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Answering: “Why Doesn’t My Bank offer Cash Advances?”

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Question 1:  Why doesn’t my bank offer cash advances?

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Offline, bricks-and-mortar bank don’t see any profit in it. A cash advance is typically for a smaller amount of money: $1,000 or less, for a shorter amount of time: one month or less. By the time you fill out the forms, take the loan officer’s time and absorb the light and heat the bank needs to keep branches open, their profit has dissipated.  Online banks, on the other hand, have automated the process so efficiently, they can stay in business while offering small amounts of money for very short terms. The online banks are now even creating convenient cash advance apps for use on smart phones.

borrower getting cash advance

Question 2:  Does the teller really have a one-time great deal on loans I should consider?

The teller isn’t as interested in what you need as in meeting his or her sales quotas for the month. If you hate the hard-sell, stay out of bank branches at the ends of months or quarters when sales numbers get submitted. All tellers and loan officers are sales people with new account goals set by their managers. They even spend time cold calling in the back office. The tellers get points when they encourage people to apply for a loan with the loan officers waiting in the desks and offices beyond the counters. The loan officers get points for every loan they close. 90% of new teller training is SALES training.

Question 3:  Do I really need all these cards and accounts?

Probably not. Signing up for online bill pay, getting a debit card for a hobby business and setting up free checking all serve to get you more and more entrenched into that bank. In fact, these free/low costs offers are called “sticky.” If you saw a bank offered better rates down the street and wanted to move your account, you may be reluctant because the thought of setting up automatic bill pay, changing the checking to savings instructions on your accounts and getting issued new debit and other cards can feel pretty overwhelming. The more of these “products” tellers get you to accept, the more entangled you are in the bank.

The Smart Financial Consumer

Understanding the motivation behind what your local, brick and mortar bank teller offers can attune you to better offers at alternative financial institutions. Know that you can pick and choose the interest rates, terms and other details from a range of banks depending on what fits into your financial picture at the moment.

4 Power Tips for Getting Personal Loan Approval Even with Bad Credit

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Where achieving a healthy weight depends on limiting food (energy) intake and increasing energy expenditure, healthy financial profiles spring from a similar balance of limiting expenses and maximizing income over time. Personal loans support both sides of this balance, optimizing wealth if not in the next year, at least in the next five or 10.

Personal loans often serve to:

  • consolidate debt owed to high interest rate credit cards to lower rate loans. Lower monthly debt payments add up significantly over months and years.
  • provide the capital to finance the classes, degrees and business ventures that supplement income. Additional monthly income eventually increases exponentially.

Even if your credit score is under 640 (currently considered the lower end of “good credit”), you can get a personal loan.  Here are some tips for becoming proactive and getting the personal loan that balance your cash flow in your direction, bad credit or not.

  1. Apply for a secured personal loan.  If your name is on the title to a car or home, a bank may not even check your credit score. The asset, rather than your spending habits, gives the banker the reassurance that the loan will be repaid. Do consider whether you’re willing to lose this asset, however, should you be unable to pay back the loan. Get an idea of how much the car is worth through and how much your home is worth through. Lenders will typically lend only a portion of that amount.
  2. Consider requesting the least amount needed. Loan requirements get easier and easier the less you ask for.
  3. Research online and offline personal loan vendors up front BEFORE applying for one loan. Because each credit inquiry impacts your credit, the more banks that check your credit, the lower your score goes.  If your credit is under 640 and the bank only loans to those with “good credit,” you won’t win the loan and your credit score will drop, a lose-lose situation. Consider instead applying to financial institutions that specialize in bad credit loans. These firms have the products and resources to tailor a loan to your specific financial situation. More, you’re more likely to win the loan with just one inquiry.
  4. Consider Credit Unions and Online Financial Institutions.  Smaller and online lenders spend far less on marketing, labor and overhead. The online lender needs no bricks and mortar branches and a fraction of the labor as many decisions and actions are automated. Our blog post 4 Ways Online Banks Keep Cash Advances & PayDay Loans covers just how online lenders have the same level of security if not more than offline lenders.

