Category Archives for Uncategorized

7 Ways Couples Can Improve Their Credit | Brides

Being a couple often goes hand in hand with the merging of many things, some of which include hearts (of course), living spaces, families, and—for many—finances. Unfortunately, merging finances can be confusing and overwhelming; it’s not always a pleasant experience, especially if one or both partners have been struggling with their credit.

Janet Alvarez, personal finance expert at Wise Bread, explains that “while developing and maintaining a strong credit score is a lifelong process, there are some viable actions you can take in the short term to help boost your score quickly.” Read on for her expert advice to improve your score and take control of your credit.

While raising your credit limits can be bad news for over-spenders, those looking to boost their scores can benefit in doing so. This is because of something called your “credit utilization ratio.” Alvarez explains this as “a measure of the percentage of your available credit being actively used.” Essentially: “The more credit you have—and the less of it you use—the better the ratio and your credit score.”

Rental payments and rental history can tell an important story about making on-time consecutive payments. Unfortunately, these often go unreported. Alvarez advises using RentReporters, RentTrack, or a similar service that can make sure your payments get reported to credit agencies. She says, “By proactively signing up for one of these services, you can see a boost to your score in the vicinity of 50 points in a few months of on-time payments.”

While it may sound counterintuitive, it’s important to have a range of credit types within your profile, so taking on new types of credit (like gas or store cards) can help as long as they are used responsibly. “Having a variety of accounts that you pay on time (ranging from mortgages to student loans or credit cards) strengthens your score,” explains Alvarez.

The first step in repairing or improving your credit begins with knowing your score and ensuring it is accurate. Any signs of fraud or identity theft, inaccurate reports, or out-of-date information needs to be remedied. To tackle this, Alvarez says, “Go to to—at minimum—check it for free once a year, and if you want to be especially prudent, consider the free or low-cost credit-monitoring services offered by many credit-card companies in order to diligently track any changes.”

Alvarez warns against closing accounts, as it can damage your credit for a few reasons. “First, it reduces your credit utilization ratio, because you now have less credit available to your name. Second, it reduces the average age of your account history, which also lowers your score. The better bet is to simply pay off an existing account and use it only sparingly—and responsibly,” she says. Conversely, opening too much new credit can also damage your score and raise some red flags that you might be needing more credit for the wrong reasons. If you find yourself needing some more credit, “The better bet is to ask for credit-line increases on existing accounts,” says Alvarez, “or only open new ones judiciously.” Too many hard credit inquiries can lower your score.

Student loans are never fun, but defaulting on them is a huge mistake. If you find yourself in arrears with federal student loans, Alvarez says, “Uncle Sam can garnish your tax refunds or wages and prevent you from taking out any future student loans. It’s also a major credit blemish.”


Personal Loans Against Canadian Real Estate Hits A Record Rate of Growth | Better Dwelling

Canadian real estate leverage has been an increasing concern, and it it’s growing. Filings from Office of the Superintendent of Financial Institutions (OSFI), the federal regulator for banks, show that loans secured by real estate showed huge growth in September. In fact, these loans are now at a record high, and are printing record growth.

The total of loans secured against residential real estate for business and non business purposes is booming in 2017. Analysis of OSFI data shows $279.64 billion in loans in September, up $25.4 billion from the same month last year. That’s 9.92% growth, which is just off the peak of 12.10% established in June 2017. This year is the first year to see growth above 5%, in the 5 years of filings OSFI provided. The huge growth represents a significant increase, but some of these loans are being used for productive purposes.  Let’s break it down.

When people say “good debt,” this is the kind of debt they are typically referring to – borrowing for business. In September, banks held $31.68 billion of loans for business purposes, secured by residential real estate. That’s a massive 51.58% growth from the year before, which is just off peak growth established earlier this year. While the growth is huge, it is just a fraction of the total debt here.

