Catching your favorite show or movie via streaming service is commonplace in this day and age â especially during the COVID-19 pandemic â and doing so using a smart device other than a standard computer has gained popularity in recent years.
In fact, 2020 data out of the Leichtman Research Group found that 80% of T.V.-owning households in the U.S. have at least one internet-connected T.V. device â from streaming devices like the Roku Streaming Stick to video game consoles like Nintendo Switch to standard smart T.V.s. And with the uptick in internet-connected T.V. devices, one can assume the popularity of streaming services (coupled with Americans’ ever-heightening presence online) may have something to do with it.
As the popularity of streaming services grows, U.S. households are increasingly cutting the cord with cable
Research published as recently as this year by the Leichtman Research Group indicates that â82% of U.S. households have at least one streaming video serviceâ from 11 of the top direct-to-consumer and subscription-based video-on-demand services â a slight increase from its 2019 findings.
At the same time, numerical estimates from eMarketer forecast that an additional 6.6 million U.S. households will âcut the cordâ with cable T.V. subscriptions in 2021, bringing the projected total number of U.S. cord-cutters to 31.2 million.
Overall, it can be inferred that the COVID-19 pandemic could have something to do with these numbers as Americans look for more ways to stay entertained while under stay-at-home orders.
Got streaming subscriptions? A rewards card can help
If you happen to be juggling streaming service subscriptions for personal use â or even to stream calming tunes at your small business or within your (virtual) second-grade classroom, for example â odds are you’re spending a decent amount on these services per month. And while financial tools like a rewards credit card can be helpful, streaming services probably arenât the first bonus category you check for when scoping out the most ârewardingâ card options.
Since these purchases likely make up less of your budget, it makes sense that they wonât be your first priority. Thankfully, though, many great rewards and cash back credit cards now include streaming service bonuses in addition to their ongoing rewards and perks. Hereâs a quick look at some of our favorite cards that reward streaming.
Wells Fargo Propel American Express® card*: Best for earning rewards on streaming with no annual fee
Blue Cash Preferred® Card from American Express: Best for earning rewards on streaming with an ongoing annual fee
Discover it® Cash Back: Best for rotating category enthusiasts
Amazon Prime Rewards Visa Signature card: Best for Amazon Prime loyalists
U.S. Bank Altitude Go Card: Best for everyday spending
U.S. Bank Altitude Connect Card: Best for streaming credit
Capital One Savor Cash Rewards Credit Card*: Best for dinner and a movie
Best for earning rewards on streaming (no annual fee): Wells Fargo Propel
For cardholders who prefer a rewards card with no annual fee, the Wells Fargo Propel American Express card is a great option. It offers 3X points per dollar on dining, travel and transit, gas station purchases and select streaming services. Cardholders also earn 1X point per dollar on other purchases. Based on the average person’s spending habits, we estimate this card offers an average rewards rate of 1.78 points per dollar, one of the highest rates you can find on a card with no annual fee.
Wells Fargo Propel American Express® card*
Why should you get this card?
The Wells Fargo Propel card is one of the best no-annual-fee travel cards on the market, thanks to its 3X point bonus.
Read full review
Other things to know:
3X points per dollar on dining, travel and transit, gas station purchases and select streaming services; 1X point per dollar on other purchases
20,000 points if you spend $1,000 in first 3 months
$0 annual fee
No foreign transaction fee
If you were to spend $29 a month on streaming services, you’d earn 1,044 points annually with this card. That’s just over $10 a year in cash back from streaming purchases.
Streaming services eligible for bonus rewards on Wells Fargo Propel
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This card’s video streaming service category includes a number of popular providers. Eligible partners include Netflix, Hulu, Amazon Prime, Disney+, HBO Now and more. You can also earn rewards on eligible music streaming services, including Apple Music, Spotify Premium and Pandora. With so many providers included, it’s easy to rack up points on your subscriptions.
Other card perks to consider
Beyond offering a good rate on streaming services, the Wells Fargo Propel comes with several other perks that make it a valuable option. New cardholders can enjoy a generous sign-up bonus of 20,000 points for spending $1,000 in the first three months. Plus, the Propel cardâs bonus categories are particularly valuable for frequent travelers, as they include gas stations, transit, travel and dining purchases.
Best for earning rewards on streaming (with an ongoing annual fee): Blue Cash Preferred
The Blue Cash Preferred Card from American Express is a great choice for cardholders looking to earn cash back on streaming service purchases, and the card’s terrific ongoing rewards rate should make it easy to offset the $95 annual fee after the first year.
You’ll earn 6% cash back on U.S. supermarket purchases (for up to $6,000 per year in purchases, then 1%), 6% cash back on select U.S. streaming subscriptions, 3% on transit and U.S. gas station purchases, and 1% on general purchases.
Blue Cash Preferred® Card from American Express
Why should you get this card?
The Blue Cash Preferred card helps take the sting out of long commutes by offering a generous point bonus on U.S. gas station spending, and it offers one of the highest cash back bonuses you can get when you use your card at U.S. supermarkets.
Read full review
Other things to know:
6% cash back on select U.S. streaming subscriptions, 6% cash back at U.S. supermarkets (up to $6,000 in purchases per year, then 1%), 3% cash back at U.S. gas stations and on transit purchases and 1% cash back on other purchases
$150 statement credit if you spend $3,000 in first 6 months
20% back on Amazon.com purchases in first 6 months, up to $200 back
Free ShopRunner membership
$95 annual fee is waived the first year
Terms apply
The 6% cash back on streaming services is the most generous bonus on this category currently available among rewards cards â especially since there is no cap on how much you can earn. If, like the average person, you pay about $29 each month on various services, you can earn more than $20 a year in cash back on those purchases alone.
Streaming services eligible for cash back on Blue Cash Preferred
The Blue Cash Preferred card also boasts a robust list of eligible streaming services, including popular options like Apple TV+, Netflix, Hulu, SlingTV, Spotify and Disney+, as well as HBO Max.
Keep in mind, however, that according to Amex, “If your subscription is bundled with another product or service or billed by a third party (such as a digital platform, a cable, telecommunications, or internet provider or a car manufacturer), your purchase may not be eligible.”
In other words, if you have an add-on subscription to a service like HBO included as part of your cable service, you won’t earn bonus rewards even if you pay that bill with the Blue Cash Preferred.
