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Mortgage Rates Jan. 13: Bump Up; Foreclosures Hit 10-Year Low

Thirty- and 15-year fixed mortgage rates rose noticeably today, while 5/1 ARM rates rose by a hair, according to a NerdWallet survey of mortgage rates published by national lenders on Thursday.

Mortgage Rates Today, Friday, Jan. 13 (Change from 1/12) 30-year fixed: 4.30% APR (+0.04) 15-year fixed: 3.70% APR (+0.03) 5/1 ARM: 3.84% APR (+0.01) Nationwide foreclosure activity hits 10-year low

According to a report released Thursday by ATTOM Data Solutions, a company that runs a national property database, foreclosures hit a 10-year low in 2016. Foreclosure filings, which included default notices, scheduled auctions and bank repossessions, were made on 933,045 properties in 2016, which was a 14% decrease from the previous year. Foreclosure filings haven’t been lower since 2006, when they were made on 717,522 properties.

» MORE: Calculate how much house you can afford

Legacy foreclosures on mortgages that originated between 2004 and 2008 made up 55% of all loans actively in foreclosure by the end of 2016, according to the report. The District of Columbia had the highest share of legacy foreclosures, with 76%. Hawaii had the second-highest at 66%, followed by New Jersey at 64%, Nevada at 63%, and Delaware and Massachusetts each at 61%.

“The national foreclosure rate stayed within a historically normal range for the third consecutive year in 2016, even as banks continued to clear out legacy foreclosures from the last housing bubble, particularly in the final quarter of the year,” Daren Blomquist, senior vice president of ATTOM Data Solutions, said in the news release.

“Foreclosures completed in the fourth quarter had been in the foreclosure process 803 days on average, a substantial jump from the third quarter and indicating that banks pushed through significant numbers of legacy foreclosures during the quarter. Despite that push, we still show that more than half of all active foreclosures nationwide are on loans originated between 2004 and 2008, with a much higher share of legacy foreclosures in some markets.”

Twelve states and the District of Columbia saw an increase in overall foreclosure activity in 2016 compared to 2015, and 15 states plus D.C. saw a year-over-year increase in foreclosure starts in 2016.

Overall, foreclosure starts last year were down 16% compared to 2015, with a total of 478,857 properties that started the foreclosure process in 2016. This is a 78% drop from the peak of over 2.1 million foreclosure starts during the housing crisis in 2009, and is the lowest level since ATTOM began tracking foreclosure starts in 2006.

Homeowners looking to lower their mortgage rate can shop for refinance lenders here.

NerdWallet daily mortgage rates are an average of the published APR with the lowest points for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

Michael Burge is a staff writer at NerdWallet, a personal finance website. Email:

Front-Load Your IRA in January for a Bigger Payoff

Happy New Year! Do you have $5,500 to spare?

It’s an uncomfortable question, especially if your credit card is still smoking from last month. There’s no hangover quite like a holiday financial hangover.

But I ask because that’s the amount it takes to fully fund a traditional or Roth IRA for a year, and there’s a lot of value — a five-digit value — in front-loading your contributions.

What that means: If you do have $5,500 — say from an end-of-year bonus, overstuffed emergency fund or taxable investment account — consider adding it to your IRA now, rather than waiting until the contribution deadline as most people do. (If you haven’t yet maxed out your 2016 contribution, do that first. You can contribute until the April 18 tax deadline.)

And if you don’t? You probably already know you’re far from alone. But you can still read this with an eye toward scraping the money together ASAP. January is all about stretch goals, right?

Why now is better than later

It comes down to compound interest, which is as close as you’ll get to having your own money tree. As your investment earns a return, future returns are based on that now-larger balance.

That’s why a 25-year-old can invest $10,000 today and end up with $100,000 at age 65 — assuming a 6% average annual return — but a 45-year-old would have to invest more than $30,000 to end up with $100,000 by the same age.

A smaller head start makes a pretty striking case, too. You have a little more than 15 months to make an IRA contribution for each tax year, from January until the tax-filing deadline the following April. The robo-advisor Betterment compared average gains on 10 annual $5,500 IRA contributions — one set made on the first possible day in January and one set made the last possible day in April the next year — using 10-year periods of S&P 500 returns since 1928.

The result: The early contributions had a $14,507 balance advantage after 10 years, on average.

“By front-loading, you end up with almost a third more after 10 years,” says Dan Egan, Betterment’s director of behavioral finance and investing. Egan found that only in individual years with serious market crises — the Great Depression, the dot-com bust — did early investors fail to earn a premium.

