Car Prices Hit an All-Time High — Here’s How to Save When Buying New

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The first Model-T cost as little as $825 in 1908, which is about $18,000 adjusted for inflation. Today, the average car buyer can expect to leave a dealership with a new car for around $35,428. That was the average transaction price for a new vehicle in October — an all-time high — according to auto comparison website Edmunds.com.

The average new-vehicle transaction rose 2 percent from October 2016 and 12 percent over the past five years. The average down payment on a new car also hit a new record: $3,966, which is up $374 from last year and $454 from five years ago.

Why are prices up?

The increase is due in part to a rise in the number of features that come standard with a new car these days, like automatic emergency braking and backup cameras, says Ronald Montoya, senior consumer advice editor for Edmunds. In addition, consumers are moving away from lower-cost, smaller sedans, climbing into higher-priced, larger SUVs and trucks.

Montoya says the general decline in overall gas prices since 2008 is partly responsible for the shift in consumer preferences. Plus, many shoppers favor a higher driving position and having more storage space.

Before we get to how you can find savings on a new car despite the higher price tags, let’s talk about a savings strategy that can backfire.

Looking beyond your monthly payment

Many are opting for longer auto loans to cope with rising car prices, says Matt DeLorenzo, managing editor for kbb.com, the website for vehicle research publisher Kelley Blue Book. Recently, the Consumer Financial Protection Bureau (CFPB) found that 42 percent of auto loans made in the last year were for six-year terms or longer, up from 26 percent in 2009.

Taking out a longer auto loan to pay a lower monthly price isn’t an ideal hack, DeLorenzo tells MagnifyMoney. While a longer term keeps your monthly payments lower, you end up paying more in interest over the life of the loan than you would with a shorter-term product. That makes your new car even pricier, so avoid taking out a longer loan to squeeze an expensive vehicle into your budget..

The CFPB found that six-year auto loans cost more in interest over time, are used by consumers with lower credit scores to finance larger amounts, and have higher rates of default. Here’s a good rule of thumb to keep in mind when you’re reviewing financing options: If you are unable to afford financing an auto purchase over four years, perhaps it’s out of your price range.

DeLorenzo says going with a longer loan is one of two actions people are taking in response to higher prices. The other: leasing.

It is true that leasing a vehicle saves you money on monthly payments in the short run, but there’s more to this financial story. Indeed, if you drive a lot of miles, leasing may be a bad idea. You may be hit with extra mileage and wear-and-tear charges at the end of your lease.

How to save on a new car

So prices are at record highs. The experts we talked to say there are still ways you can save when buying a new vehicle in this market.

Try a compact vehicle

If you’re shopping for a car in 2017, you’re likely looking at a crossover, midsize vehicle or truck. Those larger vehicles are in demand right now, and, according to Edmunds, the shift to the larger vehicles has driven interest rates and prices up. However, automakers are struggling to move less-popular 2017 models like compact sedans off dealership lots.

DeLorenzo, the KBB editor, recommends purchasing a less-in-demand sedan or crossover vehicle to find savings.

Many new compact cars may be sold for up to $10,000 less than a larger SUV or truck by the same manufacturer, he says. By choosing a sedan or other compact vehicle, you trade size for better fuel economy and a more affordable car.

And because dealers are having a hard time selling these models, you might see better discounts, more incentives and improved lease deals on more traditional sedans and family cars, according to DeLorenzo.

Pair a lower down payment with GAP insurance

Common savings advice for car shoppers includes making a down payment of at least 20 percent of the vehicle’s transaction price. This tactic is intended to save you money right away, as a new car loses about 20 percent of its value in its first year of ownership, according to Montoya.

People are putting down closer to 12 percent of the vehicle’s value at signing because it’s tough to save up 20 percent since vehicle prices have gotten more expensive, Montoya tells MagnifyMoney. He says most people tend to go with making a down payment that results in a monthly payment they are comfortable with.

But, since a new vehicle loses about a fifth of its value in its first year of ownership, “if you put down payment of 12 percent, you are already in the red,” Montoya adds. He says you may want to look at GAP insurance if you put down less than 20 percent.

Services like GAP — Guaranteed Auto Protection — insurance and new car replacement insurance will cover the difference between what the vehicle is worth and what is owed on the loan in the event of total loss or accident.

Ask your insurance company if it offers new car replacement insurance or GAP insurance. If your insurance doesn’t offer new car replacement or the monthly cost of the insurance is outside of your budget, Montoya says to consider getting GAP insurance from the dealership.

Adding GAP insurance may tack on another monthly transportation cost, but it can save you from possibly owing thousands on an upside down auto loan in the event you have an accident and lose your vehicle.

On the downside, GAP insurance coverage may vary from insurer to insurer, so be sure to ask what the insurance can apply to. Some policies, for example, may cover collisions but not flooding or theft.

Look out for incentives

A little research can go a long way when you’re car shopping. Keep an eye out for extra savings in the form of incentives from both the dealer and the manufacturer.

Both Montoya and DeLorenzo recommend checking the manufacturer’s website or comparison websites like KelleyBlueBook.com or Edmunds.com for savings before you set foot on a dealer’s lot.

There may be special incentives you qualify for based on your status as a veteran, student or ride-share driver. You may also find a loyalty incentive, reserved for those who already own a car by the same manufacturer, or a conquest incentive, offered to customers willing to trade in a competing brand.

Be sure to enter your ZIP code to find incentives most relevant to you at local dealerships, and to search based on the exact model you’re looking for.

Even if you think you’ve found all you could dig up, you may discover additional savings if you ask the salesperson about any deals or promotional offers the dealer may be running when you come in. Wait until you’re at the negotiating table to bring the deal up, advises DeLorenzo.

“Keep that in your back pocket,” he says. “If they don’t offer them to you. then bring them up.”

Get preapproved for financing

You don’t have to leave the financing to the dealer, and you shouldn’t if you want to ensure you’re getting a good deal. Get preapproved for financing before you show up at a dealership. That way, if the dealership offers you financing at a higher interest rate, you can counter the offer or, at the very least, have a benchmark for offer comparisons. Naturally, you should aim to finance your new vehicle at the lowest interest rate possible.

Compare prices

The first step to saving money on anything is shopping around. Compare prices of the vehicle you want across multiple dealers.

“A lot of people tend to go to the dealership that’s closest to them and they don’t shop around,” says Montoya. He recommends going to at least three different dealerships. “You’ll see three different offers and you’ll get a better idea as far as price,” he says.

Websites like Kelley Blue Book, TrueCar and Edmunds make it fast and simple to compare prices of new and used vehicles online. Use the sites to compare sticker prices before you head out to the dealership. Beyond the physical vehicle, take the time to compare what you can expect to pay for must-haves like auto insurance and vehicle maintenance, as they can fluctuate depending on the vehicle you choose.

Time your purchase just right

Simply walking onto the a dealer’s lot at the right time of the year can save you a chunk of cash. Montoya says the holiday season is a good time to shop for a new vehicle; dealers are looking to clear out their inventory of the outgoing year’s models to make room for new vehicles.

“Look at vehicles on the outgoing year,” says Montoya. “They will have more discounts and there is more incentive for dealers to sell those models.”

You also want to pay attention to when the vehicle came out. The longer a car is out, the more likely it is to have more discounts than newer models, adds Montoya. He recommends going back a model year to save money if you don’t mind getting a used car instead of a new one.

The post Car Prices Hit an All-Time High — Here’s How to Save When Buying New appeared first on MagnifyMoney.

Consumer Bureau Loses Fight to Allow Class-Action Suits Against Finance Giants

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Senate Republicans on Tuesday killed a new rule that would have made it easier for Americans to file class-action lawsuits against big Wall Street banks. 

