Jul 08, 2022
Current Events

Reading List for July 8-10th, 2022

Filling in for Beth who will be back next week.  Here's the news in credit cards, student loans, budgeting and...Twitter that caught my attention: 

Credit cards

  • Did you know that consumers pay $12 billion/year in penalties to credit card companies? The CFPB is taking a closer look. 
    • “Credit card late fees are big revenue generators for card issuers. We want to know how the card issuers determine these fees and whether existing rules are undermining the reforms enacted by Congress over a decade ago,” said CFPB Director Rohit Chopra
  • How are Americans responding to inflation? Opening lots of new credit card accounts according to Money
    • New data from credit reporting agency Equifax shows that banks issued 18.6 million new credit cards in the first three months of 2022 — a roughly 28% jump from the same period last year.
  • Will buy now, pay later (BNPL) upend the traditional credit card business? McKinsey weighs in with this research study with tons of trend data. 
    • Buy now, pay later could pose a challenge to credit cards’ leading position in US payments. To sustain profitable growth, issuers may need to rethink their products, economics, and value propositions.

Student loans

  • You may have read (or even experienced it) about the challenges of student loan forgiveness. The Education Department put out some rules this week to try and simplify it (Inside Higher Ed).
    • The Education Department released a series of proposed rules Wednesday that would simplify federal loans, to make it easier for students who attended fraudulent colleges or who are public service workers to get loan forgiveness.

  • Find out more about the Public Student Loan Forgiveness program in this article from the Associated Press.  The rules around this program have changed making it easier for people to qualify. 
    • Hundreds of thousands more have completed the paperwork for the Public Service Loan Forgiveness program, and officials say many more likely qualify. An Oct. 31 deadline to apply under the less stringent rules is fast approaching.
  • In case you needed a reminder, the interest rate on federal student loans for undergraduate borrowers rose on July 1st to 4.99% from 3.73% (Forbes)

Budgeting

  • The average car payment for new cars just crossed a significant threshold...$700! (NPR 4 minute podcast + transcript)
    • The average monthly car payment crossed $700 a month earlier this year, the highest on record, according to Cox Automotive/Moody's Analytics. "I joke with people that every new car purchase is a luxury car purchase, I don't care what you're buying," says Ivan Drury, senior manager of insights at the car buying expert Edmunds.

  • If you can't out-budget inflation, what can you do? Here's some tips from CBS News
    • First cover expenses that enable you to live safely including housing costs, utility bills and food. Also try to cover costs that enable you to work, such as transportation fees, your cell phone bill and child care costs. Next-level priorities are those that trigger major consequences if you don't pay them. Think taxes, child support payments and insurance

Twitter and Elon Musk

  • Late Friday, Elon Musk notified Twitter he wants out of the deal to acquire the company (CNBC). This likely goes to the courts now with the battle likely to continue in the court of public opinion. Is this a negotiating ploy to lower the acquisition price (He offered $54.20; stock now is in the low $30s) or is this really the end of his efforts to buy the company? I have no idea...but I do know one group who will prosper: the lawyers! 
    • Billionaire Elon Musk wants to end his $44 billion deal to buy Twitter, according to a letter sent by a lawyer on his behalf to the company’s chief legal officer Friday. But Twitter’s board chairman Bret Taylor said the company is still committed to closing the deal at the agreed-upon price and plans to pursue legal action to enforce the agreement.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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