 

Is the Personal Loan a Solution for You?

Consumers often find that once they begin their new financial habits (reducing expenses and increasing income), the process becomes addictive. Just taking charge of your finances will help you feel more confident and happy. Even if you’ve spent yourself into the “bad credit” category, having a plan and acting on it provides the reassurance that you won’t be there forever!

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What Is a Cash Advance and When Should I Use One?

What Is a Cash Advance and When Should I Use One?

A cash advance lets you use your credit card to get a short-term cash loan. Learn all about cash advances and when to use them in this guide.

https://www.firstfinancial.com/cash-advance/

cash advance

43 million Americans have bad credit, with the bulk of these being young consumers.

While student loans and tough economic times can be blamed for this, poor planning and a low comprehension of credit facilities are partly to blame as well.

Cash advance loans are very convenient and can be hard to resist, but they can also put you in trouble.

How do these loans work, and how can you ensure to get the most out of them?
Here is an in-depth cash advance guide.

What is a Cash Advance?

Your credit card lets you use your credit card to get a short term loan at an ATM or a bank. This is then paid back in the same way you pay for anything you put on your credit card.

In a way, this is like using your credit card to ‘purchase’ hard cash, which you then use to buy goods and services. In this way, you get to borrow cash against your credit card limit.

The same way you use your debit card to get cash from an ATM, you get cash from a credit card to be repaid with interest.

The difference between a credit card advance and a payday advance loan is that the latter is not dependent on your credit card.

When to Get Cash Advance

If you typically do not carry paper money for your day to day spending, you might run into trouble when you need to pay for something at a business that only accepts cash payments.

In such cases, being allowed to convert your credit card limit into cash becomes very convenient.

Advance Limits

Most credit card companies allow their clients to convert a percentage of their credit limit into cash, as opposed to the entire amount.

For most people, this translates into a couple of hundred dollars. This is therefore useful for smaller emergencies purchases and should not be dependent on for larger purchases.

Interest on Cash Advances

While getting a credit card advance is easy, the interest rates can be a bit high.
Here are some of the associated costs that make it so:

ATM or Bank Fees

These are determined by the financial institution that processes a transaction. This can be a bank or an ATM where you get your cash advance from.

If you use a bank outside your card issuer’s network, expect the fees to be higher.

Cash Advance Fees

These are determined by the company that issues your credit card.
These are charged in three different ways.

The first is by charging a percentage of the amount advanced. This can be as high as 5%.

The second way is by charging a flat fee per cash advance. For example, you can be charged $5 to $10 per advance, irrespective of the amount.

The third one is by charging the higher figure between the percentage or the minimum amount. An example of this is $5 or 10% of the withdrawal amount; whichever amount is higher.

Interest

To begin with, the interest charged on credit card loans is always higher than that charged on a credit card purchase.

Secondly, while you get a grace period with credit cash purchases, interest on cash advances starts accruing immediately.

Credit Card Advance Tips

It might be impossible to avoid this loan facility altogether.

For this reason, it’s key to know how to keep the costs low and avoid getting into unmanageable debt.

Here are a few tips.

1. Know Your Limit

The amount available for you to convert to cash is lower than your credit card limit. Exceeding this amount can result in higher interest rates and other over-limit charges.

Ensure to find out your card limit when you get a new card so you can adhere to a safe limit.

2. Understand your agreement

The key information to look out for is the one-off payable cash advance fee and the applicable APR as well.

If you are unclear on any terms of your contract, ensure to engage your service provider’s customer care representative.

3. Use It for Emergencies Only

Limit the use of this facility to emergencies you cannot use your credit cards on. It’s also important to create an emergency fund to draw from when needed.

If used without caution, credit card advances can spiral out of control making it difficult for you to make timely repayments. Consequently, this has the potential to lower your credit score.

4. Limit the Amounts

Aside from only using this facility as a last result, limit your withdrawals to only what you need.