Vice President Mike Pence cast a critical vote to break a 50-50 tie, giving the Street its first major victory since the Trump administration took office in January.  

Implications for consumers 

In the regulatory overhaul following the housing slump, Congress directed the Consumer Financial Protection Bureau (CFPB) to write the rule preventing financial firms from imposing arbitration when consumers wished to band together in class-action cases to resolve disputes. 

For years, financial companies have included class-action waivers in new contracts offering a consumer financial product or service. The arbitration clauses forced consumers to waive their rights to join class-action lawsuits. 

CFPB’s proposed rule, issued in July, would have banned financial institutions from inserting such clauses in standard contracts. Consequently, it would have restored individuals’ ability to pool resources and fight against banks and credit card companies in court.  

“Tonight’s vote is a giant setback for every consumer in this country,”  Richard Cordray, the director of the consumer bureau, said in an emailed statement to MagnifyMoney. “Wall Street won and ordinary people lost.” 

He added, “As a result, companies like Wells Fargo and Equifax remain free to break the law without fear of legal blowback from their customers.” 

What’s arbitration? 

When a company includes a mandatory arbitration clause in a contract, it generally means disputes will be handled as individual cases in small claims court or settled outside the court system, through arbitration. A neutral third party — an arbitrator or panel of arbitrators — listens to the arguments and decides on a resolution.  

Arbitration is said to be faster, simpler and cheaper than litigation. But opponents of arbitration say its downsides include questionable neutrality on the arbitrator’s part, a lack of transparency and a lack of recourse. For example, in a court case, a losing party could appeal — an option that doesn’t exist in arbitration.  

The CFPB argues that reducing consumers’ options to private arbitration or an individual lawsuit makes it easy for companies to avoid accountability for actions that can affect thousands or millions of people. 

Why now? 

The Trump administration and Republicans have pushed to curtail the CFPB as part of a broader effort to weaken the Obama administration’s tighter federal grip over financial institutions.  

The arbitration rule had sparked a political firestorm in Washington. Over the summer, members of the Senate Banking Committee pledged that they would take the unusual step of filing a Congressional Review Act Joint Resolution of Disapproval to overturn the CFPB rule.  

Rep. Jeb Hensarling, D-Texas,  introduced a companion measure in the House. 

Under the Congressional Review Act, Republicans had about 60 legislative days to overturn the rule. In ensuing months, financial institutions and their Republican allies in Congress joined forces, making serious efforts to block the arbitration rule.  

The Treasury Department on Monday released a report against the rule. “The Bureau failed to meaningfully evaluate whether prohibiting mandatory arbitration clauses in consumer financial contracts would serve either consumer protection or the public interest — its two statutory mandates,” according to the report. 

On Tuesday, the White House applauded the move by Senate Republicans. 

“The evidence is clear that the CFPB’s rule would neither protect consumers nor serve the public interest,” the White House said in a statement. “Rather, under the rule, consumers would have fewer options for quickly and efficiently resolving financial disputes.” 

The post Consumer Bureau Loses Fight to Allow Class-Action Suits Against Finance Giants appeared first on MagnifyMoney.

New CFPB Rules Get Tougher With Payday-Lender Debt Traps

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In early October, the Consumer Financial Protection Bureau announced it would implement long-awaited new rules aimed at limiting the power of payday and title lenders. The bureau director, Richard Cordray,  has been a vocal critic of the nonbank lenders, and the agency has been working on new rules to regulate lenders in this space for several years.

“The CFPB’s new rule puts a stop to the payday debt traps that have plagued communities across the country,” Cordray said in a statement. “Too often, borrowers who need quick cash end up trapped in loans they can’t afford. The rule’s common sense ability-to-repay protections prevent lenders from succeeding by setting up borrowers to fail.”These rules will apply to both brick-and-mortar and online lenders.

What changes are happening

Lenders are going to have to prove that a borrower can afford to repay the loan

One of the major rules is a “full-payment test” that will determine if borrowers can “afford the loan payments and still meet basic living expenses and major financial obligations.” Payday lenders typically don’t run a credit report on borrowers and only usually look at a pay stub to determine if you qualify.

Most consumers end up unable to repay the loan when it comes due, usually a couple weeks later. According to the CFPB, more than 80 percent of all payday loans are rolled over or renewed. The same is true for title loans, with 20 percent of borrowers losing their vehicle to title loan companies. Because there is little regulation on interest rates, these loans usually have APRs of 300 percent or more.

However, borrowers can avoid the full-payment test if the lender meets the following requirements: It must make 2,500 or fewer covered short-term or balloon-payment loans per year and earn no more than 10 percent of its revenue from such loans.

It won’t be as easy for lenders to access funds in borrowers’ bank accounts

Another issue is that many payday and title loans require access to the user’s bank account, where payments will be automatically debited. If the user does not have the amount available in his or her account, the account will be overdrawn. This usually results in the consumer being charged overdraft fees on top of the hefty interest already going to the payday lender.

According to the CFPB, “these borrowers incur an average of $185 in bank penalty fees, in addition to any fees the lender might charge for failed debit attempts, specifically, a late fee, a returned-payment fee, or both.”

One of the rules that the CFPB installed is a limit on attempted debits, so the lender has to get authorization from the consumer to debit the account more than twice. The CFPB also hopes to limit the amount of times a loan can be extended, as a way to decrease the fees the borrower must pay.

Borrowers can repay debt more gradually

To avoid the full-payment test, payday lenders can lend up to $500 if they structure the payments so the borrower can pay them off “more gradually.” However, there will be strict rules in place for this type of loan.

For example, lenders won’t be able to offer gradual repayment plans to customers who have recent or outstanding short-term or balloon-payment loans. They also can’t make more than three loans in quick succession and can’t make loans under this option if the consumer has already had more than six short-term loans or been in debt for more than 90 days on short-term loans over a rolling 12-month period.

Few options for borrowers in need

The CFPB’s long-awaited rules may help protect borrowers from predatory lenders, but don’t solve a key issue: There just aren’t that many viable alternatives for people who need to borrow small sums quickly.

A report from the Milken Institute, “Where Banks Are Few, Payday Lenders Thrive,” found that neighborhoods with more banks tend to have fewer payday lenders, and vice versa. There was also a strong correlation between payday lenders and neighborhoods with higher African-American and Latino populations as well as a greater instance of payday lenders where there are fewer high school and college graduates.

Jennifer Harper, who researched predatory lending in Chattanooga, Tenn., as part of the Financial Independence Committee for the Mayor’s Council for Women, said she hopes there will be a solution for consumers that doesn’t require them to take out a payday loan.

“We want to find an alternative to payday lending that would still allow people to access they need, without those crazy interest rates,’ she said. “Getting that quick access to cash may be fine for that day, but then it really puts a burden on the borrower long-term.”

Jason J. Howell,  a certified financial planner and fiduciary wealth adviser in Virginia, agrees with the new regulations taking place.

“The CFPB is taking the opportunity to protect the most vulnerable consumers: lower-income borrowers that are typically ‘un-banked,’” he said. “The proposed rule would reduce fees that make payday loans especially hard to pay back; and that could also reduce the issuance of these loans in the first place.”

The post New CFPB Rules Get Tougher With Payday-Lender Debt Traps appeared first on MagnifyMoney.

The Guide to Freezing and Thawing Your Credit Report

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The recent Equifax data breach that exposed the names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers of about 44 percent of the current American population has many consumers now rushing to freeze their credit scores. However, many consumers may not grasp what that really entails.

In a recent survey by CompareCards.com, a subsidiary of MagnifyMoney’s parent company, LendingTree.com, 78 percent of respondents said they had never put a freeze on their credit reports.

