Quick access to cash and credit is the priority, survey finds.
Millennials shell out for convenience.
That’s what a new survey to be released Friday and given exclusively to USA TODAY suggests when it comes to the generation’s use of alternative financial products that often come with high fees.
The survey of more than 1,000 people ages 18 to 34 by alternative financial products company Think Finance found that while 92% currently use a bank, nearly half, or 45%, say they have also used outside services including prepaid cards, check cashing, pawn shops and payday loans.
For a generation in which many are finding themselves cash-strapped, in debt from student loans and underemployed, convenience appears to trump getting stuck with extra charges when it comes to quick access to cash and credit.
“It’s flexibility and controllability that’s really important for Millennials,” says Ken Rees, president and CEO of Think Finance. “Banks don’t have great products for people who need short-term credit. They’re not really set up for that.”
And he points out that more than 80% of survey respondents said emergency credit options are at least somewhat important to them.
These are options that have been historically known for charging fees — check cashing can cost up to 3% of the amount of the check, and more depending on the company and how much you’re cashing. Most prepaid debit cards come with at least a monthly fee, and more fees for checking the account balance, ATM withdrawal or activation among others, found a survey of prepaid cards by Bankrate.com in April. Continue reading
Most small business owners are aware that their personal finances and business finances are inextricably linked. Apply for a small business loan, and the bank will ask for a personal credit score. Miss a payment on a business credit card, and the issuer is likely to report the transgression on the owner’s personal credit profile. Credit-card issuers can also go after personal assets in the case of default.
Since issuers treat business owners as proxies for their companies, it might seem business credit-card accounts would be afforded the same protections as are personal credit-card holders. Not so, says Odysseas Papadimitriou, chief executive of credit-card comparison website CardHub.com. Four years after Congress passed the Credit Card Accountability, Responsibility, & Disclosure (CARD) Act to make credit-card borrowing more transparent, business owners lack protection that individual consumers get. Continue reading
Women may earn less than men but they are better managers of credit.
According to a new report from Experian , women earn 23% less than men, but men have 4.3% more debt than women. Women also have a slightly higher average credit score of 675 compared to the men’s average of 674.
The study found that men use more of their available credit (31%) than women (30%).
The average man carried $26,227 in debt from credit cards, personal loans and auto loans compared to a $25,095 average for a woman.
Men are also taking out larger mortgages–an average of $187,245 for a man versus $178,140 for a woman. Men also have a higher incidence of late payments on their mortgages (5.7%) than women (5.3%). Continue reading