Resist the temptation to take out more because the higher you take, the higher the interest you will pay.

While this might seem like much, these amounts add up to a significant figure over time.

Credit Card Advance and Credit Score

Taking out this facility does not directly impact your credit score, but it might have some indirect consequences.

The first one is that it raises your credit utilization ratio. This is among the benchmarks used to calculate your credit scoring. A high utilization ratio positions you as a high-risk borrower and may lower your scoring.

The other one is tied in with the costs of repaying a credit card advance. If you are not able to afford the high-interest rate, you may resort to late payments or even default.

When this information makes its way into the credit bureaus, it can negatively affect your scoring as well. As a rule of thumb, avoid making payments 30 days past the due date. Timely payment could help improve your credit score.

Ensure you understand all processing costs, the applicable APR and your ability to repay before taking out the loan.

How to Obtain No Credit Car Loans

How to Obtain No Credit Car Loans

Though good credit is valuable, is there a such thing as no credit car loans? Yes! Find out how to easily obtain an auto loan without credit experience.

How to Obtain No Credit Car Loans

Did you know that approximately 45 million Americans have no credit score at all?

If you’re part of this group, you might think that it’s impossible for you to get approved for a car loan. That’s not exactly true, though.

There are lots of loans out there designed for people with low credit scores, as well as those with no credit score.

Read on to learn more about no credit car loans and how you can increase your chances of getting approved for one.

No Credit Car Loan Minimum Qualifications

If you have a bad credit score or no credit score, you can still qualify for a car loan. You just have to make sure you meet some other basic qualifications, including the following:

  • Have a gross monthly income of at least $1,500
  • Provide proof that you are a legal U.S. or Canadian resident
  • Provide proof that you are at least 18 years of age or older

If you have filed for bankruptcy in the past, you may also need to complete some additional paperwork to show that you authorized to purchase a car.

Many car dealerships also work with specific lenders to provide financing to people who might not otherwise qualify for an auto loan.

When you begin looking to purchase a car, consider asking the lender which dealerships they work with or recommend purchasing a car from.

Increase Your Chances of Approval

If you meet these minimum qualifications, there’s a good chance your auto loan application will be approved.

There are some other steps you can take to increase your chances even more, though, including the following:

Check Your Credit History

You may think you have no credit history, but it’s a good idea to double check before you apply for an auto loan. You might find out that you do, actually have a credit score.

Checking your credit report also allows you to notice and correct any errors that might affect your credit in the future.

Set a Budget

Figure out how much money you are able to spend on a car before you apply for a loan, too.

Think, specifically, about what you can afford to spend each month on the car and insurance. Don’t forget about maintenance and gas, too.

Doing these calculations and putting together a budget first will help you figure out how much money you should ask for when you fill out your loan application.

Consider a Higher Down Payment

You’ll have an easier time getting approved for a car loan — even if you don’t have a credit score — if you’re able to put down a larger down payment.

This makes you a more credible lending candidate. It will also help to lower your monthly car payments, so it’s a good strategy for every car buyer to use.

Consider a Co-Signer

You can also increase your chances of getting approved if you find someone who can co-sign your loan.

A co-signer is someone with a high credit score who agrees to take over your loan payments if you default.

Having someone co-sign your loan can help to bring down the monthly payments and give you better terms and interest rates.

A co-signer is a great option to consider.

Just keep in mind that it’s a big responsibility, and it can be difficult to find someone who’s willing to co-sign your loan. You may have to ask a few different people before you get a “yes”.

Gather Appropriate Documents

Make sure you have all the necessary documentation ready to go when you apply for your auto loan, too.

The following are some documents that will help you make a good case for yourself and prove that you can pay back the loan:

  • A copy of your bank statement to verify your monthly income
  • Documentation of recurring bills like your cell phone or utility bills — this helps to show that you pay your other bills on time each month
  • Pay stubs or other documents that provide proof of employment

If you can provide these documents when you’re applying for a loan, you’ll have a much better chance of getting approved.