When you freeze and thaw your report, you are preventing anyone else from opening a credit account under your name without your knowledge. It’s a smart way to defend yourself against some cases of identity theft. Massive data breaches like the one that hit Equifax are stark reminders of the importance of protecting sensitive information from potential fraudsters, but that doesn’t mean you should wait until your information is compromised in a data breach to act.

“We should all be vigilant,” says Eva Velasquez, president of the Identity Theft Resource Center. “Being vigilant about your identity is just a part of the world that we live in. If being involved in a data breach is the catalyst that brings that to the top of your mind, then we can see that as a positive.”

What a credit freeze does — and doesn’t — accomplish

A credit freeze, or security freeze, is a tool consumers can use to restrict access to their credit reports. The freeze makes it harder for criminals to commit financial fraud using your information.

The freeze seals your credit reports so that new requests won’t be processed without your approval. You will need to use a personal identification number — only you will know it — to lift or thaw the freeze before creditors can again have access to your credit report. A freeze adds a layer of security, since most creditors won’t extend new credit without seeing your report.

You will need to request a credit freeze with each of the big three reporting bureaus — Equifax, TransUnion and Experian — for the freeze to have the biggest impact.

Freezing your credit report will NOT:

  • Impact your credit score
    • A credit freeze will have no impact whatsoever on your credit score. Freezing your credit will neither raise nor lower your score.
  • Restrict existing creditors’ access to your report
    • Your current creditors, government agencies or debt collectors acting on behalf of those parties will still have access to your credit report if you freeze it.
  • Keep you from opening new credit
    • You will still be able to use your credit report to do things like open a new credit account, apply for a mortgage, rent an apartment or take any other action that calls for a credit check. But you’ll need to lift the temporary freeze before lenders can gain access to the report. If you know you’ll be doing any of those activities, you can temporarily lift the freeze for a certain party or a length of time, but it may cost you money to do so.
  • Prevent a criminal from committing fraud involving your existing accounts.
    • Freezing your credit report won’t prevent you, or any would-be thieves, from using your existing credit accounts. You will still need to vigilantly monitor all of your personal bank, credit and insurance accounts for fraudulent transactions or other signs of fraudulent activity.
  • Stop you from receiving prescreened credit offers
    • Freezing your credit report won’t stop lenders from sending you prescreened credit offers, as they prequalify new customers using a “soft pull.” A soft pull doesn’t show up on your credit report or harm your credit score. Banks buy the names of people who meet their credit criteria from credit bureaus to create their prequalification lists. So when you are prequalified, it just means you’re on a list somewhere. If you want to stop receiving such credit offers, call 888-5OPTOUT (888-567-8688) or ask to be excluded here.
  • Protect you from all forms of ID theft
    • A credit freeze can help to prevent financial fraud, but it will still leave you vulnerable to many other kinds of fraud. When criminals obtain important and sensitive information like your Social Security number as they did in the Equifax breach, they can use this data to commit criminal, medical, tax and employment theft, too. For example, a thief could use your Social Security number to file a tax return and claim a fraudulent refund, or use your personal information to obtain medical care or employment without your knowledge. Remain vigilant to protect yourself from other forms of fraud. Pay careful attention to any mail or phone calls from a medical office, government agency or other entity. They may be reaching out to verify your identity or report that someone else is attempting to commit fraud in your name.

How to freeze your credit report

You must go through a separate process with each of the three major credit bureaus to freeze your credit report.

Equifax

Equifax Complete Advantage Plan You can freeze your Equifax credit report online, by phone or by mail.

  • Online: In a statement issued in The Wall Street Journal on Sept. 27, Equifax said it would offer a new service that permanently allows consumers to lock and unlock their credit reports for free. The service is set to debut by Jan. 31, 2018.

    In the meantime, you can still freeze your Equifax score the traditional way, by visiting the Equifax security freeze site. You will first need to fill out a form with your personal information, then make any payment required by your state. Equifax’s site may be experiencing high traffic as a result of the recent breach, so it may not be able to process your request right away. If that is the case, try one of the other methods or try again online in a day or two.

  • Phone: Call 1-800-685-1111 (New York residents call 1-800-349-9960), and you should be connected with an Equifax representative who will verify your personal information and assist you with your credit freeze request.
  • Mail: Request your credit freeze by certified mail. If you’re a victim of identity theft, this is the channel you will need to use; your request must be submitted in writing with relevant documents, like a police report or other documented proof of theft, to have your fee waived. Write a letter to the reporting agency requesting the credit request and send it to the following address: Equifax Security Freeze/P.O. Box 105788/Atlanta, GA 30348

TransUnion

TrueIdentity You can freeze your credit TransUnion report online, by phone or mail, or by using TrueIdentity,

  • Online: Go to the TransUnion security freeze site. You will need to log in or create a TransUnion account before you can submit your request online.
  • Phone: Call 1-888-909-8872 and a TransUnion representative should verify your personal information and assist you with your credit freeze request.
  • Mail: Request your credit freeze by certified mail. Write a letter to the reporting agency requesting the credit request and send it to the following address: TransUnion LLC/P.O. Box 2000/Chester, PA 19016
  • TrueIdentity: TransUnion offers a free credit report monitoring service called TrueIdentity. The service allows users to lock and unlock their credit report with a swipe on their mobile device or a click online. It gives access to unlimited TransUnion Credit report refreshes, and alerts you if an entity pulls your TransUnion credit report.

Experian

Experian You can freeze your Equifax credit report online, by phone or by mail.

  • Online: Go to the Experian security freeze site. Select “add a security freeze,” then “apply online” and you’ll be redirected to a form requesting your personal information. Submit the form and make any payment required by your state to freeze your report.
  • Phone: 1-888-EXPERIAN (1-888-397-3742). Press 2 to be guided through prompts to request a security freeze.
  • Mail: Request your credit freeze by certified mail. Write a letter to Experian requesting the credit request and send it to the following address: Experian Security Freeze/P.O. Box 9554/Allen, TX 75013

How to thaw your credit report with each agency

Equifax

You can temporarily thaw your Equifax credit report via mail, online via Equifax’s security freeze site, or by calling 1-800-685-1111. (New York residents dial 1-800-349-9960.) Send mailed requests to the following address:
Equifax Security Freeze/P.O. Box 105788/Atlanta, GA 30348

TransUnion

You can temporarily thaw your TransUnion credit freeze by mail, online or via TransUnion’s credit freeze site, or by calling 1-888-909-8872. Send mailed requests to the following address: TransUnion LLC/P.O. Box 2000/Chester, PA 19016

Experian

You can temporarily thaw your Experian credit report by mail, online via Experian’s security freeze site, or by calling 1-888-397-3742. Send mailed requests to the following address:
Experian/P.O. Box 9554/Allen, TX. 75013

How much a credit freeze will cost you — by state

The protection isn’t free. Each time you freeze your report, temporarily lift a freeze or permanently end one, you may have to pay a fee. In the wake of the Equifax hack, consumer advocacy groups and some lawmakers have renewed their efforts to allow data breach victims to sign up for free credit freezes in their states.

“It is outrageous that the credit bureaus charge us fees to prevent identity theft when we didn’t even give them permission to collect our information in the first place,” Mike Litt, a consumer program advocate with the U.S. Public Interest Research Group, said in a statement a little over a week after the Equifax data breach was made public.

Sens. Elizabeth Warren (D-Mass.) and Brian Schatz (D-Hawaii) introduced the Freedom from Equifax Exploitation (FREE) Act on the same day. The act is intended to make actions related to freezing credit reports free for all consumers nationwide.

Until the proposed act wends its way through both houses of Congress, the amount you may pay to freeze, thaw or permanently end a credit freeze will vary from state to state and may be up to $10.

There is a silver lining for some. If you can present documentation showing you are a victim of identity theft at the time you place a freeze on your credit, most states will waive fees.