Other card perks to consider
On top of the highest rate of cash back currently available for streaming services, the Blue Cash Preferred offers a top-tier rate on U.S. supermarket purchases (6% on up to $6,000 in purchases a year, then 1%). If you spend a lot on groceries each month, this card is one of the most rewarding options available. Even with the $6,000 per year spend cap, you can rack up quite a bit of cash back.
Best for rotating category enthusiasts: Discover it Cash Back
If you enjoy tracking quarterly rotating categories for higher cash back rates, the Discover it Cash Back might be your card of choice. The Discover it Cash Back publishes its quarterly rotating categories ahead of time.
In 2021, the Spring (April to June, activate starting March 1, 2021) categories include select streaming services. During the Spring quarter, if activated, you can earn 5% cash back on up to $1,500 in purchases per quarter in the bonus categories, then 1% after that. If you miss the Spring bonus quarter this year, keep an eye out to see if itâs offered again next year.
Discover it® Cash Back
Why should you get this card?
The Discover it® Cash Back offers rotating quarterly rewards category, plus no annual fee.
Read full review
Other things to know:
Enroll every quarter to earn 5% cash back on up to $1,500 in purchases in various categories throughout the year
1% cash back on general purchases
$0 annual fee
Streaming services eligible for cash back on Discover it Cash Back
The following streaming services are eligible in this category: Apple Music and Apple TV+, YouTube TV, Spotify, Disney+, HBO Max, AT&T TV Now, HBO Max, Hulu, Netflix, Pandora, BET+, CBS All Access, DAZN, ESPN+, Fubo TV, Google Play Movies & TV, Philo, Peacock TV, Showtime, Sirius XM, Starz, Sling and Vudu.
Note that if your subscription is bundled with another product or service billed by a third party, it may not be eligible in this category. The same goes for add-ons on select streaming services if they arenât on the list of eligible services.
Other card perks to consider
The Discover it Cash Back card offers other great perks, including a sign-up bonus that matches your cash back at the end of your first year of card membership. In addition, it comes with a $0 annual fee and multiple easy options for how you can redeem your rewards.
Best for Amazon Prime Video loyalists: Amazon Prime Rewards card
The Amazon Prime Rewards Visa Signature card is designed with Amazon fans in mind, making it one of the best options if your streaming service of choice is Amazon Prime Video. The card earns 5% cash back on Amazon.com and Whole Foods purchases (including your Amazon Prime membership), 2% cash back on restaurant, gas station and drugstore purchases, and 1% cash back on everything else. In order to qualify for the card, an Amazon Prime membership is required â but the cardâs 5% rewards rate can help offset the fee.
Amazon Prime Rewards Visa Signature card
Why should you get this card?
The Amazon Prime Rewards Visa Signature card offers a great 5% rate on Amazon and Whole Foods purchases.
Read full review
Other things to know:
5% cash back on Amazon and Whole Foods purchases, 2% back on restaurant, gas station and drugstore purchases. and 1% back on other purchases
$70 Amazon gift card when you sign up
No foreign transaction fees
Streaming services eligible for cash back on Amazon Prime Rewards Visa Signature
While Amazon Prime is technically the only streaming platform eligible for rewards, the Amazon Prime Rewards card should prove surprisingly flexible if you want to juggle multiple subscriptions. In addition to your Prime membership (which includes Prime Video and Amazon Music), you’ll earn 5% back on all Prime Video rentals and purchases, as well as on any subscriptions you add to your membership through Amazon Prime Video Channels.
With Amazon Prime Video Channels, you can choose from more than 100 add-on video subscriptions, including premium channels like HBO and niche channels like PBS Masterpiece. Here is a brief selection of Prime Video Channels, all of which earn 5% back when added to your Prime Video account:
Acorn TV
BET+
BritBox
Cheddar
Cinemax
Epix
Hallmark Movies Now
HBO
Lifetime Movie Club
MLB.TV
NBA League Pass
Paramount+
PBS Masterpiece
PBS Kids
Showtime
Starz
Shudder
Sundance Now
To earn rewards on these add-on subscriptions and any video rentals or purchases, be sure your Amazon Prime Rewards card is set as your default payment method for Prime Video. You can adjust this setting in the “Your Payments” section of your account, under “Settings” â or change your payment method for Prime Video Channels in the “Manage Your Prime Video Channels” section of your account.
Other card perks to consider
The Amazon Prime Visa also makes a great grocery card for users who live near a Whole Foods location. The 5% cash back you earn on these purchases is one of the best grocery rates available. Additionally, youâll get a $70 Amazon gift card just for signing up. While this is not the highest sign-up bonus available among rewards cards, it doesnât require you to meet any spend requirement, and youâll be able to take advantage of the perk immediately.
Best for everyday spending: U.S. Bank Altitude Go Card
If you want to earn rewards on an array of everyday expenses, including streaming services, the U.S. Bank Altitude Go Card is a terrific option without paying an annual fee. Along with the 4X points per dollar you’ll earn on takeout, dining and food delivery purchases, youâll earn 2X points per dollar at grocery stores, grocery delivery, gas stations and streaming services, then 1X point per dollar on all other eligible purchases.
U.S. Bank Altitude Go Card
Why should you get this card?
It charges no annual fee, offers an impressive rewards rate on a variety of everyday purchases and comes with the added perk of an annual streaming credit.
Read full review
Other things to know:
4X points per dollar on dining, 2X points per dollar on grocery store, gas station and streaming service purchases, then 1X point per dollar on other purchases
20,000-point bonus when you spend $1,000 in first 90 days
Includes an introductory APR on balance transfers and new purchases
No annual fee
On top of its ongoing rewards on streaming service purchases, the card offers a unique annual streaming credit: When you make 11 consecutive calendar month eligible streaming service purchases, youâll receive a $15 credit (automatic statement credit will be applied within two statement billing cycles following the eleventh month; you are eligible for this credit once per 12-month period).
Streaming services eligible for bonus rewards and credit on U.S. Bank Altitude Go Card
While U.S. Bank does not offer a full list of eligible streaming services, it’s safe to assume based on how merchant category codes are typically assigned that services like Amazon Music, Apple Music, AT&T TV Now, Disney+, Google Music, Hulu, Netflix, Pandora, SiriusXM, Slacker Radio, Sling TV, Spotify, Tidal, Vudu, YouTube Music and YouTube TV are included.
