Month: August 2023

Five years ago, there were a dozen models of new cars that sold for less than $20,000.  Today, there’s only one.  If you’re will to spend over $100,000, there are 32 models to choose from.

And if you think the answer is to buy a used car, think again: the average listing price for a used car on a used car lot is about $27,000.  That up more than 30% from pre-pandemic prices.

The average monthly payment for a new car loan is over $750 and the average interest rate for a used car loan is above 13.7%!

We know why interest rates are so high.  That’s because the Federal Reserve has been hiking interest rates over the last year or so.  But why are car prices so high?  That can be partially be explained by the “supply chain” disruptions during the pandemic.  The other reason: car manufacturers focused on producing more expensive, higher profit margin cars.  So it’s not your imagination.  Car prices really are higher!

What to do?  If you can get by with your current ride, hold tight.  Prices will start coming down soon.  Inventory is increasing and the more cars there are for sale, the lower the prices will go.

If you’re having trouble making those sky-high payments, we can help.  A bankruptcy can allow you to re-write your car loan, often with a lower interest rate and a lower payment.  We can also cancel those expensive add-on contracts and, under certain circumstances, we can even reduce the amount that has to be paid back based on the current value of your car.

Don’t wait until your car is repossessed.  Call us today to schedule an appointment to discuss your options.

Ralph Guenther

Remember when you used cash to make your purchases?  People today have more ways than ever:  Apple Pay, Venmo, credit cards, debit cards and dozens of other ways.  And yes, there are important differences.  What you choose might matter as much as the purchase itself.

Each of the different payment methods provides various conveniences, perks and protections from fraud. Credit cards have long been the “go to” method of payment, but outrageous interest rates have now raised the cost of carrying a credit card balance.

Money transfer apps like Venmo and Zelle provide easy instant payments, usually for free.  The downside is that they offer fewer protections from scams and unfilled orders, and they have access to your spending habits.  (Remember, if the app is free, you are the product!)  Payment apps are the fastest growing sources of fraud reports and losses, according the Federal Trade Commission.

Here are some simple tips on how to weigh the convenience, security and benefits of each payment method:

Credit and debit cards

When you use a credit or debit card, the merchant’s bank communicates with your bank through a card network such as Mastercard or Visa ask permission to withdraw a certain amount. Your bank then decides whether to approve the transaction based on your available funds or credit and the likelihood the transaction is fraudulent. If approved, your bank puts a hold on the funds until they are sent to the merchant’s account, usually within a business day.

Credit cards can be the most rewarding way to pay online. Card issuers use the revenue from transaction fees to provide cash back or other perks for customers and fraud protection.

But a credit card can be expensive if you don’t pay your balance in full each month.  And higher interest rates have now raised the cost of carrying a credit card balance.  An annual percentage rate of 25% to 30% is not unusual these days.

Debit cards don’t offer the same rewards as credit cards since their issuers make less money from each transaction. They do come with similar fraud and payment protections as credit cards.

Digital wallets

Digital wallets such as PayPal or Apple Pay are among the safest and easiest ways to pay online. Checking out with a wallet is typically faster than paying with a credit card directly since you don’t have to re-enter your billing information and shipping address.

All of the protections and benefits associated with the underlying card are still in effect for wallet transactions, so it’s a good idea to connect these wallets to a credit card directly to maximize your protection.

If a digital wallet gives you the option to link a bank account directly, you should read the policy agreement to make sure you understand what is protected. For example, PayPal offers an extra level of purchase protection, but Apple Pay and Google Pay don’t.

Peer-to-peer payment apps

Apps like Venmo, Cash App and Zelle were designed to help people send money to friends and family, but they are now used for paying contractors or for purchases on Craigslist. They move money quicker than card payments because they don’t wait for the bank to approve the transaction.  But that means it’s almost impossible to get money back once it has been sent.

These payment methods aren’t regulated as heavily as cards, so you might still be on the hook for unauthorized payments if a swindler gets control of their accounts.

Bank transfers

People should be selective in sharing their bank information with merchants since wire transfers don’t have the same protection guarantees as cards. If a business requests a direct bank transfer instead of a card payment, choosing a slower option over the newer instant methods such as Zelle might be best. ACH transfers typically take a few days to settle, giving you a few more days to try to stop the transaction before the money leaves your account.

If you’ve been scammed and can’t get your money back, sometimes the only option is a bankruptcy filing.  I have helped many people deal with these kind of situations.  I can help you too!

Ralph Guenther