You can check what your state will charge you for each action below. Multiply the amount by three because you will need to pay each credit bureau.

In a Sept. 15, 2017, statement addressing the recent breach, Equifax said it would waive security freeze fees for all consumers through Nov. 21 and refund those who have paid to place or remove a credit freeze since 5 p.m. on Sept. 7, just after the breach was announced.

Nearly every state has legally identified definitions of a “protected consumer,” which may be a minor, an elderly citizen, a service member, a spouse of a victim of ID theft, a medically incapacitated person or some other distinction. Depending on the state, a protected consumer may pay a different amount or have his or her fee waived. The National Conference of State Legislators has more information on whom each state counts as a protected consumer, here.

State

Consumer Category

Freeze

Thaw

End Freeze

Alabama

Victim of ID theft

free

free

free

Senior (65+)

free

$10

$10

All other consumers

$10

$10

$10

Alaska

Victim of ID theft

free

free

free

All other consumers

$5

$2

free

Arizona

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

All other consumers

$5

$5

$5

Arkansas

Victim of ID theft

free

free

free

Senior (65+)

free

$5

free

All other consumers

$5

$5

$5

California

Protected Consumer

$10

n/a

$10

Minor <16

free

n/a

free

Senior (65+)

$5

$5

$5

All other consumers

$10

$10

$10

Colorado

Victim of ID theft

free

free

free

All other consumers

free

$10

$10

Connecticut

Victim of ID theft

free

free

free

Protected Consumer

free

free

free

All other consumers

$10

$10

$10

Delaware

Victim of ID theft

free

free

free

Protected Consumer

free

free

free

Senior (65+)

$5

free

free

All other consumers

$10

free

free

District of Columbia

Victim of ID theft

free

free

free

All other consumers

$10.00

free

free

Florida

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

Senior (65+)

free

$10

free

All other consumers

$10

$10

$10

Georgia

Victim of ID theft

free

free

free

Minor < 16

free

n/a

free

Senior (65+)

free

$3

$3

All other consumers

$3

$3

$3

Guam

Victim of ID theft

free

free

free

All other consumers

$10

$10

$10

Hawaii

Victim of ID theft

free

free

free

All other consumers

$5

$5

$5

Idaho

Victim of ID theft

free

free

free

All other consumers

$6

$6

$6

Illinois

Victim of ID theft

free

free

free

Minor < 18

$10

n/a

$10

Senior (65+)

free

$10

free

Active duty military member

free

free

free

All other consumers

$10

$10

$10

Indiana

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

All other consumers

free

free

free

Iowa

Victim of ID theft

free

free

free

All other consumers

$10

$12

$12

Kansas

Victim of ID theft

free

free

free

All other consumers

$5

$5

$5

Kentucky**

Victim of ID theft

free

free

free

All other consumers

$10

$10

$10

Louisiana

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

Senior (62+)

free

free

free

All other consumers

$10

$8

free

Maine

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

All other consumers

free

free

free

Maryland

Victim of ID theft

free

free

free

Minor < 16

$5

n/a

$5

All other consumers

$5

$5

$5

Massachusetts

Victim of ID theft

free

free

free

Protected Consumer

free

free

free

All other consumers

$5

$5

$5

Michigan

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

All other consumers

$10

$10

$10

Minnesota

Victim of ID theft

free

free

free

All other consumers

$5

$5

$5

Mississippi

Victim of ID theft

$10

free

free

All other consumers

$10

$10

$10

Missouri

Victim of ID theft

free

free

free

All other consumers

$5

$5

free

Montana

Victim of ID theft

free

free

free

All other consumers

$3

$3

free

Nebraska

Victim of ID theft

free

free

free

Minor < 16

free

n/a

free

All other consumers

$3

$3

free

Nevada

Victim of ID theft

free

free

free

Senior (65+)

free

free

free

All other consumers

$10

$10

$10

New Hampshire

Victim of ID theft

free

free

free

All other consumers

$10

$10

$10

New Jersey

Victim of ID theft

free

$5

$5

All other consumers

free

$5

$5

New Mexico

Victim of ID theft

free

free

free

Senior (65+)

free

free

free

All other consumers

$10

$5

$5

New York

Victim of ID theft

free

free

free

Protected Consumer

free

free

free

All other consumers

free

$5

$5

North Carolina

Victim of ID theft

free

free

free

Spouse of ID Theft Victim

free

free

free

Minor < 16

$5

n/a

$5

Senior (62+)

free

free

free

All other consumers

free

free

free

North Dakota

Victim of ID theft

free

free

free

All other consumers

$5

$5

free

Ohio

Victim of ID theft

free

free

free

All other consumers

$5

$5

$5

Oklahoma

Victim of ID theft

free

free

free

Senior (65+)

free

$10

free

All other consumers

$10

$10

$10

Oregon

Victim of ID theft

free

free

free

Minor < 16

free

n/a

free

All other consumers

$10

$10

$10

Pennsylvania**

Victim of ID theft

free

free

free

Senior (65+)

free

$10

free

All other consumers

$10

$10

free

Puerto Rico

Victim of ID theft

free

free

free

Senior (65+)

free

$10

free

All other consumers

$10

$10

$10

Rhode Island

Victim of ID theft

free

free

free

Senior (65+)

free

free

free

All other consumers

$10

$10

$10

South Carolina

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

All other consumers

free

free

free

South Dakota**

Victim of ID theft

free

free

free

Minor < 16

$5

n/a

$5

All other consumers

$10

$10

$10

Tennessee

Victim of ID theft

free

free

free

Minor < 16

$10

n/a

$10

All other consumers

$7.50

free

$5

Texas

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

All other consumers

$10

$10

$10

Utah

Victim of ID theft

free

free

free

Minor < 16

free

n/a

free

All other consumers

$10

$10

free

Vermont

Victim of ID theft

free

free

free

All other consumers

$10

$5

$5

Virgin Islands

Victim of ID theft

free

free

free

All other consumers

$10

$10

$10

Virginia

Victim of ID theft

free

free

free

Protected Consumer

free

n/a

free

All other consumers

$10

free

free

Washington

Victim of ID theft

free

free

free

Senior (65+)

free

free

free

All other consumers

$10

$10

$10

West Virginia

Victim of ID theft

free

free

free

All other consumers

$5

$5

$5

Wisconsin

Victim of ID theft

free

free

free

Minor < 16

free

n/a

free

Medically incapacitated and not an ID theft victim

$10

n/a

$10

All other consumers

$10

free

free

Wyoming

Victim of ID theft

free

free

free

All other consumers

$10

$10

$10

Sources: Consumersunion.org Transunion.com NCSL.org

When a credit freeze makes sense — and when it doesn’t

You should freeze your credit report when you are in danger of financial or identity fraud.

Eva Velasquez, of the Identity Theft Resource Center, says consumers should consider freezing their reports if they are victims of identity theft or at an increased risk of having their information misused for identity theft because of lost or stolen items.

Consumers might also consider a credit freeze “if their personal information, specifically their Social Security number, is compromised in some way, like in that of a data breach,” says Velasquez.

Freezing your report is an important consumer protection you can and sometimes should take advantage of as a general consumer. However, there are several occasions when you may not want to freeze your credit.

  • You are planning to open a new line of credit (credit card, mortgage, etc.) in the near future.
  • You work for a company that requires a regular background check or access to your credit report.
  • You regularly open new accounts with financial institutions.

Ultimately, if you are not in danger of ID theft, the decision to freeze or unfreeze your credit report depends on whether or not you’re willing to go through the inconvenience and cost of unfreezing and refreezing each time an entity you approve of wants access to your credit report. If you want a more convenient way to monitor use of your credit report, you may want to consider placement of a credit fraud alert instead of the freeze, as explained below.