Other card perks to considerinstant card number on approval. As soon as you’re approved, you can load your card number into your favorite mobile wallet and start earning rewards instead of waiting for it in the mail. You can also use the card to pay off a transferred balance or finance new purchases â a major plus considering how difficult balance transfer offers can be to come by.
students with a limited credit history can also enjoy streaming service perks with the Journey Student Rewards from Capital One. You can earn up to $60 in streaming service credits: $5 per month for 12 months on select subscriptions when you pay on time. Some exclusions apply, but popular services like Prime Video, Disney+ and Netflix are included.
Best for streaming credit: U.S. Bank Altitude Connect Card
The streaming service earning on the newly launched U.S. Bank Altitude Connect Card is pay, but it makes up for it with a slightly higher credit of $30 for annual streaming service purchases. Plus, you can still rack up plenty of rewards with the card’s 4X rate on gas and travel, 2X on groceries (including grocery delivery), dining and streaming services and 1X on everything else.
U.S. Bank Altitude® Connect Visa Signature®
Why should you get this card?
The new U.S. Bank Altitude Connect offers a leading rewards rate on gas and travel, and its TSA Precheck/Global Entry application fee credit can help offset the annual fee.
Other things to know:
4 points per dollar on travel and at gas stations
2 points per dollar at grocery stores and on grocery delivery, dining and streaming services
1 point per dollar on all other purchases
50,000 points when you spend $3,000 in the first 120 days
$95 annual fee (waived the first year)
$30 credit for annual streaming service purchases such as Netflix and Spotify
Receive up to $100 in statement credits for reimbursement toward your TSA Precheck or Global Entry application fee once every four years.
No foreign transaction fees
While the card does offer 2X ongoing rewards on streaming service purchases, the annual streaming credit offers the real value. Like with the Altitude Go Card, you just need to make 11 consecutive calendar month eligible streaming service purchases, and then you’ll receive a $30 statement credit.
Streaming services eligible for bonus rewards and credit on U.S. Bank Altitude Connect Card
There is not a full list of eligible streaming services publicly available, but services like Amazon Music, Netflix, Pandora and YouTube TV are said to qualify.
Other card perks to consider
In addition to its high earning rate on travel and gas purchases, the U.S. Bank Altitude Connect card comes with a statement credit of up to $100 to cover your TSA Precheck or Global Entry application fee. Since the annual fee on this card is only $95 (waived in the first year), you can easily offset the cost on the years you use this credit. (Note, membership to these programs last five years.)
Best for dinner and a movie: Capital One Savor Cash Rewards Credit Card
The Capital One Savor Cash Rewards card has long been a favorite for foodies, thanks to its generous earning rate on both dining and grocery store purchases. But this fan-favorite recently got an upgrade â and with it a new, enhanced rate on streaming service purchases.
Capital One Savor Cash Rewards Credit Card
Why should you get this card?
The Capital One Savor card offers one of the best cash back rates on dining and entertainment purchases combined.
Read full review
Other things to know:
8% cash back on tickets at Vivid Seats through January 2023
4% cash back on dining, entertainment and streaming services
3% cash back at grocery stores
1% cash back on other purchases
$300 if you spend $3,000 in the first 3 months
$95 annual fee
Streaming services eligible for bonus rewards and credit on Capital One Savor Cash Rewards Credit Card
There is not a full list of eligible streaming services publicly available, but services like Hulu, Disney+ and Netflix are said to qualify.
Other card perks to consider
The Savor card also recently enhanced its earning rate on grocery store purchases, making it more valuable for those who prefer eating in to dining out. So whether you’d rather order takeout (earning 4% cash back) or stock up for cooking your own meal (3% cash back), the Savor will reward you for your next movie night.
Final thoughts
While streaming services like Netflix, Amazon Prime, YouTube TV or Tidal might not make up the biggest part of your monthly budget, you can still bring in great rewards on your membership fees by choosing the right rewards card. Whether you prefer a dining, grocery or travel card, you can combine rewards on various purchases with a streaming bonus to maximize points or cash back.
*All information about the Wells Fargo Propel American Express card and Capital One Savor Cash Rewards card has been collected independently by CreditCards.com and has not been reviewed by the issuer.
In the earliest days of my business, I wasn’t so much running toward a passion or purpose but running away from my disengaging full-time job. And that absence of purpose scared me. This was the next phase of my life, and I wanted it to be infused with intention.
And also… I had no idea how to achieve this.
Then one day, browsing aimlessly in a bookstore (a tactic I recommend anytime you’re struggling with literally anything) I stumbled on a book called Designing Your Life: How to Build a Well-Lived, Joyful Life, by Bill Burnett and Dave Evans.
At first glance it sounded a little squishy. But I noticed the book is based on a course of the same name, authored by two professors who famously teach at Stanford University – an institution not known for its squishiness. So, I grabbed it.
Its purpose is to help you answer this question: Can we apply design thinking to the “wicked problem” of designing your job, your career, and even your life? Evans and Burnett believe we can.
Design thinking is a means of user-centered design. It’s about designing not the best outcome, but rather the best path for a particular user. In the case of this book, the user is you. Today I’ll introduce you to the five phases of the design thinking process, and how Burnett and Evans might encourage you to harness it in designing your ideal life.
Whether you’re on a quest for joy, change, or a fresh start, welcome to your new beginning.
Design thinking … is about designing not the best outcome, but rather the best path for a particular user – in this case, the user is you.
Step #1: Empathize
Design thinking begins with empathy because you can only design for a user you understand. And since you are the user, this phase is about self-awareness. So how can you get to know you a little bit better? There’s a process Burnett and Evans describe called wayfinding, which is a simple method of self-discovery that puts you in the direction of where you need to go.
Through wayfinding, you’ll discover which activities engage you (leaving you feeling inspired and “in the zone”) and which sap your energy. The process is simple: keep a journal (here's a good example of one). For the next few weeks, keep track of your work and home activities throughout each day. Whether it's writing a sales pitch, reorganizing your sock drawer, or anything else. For each activity, grab your journal and log how high or low your engagement was during the activity (did you enjoy your time spent?) and how you feel afterwards (energized or exhausted, positive or negative?).
This process will reveal some important information about you!
Step #2: Define
The next phase of design thinking is to define the needs or insights you’ve gained through empathy. So after a few weeks, take a closer look at your journal and do a bit of reflecting. What captures your attention? Any surprises?
When I did this exercise, I validated some things I already knew – I love spending time with people and learning about topics of interest. But the news to me was that I was also enjoying writing copy for my website. This insight led me to start publishing an email newsletter which has since become critical to my business growth.
