or all expenses on your tax return, however, talk to a mortgage officer about your home buying goals. Here are some tips for finding a good mortgage lender.

“Go to a mortgage officer and say, ‘This is the amount of home I want to buy, how much income will I need to show?’” said Hardin. “Don’t just arbitrarily stop writing things off.”

In other words, get educated about the income you’ll need to show on paper first, before throwing write-offs out the window. Once you’ve identified how much mortgage you’d like, it will be easier to determine what the monthly mortgage payment would be and thus, how much income you’ll need to be able to document.

“The first step is to talk to a mortgage loan officer and then take that information to your tax preparer and say, ‘This is the number I need to hit in terms of income,’” Hardin said.

5. Get Your Debt Down

Let’s stress this one more time — because you are a gig economy worker, mortgage lenders will require more assurance that you’re qualified for a loan and that you’re a good risk.

To that end, work to get your debt down to zero, or as low as possible before applying for a mortgage, and keep your credit score in excellent standing, said Casey Fleming, a mortgage adviser since 1995 and author of The Loan Guide: How to Get the Best Possible Mortgage.

“Self-employed borrowers are going to be held to a higher standard because there is an added layer of risk with them,” said Fleming.

6. Try a ‘Bank Statement’ Mortgage

Newly emerging “bank statement” mortgage programs may be a good option for self-employed or gig economy workers to consider, said Fite, of Angel Oak Home Loans.

Such mortgages rely upon reviewing 12 to 24 months worth of deposits to one bank account  and a profit and loss statement for your business, in lieu of the traditional two years of tax returns, W-2s, and payroll checks.

“These are geared toward the gig economy. It’s a rapidly growing segment of mortgages across our industry,” said Fite.

A variety of mortgage lenders are beginning to offer this loan option.

Image: Jacob Ammentorp Lund

The post How to Get a Mortgage Without a Full-Time, Permanent Job appeared first on Credit.com.

On a Budget? You Can Still Visit Mexico for Cheap This Summer

Use these seven tips to maximize your savings while vacationing south of the border.

Travel site Hipmunk released two reports about Mexico recently that offer a host of insights. Not only is Mexico the site’s most popular international country for flights and hotels, it turns out it’s popular year-round. Bookings to the country are up 15% this summer over last year.

The increase comes despite regular headlines about violence. Mexico remains a go-to destination. Around 7 million Americans visit each year, said Steve Clarke, Hipmunk’s senior director of product.

“Mexico is a really big country, and these things happening in some areas of country are not happening in tourist locations or where Americans usually go,” said Daniel Peña, founder of LocalAdventures in Guadalajara. “If you go to Cancun or Mexico City or Puerto Vallarta, you’re not going to have these problems.”

What’s more, reported Hipmunk, the average round trip airfare to Mexico this summer is down 8%, making now a budget-friendly time to visit. With that in mind, here are seven tips to maximize your savings while vacationing south of the border.

1. Venture Beyond the Hotel

“Everything in a hotel is going to be 20% to 30% more than if you step outside of hotel and seek the same thing,” said Peña. This rule of thumb applies to activities, souvenirs and more, he added.

2. Ask Locals for Recommendations

When hunting for the best margarita, it helps to speak with the locals about things to see and do.

“Spend five minutes or 10 minutes talking to locals, and they will tell how to get a better price on whatever you want to do and where to go,” said Peña. A hotel concierge often receives a commission for their recommendations, he added. Locals will likely provide an unbiased opinion.

3. Come in Late Summer or Early Fall

According to Hipmunk, the low season, late summer through early fall, presents the best chance to optimize savings. The average hotel price in August in Oaxaca, for example, drops to $67 per night. During the same month in Ensenada, average nightly room rates are $87, according to Hipmunk.

Come October, there are still deals to be had. In Alcapulco, the average nightly room rate drops to $79, the lowest all year. Similarly, in Tijuana, hotel room costs hit their lowest in October, with the average being $76.

Flights are cheaper during these times, the report said. For instance, the average cost of a flight to Puerto Vallarta hits its lowest in September, at $389.

However, you’ll need to keep an eye on the hurricane forecast, especially if you’re bound for a coastal community.

4. Check Airbnb & Vacation-Home Rentals

All-inclusive resorts have their perks, as do luxe hotels, but if your mission is to save pesos, don’t overlook vacation home rentals on Airbnb or other sites.

Even the smallest Mexican communities have Airbnb listings these days, said Randy Bonds, owner of TravelYucatan.com. “There’s a plethora of beautiful condos and homes available and property management in the (Yucatan) region is outstanding,” he said. “A lot of times you get better services than at a hotel. And the rentals are as cheap, if not cheaper than a hotel.”

5. Check Social Media for Deals

“Local businesses will contact local influencers and travel boards to spread the word about any deals they might be offering for the next week or so,” said Bonds. “So if you follow the local tourism boards on Instagram and Facebook, you will find local deals.”

6. Haggle for Bargains

It might not be customary to haggle over the purchase of a coffee cup in the U.S., but in Mexico, asking for a discount is standard.

“Every Mexican asks for discounts when they are buying something or receiving a service, so people shouldn’t feel bad doing this,” said Peña. Expect to get at least 10% off the sticker price, he said. That said, if you’re dining at a fine restaurant, leave your haggling skills at the door.

7. Pack a Travel Rewards Card 

Nothing sweetens a vacation like getting a kickback for your spending. With travel rewards cards, you’ll receive bonus points and other incentives for swiping as you normally would. That could translate to free checked bags on your airline of choice, hotel upgrades and plenty more. (See some travel rewards cards to consider here.)

Thinking of getting a new piece of a plastic? Be sure to check your credit before you apply. You can view two of your credit scores for free on Credit.com.

Image: Dirima

The post On a Budget? You Can Still Visit Mexico for Cheap This Summer appeared first on Credit.com.