Pros and cons of freezing your credit report

Pros:

  • Locks your credit report
    The most obvious benefit you’d get from freezing all of your credit reports is an additional layer of protection. Only you can permit a lender or other entity to receive your full, detailed credit report. You’ll have the opportunity to verify a request’s legitimacy before anyone can obtain your report.
  • No impact on your credit score
    Neither freezing nor thawing your credit report will affect your credit score. Your credit score is impacted by positive or negative activity on your end. Adding protection is considered a neutral action.
  • Generally free for ID theft victims
    If you’re a victim of ID theft, you won’t be required to pay any fees to freeze, thaw or lift a freeze on your credit report in most states. However, you may need to provide additional documentation proving the theft and submit your request in writing.

Cons:

  • Need to plan before opening a credit line
    The added protection comes with the added inconvenience of freezing, or thawing your credit report when you need to apply for credit. This will take just a bit of forethought and may cost you up to $10 each time you thaw your report. You may take several minutes to complete thaw requests for all three bureaus online, which will make it a little more difficult to apply for a credit card in the checkout line. You can manually refreeze your accounts or set your request to automatically do so on a certain date.
  • Fees, unless you’re a victim of ID theft
    Each action — freezing or lifting a freeze — may cost you $3 to $10 in many states. The cost is often tripled, as it’s necessary to freeze or thaw all three of your credit reports if you are unsure which bureau the entity requesting your report will use. The cost may be high for some consumers. Freeze and thaw your reports wisely, and ask the requesting entity which bureau it uses to avoid paying unnecessary fees whenever you can.

An alternative to freezing your credit report

If you don’t think you are in immediate danger of ID theft, you can opt for less-drastic protection and set up a credit fraud alert with all three bureaus instead. When you have the alert set, all lenders attempting to pull your credit history will see a flag on the reports, alerting them to verify your identity before extending credit.

The entity is not required to go through additional verification, but the warning puts it at that entity’s discretion. You will still be able to apply for credit whenever you’d like, and won’t need to remember a PIN to unlock your credit report.

Additionally, fraud alerts are temporary. In most cases, you will be required to renew the alert in 90 days.

The post The Guide to Freezing and Thawing Your Credit Report appeared first on MagnifyMoney.

The Truth About ‘Obama Student Loan Forgiveness’

Source: iStock

The average 2016 college graduate carries $37,000 worth of student loan debt today according to an analysis of student loan debt by Mark Kantrowitz, publisher of Cappex.com. Kantrowitz tells MagnifyMoney he expects that number to rise for 2017 graduates.

It’s no wonder that those drowning in debt can get desperate. And scammers have come up with a clever way to dupe these borrowers into spending money on services that promise to erase their debt. One of the most popular student loan scams today involves companies that charge borrowers to sign up for the so-called “Obama Student Loan Forgiveness” program.

The only problem is that there is no such loan forgiveness program.

The truth about “Obama Student Loan Forgiveness”

So-called student “debt relief” companies use “Obama Student Loan Forgiveness” as a blanket term for the various flexible federal student loan repayment programs implemented over the last decade by the Bush and Obama administrations.

What they don’t tell unwitting consumers is that these programs, which include income-driven repayment plans and Public Service Loan Forgiveness, among others, are free to borrowers and do not require paying for any special services in order to enroll.

Promising relief to indebted college graduates, these companies lead people to believe that enrolling in these programs requires special assistance — which they may offer for a sizable upfront fee and/or recurring monthly payments. Rather than getting the help they need, borrowers are duped into paying for something they could easily accomplish for free with a simple phone call to their student loan servicer.

While there are multiple ways you can get scammed by debt relief companies claiming to offer you “Obama Student Loan Forgiveness,” there are some red flags that can help you spot a scam.

6 ways to spot a student debt relief scam

It’s important to note that it’s not illegal for a company to charge a borrower to enroll them in a program that’s free to them. These companies are arguably taking some of the work out of getting enrolled, even if that “work” could easily be accomplished with a phone call to your student loan servicer.

Nonetheless, some debt relief firms take things a bit too far, and it’s important to be aware of scams out there. After all, student loan forgiveness scams are really only one part of a broad range of debt relief scams. Debt relief scams share many of the same qualities and employ similar tactics to mislead consumers into paying for their services.

Here are some red flags to watch out for:

  1. They ask for fees upfront. By law, debt relief services are not allowed to ask for payment until they have performed services for their customer. A legitimate debt relief service may ask for a fee upfront, but they will place that payment in an escrow account, and they will not officially receive the payment until they complete the work.
  2. They charge fees for free government services. This one is a bit tricky. So long as a company makes it clear that it is possible to gain access to a government debt relief program for free, it’s not illegal for them to charge consumers for their help in enrolling in those programs. However, the worst actors out there will keep that information to themselves, leading consumers to believe they need to pay a professional for access.
  3. They claim to be affiliated with the U.S. Department of Education. The Department of Education, which manages the federal student loan system, does not partner with any debt relief services. Any company claiming to be associated with the Department of Education is a scam.
  4. They “guarantee” that your debt will be forgiven. Services will try to entice customers by promising total loan forgiveness or a reduction in their student loan payments. But monthly payments for borrowers enrolled in federal student loan repayment programs are established by law and cannot be negotiated. Also, the legitimate loan forgiveness programs out there usually require making payments for several years, and there is no company that can promise loan forgiveness unless you meet those payment requirements first.
  5. They advertise “pre-approval” for debt relief programs. There is no “pre-approval” for federal income-driven repayment or loan forgiveness programs. They are free for borrowers, and so long as your loans are in good standing, it’s a matter of the types of loans you have when you took them out that qualifies you for the different programs. To see if you qualify for a given program, contact your loan servicer directly.
  6. They offer to make your student loan payments for you. You should be the only person submitting payments to your loan servicer. The Department of Education has contracted these loan servicers to manage federal student loans, and loan payments should be made directly through their websites. Never send your payment to a debt relief firm, even if they promise to pay your loans for you. The exception here is if you’re working with a debt relief firm to settle a debt with a lump-sum payment. In that case, they are legally required to hold your cash in an FDIC-insured account until they officially settle the debt. And if their client decides they no longer want their services, they have to return the funds to them in full.

Do your due diligence before working with any debt relief service, by keeping an eye out for these red flags, as well as checking sites like the Consumer Financial Protection Bureau, the Federal Trade Commission, or the Better Business Bureau for complaints against the company.

What to do if you’ve fallen for a student debt relief scam

If you’ve been scammed by a debt relief company, there are certain steps you need to take to prevent further financial damage. However, know that it is possible you may never get your money back.

Submit a complaint to the Consumer Financial Protection Bureau and the Federal Trade Commission. Reporting scams, can not only help others from losing their money, but if an investigation by the CFPB or FTC results in suit and judgment, then the debt relief company may be required to issue refunds, cease business, and ensure borrowers do not miss out on important repayment benefits.

Track your credit reports with all three credit bureaus to ensure your personal information is not used fraudulently. You can get one free credit report each year at annualcreditreport.com or use these free services to monitor your report for suspicious activity. If you fear a debt relief scammer has your Social Security number and other financial information, you might want to consider a credit freeze. That will stop anyone from being able to open a new line of credit without you knowing.

Contact your loan servicing companies and have any power of attorney authorizations removed. Some companies will ask borrowers to give them power of attorney so they can negotiate directly with their loan servicers. You don’t want to leave any company with this privilege because they will be able to make decisions about your loans without you knowing.

Contact your bank or credit cards to stop payment to the debt relief company and see if they can work with you to try and get your money back. It is common for debt relief services to charge monthly recurring fees for their services.

Change your Federal Student Aid password. Every federal student loan borrower has a unique login for the https://studentloans.gov site, where you can track all of your federal loans. If you gave a company your FSA information, consider that information compromised and change your FSA password immediately.