Now it’s your turn. What insights pop out for you? What assumptions can you validate, and what new things did you discover?
Step #3: Ideate
Now it’s time to develop a set of possible solutions. This phase is meant to be playful and exploratory, leveraging the insights you’ve collected.
Burnett and Evans call this Odyssey Planning. I love this phrase – it sounds more like an adventure in the wilderness than a planning process. How you craft your odysseys is up to you – you can draw, write stories, brainstorm or create a mind map. But the goal is to generate possibilities using pen and paper.
“Each of us is many,” Evans and Burnett say. “The life you are living is one of many lives you will live.”
So start with three possible lives:
A better version of the present – what your life would look like if everything stayed the same, but you added in more of the engaging and stripped out some of what leaves you drained
An alternate version of the present – what your life would look like if suddenly your job went away
A what-if-money-were-no-object version – what your life would look like if finances weren’t a constraint
Let your creative brain take over here. None of these will be your final life design, so don’t be hampered by too many rules. This is only about possibilities.
Step #4: Prototype
This phase is about collecting data to inform how we turn ideas into action plans. Now that you’ve crafted three possible lives that sound great to you. What can you do to test and validate those assumptions?
Who in your life has lived pieces of your envisioned lives? If one Odyssey involves you opening a restaurant or becoming a stay-at-home parent or launching a side hustle, who do you know who has done these things?
Find and interview people who you trust to share the good, the bad, and the ugly of their experience. Arm yourself with as much information as you can, so you can ultimately make informed choices about how to proceed.
Find and interview people who you trust to share the good, the bad, and the ugly of their experience. Arm yourself with as much information as you can.
Step #5: Test
The most valuable thing I learned while going through this life design process was that change needn’t be wholesale. You don’t have to throw out one life and take on another. You can take just one step at a time. Here’s where you put your insights, your possibilities, and your data into a blender and take small sips of the smoothie that emerges.
Maybe in your current job you spend a lot of time in meetings that drain your energy. This doesn’t mean you have to quit your job or boycott meetings. But can you craft a small experiment in which you opt out of one meeting per week and replace it with something that really lights you up? (Go back and check your journal to find the things that make you happiest).
This was my approach. I didn’t throw out my business. Instead, I started turning up the dial on things I believed would make me happy – choosing different clients, saying no to certain projects and yes to others.
If I was right, I kept going. If I was wrong, everything was reversible because I was doing this in small steps, rather than giant leaps. This process can be fun and invigorating. The beauty of human-centered design is that there is no right answer. There’s only the outcome that lifts you up.
And now it’s your turn. Are you ready to build the life you love?
Some good news for homeowners struggling to make ends meet thanks to COVID-19, which as the name implies has been going on for a while now. The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, has just announced an extension to the COVID forbearance period, which was previously capped at 360 [&hellip
The post You Can Now Request COVID-Related Mortgage Forbearance for Up to 18 Months first appeared on The Truth About Mortgage.
The pandemic threw many Americans into financial disaster, but credit card delinquencies surprisingly declined during the health crisis.
According to the Experian 2020 Consumer Credit Review published in January 2021, the number of accounts one month past due fell by 37%, two months past due by 36% and three or more months past due by 53%.
And although the American Banking Association reported that consumer delinquencies rose in the fourth quarter of 2020, it noted that credit card delinquencies remained near all-time lows.
âConsumers have done a good job of managing their spending throughout the pandemic and paid down their credit card balances at a record pace last year,â said Rob Strand, ABA senior economist, in a news release.
He went to say that during the pandemic, online purchases climbed, but that consumers continued to prioritize their credit card payments.
âAt the same time, card issuers have worked with customers who have experienced economic challenges related to the pandemic,â he said.
But will delinquencies rise once the pandemic â and help from card issuers and the government â is over?
Keep reading to see what industry experts think will happen in 2021.
See related: Acerage credit card interest rates
Congress and banks stepped in to help consumers
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When unemployment numbers dramatically rose last March, observers presumed that default rates would rise in lockstep, said Martin Lynch, compliance manager and director of education at the nonprofit Cambridge Credit Counseling Corp.
But Congress quickly responded by passing the CARES Act that same month: The distribution of stimulus payments began in April and other efforts followed in short order, including the PPP loan program for businesses, unemployment support for states and forbearance for federal student loans and federally backed mortgages.
Major banks also stepped in and offered relief, trying their best to keep their clients afloat in the hope that the pandemic would exit as quickly as it came.
All of these efforts have combined to help mitigate the economic effects of the virus, but the long-term effect is the subject of considerable debate, Lynch said.
Have the various relief efforts only put off the inevitable? Will the economy enter a significant recession once the forbearances end?
Default rates might give insights into future delinquencies
A closer look at default rates, Lynch said, may be the key that unlocks the answers to the questions above.
In ordinary times, loan default rates are simple data that show how many borrowers are paying and how many aren’t.
The CARES Act included a clause allowing that a loan in forbearance need not be reported as delinquent if it was current when the forbearance was granted.
Now that some of the dust has cleared, it’s apparent that at least some loans that were delinquent prior to the pandemic were also granted forbearance, Lynch explained, and that those loans were reported to the credit bureaus as current.
This means that looking at default rates alone isn’t enough to get an idea about how borrowers are performing during the pandemic.
To get more accurate results, Lynch said, we need to look at the number of defaults as well as the number of loans in forbearance.
But even this approach might not yield a definitive answer because no one knows whether the sheer number of forbearances consists solely of borrowers who were in dire need of assistance or whether that number also includes borrowers who simply took advantage of a pause in payments because it was offered, he pointed out.
And beyond all that, Lynch added, the effect of unemployment support and stimulus checks must have come at a critical moment for at least some of these same borrowers, allowing them to avoid delinquency and earn the forbearances extended to them.
See related: Poll â 51% of U.S. adults accrued more debt during the COVID-19 outbreak
Banks donât believe we are out of the woods yet
Ted Rossman, senior industry analyst at CreditCards.com, views all delinquency stats, which have fallen across the board, through the lens of pandemic relief.
âIt’s not what we expected at the onset of the pandemic, and it’s artificial, but the stimulus and accommodation programs have helped tremendously,â Rossman said.
The big question now is, what happens moving forward?
Will there be more stimulus and accommodations once the current programs expire? Will the metaphorical bridge that has already been built be enough to carry us through to the other side?
Rossman is hoping for the best and he said there are many reasons to be optimistic, but banks don’t believe we’re out of the woods yet.