“This is purely a time in the market effect,” Egan says. “There are periods when you can get unlucky and happen to invest right before a market downturn, and [being early] ends up not being a good thing. But at the end of the day, what’s happening here is you have 15 months that you wouldn’t have if you waited until the following April.”

It also gets the money out of your hands

Your brain thinks now is better than later, too — but by that it means, “Happy hour today, worry about retirement when you’re old and gray.” The pull of instant gratification, as evidenced by the marshmallow test, is strong.

So there’s a behavioral perk to front-loading. The most successful savers treat savings as an expense. When deciding the rent, mortgage or car they can afford, they look at their balance after they’ve set money aside — ideally 10% to 15% of income.

You wouldn’t tell the electric company you’ll be paying only half your bill going forward because you bought a Lexus on a Toyota budget — not without a couple of flashlights handy. Shortchanging your savings to fund spending feels more reasonable, but it’s a good way to turn out the lights on your future self. (I say that somewhat jokingly, but that kind of financial insecurity is a very real concern for millions of retirees.)

When you fund your IRA at the beginning of the year, you’re not just mentally setting aside that money. IRA distribution rules make it hard — but not impossible — to get back.

» MORE: Roth IRA rules for 2017

Getting ahead is harder than it sounds

I’m not pretending that it’s easy to front-load your IRA. Many investors don’t fund them until the last possible second because they don’t have the money until then. NerdWallet’s end-of-year study found that only one-fifth of Americans who are saving for retirement planned to max out their IRA for 2016.

If you contribute a bit from each paycheck instead, you’ll still have a time advantage over people who wait and make their contribution at the finish line each April. This extra bump in investment growth isn’t worth “impoverishing yourself,” as Egan puts it. It’s just a nice bonus.

But if you want to be able to make a January lump-sum contribution for the year, consider this a first push. After all, holiday spending guilt isn’t the only feeling running high now — willpower and resolve are, too. Take advantage.

Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @arioshea.

This article was written by NerdWallet and was originally published by Forbes.

Why January Is the Best Time to Buy a Home

Spring and summer are historically the most popular times to buy a home. The weather is warm, inventory is high and the school year is winding down or done. But those who shop during this peak buying season also face more competition and higher prices. Buyers willing to brave the colder weather can benefit in multiple ways by purchasing a home now.

While winter homebuyers generally encounter a lower inventory, a September 2016 NerdWallet study found that they have the advantage of less competition. Additionally, the study showed that home prices in January are typically the lowest they’ll be all year. And in 2017, with a likely increase in mortgage rates on the way, there are several reasons why January is the best time to buy a home.

Prices are likely to only go higher

Home prices in January typically take a dip compared with the summer buying season. In its report, NerdWallet analyzed two years of data for the 50 most populous U.S. metro areas and found that in January and February, home sales prices were 8.45% lower on average than in June through August.

The outlook for January 2017, though, is a little different after an abnormally strong fall housing market nationwide, says Jonathan Smoke, chief economist at Even though the summer seasonal cycle was still in play in 2016, he says, sales in October and November were much stronger than average, and housing prices in January haven’t dropped as much as in past years.

“[Home] prices are likely to increase even more than you typically see in spring because of low levels of inventory and because we didn’t see the normal weakness we see in fall,” Smoke says.

Less competition

Home prices may not have taken their usual dip this January, but Smoke says it’s still a favorable time to buy due to the ratio of inventory to sales — the number of homes on the market compared with the amount of competition. In 2016, there were almost twice as many people buying in June as there were in January, he says. This is in line with NerdWallet’s analysis of data from the previous two years, which found a 47% drop in sales in January when compared with July in the 50 largest metro areas.

Home inventory, meanwhile, doesn’t vary as much as price throughout the year, Smoke says, noting that there were 21% fewer homes on the market in the winter months of 2016 than in the summer.

“You basically face almost half of the competition with almost the same amount of inventory in the market,” Smoke says. This potentially means fewer homes with multiple bidders and more room for negotiating with sellers.

During nonpeak homebuying periods, there also tends to be a larger discrepancy between listing prices and sale prices, according to NerdWallet’s analysis. This can mean hidden savings for buyers. The September 2016 study found that in the previous two Januarys, the median home sold for $7,003 less than the listing price.

Mortgage rates expected to rise

After hitting historic lows, mortgage rates started rising in fall 2016. This year, economists expect additional rate increases, which means higher monthly payments for future homeowners.