Personal loans secured by real estate are experiencing record growth. These are the loans that we have no idea what they did with the money. These can be anything from renovation financing, to buying second homes, or even possibly using home equity to buy bitcoin – no one’s quite sure. At the end of September, banks held $248.95 billion in personal loans secured by residential real estate, a 6.91% increase from last year. This is the highest annual growth observed in the OSFI filings.

Home prices fluctuating is normal and most people just weather the storm, stay put and then sell later if at all…i.e. I am a middle class person and my retirement is tied to my house because I got fleeced in the last bad recession. I took some change out to help the kiddies if there is looming price depression won’t everyone have a collective freakout and accelerate a drop in housing prices? Thoughts?

Typically leverage capitulates movements, so the drop would be further down than it would naturally be. Expected, since market prices regress to the mean, and never actually sit on the mean. The longer it takes new buyers to capitalize however, may delay a recovery.

Housing in a big city isn’t usually a balance sheet loss, but an economic loss carried over time. If your house is the same price 10 years down the line, you could have rented and banked the difference. Then bought it with your fresh gains.

Could, should, would. Those that argue for renting and banking the difference, then buying when the market is down is just a convoluted way of trying to time the market, and that’s not possible to do. If your house is the same price 10 years from now, that’s unfortunate, however you only have 15 years of mortgage payments left while the newcomer is paying exactly what you did 10 years ago but has 25 years of payments to look forward to. In the interim, you’ve enjoyed 10 years in a home of your own, customizing and living on your own terms, while the renter has been dealing with cockroaches, mice, rats, bedbugs, noisy stinky apartment dwellers, landlords that don’t fix anything, and drafty windows.

As well, renter will be paying more monthly every year the rent increases. The buyer could be paying the same or less than previously for mortgage interest when the mortgage is renewed which maintains the same monthly cost or lowers it.

No, not the same. The issue in the US was related to sub-prime borrowers; the dregs (yes I’m a prick) who shouldn’t have been able to get a mortgage at all. The primary mortgage,not secondary debt, was the fatal flaw. This is much worse. There are many people with great credit and a ‘path to retirement’ who thought helping out their children/grandchildren was a good idea and if they can’t get out it will have huge ramifications.


Bitcoin smashes through $15,000, soaring 20% in just 24 hours | Financial Post

Bitcoin touched US$15,000 for the first time on Thursday, extending its advance this month to more than 50 per cent as concerns mounted the cryptocurrency’s rapid rise masks risks.

The world’s biggest cryptocurrency is surging on expectations that new bitcoin derivatives products expected to begin trading this month will boost mainstream demand. Some of the world’s biggest brokerages criticized those plans on Wednesday, telling regulators the contracts have been rushed to market without enough due diligence.

Bitcoin jumped as much as 18.4 per cent to US$15,797 on Friday, before paring gains to US$14,818 at 12:20 p.m. in London. That takes the digital currency’s surge this year to more than 1,400 per cent and its market capitalization to US$257 billion.

“This is irrational exuberance,” Royal Bank of Scotland Chairman Howard John Davies said in an interview on Bloomberg TV on Thursday. “This is a very, very unusual market, that shows we’re not in a normal two-way trading market.”

Davies agreed with the brokerages’ concerns that exchanges which are set to offer bitcoin futures and options have failed to get enough feedback from market participants on margin levels, trading limits, stress tests and clearing. Those warnings were laid out in an open letter via the Futures Industry Association on Wednesday.

Cboe Global Markets Inc. has said it will start trading bitcoin futures on Dec. 10, while CME Group Inc.’s contracts are set to debut on Dec. 18. Nasdaq Inc. is planning to offer futures in 2018, according to a person familiar with the matter. Cantor Fitzgerald LP’s Cantor Exchange is creating a bitcoin derivative, and startup LedgerX already offers options.

ASX Ltd., the main exchange operator for equities and derivatives in Australia, on Thursday said it will start using blockchain, the technology that underlies bitcoin, to process equity transactions. The digital currency also got a boost from a successful test of a technology that will attempt to ease congestion in purchases of the digital currency.