While many have begun to release some of the loan-loss reserves they stockpiled in the early days of the pandemic, they’re proceeding cautiously, Rossman pointed out.
They still have significantly elevated reserves and are watching the situation carefully. Many have begun to ease their lending standards a bit, but we still see a lot more caution than we did just prior to the pandemic.
Much of this will depend on how the health situation plays out â with the vaccine rollout and the COVID-19 variant progression â and what the government and consumer responses are.
âWe’re optimistic that we’re close to the end of this, but sadly some people are in deep holes created by extended unemployment,â Rossman said.
Several sectors are doing great, others are on the mend and some will be slow to recover, he added.
For example, he said, over the past year, goods have mostly outperformed services â E-commerce, electronics, furniture and other home goods did very well, while travel and restaurants were among the worst performers.
But that’s starting to change.
So, Rossman said, if you work in a restaurant, it has been a very tough year, but if your savings, unemployment benefits and stimulus payments kept you afloat, the hope is you won’t be delinquent going forward because now you’ll be making more money.
Many forbearances will turn into defaults
Lynch said itâs not unreasonable to look at all of this delinquency data and conclude that low default rates are a mirage and that the country’s economy isn’t as healthy as the default rates would suggest.
A fair amount of the forbearances granted will turn into defaults when those programs end, but we won’t know for certain until it happens, he said.
What we can say for certain is that, to their credit, the federal government and a large number of private lenders worked hard to build an economic bridge to the other side of the pandemic.
If they were successful, we’ll have learned lessons that could be applied if something like this happens again. And if some of those efforts turn out to have been in vain, we’ll have learned something else that might still be useful.
If you have loans in forbearance, act now
Consumers with loans in forbearance need to take stock now before those payment holidays come to an end, Lynch warned.
For example, we know that federal student loan payments are set to resume in October 2021, so those borrowers should prepare a budget now to ensure they’ll be able to handle the payments when they start coming due.
The same approach will work for other loans, though lenders won’t have the same flexibility as student loan servicers.
âAt this point, I’d be making sure my budget accurately reflected appropriate repayment priorities,â Lynch said.
If you can’t meet your obligations, consider talking to a nonprofit credit counselor to review your budget and credit report, then go over your options, Lynch suggested.
You’ll also want to let your creditors know what’s happening before you start missing payments, Lynch advised; âIt’s the adult thing to do, and they may be able to help.â
Bottom line
What happens now very much depends on your individual circumstances, such as the industry you work in and how much savings you have, Rossman said.
Ironically, many people’s finances have improved during the pandemic because they were able to save more and spend less and their home values and investment portfolios grew, he added.
But, sadly, others have not shared in these gains, Rossman said, and they’re the ones who could cause the delinquency stats to rise once stimulus and accommodations run out.
See related: How to protect your credit during the coronavirus crisis
Now, with AmOne, you donât need a perfect credit score to get a loan â and comparing your options wonât affect your score at all. Plus, AmOne keeps your information confidential and secure, which is probably why after 20 years in business, it still has an A+ rating with the Better Business Bureau.
Plus: No credit card payments for you this month!
Source: thepennyhoarder.com
It takes less than a minute and just 11 questions to see what loans you qualify for â you donât even need to enter your Social Security number. You do need to give AmOne a real phone number in order to qualify, but donât worry â they wonât spam you with phone calls.
When the COVID-19 pandemic hit, banks expected delinquencies to surge, forcing borrowers to rely on their credit cards to make ends meet, The Wall Street Journal reported. But then the government stepped in with stimulus checks and expanded unemployment benefits. It allowed borrowers to pause payments on mortgages and student loans. So that surge of delinquencies never happened.
Wouldnât it be great to turn the tables on them? Well, now a lot of people are. More and more Americans are simply paying off their credit card balances, and thatâs making credit card companies like Capital One, Citibank and Chase really, really nervous. Thatâs because their whole business model is based on gouging you.
âAmericans are paying down their credit card debt at levels not seen in years. That is good news for everyone but credit card issuers,â reports The Wall Street Journal. âMany card issuers rely on growing card usage and balances for their revenue, and they are wondering if the pandemic trends will turn into a long-term shift.â
Theyâre Getting Awfully Nervous
Wouldnât it be nice to get a little revenge and make your credit card companies sweat for a change? Now you can, and itâs easier than you think.
A free website called Credit Sesame makes it easy to put your credit score on track to reach your goals. Within two minutes, itâll give you access to your credit score, any debt-carrying accounts and a handful of personalized tips to improve your score. Youâll even be able to spot any errors holding you back (one in five reports have one).
The benefit? Youâll be left with one bill to pay each month. And because personal loans have significantly lower interest rates (AmOne rates start at 3.49% APR), youâll get out of debt that much faster.
Why is this happening? This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
If youâve got credit card debt, you know how painful it is. Itâs the most expensive kind of debt you can have, and your credit card companies are just getting rich and fat while they gouge you with high interest rates.
How to Beat Your Credit Card Company
Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He paid off all his credit cards, and wow did it feel good.
Credit cards charge you harsh interest rates that routinely rise north of 20% APR. But if you owe your credit card companies ,000 or less, a website called AmOne will match you with a low-interest loan you can use to pay off all your balances.
Overall, credit card balances are down nearly 15% compared to a year before, according to the credit reporting firm Equifax.
Now, âit appears that many households are working to reduce their revolving debt balances, and this is happening across the board,â the Fed wrote.
These days, credit card companies are sweating bullets because Americansâ credit card balances are falling. They shrunk by a whopping billion in the first quarter of 2021 compared to the previous quarter, according to data released last week by the New York Fed,
Revenge is sweet.
Stop shoveling money into high-interest credit card payments. Cackle along with the rest of us as credit card companies express deep concern in earnings calls, sweating over their plummeting profits.
If youâre interested in getting a personal loan to wipe out your credit card balances, it helps to have a good credit score. For big credit card issuers like Capital One, Discover and Synchrony (the largest issuer of store credit cards), balances are down by 17%, 9% and 7% compared to a year ago, those companies reported.
These days, it can take a long time to pay off a car loan. On average, car loans come with terms lasting for more than five years. Paying down a car loan isnât that different from paying down a mortgage. In both cases, a large percentage of your initial payments go toward paying interest. If you donât understand why, you might need a crash course on a concept called amortization.
Find out now: How much house can I afford?