“As we look toward spring and later in 2017, that’s another reason to buy in January and February,” Smoke says. “Because rates are expected to be about 50 basis points, or half a percent, more as the year goes on.”

With mortgage rates likely the lowest they’ll be all year — and with lower prices and less competition — January is an ideal time to make your bid.

Emily Starbuck Crone is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @emstarbuck. Dan Tonkovich is a data analyst at NerdWallet. Email:

Home Equity Line of Credit Rates to Rise; What Should You Do?

Mortgage rates may be a mystery; they move up one day and down the next, often befuddling the experts. However, the prime rate, which is the foundation for the interest you’re charged on home equity lines of credit, is a bit more transparent.

The Federal Reserve establishes short-term rates — and indirectly the prime rate — in an effort to reach economic targets. When the Fed raises rates, mortgage rates may or may not respond immediately, but the prime rate reacts right away. With one increase in each of the past two Decembers, and with a Fed plan to raise rates three more times this year, it’s pretty clear: Your HELOC rate is likely heading higher.

Primed for higher rates

“HELOC loans are generally a function of prime plus something,” says Brian Sacks, branch manager of HomeBridge Financial Services in Pikesville, Maryland. That “something” is a margin, a set markup that varies by lender. For example, if the prime rate is 3.75% and a lender adds a margin of two percentage points, your HELOC interest rate would be 5.75%.

“Prime will likely go up several times in the coming year,” Sacks says. “And certainly, long term, prime is likely to continue to rise.”

He says we’ve likely hit the “low end of the interest rate cycle for quite some time.”

If you’re going to be staying in the same home for more than the next two to three years, Sacks says you should seriously consider refinancing your home equity line of credit into a fixed-rate loan.

Big balance? Beware but don’t panic

“It’s still relatively inexpensive to borrow,” says Sean Andrews, senior manager for consumer credit products with KeyBank in Cleveland. He says traditional second-mortgage HELOC borrowers, who have tapped their home equity in a line of credit for home improvements and the like, still have quite a bit of headroom before higher rates start encouraging a change in plan.

However, for those homeowners who have a substantial balance, it might soon be time to seek a fixed-rate option, he adds. In that case, keep an eye on the prime rate.

For those with first-lien HELOCs

Over the past few years, as the prime rate remained in the cellar, Andrews says some borrowers began using HELOCs to refinance their primary, or first-lien, mortgage. First lien means the loan is first in line from a collection standpoint — the highest priority debt placed on a property.

One reason borrowers used a HELOC instead of a typical purchase mortgage: HELOCs often don’t have closing costs, he says, though some lenders will require you to pay an annual fee or origination charge.

Refinancing into a HELOC with no closings costs has been very attractive to homeowners, particularly those who didn’t plan on being in their home long term. Now, as rates start moving higher, Andrews says some customers have already begun moving those first-lien HELOCs to fixed-rate loans.

The case for a HELOC conversion

Dodging higher interest rates doesn’t mean you have to give up your home equity line of credit. Many banks let customers take a portion of their variable-rate line and convert it to a fixed-rate loan.

“It’s taking a chunk of your line and fixing [the rate] so that you can protect yourself from future rate movements,” Andrews says. You still have the remaining available line of credit to draw on as you desire, with variable-rate interest charged only when the proceeds are drawn.

The cost of waiting

While it may be human nature to put such decisions on hold for a while, waiting to consider your options for too long can get you stuck on a ramp of rising interest rates.

Rates could have a “significant and consistent pattern of going up,” thus rendering a HELOC unaffordable, Sacks says. Even if your HELOC has a lifetime rate cap that limits how high your interest can rise, it may be a good time to shop options, he says.

“If nothing else, it’s worth exploring the opportunity of refinancing,” by perhaps combining your first and your second mortgage in a refinance.

“During these moments in time, when rates actually thaw and start moving, customers should unpack their agreements,” Andrews says. By dusting off and reviewing those loan docs now, you might prevent the potential impact of procrastination.

If you wait to fix your rate until after interest rates have made a significant move higher — “I want to be honest with you, at that moment, it’s too late.”

Hal Bundrick is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @halmbundrick.

Rideshare Insurance for Drivers: Where to Buy, What It Covers

As Uber and Lyft have grown in popularity, auto insurance companies have expanded their efforts to meet the demand from drivers for coverage. Typically, rideshare insurance covers personal use and adds coverage for at least part of the time that drivers are signed in to a ridesharing app.

In this article:

Where to get rideshare insurance

Who needs rideshare insurance

How to buy rideshare insurance

What happens if you have an accident

How to report an accident and file a claim

Where to get rideshare insurance

Not all insurance companies offer rideshare insurance policies, nor is coverage available in all states.