Lightning Network, the company behind the technology, is trying to move some transactions away from the blockchain by allowing buyers and sellers to transact privately and later broadcast their activity to the public network.

The price of bitcoin cash fell on the news, slumping 9.1 per cent to US$1,342.86, according to prices on The cryptocurrency rival offers a separate solution to bitcoin’s congestion issue.


Threat of Canadian financial crisis eases (but don’t take that to the bank) – The Globe and Mail

Certainly, the picture is improving. Canada has finally dipped below a key level on an early-warning indicator reported by the Bank for International Settlements, a body made up of the world’s central banks.

That key level is 10, above which a country is considered at risk of huge strain on the banking system within three years. Known as the credit-to-GDP gap, Canada had been above that mark for some time, but had a better showing of 9.4 in the second quarter, the BIS said in its latest report, released Sunday.

The gap measures the ratio of debt to gross domestic product, compared to its long-term trend. So Sunday’s measure means Canada is now 9.4 percentage points above the long-term average.

In measuring all credit to the non-financial sector, it takes in everything from loans to debt securities, and is aimed as a guide for the strength of capital buffers among commercial banks.

Over the past five years, the gap in Canada has run from a low of 6.9 in 2012 to a peak of 16.9 in the third quarter of last year, after which it began to decline.

So the threat has eased, but it hasn’t gone away. Consider a BIS reading above 10 as flashing red, and anything between 2 and 10 as flashing yellow.

Not only that, Canada’s 9.4 is still high among the countries measured.

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Swollen household debt and fast-rising home prices have been a source of angst in Canada for quite some time, prompting federal and provincial governments, along with the commercial bank regulator, to bring in a series of measures. Consumers have also been leaning heavily on home equity lines of credit, or HELOCs.

The key measure of household debt to disposable income has been at or near record levels as Canadians borrowed ever more to pay those high prices, with growth in credit outstripping that of incomes. It stands now at 167.8 per cent, which means Canadians owe $1.68 for each dollar they have to spend.

The Bank of Canada warned again just last week that this is a major threat to the financial system, though it expects the problem to ease along with the new measures. One of those measures, for example, will make it more difficult to qualify for a mortgage.

Another part of the BIS report puts Canada in a noteable category for household debt alone. This includes countries whose household debt as a percentage of GDP is “high and rising” since the 2008 global meltdown.

Unlike the credit-to-GDP gap, reported for the second quarter, this study looks at household debt over a longer timeframe.

And the potential impact is high.

“Elevated levels of household debt could pose a threat to financial stability, defined here as distress among financial institutions,” BIS economist Anna Zabai said in the report.

“Contrary to the U.S., Canadians have been increasing leverage since the [Great Financial Crisis],” said Citigroup economist Dana M. Peterson, noting that about two-thirds of this borrowing is mortgage debt and much of the non-mortgage credit is in the form of HELOCs.

High home prices are largely behind the elevated debt-to-disposable income measure, she said, attributing the housing market’s run-up to low interest rates, rising incomes, strong commodity prices before the oil shock, migration and immigration, land restrictions, HELOC-friendly policies, speculation and foreign money.


Justin Trudeau Delivers Formal Apology To LGBTQ Canadians | HuffPost

Canadian Prime Minister Justin Trudeau delivered an official apology for his country’s past persecution of LGBTQ public servants on Tuesday.

The address delivered in the House of Commons comes just over a week after Trudeau announced he would apologize for Canada’s dehumanizing treatment of LGBTQ service members and other government employees throughout the second half of the 20th century.

“Imagine, if you will, being told that the very country you had willingly laid down your life to defend doesn’t want you, doesn’t accept you, sees you as defective, sees you as a threat to our national security,” Trudeau said Tuesday, speaking in both French and English.