Car Loan Amortization: The Basics
Amortization is just a fancy way of saying that youâre in the process of paying back the money you borrowed from your lender. In order to do that, youâre required to make a payment every month by a certain due date. With each payment, your money is split between paying off interest and paying off your principal balance (or the amount that your lender agreed to lend you).
What youâll soon discover is that your car payments â at least in the beginning â cover quite a bit of interest. Thatâs how amortization works. Over time, your lender will use a greater share of your car payments to reduce your principal loan balance (and a smaller percentage to pay for interest) until youâve completely paid off the vehicle you purchased.
Not all loans amortize. For example, applying for a credit card is akin to applying for a loan. While your credit card statement will include a minimum payment amount, thereâs no date set in advance for when that credit card debt has to be paid off.
With amortizing loans â like car loans and home loans â youâre expected to make payments on a regular basis according to something called an amortization schedule. Your lender determines in advance when your loan must be paid off, whether thatâs in five years or 30 years.
The Interest on Your Car Loan
Now letâs talk about interest. Youâre not going to be able to borrow money to finance a car purchase without paying a fee (interest). But thereâs a key difference between simple interest and compound interest.
When it comes to taking out a loan, simple interest is the amount of money thatâs charged on top of your principal. Compound interest, however, accounts for the fee that accrues on top of your principal balance and on any unpaid interest.
Related Article: How to Make Your First Car Purchase Happen
As of April 2016, 60-month new car loans have rates that are just above 3%, on average. Rates for used cars with 36-month terms are closer to 4%.
The majority of car loans have simple interest rates. As a borrower, thatâs good news. If your interest doesnât compound, you wonât have to turn as much money over to your lender. And the sooner you pay off your car loan, the less interest youâll pay overall. You can also speed up the process of eliminating your debt by making extra car payments (if thatâs affordable) and refinancing to a shorter loan term.
Car Loan Amortization Schedules
An amortization schedule is a table that specifies just how much of each loan payment will cover the interest owed and how much will cover the principal balance. If you agreed to pay back the money you borrowed to buy a car in five years, your auto loan amortization schedule will include all 60 payments that youâll need to make. Beside each payment, youâll likely see the total amount of paid interest and whatâs left of your car loanâs principal balance.
While the ratio of whatâs applied towards interest versus the principal will change as your final payment deadline draws nearer, your car payments will probably stay the same from month to month. To view your amortization schedule, you can use an online calculator thatâll do the math for you. But if youâre feeling ambitious, you can easily make an auto loan amortization schedule by creating an Excel spreadsheet.
To determine the percentage of your initial car payment thatâll pay for your interest, just multiply the principal balance by the periodic interest rate (your annual interest rate divided by 12). Then youâll calculate whatâs going toward the principal by subtracting the interest amount from the total payment amount.
For example, if you have a $25,000 five-year car loan with an annual interest rate of 3%, your first payment might be $449. Out of that payment, youâll pay $62.50 in interest and reduce your principal balance by $386.50 ($449 â $62.50). Now you only have a remaining balance of $24,613.50 to pay off, and you can continue your calculations until you get to the point where you donât owe your lender anything.
Related Article: The Best Cities for Electric Cars
Final Word
Auto loan amortization isnât nearly as complicated as it might sound. It requires car owners to make regular payments until their loans are paid off. Since lenders arenât required to hand out auto amortization schedules, it might be a good idea to ask for one or use a calculator before taking out a loan. That way, youâll know how your lender will break down your payments.
Update: Have more financial questions? SmartAsset can help. So many people reached out to us looking for tax and long-term financial planning help, we started our own matching service to help you find a financial advisor. The SmartAdvisor matching tool can help you find a person to work with to meet your needs. First youâll answer a series of questions about your situation and goals. Then the program will narrow down your options from thousands of advisors to three fiduciaries who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.
Looking to cool down your apartment? With spring and summer approaching soon, it’s important to start thinking about how to prepare for those hotter months and stay cool. While many apartments come with built-in air conditioning (AC) units, many do not. So what are your options for cooling down your space? In this article, we’ll go into detail about how to decide what is the best air conditioner for your apartment.
How do air conditioners work to keep your apartment cool?
Air conditioners have been around for a very long time, in fact, the first air conditioning system was developed in 1902.The basics of how air conditioners work are similar to how a fridge works. Air conditioners use an internal refrigerating system to take in hot air and cool it. The hot air, absorbed by the AC unit through various coils and systems, turns into a gas. From there, the unit converts it back into a liquid.
Next, the hot air pushes out the back through vents or a window and the cool air pushes into your apartment. The website HowStuffWorks.com puts it very simply: “Think of it as an endless, elegant cycle: liquid refrigerant, phase conversion to a gas/heat absorption, compression and phase transition back to a liquid again.”
Important things to understand when selecting your AC unit
There are a couple of other things to consider when picking which type of AC unit to use for your apartment. You’ll want to consider things such as cooling capacity, BTUs, energy efficiency and costs.
BTUs
BTU or British thermal units is the amount of energy it takes to heat or cool one pound of water. For air conditioners specifically, the BTU refers to the amount of heat your unit can remove in an hour. Some units take more than others. For instance, a window unit takes anywhere from 3,000 to 25,000 BTUs, whereas a portable system can use anywhere from 8,000 to 12,000 BTUs. Make sure to take the time to research this before deciding on which unit is best for you. Learn Metrics has created a more in-depth chart for understanding different BTUs for different sized apartments.
Cooling capacity
When picking out your AC unit keep in mind its cooling capacity. The size of the area you want to cool will greatly impact your choice. Different units cool different area sizes. Take portable units for example â these are usually only able to cool the area they sit in. Window units on the other hand are a better option if you are looking to cool down an entire apartment.
Energy costs
The cost that it takes to run an AC unit is something else to consider. The price can greatly change depending on how big your unit is and how big of an area you’re trying to cool. On average it can cost anywhere from $14.40 per month to $211.20 to run different types of AC units.
Best air conditioner options for your apartment
Now you know how air conditioners work, how do you know which type is right for your apartment? Here are a couple of different options that you can choose from.
1. Portable air conditioner
Portable units are one option when looking for an AC unit. They come in various sizes and work in many different rooms. Often referred to as âportable swamp coolers” or âevaporated cooling” these two systems work similarly to other AC units but primarily rely on water. Another difference is their setup. For instance, some require their own voltage plug and most require you the ability to vent the hot air out of a window.