These three insurance companies offer the most complete rideshare insurance packages.

Insurer Cost above traditional policy States where available Worth noting Erie Between $9 and $15 per month more than personal auto insurance that includes “business use.” DC, IL, IN, KY, MD, OH, PA, TN, VA, WI, WV Get a quote Coverage applies whether driving for business or personal use, and during every part of the trip: before, during and after the ride. Farmers Varies AR, AZ, CA, CO, GA, IA, ID, IL, IN, KS, MD, MI, MN, MT, ND, NE, NJ, NM, NV, OH, OK, OR, TN, TX, UT, WI Get a quote Fills gap by extending drivers’ personal coverage limits from the time they log in to ridesharing app until they accept ride request. Geico About $150 a year more in some cases, based on NerdWallet research. AL, AZ, CO, CT, DC, DE, GA, IA, ID, IL, IN, KS, LA, MD, ME, MN, MO, MS, ND, NE, NM, OH, OK, OR, PA, RI, SC, SD, TN, TX, VA, VT, WI, WY Get a quote Acts as primary coverage whether or not drivers have a passenger.

If your current insurer doesn’t offer rideshare insurance, it’s time to look elsewhere. (For price comparison, that’s a smart thing to do anyway.)

Although Erie, Farmers and Geico tend to offer the best mix of coverage and availability, rideshare insurance is also available on a more limited basis from a handful of other well-known companies.

Other options for rideshare insurance Insurer Cost above traditional policy Ridesharing companies accepted Continuous coverage when signed in to their app? States where available MetLife Depends on miles driven Lyft Yes CA, CO, IL, TX, WA Metromile Depends on miles driven Uber No CA, IL, WA Progressive Available by quote All Yes PA, TX USAA Note: Open only to active military members, veterans and their families. $6 to $8 per month All No AZ, CA, CO, IL, MA, OH, TX, WA Allstate $15 to $20 per year All No CA, CO, GA, IL, IN, MN, NV, OK, SC, TX, UT, WA, WI State Farm Available by quote All No for liability; yes for other coverages driver carries on personal policy CA, CO, KY, ME, MN, TN, WI

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What if my state doesn’t have rideshare insurance?

If coverage isn’t yet available for you, you’ll have to buy a commercial insurance policy to be fully insured. These plans have higher liability limits than a typical policy. They’re also pricey. According to insurance agent group Trusted Choice, the average commercial policy for a passenger car costs from $1,200 to $2,400 per year or higher.

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Who needs rideshare insurance

If you’re a rideshare driver and your rideshare company provides insurance, its coverage might apply only once you’ve accepted a ride request. It might not apply, or your coverage might be reduced, when you have the app on and are waiting to be hailed. If that’s the case, you’ll need rideshare insurance to cover those periods.

Here’s a snapshot of what Uber and Lyft provide to drivers:

Company Coverage limits with passengers/ after accepting a ride request Liability limits without passengers and before accepting a ride request Comprehensive/ Collision Comprehensive/ Collision Deductible Uber $1 million liability per incident; $1 million uninsured/underinsured motorist per incident $50,000 per person, $100,000 per incident, $25,000 property damage $50,000 (applies only with passengers) $1,000 Lyft $1 million liability per incident; $1 million uninsured/underinsured motorist per incident $50,000 per person, $100,000 per incident, $25,000 property damage $50,000 (applies only with passengers) $2,500

You might also consider rideshare insurance if you want higher coverage limits than your company offers.

If your rideshare company insures you during all phases of the job — before, during and after ride requests — or you have a commercial auto policy, you probably don’t need separate rideshare coverage.

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How to buy rideshare insurance

Here are some smart initial steps to take when selecting rideshare insurance:

  • No matter what, if you haven’t already, tell your personal auto insurer you’re driving for a ridesharing company. If you don’t, the insurer could find out anyway and then cancel your personal policy.
  • If the ridesharing company you’re driving for offers coverage, call to figure out the gaps between your personal policy and their policy. Bigger ridesharing companies generally provide at least $1 million in liability coverage for drivers carrying passengers, although policies can vary for rideshare drivers who don’t have passengers in the car.
  • Reach out to your current insurer to see whether it offers ridesharing insurance or commercial insurance to fill in coverage gaps. Ridesharing insurance policies are generally more cost-effective than commercial insurance, which can cost up to 10 times as much as personal car insurance.

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What happens if you have an accident?