9 Legitimate Student Loan Forgiveness Programs

While there is no such program called “Obama Student Loan Forgiveness,” there are several legitimate student loan repayment programs that offer student loan forgiveness.

These programs have a wide range of requirements and payment terms, some as short as five years, others as long as 25 years, and can be available based on the types of federal student loans you have as well as your chosen career.

In addition to loan forgiveness programs, there are programs that offer loan repayment assistance or loan discharge. How much can be discharged and the amount of repayment assistance varies greatly depending on the program.

9 examples of legitimate loan forgiveness programs, loan repayment assistance programs, and loan discharge programs

What to do if you can’t afford your student loan payments

If you are struggling to afford your student loan payments, there are some actions you can take to ensure your loans remain in good standing and you avoid a default that could negatively impact your credit score.

Enroll in an income-driven repayment plan

If you are unable to afford your current payment, you can apply to change repayment plans. For example, if you are on a Standard Repayment Plan for your federal student loans, you could request to enroll in an income-driven repayment plan. If you are already on an IDR plan and your income has changed significantly, you can request to have your payment amount recalculated.

Ask for a deferment or forbearance

If you are going through a temporary financial hardship, you can ask your loan servicer to apply a deferment or forbearance, which would not require you to make payments during the deferment or forbearance. While both a deferment and forbearance offer you relief from making payments, with a forbearance you will be required to eventually pay back the interest that accrues during that time. Also, it’s important to note that while you are in deferment or forbearance, you aren’t making payments, which means you might be missing out on forgiveness programs like PSLF if you are working in public service or for a nonprofit.

Consider refinancing or consolidating your loans

Refinancing involves taking out a new loan from a private lender and using that loan to pay off your old loan. The pros of refinancing include a reduced interest rate and the ease of having just one payment. If you refinance a federal student loan, you will lose all of the benefits that federal student loans offer.

Alternatively, you could consolidate your federal loans. A Direct Consolidation Loan combines all your loans using the average weighted interest rate into one loan. So instead of dealing with multiple loan servicers and multiple loan payments each month, you only have one student loan payment to make each month. You can apply for a Direct Consolidation Loan at no cost through the government’s Federal Student Aid website.

Work with your loan servicer

If you have private loans, your lender may not offer as many repayment options as federal loans. Reach out and work with your lender anyway. They may offer a financial hardship program that would lower your payments. Your loan servicer would much rather work with you to ensure they get paid.

Consider bankruptcy if you can pass the “hardship test”

While it is highly unlikely you will be able to discharge your student loans in bankruptcy, it isn’t impossible. You must either show that your loans would impose an undue financial hardship that will not go away or that the loan was not a qualified student loan in that it did not fit the definition or was in an amount that exceeds the school’s cost of attendance. An example of where this argument has been successful would be a private bar loan, a loan taken out to cover the expenses of taking the bar exam.

The post The Truth About ‘Obama Student Loan Forgiveness’ appeared first on MagnifyMoney.

GOP Moves to Block Rule That Allows Consumers to Join Class Action Lawsuits

A rule that would make it easier for consumers to join together and sue their banks might be shelved by congressional Republicans or other banking regulators before it takes effect.

Members of the Senate Banking Committee announced Thursday that they will take the unusual step of filing a Congressional Review Act Joint Resolution of Disapproval to stop a new rule announced earlier this month by the Consumer Financial Protection Bureau. Rep. Jeb Hensarling (D-Texas) introduced a companion measure in the House of Representatives.

The CFPB rule, which was published in the Federal Register this week and would take effect in 60 days, bans financial firms from including language in standard form contracts that force consumers to waive their rights to join class action lawsuits.

The congressional challenge is one of three potential roadblocks opponents might throw up to overturn or stall the rule before it takes effect in two months.

So-called mandatory arbitration clauses have long been criticized by consumer groups, who say they make it easier for companies to mistreat consumers. But Senate Republicans, led by banking committee chairman Mike Crapo (R-Idaho), say the rule is “anti-business” and would lead to a flood of class action lawsuits that would harm the economy. They also say the CFPB overstepped its bounds in writing the rule.

“Congress, not King Richard Cordray, writes the laws,” said Sen. Ben Sasse (R-Neb.), referring to the CFPB director. “This resolution is a good place for Congress to start reining in one of Washington’s most powerful bureaucracies.”

Congress’s financial reform bill of 2010, known as Dodd-Frank, directed the CFPB to study arbitration clauses and write a rule about them. The rule permits arbitration clauses for individual disputes, but prevents firms from requiring arbitration when consumers wish to band together in class action cases.

Consumer groups were quick to criticize congressional Republicans.

“Senator Crapo is doing the bidding of Wall Street by jumping to take away our day in court and repeal a common-sense rule years in the making,” said Lauren Saunders, associate director of the National Consumer Law Center. “None of these senators would want to look a Wells Fargo fraud victim in the eye and say, ‘you can’t have your day in court,’ yet they are helping Wells Fargo do just that.”

Meanwhile, the new rule also faces a challenge from the Financial Stability Oversight Council, made up of 10 banking regulators. The council can overturn a CFPB rule with a two-thirds vote if members believe it threatens the safety and soundness of the banking system. A letter from Acting Comptroller of the Currency Keith Noreika, a council member, to the CFPB on Monday asked the bureau for more data on the rule, and raised possible safety and soundness issues. Any council member can ask the Treasury secretary to stay a new rule within 10 days of publication. The council would then have 90 days to veto the rule via a vote. It would be the first such veto.

The CFPB rule also faces potential lawsuits from private parties.

How to be sure you’re protected by the new rule

Barring action by Congress, the CFPB rule is slated to take effect in late September 2017, with covered firms having an additional 6 months to comply, meaning most new contracts signed after that date can’t contain the class-action waiver. Prohibitions in current contracts will remain in effect.

Consumers who want to ensure they enjoy their new rights will have to close current accounts and open new ones after the effective date, the CFPB said.

The post GOP Moves to Block Rule That Allows Consumers to Join Class Action Lawsuits appeared first on MagnifyMoney.

How the “Financial Choice Act” Could Impact Your Wallet

 

Wikimedia Commons

A plan to repeal major aspects of Dodd-Frank — legislation enacted to regulate the types of lender behavior that contributed to the 2008 economic crisis — crossed its first major hurdle last week when the U.S. House passed the Financial Choice Act.

The bill still has to pass the U.S. Senate and be signed by the president before becoming a law. However, if it does, significant changes would be made to some regulations that might require consumers to pay more attention to their financial decisions.

“[The Financial Choice Act] stands for economic growth for all, but bank bailouts for none. We will end bank bailouts once and for all. We will replace bailouts with bankruptcy,” Rep. Jeb Hensarling (R-Texas), House Financial Services Committee chairman, said in a press release. “We will replace economic stagnation with a growing, healthy economy.”

What’s at stake with the Financial Choice Act, and how does it impact your finances? We’ll explore these questions in this post.

What did the Dodd-Frank Act do, anyway?

Bailouts: After it was implemented in 2010 by President Barack Obama, one of the law’s main pillars was enacting the “Orderly Liquidation Authority” to use taxpayer dollars to bail out financial institutions that were failing but considered “too big to fail” — meaning their collapse would significantly hurt the economy. In addition, Dodd-Frank created a fund for the FDIC to use instead of taxpayer dollars for any future bailouts.

Consumer watchdog: Dodd-Frank also created the Consumer Financial Protection Bureau, an independent government agency that focuses on protecting “consumers from unfair, deceptive, or abusive practices and take action against companies that break the law.”

In one of its most high profile cases to date, the CFPB in 2016 fined Wells Fargo $100 million for allegedly opening accounts customers did not ask for.