Another great question to ask when thinking about portable units is, “Can you use a portable air conditioner in an apartment?” The answer depends on your apartment complex and its rules. In certain apartments they are not allowed, so make sure to check with your apartment before you invest in one. Here are some pros and cons of portable AC units.
Pros:
Move room-to-room
Cost-efficient
Come in various sizes
Great if you have a strict HOA or landlord and can’t install a window unit
Cons:
Sometimes are less energy efficient
Can be noisy
2. Window units
Window units are very popular throughout Europe and make another great option for your apartment AC unit. Set in a window, they function much like other AC units and are capable of cooling medium-sized spaces. Here are some of their pros and cons.
Pros:
Easy to install
Inexpensive
Come in various sizes to fit your windows
Can come with a heating system
Cons:
Not portable and stay in the window you place them in
Not energy efficient
3. Wall-mounted
Wall-mounted units are a great option for people who are living in older buildings that tend to get very hot during summer. Here are the pros and cons of these AC units.
Pros:
Easy to install
Don’t take up a window or block the view
Energy efficient
Cons:
Don’t cool the whole space
Must be cleaned and maintained regularly
4. Personal AC unit
Personal AC units are great for cooling down a single person in a smaller space. They are typically very small â meant for bed stands or desks and are not meant to cool the entire space down. These typically only need a plug and water, however, they do not cool as well as bigger units. Here are their pros and cons.
Pros:
Great for personal use
Move from room-to-room
Easy to use and install
Cons:
Not energy efficient
Need cleaning after each use to avoid germ growth
How to keep your apartment cool without an AC unit
If none of these options work for you, there are other ways to keep yourself cool this summer. Here is a list of other options to consider:
Installing fans
Purchasing dark blinds to block the sun
Putting cooling sheets on your bed
Switching out your light bulbs to ones that produce less heat
Opening your windows at night
Cooking outside
Stay cool as a cucumber
While the summer heat is great for outdoor activities and vacations, it’s not so great for your apartment. Keeping your place cool throughout these hot months is essential. There is nothing worse than being uncomfortable in your own living space. The good news is there are many different options to consider when thinking about the best air conditioner for your apartment.
The post Picking the Best Air Conditioner for Your Apartment appeared first on Apartment Living Tips – Apartment Tips from ApartmentGuide.com.
Consumers have not been immune to financial challenges in the grips of a global pandemic. One way lenders are responding is by tightening their standards when issuing credit card accounts as the number of credit card accounts continues to fall.
According to data released in May 2021 by the American Bankers Association, there were 365 million open credit card accounts in the U.S. as of the end of 2020.
That number includes 203 million accounts held by superprime consumers, 98 million held by prime consumers and 64 million held by subprime consumers. According to the ABA data, the number of credit card accounts decreased for the third quarter in a row.1
While the number of prime and subprime accounts dropped to levels not seen since 2015-2016, the number of superprime accounts hit an all-time high, suggesting that those with the best credit have plenty of options to choose from.1
See related: How to choose the best credit card
How many Americans own credit cards?
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Despite the decline in credit card accounts, credit cards are found in most Americans’ wallets. Federal Reserve Bank of Atlanta data released in May 2021 found that in 2020, 79% of consumers had at least one credit card or charge card, which is the highest percentage since the Fed began conducting the Survey of Consumer Payment Choice in 2008.2
A credit card is defined as a card that allows the cardholder to make a purchase by borrowing funds paid back to the credit card company later. A charge card is a type of credit card that must be paid off in full every month.
Using the U.S. Census Bureau estimate of 253 million adults in the U.S.,3 that means nearly 200 million American adults have a credit card, a charge card or both.
However, lenders have shown caution when extending new credit, perhaps due to Americans’ financial challenges during the pandemic. Average new account credit lines decreased to $3,696 in the first quarter of 2021 from $5,128 the year before, according to a May 2021 TransUnion report. And the number of credit cards fell from 457.6 million in Q1 2020 to 454.6 million in Q1 2021.4
According to a survey conducted in August 2020 by Travis Credit Union, more and more Americans are going cash-free. Fifty percent of respondents said they used cash less during the pandemic than they did before the COVID-19 crisis. On top of that, 58% said they planned to stop using cash entirely after the pandemic.5
See related: How COVID-19 is possibly leading the cashless revolution
Types of credit cards Americans own
Americans tend to hold a variety of cards, but cash back credit cards are most popular. According to a 2021 survey of 2,000 Americans by The Ascent, from the investing site The Motley Fool, 46% of Americans own a cash back credit card, down from nearly 60% who had a cash back credit card in 2019. Also, 31% own a retail credit card, 25% own a low-interest card and 19% own an airline or other travel rewards card.6
Card ownership by age
Older consumers tend to carry the most cards. According to Experian, in the third quarter of 2020, baby boomers – those between 56-74 – carried, on average, 4.61 cards followed by:
Generation X – those between 40-55 – who carried 4.23 cards on average.
The silent generation – those 75 and up – carried 3.64 cards, on average.
Among younger cardholders, millennials – those between 24-39 – carried on average 3.18 cards and Generation Z – those between 18-23 – carried 1.91 cards.7
Young Americans are waiting longer to get their first credit card, possibly because younger consumers also are dealing with student debt. Additionally, the Credit CARD Act of 2009 bans credit card approvals for anyone under 21 years old unless they have an adult co-signer or can prove they have sufficient income to pay the bills.
However, that doesn’t mean young people are not using credit cards.
According to Sallie Mae’s 2019 “Majoring in Money” report, 57% of undergraduate students owned a credit card in 2019, and 38% of undergraduates have two or more cards.8
However, a higher percentage of college students (19%) have only one card, compared with college graduates or people who didn’t finish college (14%).8
Debit cards are still more popular, and 85% of undergraduate students carry debit cards. Students overall are more likely to use debit (85%) or cash (81%) than credit cards (57%).