“Not because you can’t do the job or because you lack patriotism or courage, no, but because of who you are as a person and because of who your sexual partners are.”

From the 1950s until 1992, many public servants that Canada’s government suspected of being gay were interrogated, forced to sit through humiliating tests that sought to expose their sexual orientation, and expelled from their Canadian government positions.

That treatment happened on “a timeline more recent than any of us would like to admit,” Trudeau said Tuesday, calling the oppression “an often overlooked part of Canada’s history.”

One of the most egregious tools used was the “fruit machine,” a device he mentioned by name Tuesday that claimed to reveal a person’s sexual orientation based on their response to various sexual stimuli.

“It is my hope in talking about these injustices, in vowing to never repeat them, acting to right these wrongs, we can begin to heal,” Trudeau said.

Throughout his two years in office, Trudeau has also issued apologies for Canada’s past treatment of indigenous peoples and for the 1914 “Komagata Maru incident,” in which Canada rejected hundreds of Sikh, Muslim and Hindu passengers attempting to seek refuge in the country, forcing them to return to a violent situation back in India.


Equifax takes down customer service page after reports of new hack | Toronto Star

Hackers reportedly altered Equifax’s credit report assistance page so that it would send users malicious software disguised as Adobe Flash.
Equifax Inc. is reporting that a third-party vendor the credit rating agency uses to collect performance data on its U.S. Equifax website was serving malicious content.

“Since we learned of the issue, the vendor’s code was removed from the webpage and we have taken the webpage offline to conduct further analysis,” an Equifax spokesperson said in an emailed statement Thursday.

“Equifax can confirm that its systems were not compromised and that the reported issue did not affect our customer dispute portal.”

Equifax says 100,000 Canadians may have been in data breach

Earlier Thursday, Equifax Canada said its U.S. parent company was temporarily taking down one of its customer services pages amid reports that hackers had allegedly altered Equifax’s credit report assistance page so that it would send users malicious software disguised as Adobe Flash.

“We are aware of the situation identified on the website in the credit report assistance link,” Equifax Canada spokesperson Tom Carroll said in an emailed statement.

“Our IT and security teams are looking into this matter, and out of an abundance of caution have temporarily taken this page offline.”

Carroll did not respond to direct questions about any potential breach to Equifax Canada’s website.

The news comes as Equifax Inc. continues to deal with the aftermath of a cyber breach earlier this year which allowed the personal information of 145.5 million Americans, and 8,000 Canadians, to be accessed or stolen.

The massive data breach has also led to a number of high-profile departures at the Atlanta-based consumer credit reporting agency, including its chief executive, chief information officer and chief security officer.

In early October, Equifax revised the number of consumers potentially impacted in the breach — bumping up the total in the U.S. to 145.5 million and reducing the number in Canada from an estimated 100,000 to 8,000.

For these Canadian consumers, Equifax says the information that may have been accessed includes name, address, social insurance number and, in “limited cases” credit card numbers.

On its website, Equifax’s Canadian division says it has not yet mailed out any notices and made clear it would not be making any unsolicited calls or emails about the issue.

In September, Equifax reported that its investigation had shown that hackers had unauthorized access to its files from May 13 to July 30. Equifax Canada said at the time it was working closely with its parent company Equifax Inc. and an unnamed, independent cybersecurity firm conducting the ongoing investigation.

The cyberattack occurred through a vulnerability in an open-source application framework it uses called Apache Struts. The United States Computer Readiness team detected and disclosed the vulnerability in March, and Equifax “took efforts to identify and to patch any vulnerable systems in the company’s IT infrastructure.”


Stricter OSFI rules on mortgage lending ‘will do more harm than good’: Fraser Institute | Financial Post

Add another group to the growing list of organizations trying to convince the federal banking regulator to back down from its plan to tighten the reins on consumers borrowing with low ratio loans.