The CFPB’s actions against predatory practices in a number of industries, including payday lending, prepaid debit cards, and mortgage lenders, among others, have won the agency many fans among consumer advocates.

“In fewer than six years, [the CFPB has] returned $12 million to over 29 million Americans, not just harmed by predatory lenders or fly-by-night debt collectors, but some of the biggest banks in the country,” says Ed Mierzwinski, director of the consumer program for the U.S. Public Interest Research Group, a Washington, D.C.-based nonprofit that advocates for consumers.

And how would the Financial Choice Act change Dodd-Frank?

No more bailouts: The Financial Choice Act would replace Dodd-Frank’s Orderly Liquidation Authority with a new bankruptcy code. So financial institutions would have a path to declare bankruptcy in lieu of shutting down completely.

Fewer regulations for banks: The act will provide community banks with “almost two dozen” regulatory relief bills that will lessen the number of rules small banks need to comply with, making it easier for them to operate.

A weaker CFPB: It would convert the CFPB into the Consumer Law Enforcement Agency (CLEA) and make it part of the executive branch. The Financial Choice Act also gives the president the ability to fire the head of the newly created CLEA at any time, for any reason, and gives Congress control over it and its budget. These changes will take away much of the power the CFPB holds to monitor the marketplace and pursue any unfair practices.

“It not only took the bullets out of [the CFPB’s] guns, it took their guns away,” Mierzwinski says.

Specifically, he says the CFPB would no longer be able to go after high-cost, small-dollar credit institutions, such as payday lenders and auto title lenders.

However, some experts see benefits from taking the teeth out of the CFPB.

“I personally think that’s a good thing because I think the way that the CFPB is structured is fundamentally flawed,” says Robert Berger, a retired lawyer who now runs doughroller.net, a personal finance blog. “You basically have one person with very little meaningful oversight that can have a huge impact on the regulations of the financial industry.”

The bill also would roll back the U.S. Department of Labor’s new fiduciary rule, which isn’t part of Dodd-Frank, but requires retirement financial advisers to act in their clients’ best interests. It went into partial effect on June 9.

What does this mean to consumers?

If the Financial Choice Act becomes law, opponents say it could mean that consumers will have to be even more careful with their financial choices and who they trust as a financial adviser because there will be less government oversight.

“If you’re a consumer, you’re going to have to watch your wallet even if you have a zippered pocket with a chain on your wallet,” Mierzwinski says.

If the bill passes the Senate, it could still face some hurdles. Any changes to Dodd-Frank regulations would need to be approved by the heads of the Federal Reserve System and Federal Deposit Insurance Corp. and the Comptroller of the Currency.

The post How the “Financial Choice Act” Could Impact Your Wallet appeared first on MagnifyMoney.

11 Sephora Savings Hacks Everyone Needs to Know

If you can name your top 5 favorite beauty vloggers on YouTube, you’ve probably heard of a little makeup wonderland called Sephora. Bonus points if you’ve ever walked into the makeup emporium to touch up your brows with a free sample and left half an hour later and $100 poorer.

The LVMH-owned beauty store has been fairly successful since it first opened in 1969. It currently boasts 2,000 retail stores worldwide and around 15,000 of your favorite products. All of that revenue doesn’t have to come at the expense of your wallet.

We’ve done some digging to find 12 ways you can save money the next time the smell of perfume whisks you into your local Sephora retailer’s checkout counter with your credit card in hand.

  1. Loyalty Pays

Sephora is good to those who are loyal to the brand. Save on products and services when you sign up for the retailer’s loyalty program, Sephora Beauty Insider.

When you sign up, you’ll get points for each dollar spent in-store and online. The program has three tiers: Beauty Insider, VIB, and VIB Rouge, depending on how much money you spend with the leading makeup retailer.

Beauty Insiders — aka Sephora shoppers who spend less than $350 a year — get a free birthday gift and free classes, plus the option to pay $10 a year for unlimited free shipping privileges. VIBs, or Very Important Beauty Insiders, get all of the above plus additional exclusive savings and one free custom makeover for an annual $350 spent on merchandise.

Spend $1,000 a year in merchandise purchases, and you’re rewarded with the VIB Rouge level. Rouge offers all of the aforementioned perks, but you won’t need to pay the additional $10 a year for unlimited free shipping. You’ll also get other exclusive perks like unlimited custom makeovers.

  1. Get freebies by scanning the Beauty Deals page

Sephora has an entire page of its website dedicated to savvy shoppers like yourself. It’s appropriately titled Beauty Deals. It’s a little tricky to find the deals page as there isn’t a direct link to the page on Sephora’s home page, so make sure to bookmark www.sephora.com/beauty-deals.

It’s where you’re sure to find all of Sephora’s promotional codes for additional discounts and samples. You’re allowed a maximum of three free samples at checkout.

  1. Buy gift sets to save on individual products

If you’re going to purchase one or two items from a product line, you might be better off just buying a gift set. For example, the Yves Saint Laurent Black Opium Beauty Gift Set will run you $100 and comes with the Black Opium Eau de Parfum ($91), Rouge Pur Couture lipstick ($37), and Mascara Volume Effet Faux Cils ($32).

$91 + $37 + $32 = $160 value.

By getting the set, you’d save $60.

  1. Size up and save

If you buy something regularly, purchase the value size rather than smaller sizes. You’ll almost always spend less per ounce that way. For example, the regular 4.2-oz. bottle of Clinique’s Dramatically Different Gel will run you about $6.24 per ounce, whereas the smaller, half-ounce travel size option costs about $10 per ounce.

  1. Stock up on free samples in store

If you want to try out a product that’s way, way, out of your normal price range, get a free sample in-store to try before you buy. That way you won’t waste the full-size perfume you bought because of the brand more than the scent.

You are allowed up to three free samples per department in-store, and can get even more freebies online with beauty deals. Make sure to take home a sample of that expensive foundation to see if you can apply it as smoothly in your bathroom as the artist did in the store’s lighting.

Samples can also come handy when you’re traveling. So stop by Sephora and stock up on samples instead of travel-size bottles for short vacations.

  1. You can and should return products you don’t like

If you didn’t follow amazing aforementioned advice to try before you buy, it’s OK, I don’t listen to my mom either. What’s great is that at Sephora, you CAN make returns, even on makeup. Learn the return policy: you can return opened goods within 60 days in gently used condition.

  1. Shop out to in, bottom to top

Like at grocery stores, products are arranged at Sephora so that you see what costs the most, first. Check out items on the outer edges and on the bottom shelves first. They are typically cheaper than the ones you’ll see displayed at eye level according to Real Simple.

  1. Shop semi-annual sales

Sephora holds major semi-annual sales twice a year. This is another instance where your loyalty pays. Only Beauty Insiders get access to the major sale, when products are up to 20% off. The semi-annual sales typically happen in the spring and fall, usually mid-April or mid-November, and the sales normally last a few days.

  1. Use discounted gift cards

Purchase a gift card someone else is getting rid of at a discount before you shop. You can buy discounted gift cards for Sephora or department stores like Macy’s or JC Penney’s with in-store Sephora counters.

To find discounted gift cards, use sites like Gift Card Granny, which aggregates discounted gift card offers from around the web for you. Other great resources are Raise, WalletWhiz, and Cardpool.

Right now, we found Sephora gift cards available for up to 9% off through Gift Card Granny.

  1. Download a rebates app

You can get even more of the money you spent at Sephora when you shop using rebate smartphone apps like Ibotta or Checkout 51. For example, when you take a picture of your receipt after spending at least $50 at Sephora, you get $5 back on Ibotta.

With Checkout 51, you’ll browse local offers at stores, then take a picture of your receipt, and your savings will be credited to your account. When your account hits $20, you can cash out.