If you have an accident while you’re carrying passengers or on your way to a fare, Uber and Lyft will cover medical expenses and other damages up to $1 million, even if an uninsured or underinsured driver is involved. The $1 million limit is much higher than most drivers — even taxi drivers in many major cities — carry in liability coverage.

You can also draw on comprehensive and collision coverage offered by the ridesharing companies, as long as you also have such coverage on your personal insurance. Beware, though: Deductibles are high, and the policies apply only while you’re carrying passengers.

If you have an accident while waiting for a fare, you’ll need to file a claim with your insurance provider unless your state law or ridesharing endorsement specifies otherwise. If the claim is denied or you’re not fully reimbursed, coverage from Lyft and Uber will kick in. But ridesharing companies’ limits in these cases are relatively low. Ridesharing coverage from your personal insurance company is designed to cover this gap.

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How to report an accident and file a claim

Call the police: Whether or not your accident results from ridesharing, your first step should be to call the police. Depending on the type of accident and your ridesharing company’s rules, you might have to provide your personal proof of insurance or your company’s certificate. Exchange information with the other driver as you normally would.

How to file: Next, if you need to, file a claim with your personal insurer. Even if you can rely on your ridesharing company to cover your damage, your personal insurer will want to know about any accidents. This can put drivers who haven’t been honest about their employment status in a tough situation. If you choose not to tell your insurer, you risk being dropped anyway if the company finds out. You should notify your ridesharing company as well, even if it isn’t covering the accident. If you can take advantage of your ridesharing company’s coverage, a rep can help you start the claims process.

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Mortgage Rates Today, Jan. 12: Inching Down Again; Mortgage Applications Up

Thirty- and 15-year fixed mortgage rates inched down again today, while 5/1 ARM rates held steady, according to a NerdWallet survey of mortgage rates published by national lenders on Thursday.

Freddie Mac released the results from its Primary Mortgage Market Survey this morning, showing that for the second week in a row, rates have fallen. Sean Becketti, Freddie Mac’s chief economist, said in the release that the 30-year mortgage rate has fallen, along with the 10-year Treasury yield, which fell 8 basis points “after absorbing a mixed December jobs report.”

“The December jobs report showed 156,000 jobs added, barely meeting many experts’ expectations, while wage growth was at the high end of expectations, at 0.4%,” Becketti said. “If strong wage gains persist, they may push inflation and interest rates higher.”

The decline in mortgage rates is a reverse of the sudden increase that started after President-elect Donald Trump’s win last November.

Mortgage Rates Today, Thursday, Jan. 12 (Change from 1/11) 30-year fixed: 4.26% APR (-0.01) 15-year fixed: 3.67% APR (-0.02) 5/1 ARM: 3.83% APR (NC) MBA: Mortgage applications up 5.8%

The first week of the new year saw a pickup in mortgage applications, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Jan. 6, 2017. The 5.8% increase in application volume includes an adjustment for the New Year’s Day holiday, while the previous week’s results were adjusted for the Christmas holiday. Without the holiday adjustments, the Market Composite Index increased 42% compared with the previous week.

» MORE: Calculate how much house you can afford

The seasonally adjusted Purchase Index increased 6% from the previous week, while the Refinance Index increased by 4%. Unadjusted, the Purchase Index increased 45% compared with the previous week and was 18% lower than the same week in 2016, according to the survey.

The share of adjustable-rate mortgage activity rose to 5.5% of total applications. FHA loan applications increased to 11.7% from 11.6% the previous week, and VA loans increased to 12.8% from 12.3% the previous week.

USDA loan applications decreased to 0.9% from 1.1% the previous week. Refinance application activity was down as well, decreasing from 52.2% the previous week to 51.2% of total applications.

Homeowners looking to lower their mortgage rate can shop for refinance lenders here.

NerdWallet daily mortgage rates are an average of the published APR with the lowest points for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

Michael Burge is a staff writer at NerdWallet, a personal finance website. Email:

3 in 4 Say Debt Collectors Defy Requests to Stop Calling

Three out of four consumers said debt collectors ignored their requests to stop calling, according to a survey released Thursday by the Consumer Financial Protection Bureau, which detailed “troubling” practices in the multibillion-dollar industry.

Despite specific protections outlined in the Fair Debt Collection Practices Act, consumers told the CFPB that they often felt threatened by debt collectors, were contacted late at night or early in the morning, and were pursued by collectors using incorrect information.

Debt-collection efforts affect more than 70 million Americans annually and are one of the leading sources of consumer complaints to the CFPB.