The Fraser Institute said Wednesday the changes to consumers with 20 per cent down could make it harder for them to access mortgages, especially in higher-priced markets. Those buyers could turn to less regulated finance companies or perhaps turn to shorter, more volatile variable loans to meet qualification criteria.

“The proposed stress test for financially sound homebuyers is unnecessary and will do more harm than good,” said Neil Mohindra, a public policy consultant and author of the Fraser report, Uninsured Mortgage Regulation: From Corporate Governance to Prescription.

The Office of the Superintendent of Financial Institutions’ (OSFI) will release final changes to its mortgage lending guidelines, also known as B-20, by the end of the month and they will go into force two or three months later.

Key among the changes is a stress test for consumers borrowing with 20 per cent or more down – a level previously not heavily regulated — requiring them to qualify at a rate 200 basis points or two percentage points above their contract. In 2016, the government forced borrowers with less than 20 per cent down, and whose loans are backed by Ottawa, to qualify based on the five-year Bank of Canada posted rate which is now 4.89 per cent.

Some economists have questioned whether the changes from OSFI are needed at a time when the country’s hottest market, the Greater Toronto Area, has already cooled off and seen average sale prices on a non-seasonally adjusted basis drop about 31 per cent from the April peak.

Real estate groups have also heavily opposed the changes but those in favour of a crackdown point to a massive increase in debt, including mortgage debt. Statistics Canada said in September that household debt as a percentage of disposable income had a reached a record 167.8 per cent in the first quarter.

“We clearly see the potential risks caused by high household indebtedness across Canada, and by high real estate prices in some markets,” Jeremy Rudin, the head of OFSI, said this month. “We are not waiting to see those risks crystallize in rising arrears and defaults before we act.”

More importantly, the group says the rate of arrears, made up of borrowers more than 90 days behind in their payments, is basically the same as it was in 2002. The rate hasn’t exceeded 0.45 per cent and that includes 2009 financial crisis when the rate rose to five per cent south of the border.

“OSFI’s emphasis on corporate governance worked well during the financial crisis. Shifting towards more prescriptive rules is an ominous sign,” Mohindra said.


IMF warns Canada over perilous, longer-than-average credit boom – The Globe and Mail


The boom in Canada has been longer than the average of these benign booms

The IMF appears to be taking pains to warn Canada about a dangerous credit boom.

Indeed, Canada comes in for special mention in an IMF global financial stability report released today.

Canada is not alone as the body also cited a handful of other countries for high credit levels and “debt-servicing pressures.”

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“In other economies where debt service ratios for the private non-financial sectors have risen to high levels – such as Australia, Brazil, Canada, China, and Korea – there is a particularly strong need for financial sector policy vigilance to guard against any further buildup of imbalances,” the IMF said.

Such issues go hand in hand with rising property values, and those in Canada have spiked, largely in the Vancouver and Toronto areas.

Provincial and federal governments, along with regulators, have done just what the IMF suggests, taking action to tame overheated markets. But Vancouver has since rebounded, and Toronto is showing signs of following suit.

With debt levels so high, the Bank of Canada’s two recent interest rate hikes were a warning shot on their own, as markets believe more increases will follow, heightening the vulnerability of overburdened consumers.

Indeed, Bank of Nova Scotia warned just last week that it expects average mortgage carrying costs for new home buyers will spike by about 8 per cent in 2018 and 4 per cent a year later.

The IMF compared Canada to both Australia and the United States, noting the stark differences.

“Although not all credit booms lead to recessions it is interesting to compare the credit booms in economies most likely to face payment pressures with past experience,” the group said.

“While the boom in Australia is similar to the average of past credit booms that did not lead to a financial crisis, the boom in Canada has been longer than the average of these benign booms, and the boom in China has been steeper than the average of past credit booms that did coincide with a financial crisis,” it added.

There was no suggestion about what could happen, however, only comparisons and a history lesson.