  1. Learn to DIY

You can save a lot of time and money on makeovers at Sephora by learning a few of the artist’s tricks yourself. Learn how to sculpt the perfect brow or apply flawless foundation at one of the retailer’s free 2-hour beauty classes.

Check online or ask the manager at your local Sephora for find out when and how to sign up for classes. If you have about 15 minutes and want a more personal experience, you can have a professional explain their process to you during a mini-makeover any day.

  1. Like, follow, subscribe

Following Sephora on its social media channels is the most obvious and easiest way to save on goods and snag freebies. Look out for posts on Sephora’s Facebook and Pinterest accounts to hear first about current sales and free samples.

 

 

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Starbucks is raising its prices again

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Starbucks is giving coffee addicts another reason to make their own java at home. The company will raise prices on “select beverages” by as much as 30 cents on July 12.

Starbucks was forced to come clean about the price hike a little earlier than planned after a system glitch at some retail locations resulted in customers being overcharged. July seems to be the chosen month for Starbucks to jack up prices. It implemented 1% price hikes at locations across the U.S. last summer.

“[Some of the new prices were] prematurely entered into the point of sale systems in our U.S. company-operated stores. As a result, some customers were charged incorrectly,” the company said in a statement.

If your Starbucks fix cost more than usual this week, you may have been overcharged. Call Starbucks’ customer service line at 800-782-7282.

This, of course, isn’t the first time Starbucks has rankled its customers. The coffee chain is facing a $5 million lawsuit that claims Starbucks overcharges for some drinks. Although Starbucks advertises drinks by the fluid ounce, part of that volume is taken up by ice, the lawsuit alleges.

A 30-cent price hike won’t exactly break your wallet, but it may be a little extra incentive to save money on your daily coffee by bringing your own java to work or making it at home. If you’re determined to get your Pike Place fix, you could buy a bag of Starbucks coffee beans, have the barista ground them for free and brew your own drink right at your desk. Plus, Starbucks will give you a free cup of coffee for every bag of beans you purchase. It’s a win-win. We’re personally a big fan of the no-frills French press, which you can get easily for under $30 on Amazon.

There are also plenty of great tips online for how to “Hack” more affordable drinks at Starbucks.

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5 Steps to Take When Your Car is Repossessed

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For the most part, you will know ahead of time when a car repossession is on the horizon. But, even when you have an inkling your car is about to get taken away, walking outside to find it missing is upsetting.

A car repo can jeopardize your mobility long-term. And if you don’t have access to public transportation or a friend to give you a lift, having no car to get to and from work could mean you’ll lose your job, which triggers other financial issues. If your car has been repossessed (or it’s a possibility it will happen soon) here’s what you need to know and the options for getting it back.

Step 1: Take a Record of Any Property Damage

There are laws in place to protect you when a repo company comes for the car. They can’t disturb the peace, use excessive force, damage your property or cause you harm in the process.

If you believe the repossession happened aggressively, you may have a case for reimbursement of damage or the return of your car. The repo agency may also get hit with a penalty for their actions. Take photos of the damage as a backup and get a second opinion from an attorney.

You should also have a record of what the car looks like and any damages before it’s repossessed. Otherwise, could turn into a bit of a “he said, she said” debate.

Step 2: Find Out Why Your Car Was Taken

Technically, a car isn’t “yours” until you pay off the car note. If you default, in most states the company financing your car has the right to take it back without warning you. The same applies if you’re leasing a car. Miss a few payments and the lessor can take back the property.

When a repo occurs, contact the creditor as soon as possible. Unlike when a contractor tows your car for minor offenses like unpaid parking tickets, after a repo, your car doesn’t wait patiently on a lot until you bring your bills current. The car can be sold to recover the financial loss.

Fortunately, many states require that you’re notified of the pending auction or sale of your vehicle beforehand, so you have a reasonable time to act. Ahead of the sale, you may be able to reinstate the auto loan, pay off the loan entirely or buy the car back. We’ll talk about each option for reclaiming your car in the next section.

Besides defaulting on a loan, in some states, your car may be repossessed when your insurance lapses. If you’ve stopped paying your car insurance, find out from your creditor or DMV if that’s the reason your car is missing and ask what the penalties are for not keeping insurance.

Step 3: Explore Options to Reclaim the Car

The rules for getting your car back when your payments are in default vary by state and contract, but according to the Federal Trade Commission, there are generally three options to discuss:

Reinstate Your Auto Loan: This will probably be the most affordable and less cumbersome option if it’s available to you. Reinstating the loan is when you pay the amount you’re behind plus all of the fees associated with the repossession including towing and storage to get it back.

Redeem Your Car: Redeeming the car means paying off the entire balance of the loan to get your car back. Going this route may not be feasible or smart if your car is worth less than you owe. Besides the entire loan amount, you’re also on the hook for the repossession fees.

Buy Your Car Back: Again, this option may not be possible if you’re having a hard time just making car payments. When you get the date and time of the auction your car will be in, you can attend and try to buy it back.

Step 4: Decide if You Can Afford to Get the Car Back

After going through each of your options, you may find you’re not financially stable enough to retrieve your car. Even in the best case scenario of reinstating your loan, you’ll need to have the means to make regular payments and maintain the car. If you can’t handle it, you may have to let the car go. There are some financial implications when giving up on the car as well.

When a creditor sells your car, it has to make a reasonable effort to get a fair market price for it. If the fair market price is less than how much you owe, you can be sued for deficiency; the difference between how much you owe and how much the car sells for.

Fortunately, if the car sells for more than what you owe, you also get to pocket the difference. You should get a notification of whatever you owe or if money is owed to you. Follow up on the resale yourself if you don’t. Unpaid deficiency can end up in collections.

Lastly, if you plan to wash your hands of the car loan, you could be in a deep financial hole all the way around and in the process of filing bankruptcy. If so, you may be able to include the car in the agreement and get it back. In this case, contact the attorney handling your bankruptcy right away.

Step 5: Get Your Belongings

Regardless of how you intend to resolve the repossession, you’re entitled to all of your belongings in the car. Whoever has your car should make a reasonable effort to protect your belongings from damage and theft. It’s a good practice to not leave any valuables in the car if you’re on the verge of repossession to avoid theft or damage.

Often, you’ll be contacted with the location where you can pick your stuff up. If you find anything missing or damaged, take notes. You may be able to reduce your deficiency bill with proof that you experienced property loss.

Final Word: Act early

If you know making future car payments is going to be a struggle, you’ll benefit the most from acting early to avoid the costs of repossession. Here are a few steps you may be able to take:

  • Negotiate: If you’re going through a temporary hardship, you may be able to work out a short-term deal of reduced or excused late auto payments. You won’t know unless you ask. Be sure to get any form of agreement in writing.
  • Sell your car: Selling a car with a lien can be difficult, but not impossible. You have the best shot at selling if the car is worth more than you owe. Once sold use public transportation or a carpool for the time being.
  • Refinance the loan: You may be able to refinance to a lesser monthly payment before things go south. Keep in mind, refinancing may come with processing fees and other costs, so you need to factor them into the equation.
  • Surrender the car yourself: If you’re already in default and know the repossession is coming, you can give up the car on your own terms. No dramatic car tow scene necessary and you can clear the car of your belongings. Then if you decide to redeem your car or reinstate the loan, you won’t have to pay some of the repossession fees.

Having your car repossessed is scary, but even when you hit rock bottom, there are solutions. If you put aside the emotions and think logically, you can recover. Your best move is to prevent it and keep the lines of communication open with the company servicing your auto loan.
If it’s too late for that, your main choices (depending on your contract and state) are to bring the loan back current and fork up repossession costs, pay-off the loan, buy the car back or give up the car entirely.

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