Students prefer cash over any other payment method for in-store purchases of less than $20. Forty-three percent of college students do not use credit cards at all.8
The Ascent survey showed that while nearly 55% of consumers have maxed out at least one credit card, Generation Z (44%) was least likely to do so, followed by baby boomers (48%), millennials (51%) and Generation X (66%).6
However, millennials were most likely to fall more deeply into credit card debt because of the pandemic, according to a CreditCards.com survey conducted in May 2020. More than a third of millennial cardholders – 34% – said they incurred more debt during the pandemic compared to 23% of Generation Xers and 15% of baby boomers.9
Card ownership by state
Where you live can also play a role in how many credit cards you have. In every state, the average number of credit cards owned by consumers dropped in 2020, according to a 2021 study by Experian.7
New Jersey residents had, on average, the most credit card accounts in the third quarter of 2020 with 4.54. Other states in the top five include Connecticut (4.21), Rhode Island (4.16), Florida (4.15) and New York (4.14).7
On the low end, Alaska residents had the fewest credit card accounts in the third quarter of 2020, with 3.06 accounts. They were followed by South Dakota (3.22), Mississippi (3.26), the District of Columbia (3.26) and Wyoming (3.28).7
See related: 2020 state debt burden survey
Card ownership by credit score
Superprime (those with credit scores greater than 759) and prime borrowers (those with credit scores between 680-759) make up most credit card account holders. In fact, prime and above consumers represent 82% of all open credit card accounts, according to the ABA report.1
In Q4 2020, there were 31 million new accounts issued for superprime borrowers, 23 million new accounts issued for prime borrowers and 16 million issued for subprime borrowers (those with credit scores less than 680).1
Sources
American Bankers Association Credit Card Market Monitor, May 2021
The Federal Reserve Bank of Atlanta’s 2020 Survey of Consumer Payment Choice, May 2021
U.S. Census Bureau July 2019 estimate of U.S. population, and U.S. Census Population by Age and Sex 2019
TransUnion Industry Insights Report, Q1 2021
2020 Travis Credit Union Cash Survey
The Ascent from Motley Fool, “How Gen Z, Millennials, Gen X and baby boomers use credit cards”
Experian, “What is the average number of credit cards per U.S. consumer?”, April 2021
Sallie Mae “Majoring in Money” report, 2019
CreditCards.com, “Poll: 23% of consumers added to their card debt during the pandemic,” May 2020
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Watch out for your wallet! Do you live in one of the five U.S. states where car insurance rates are going up this year?
According to industry reports, rates are going up this year in Florida, Indiana, Massachusetts, New York and Rhode Island. For example, New York rates are expected to rise by 1.2%, and Indianaâs by 1.1%. Annoying, isnât it? Here you are, probably driving less than ever, and they want to raise your car insurance premiums.
Theyâre ripping you off. The good news? Thereâs something you can easily do about it.
A website called Insure.com makes it super easy to compare car insurance prices and make sure youâre not getting ripped off. All you have to do is enter your ZIP code and your age, and itâll show you your options.
Are you driving less than 50 miles a day? Do you have zero DUIs on your record? You could qualify for discounts.
Using Insure.com, people save an average of $540 a year.
Yup. That could be $500 back in your pocket just for taking a few minutes to look at your options.
Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He lives in one of these five states, and heâs mad about this.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
Perch is a new mobile app available for iOS that can improve your credit score by incorporating your rent history and recurring subscriptions such as streaming services.
Currently, Perch is only available through the Apple Store. There are some similar offerings out there, but I think this one is better. Itâs completely free and it reports to more credit bureaus.
Read more from our credit card experts.
Ask Ted a question.
Rent
Typically, your rental payment history does not appear on your credit reports. Thatâs a shame, because rent is the largest monthly expense for many households. It would be great if paying your rent on time helped you build your credit score.
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Subscribe to get the weekâs most important news in your inbox every week.
By providing my email address, I agree to CreditCards.comâs Privacy Policy
Your credit cards journey is officially underway.
Keep an eye on your inboxâweâll be sending over your first message soon.
There are some existing services that facilitate reporting your rent to the credit bureaus, but they typically charge fees. They can also get complicated, since many require your landlord to respond to the tracking company each month or mandate that they receive your payments through their platform). With Perch, you provide your lease details and grant read-only access to your bank account via Plaidâs secure API. That allows Perch to verify your payment history â without bugging your landlord or forcing you to change your payment method.
Even better, Perch can retroactively add up to 24 months of rental payment history to your credit reports with all three major bureaus. This could jumpstart your credit score in a big way. The company tells me their average customer improves their credit score between 60 and 160 points. And many who were previously unscorable instantly land between 670 and 690 â placing them in the âgood creditâ category. Thatâs incredible!
See related:Â How to pay rent with a credit card
SubscriptionsÂ
Perch also has a novel approach to monitoring subscriptions. Users notify the company which recurring subscriptions they want to include, and Perch provides them with a virtual debit card loaded up to that pre-approved amount. The user pays Netflix, Hulu, Spotify, Apple Music or another subscription service with that virtual card number. They then pay Perch back. Perch reports this virtual card payment activity as an additional tradeline on usersâ credit reports (note that Perch currently reports subscriptions to Equifax and TransUnion; it plans to add Experian by July).
See related:Â I signed up for Experian Boost. This is what happened
I asked Perch founder and CEO Michael Broughton what happens if someone doesnât pay them back â would that end up hurting their credit score? He said no. Perch really wants to help their users build credit, so it will not place a negative mark on a customerâs credit report in that situation â or even charge a late fee.
Instead, Perch relies on proactive measures such as cash flow underwriting and warnings if your account balance falls too low. If you donât pay, theyâll eventually prevent you from making future purchases. Broughton explained that their liability is very limited because they pre-approve these virtual card purchases and the eligible subscription services tend to charge modest amounts. He assured me that no one can get away with buying $500 Nikes and skipping town.
About Perch
Broughton is a 21-year-old graduate of the University of Southern California. He was inspired to found Perch after he had difficulty securing a loan for a $10,000 tuition shortfall. One of seven children born into a military family, Broughton was the first member of his family to attend college. Heâs now assisting others who wish to improve their financial lives. The companyâs investors include heavy hitters such as Citi, Sequoia Capital, SoftBank and Y Combinator.
The market is huge. FICO reports that 79 million Americans have subprime credit and another 53 million canât be scored because they lack a sufficient credit history. Broughton told me Perchâs initial sweet spot is 18-25 year-olds, but he also noted that many older adults could benefit, particularly immigrants and people rebuilding their credit after a misstep. He has big plans for expansion and believes Perch can benefit 100,000 people in 2021. The app formally launched in late January and is onboarding new customers in weekly batches.
See related:Â How to build credit
Broughtonâs ultimate goal is to spread the gospel of financial literacy and credit building. He wants to help people obtain their first credit cards and other financial products. âWe want to launch you into the credit world on a better foot,â he said. The way I see it, Perch is off to an excellent start.
Have a question about credit cards? E-mail me at ted.rossman@creditcards.com and Iâd be happy to help.