“Experience has shown that a buildup in leverage associated with a run-up in house price valuations can develop to a point that they create strains in the non-financial sector that, in the event of a sharp fall in asset prices, can spill over to the economy.”

In a special section, the IMF also noted the evolution of household debt levels in Canada and the U.S., which were similar until the financial crisis.

Between 1995 and early 2008, such levels rose to 100 per cent of gross domestic product from 56 per cent in the U.S., and to 80 per cent from 62 per cent in Canada.

“Afterward, U.S. household debt fell to below 80 per cent by early 2017, whereas in Canada, it continued to rise to more than 100 per cent,” the IMF said.

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“This reflects different house price and unemployment trends, as well as difference in the evolution of net wealth, which left Canadian households relatively better off than their U.S. counterparts.”

In Canada, it added, household debt “became more tilted toward” mortgage debt, which rose to 66 per cent of the total by last year. In the U.S., the share of mortgage debt fell while consumer credit rose markedly, largely because of rising student debt.

Not only that, the leverage among Americans stayed “broadly constant,” but for the poor, among whom it rose marginally.

“In Canada, on the other hand, debt-to-income ratios increased across all income groups, resulting in an average ratio almost 50 per cent higher than in the United States,” the IMF said.

“Moreover, highly indebted households (those with debt-to-income ratios above 350 per cent) held more than $400-billion (Canadian), or 21 per cent of the total household debt in Canada at the end of 2014, up from 13 per cent before the crisis.”

“The past recession in the United States showed that highly indebted households substantially reduced spending, which contributed to a significant decline in aggregate demand.”

“As the negotiations proceed, the issues covered are becoming more contentious (the less contentious issues have been quickly dealt with) and these talks will start to touch on difficult issues such as rules of origin and Trump’s ‘sunset clause,’ which would see the whole NAFTA agreement re-examined every five years,” said Adam Cole, Royal Bank of Canada’s chief currency strategist in London.

“The U.S. dollar lacks a clear direction against the G10 majors, after President Donald Trump’s quarrel with the senator Bob Corker raised doubts on the feasibility of the tax reforms again,” said Ipek Ozkardeskaya, senior market analyst at London Capital Group.


“We clearly see the potential risks”: OSFI to finalize new mortgage criteria this month | Financial Post

“We clearly see the potential risks”: OSFI to finalize new mortgage criteria this month

A document outlining the changes to mortgage underwriting rules, governed by industry guidelines know as B-20, will be published by the Office of the Superintendent of Financial Institutions sometime in October, with the changes coming into effect two to three months later, Jeremy Rudin said during a speech in downtown Toronto.

The “broad thrust of the changes will be similar to what we had in the (recent) consultation process,” and an earlier letter outlining OSFI’s proposals, he said.

These include measures aimed at ensuring banks are lending money to home buyers who can manage their loans even if interest rates rise, and reducing the banks’ reliance on loan-to-value calculations in markets where home prices are rising rapidly.

“We clearly see the potential risks caused by high household indebtedness across Canada, and by high real estate prices in some markets,” Rudin said during his speech. “We are not waiting to see those risks crystallize in rising arrears and defaults. Rather, we are adapting our standards to new developments.”

Speaking to media after the speech, Rudin said the bank regulator is still finalizing some controversial details of the overhaul, including a proposed stress test that would force uninsured home buyers to qualify for mortgages at rates two percentage points above those stipulated by their contracts.

“We’re looking at that… (It’s) yet to be finalized,” Rudin said, noting that OSFI has received feedback about the stress test and potential consequences during industry consultations in recent months.

Critics have publicly suggested the stress test could cause a shift to shorter-term loans in order to qualify more borrowers, and could potentially send more homebuyers to riskier lenders that aren’t federally regulated — and therefore aren’t bound by OSFI’s rules.

Rudin said that while some consequences may not be intended, or positive, OSFI’s role as the prudential bank regulator requires it to nonetheless ensure banks can manage their loan books though a variety of scenarios. The regulator must also work to ensure mortgage underwriting reasonably assesses a homebuyer’s capacity to carry the loan obligation, he said.