Survey finds widespread complaints

The CFPB survey, conducted between December 2014 and March 2015 about debt collection experiences from about a year before the survey was conducted, looked at a sample of consumers drawn from credit-reporting records about their experiences with debt collectors. It found:

  • More than one in four consumers contacted by a creditor or debt collector felt threatened.
  • Three in four consumers who asked collectors to cease communication said the request wasn’t honored.
  • More than a third said debt collectors called between 9 p.m. and 8 a.m.
  • More than half reported a mistake in the debt, such as an incorrect amount, a debt not owed or a debt owed by a family member.
  • Of consumers contacted about a debt, 15% were sued for payment. About 75% of sued consumers did not show up in court, which can result in an automatic judgment and wage garnishment.
  • Nearly 40% of consumers reported being contacted four or more times a week by a debt collector. And 17% said they got eight or more calls in a week.

“This is another example of why we need the CFPB,” said Liz Weston, NerdWallet columnist and certified financial planner. “Collection agencies continue to flout fair debt collection laws with bad practices and sloppy record-keeping. The CFPB is the one agency that’s been pushing to reform the industry so that it doesn’t trample vulnerable consumers in its rush for profit.”

Consumers have rights, but there’s a catch

Consumers are protected from these predatory and unfair practices by the Fair Debt Collection Practices Act. Among its protections:

  • Communication: Consumers can tell debt collectors how and when to communicate — including telling them to stop contacting them altogether.
  • Harassment and abuse: Debt collectors cannot use abusive language, threaten violence or use repeated calls to harass.
  • Truthfulness: Debt collectors must be honest about the amount of the debt, whether it’s past the statute of limitations for lawsuits, and cannot misrepresent themselves.
  • Debt validation: Consumers must receive a validation letter within five days of first contact with information about the amount owed, who’s seeking payment and their rights on disputing the debt.

The catch: It’s up to consumers to exercise these rights on their own.

“My first tip for consumers is to really slow down and evaluate the person who is calling them about the debt,” said April Kuehnhoff, a staff attorney at the National Consumer Law Center. “Ask for more information to make sure they recognize the debt, that they believe it’s theirs and that they know who this party is who’s contacting them.”

If a debt collector calls to pressure you to make a payment and makes you feel threatened or unsafe, simply hang up. Don’t feel rushed to make a payment, Kuehnhoff said.

Consumers can file complaints directly with the CFPB on its website if they believe their consumer rights have been violated.

Online selling of debts puts consumer data at risk

The CFPB simultaneously released a snapshot of the market where third-party debt collectors can buy debts that original creditors were unable to collect, sometimes putting the information on online sites such as and Buyers have the legal right to attempt to collect the amount of the original debt — and to resell it again if they don’t succeed.

The agency reviewed 298 bundles of debts available from online marketplaces from January 2015 to August 2015. The bundles contained financial details — names and often Social Security numbers, street addresses, phone numbers, dates of birth and account numbers — from more than 1.2 million consumers, the bureau said.

The face value of the debts was nearly $2 billion, the CFPB said, but the asking prices totaled about $18 million, or less than a penny on the dollar. Nearly half the debts stemmed from payday loans, and about a quarter came from credit cards. The websites also offer portfolios of medical debts, cell phone accounts and bad checks.

Most of the debt is five years old or older, and much of it has been subject to several collection attempts already, the CFPB said.

When dealing with old debt, avoid these costly mistakes.

Sean Pyles is a staff writer at NerdWallet, a personal finance website. Email: Twitter:@SeanLoranPyles.

Map Out a Year’s Worth of Shopping Right Now

We’ve probably all regretted buying something too hastily, but the opposite can also happen — you pass up a sale, and then see the item for a much higher price later.

To save your wallet the dings of mistimed shopping trips, we studied trends and asked experts when the products you’ll be shopping for will go on sale throughout 2017.

Appliances big and small

If you’re in the market for a stove or dryer this year, holiday weekends will mean discounts. Mark your calendar for Memorial Day (May 29), Labor Day (Sept. 4) and Black Friday (Nov. 24).

Over Labor Day 2016, Best Buy, Lowe’s and H.H. Gregg all took up to 35% off select major appliances. During Memorial Day 2016, Sears marked vacuums and floor care down by 30% online and in store and offered discounts on major kitchen appliances.

There are other ways to save, too. When manufacturers release a new, top-end appliance, they often discount their old top-end, says Mark E. Bergen, chair in marketing at the University of Minnesota’s Carlson School of Management. You’ll just have to do without the latest features.