Asked if a pair of recent Bank of Canada overnight interest rate increases have tempered his view on the need to take steps to cool the housing market since the proposals were made last June, Rudin suggested his views have instead been reinforced.

The rate hikes serve as “a useful reminder of the point we’re trying to make … (that) interest rates can change,” he said.

Industry watchers have been closely monitoring OSFI’s latest proposals, which followed earlier government and policy initiatives to cool hot real estate pockets including those in Vancouver and Toronto.

CIBC deputy economist Benjamin Tal previously called on the regulator to delay implementation of the latest proposals, and he wondered Tuesday whether a compromise could still be worked out. When the changes were first proposed by OSFI in June, Tal said they could slow growth in mortgage originations by a full percentage point to around 4.5 per cent.

“Some type of stress test is going to happen, Rob McLister, founder of mortgage rate comparison website, said Tuesday. “The only thing we don’t known is what type of qualification could be used.”

A decision to go with the Bank of Canada posted rate as a stress test for uninsured mortgages would maintain consistency with the insured market, added McLister, who previously called OSFI’s proposal to expand stress tests into the uninsured market one of the “biggest mortgage changes of all time.”

Roughly half of the $1.6 trillion in total mortgage debt in Canada is supported by government-backed insurance, but insured mortgages are shrinking as a percentage of the overall market.


Thinking Of Getting A Payday Loan? Read This First

September 04, 2017 1:09 PM

A reader: I’m recently divorced and have been having trouble making ends meet. I’m waiting for child support payments to come in. So, I’m thinking about getting a payday loan. There are lots of offers online. Is this a good idea?

Action Line: You may be tempted by some of the ads you are seeing, but before you click on anything check on the reputation of the company with BBB at And the Federal Trade Commission (FTC) has these tips for you:

It’s important to shop and compare available offers before you decide to take out an online payday loan.

1. Shop for the credit offer with the lowest cost. Try to find out the annual percentage rate (APR) and the finance charge (including loan fees and interest, among other credit costs) of different options before you select a credit offer. You are looking for the lowest APR. If you are shopping online and can’t find the APR and the finance charge, visit lenders in person.

2. Consider a small loan from a credit union. Some banks may offer short-term loans for small amounts at competitive rates. A local community-based organization may make small business loans, as well. A cash advance on a credit card also may be possible, but it may have a higher interest rate than other sources of funds. Find out the terms before you decide.

3. Ask for more time. Contact your creditors or loan servicer as quickly as possible if you are having trouble making a payment. Many may be willing to work with you if they believe you are acting in good faith. They may offer an extension on your bills: Find out what the charges are for that service. There could be a late charge, an additional finance charge, or a higher interest rate.

4. Make a realistic budget, including your monthly and daily expenditures, and plan, plan, plan. Try to avoid unnecessary purchases: The costs of small, every day items like a cup of coffee add up. At the same time, try to build some savings: Small deposits do help. A savings plan – however modest – can help you avoid borrowing for emergencies. Saving the fee on a $300 payday loan for six months, for example, can help you create a buffer against financial emergencies.

5. Find out if you have – or if your bank will offer you – overdraft protection on your checking account. If you are using most or all the funds in your account regularly and you make a mistake in your account records, overdraft protection can help protect you from further credit problems. Find out the terms of the overdraft protection available to you – both what it costs and what it covers. Some banks offer “bounce protection,” which may cover individual overdrafts from checks or electronic withdrawals, generally for a fee. It can be costly, and may not guarantee that the bank automatically will pay the overdraft.

Action Line is written by Blair Looney, president and CEO for the Better Business Bureau serving Central California. Send your consumer concerns, questions and problems to Action Line at the Better Business Bureau, 2600 W. Shaw Lane, Fresno, CA 93711 or

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