“As you’re purchasing, you want to think about what a good deal means,” Bergen says. For some, it’s trendiness. For others, discounts.


Department stores always seem to have clothing on sale, but deals improve at the end of each season. Retailers “want to charge the most to consumers who want to have it early,” says Rebecca Hamilton, a marketing professor at Georgetown’s McDonough School of Business.

Stores clear out inventory seasonally, so winter clothing goes on sale just before spring, spring clothing before summer and so forth. If you’re content without the latest trends, shop the clearance rack for end-of-season savings.


The day after Thanksgiving produces a wealth of deals on tablets, smartphones and gaming consoles. A NerdWallet analysis of 2016 Black Friday deals found that some products cost hundreds of dollars less on Black Friday than just weeks prior. If you’re gunning for a specific popular item, reserve your purchase until then.

Bear in mind that Apple keeps to its own sale timetable. The company hosts a keynote event each September, and discounts on previous models of its devices usually follow.

After the Sept. 2016 iPhone 7 unveiling, Best Buy offered $100 off the iPhone 6S or $200 off the iPhone 6S Plus with a two-year contract with Verizon Wireless or Sprint. Bergen recommends you begin monitoring prices of old models as soon as a new phone is announced.

Holiday decorations

With seasonal items, procrastination is key. The longer you wait to decorate, the better. And for the absolute best deal, wait until after the holiday to capitalize on excess inventory. It won’t do you much good for 2017 holidays, but you’ll be ready for 2018.

Target’s 2016 after-Easter closeout featured discounts of up to 70%. Similar deals happen after Christmas, Halloween and Fourth of July.

Home goods

Like appliances, home goods go on sale during holidays. And the prices of some major purchases, such as furniture, are negotiable. Browse online, then buy in store. Try to knock some money off the price or ask the salesperson for free delivery.

Bergen says negotiating works especially well if the retailer thinks it might lose your business. “Don’t be afraid to go into a furniture store and say, ‘I’m going to go see a competitor; is there anything you can do to make it worthwhile?’” he says.


The best time to book a flight in the U.S. is on Tuesdays at 3 p.m. Eastern time, according to travel meta-search engine FareCompare. At this point each week, the site says, airlines have released their sales and competitors have matched prices. It recommends buying U.S. domestic tickets three months to 30 days before departure.

If you’re looking to go abroad, Rick Seaney, CEO and co-founder of FareCompare, says 2017 is the year to visit Europe. Terrorism jitters, Brexit and the strong dollar have dropped prices to seven- or eight-year lows, he says.

… And everything else

January is an ideal time to budget for the household spending a new year brings. As a general rule, purchase products off-season for the best shot at a discount. If you can’t plan a purchase, compare prices and look for coupons.

One last tip? Bergen recommends learning sales cycles. Retailers such as Nordstrom and Victoria’s Secret host regular annual or semiannual sale events at the same time year after year.

Courtney Jespersen is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @courtneynerd.

This article was written by NerdWallet and was originally published by USA Today.

How Stuck-in-the-Middle Parents Can Afford College

All parents want to pay for their kids’ college, but many families find themselves too wealthy to qualify for financial aid but too strapped to pay out of pocket.

If that’s the case for you, financial advisors agree you should prioritize retirement savings over paying for college. After all, your kid can take out federal student loans, but your nest egg won’t grow itself.

Still, if you’re set on covering your child’s tuition, you have two options: Get a student loan for parents or tap your home’s equity, if you have any.

Which is best? There’s no easy answer when your kids’ education, your own financial future and your home are at stake. Think through the factors below to help you decide what to do.

Take out a federal student loan for parents

You can borrow money for your kid’s college with a federal direct PLUS loan. To apply, submit the Free Application for Federal Student Aid, or FAFSA. The form will also make your child eligible for grants, scholarships, work study and federal student loans.

Pros of PLUS loans Cons of PLUS loans Option to defer payments while the student is in school. 6.31% fixed interest rate. Flexible repayment plans. 4.28% loan fee. Loans are discharged upon death of the parent or child. $2,500 annual tax deduction limit for student loans.

Private lenders also offer parent loans. Going the private route may be best if you have excellent credit. A high credit score may qualify you for a lower interest rate than you’d get with a federal parent loan.

However, private loans don’t offer all of the benefits that federal loans do. Families should turn to private loans only if they’re in a strong financial position and have a large emergency fund, says Betsy Mayotte, director of consumer outreach and compliance at American Student Assistance, a Boston-based nonprofit.

Consider tapping your home equity

With home values high and mortgage rates low, it’s a great time to use your home equity, says Kevin McKinley, a financial planner and principal/owner of McKinley Money LLC in Eau Claire, Wisconsin.

There are three ways to unlock your equity:

  • A home equity line of credit, or HELOC.
  • A home equity loan, often referred to as a “second mortgage.”
  • A cash-out mortgage refinance.

Depending on how you tap your equity, there are pros and cons to consider. For instance, you’ll have to pay closing costs if you refinance your mortgage.

Pros of tapping home equity Cons of tapping home equity Low interest rates. Increased risk of foreclosure if home values drop or you can’t make payments. Get a tax deduction for all the interest you pay, in most cases. Could count against future financial aid eligibility.

Tapping your home equity is risky because you’re putting one of your most valuable assets on the line. If you can’t make the payments or your home’s value declines, you could lose it.

“You don’t want to take out equity to the point where if the housing market drops, all of the sudden you’re underwater,” Mayotte says.

Despite the risks, tapping your equity may be a better deal than a student loan “when it comes to just straight dollars and cents,” McKinley says. But he also acknowledges an emotional component involved with using home equity.

“Some people are uncomfortable with the notion of mortgaging their home,” he says. “If that’s the case, they should just get student loans.”

Next steps

This decision is weighty enough that it’s worth consulting a financial advisor. Feeling confident about the way your family pays for tuition will help you keep calm as you face one of the biggest transitions as a parent: sending your kid off to college.

Teddy Nykiel is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @teddynykiel.

This article was written by NerdWallet and was originally published by USA Today.

New Card: 5% Back at Amazon, Rewards Everywhere Else

Online superstore Amazon is rolling out a new credit card that combines the best features of the Amazon Prime Store Card and the existing Amazon Credit Card. Available only to Amazon Prime members, the new Amazon Prime Rewards Visa Signature Card offers:

  • 5% back on Amazon purchases.
  • 2% back at restaurants, gas stations and drugstores.
  • 1% back everywhere else.

Rewards never expire and are redeemable at Amazon. Your rewards balance appears on the checkout screen when you make a purchase, and you can apply rewards to a purchase in any amount, with no minimum redemption. The new card has no annual fee, but it requires membership in Amazon Prime, which costs $99 a year and provides such perks as free two-day shipping and unlimited access to streaming media. The card has no foreign transaction fees.

Amazon Prime customers who already have the existing Amazon Credit Card, also known as the “Amazon Rewards Visa Signature Card,” will be upgraded to the new Prime product automatically. Their existing accounts will start earning the new benefits immediately, and their new card should arrive soon, Amazon said. The new card will be made of metal rather than plastic, latching on to the craze that surrounded the 2016 release of the metal Chase Sapphire Reserve℠.

How does the new card stack up against other Amazon cards? Take a look:

 Amazon Prime Rewards Visa SignatureAmazon Credit Card Amazon Prime Store Card Where can you use it?Anywhere that accepts VisaAnywhere that accepts VisaOnly at Amazon Rewards on Amazon purchases 5%3% 5% Rewards at restaurants, drugstores, gas stations2% 2% N/A Rewards on all other purchases1%1%N/A Annual fee for card $0 (but requires $99 Prime membership)$0$0 (but requires $99 Prime membership)

» MORE: Amazon Prime Store Card: Is it right for you?

“The upgraded Amazon Prime card took the best of both worlds and is really a fantastic product for regular Amazon shoppers,” NerdWallet credit cards expert Sean McQuay says.

For Prime members who already have the existing Amazon Credit Card, upgrading to the new card will mean higher rewards at no additional cost. For cardholders who might have been on the fence about ponying up the $99 for Prime membership, the new rewards rate for Amazon purchases — a 67% increase — might be just the push they’re looking for. And for holders of the Amazon Prime Store Card, the fact that they can get the same 5% back at Amazon plus additional rewards elsewhere makes the new card an enticing upgrade.

The biggest drawback, as with any store credit card, is that the rewards can be used at only one place. But in this case, that one place is Amazon, which carries so many different kinds of products that you won’t lack for opportunities to redeem rewards, whether on Cartier watches, Angel Soft toilet paper or anything in between.

“Think of the card as a 5% discount on every Amazon purchase, no coupons needed,” McQuay says.

Information related to the Amazon Credit Card and the Amazon Prime Rewards Visa Signature Card has been collected by NerdWallet and has not been reviewed or provided by the issuer of this card.

Paul Soucy is an editor at NerdWallet, a personal finance website. Email: Twitter: @paulsoucy.

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