Work with an Online Lender

You can also increase your chances of having your auto loan application approved if you work with an online lender.

Online lenders are often more flexible than traditional lenders and are willing to work with a wider range of customers.

Keep in mind that online lenders also tend to have better loan terms and rates, so it’s worth working with them even if you do have a good credit score.

Tips for Building Your Credit Score

If you want to build up your credit score before you apply for a car loan, there are a few different steps you can take, including the following:

  • Make all of your loan payments on time
  • Pay your utility bills and other bills on time, too
  • Open a credit card account and pay your balance in full each month (it’s a common mistake to assume that you should carry a balance over from month to month)
  • Don’t apply for too many credit cards or loans at once (this has a negative effect on your credit score)

Once you have your auto loan application approved, you can also use that loan to build your credit score.

If you make the monthly payments on time, you’ll start building credit and will have an easier time getting approved for loans in the future. You might also be able to refinance your loan later to get better terms.

Apply for No Credit Car Loans Today

If you don’t have a credit score but need a car, you still have options (that don’t involve taking public transportation for the rest of your life).

There are lots of no credit car loans that you can apply for.

If you meet the minimum qualifications listed above and keep these other tips in mind, you’ll have a much easier time having your application approved.

Are you ready to apply for an auto loan? If so, we can help at First Financial.

Contact us today to learn more about our auto loan requirements or to fill out an application.

4 Ways High-Risk Merchants Can Cut EMV Chargebacks

Don’t let chargebacks sink your profits!

blank Data breaches at Target, Facebook prompted the major U.S. credit issuers to insist on the EMV chip in October 2015. The move has made it much more difficult for fraudsters to create counterfeit cards, saving both companies and consumers money and headaches. According to Stephanie Erickson, vice president of risk products at Visa, the shift working: merchants are reporting less counterfeit fraud.

We applaud anything that reduces expenses to both businesses and their customers, but EMV has created another, although less costly, issue: chargebacks. Chargebacks occur when the card issuer holds the merchant liable for a payment transacted by a thief using a stolen or counterfeit card. Where once the banks absorbed much of these charges, today they are not so amenable. One payment network reported 250,000 merchants had experienced an 50% increase in chargebacks on card transactions. In effect, the banks, card processors and issuers are putting the burden of vetting for fraud on the merchants.

A few merchants aren’t accepting this responsibility. Claiming a lack of preparation time, they are now suing issuers. Networks counter that five years was plenty of time for even the smallest business to prepare for the increase in chargebacks they warned could follow the shift from magnetic stripe to EMV.

Merchants must know that if they have not yet switched to EMV terminals, they are liable for most of the chargebacks the banks had been absorbing. The top merchants affected have been gas stations, restaurants and quick service merchants like vending operations. It seems that large cities, college towns and border areas are the most likely to be the most tempting targets for thieves looking to take advantage of those who haven’t switched to EMV equipment yet. Smart criminals are avoiding the EMV terminals, another reason to get them into your stores. When a criminal successfully uses a magnetic stripe card at your business, you will get a chargeback and be liable for the purchase.

What can you do?

As mentioned above, Visa, Mastercard, and others have been adamant that merchants pay these charges. However, there are solutions that can limit the damage the EMV shift has brought to your high-risk business.

  • If you are not fighting chargebacks, start now. Won chargebacks do not count against your chargeback ratio. So, it means that a 75 percent win rate lowers your chargeback ratio by 300 percent. A better chargeback rate also helps you to keep your merchant account in good standing.
  • Fighting chargebacks can be a somewhat technical process. Consider getting an expert or service to fight these charges for you.
  • Lock down your eCommerce site or bricks-and-mortar business with front-end fraud prevention measures. These help identify the IP address of the customer by requiring them CVV and AVS. In this way, you filter most frauds and increase your chances in winning fraud disputes in chargebacks.
  • Use a chargeback alerts when you operate a service business. A chargeback alert is a type of alert that notifies you every time a customer initiates a chargeback. You have 24-72 hours to respond to it. If you are a service business such as technical support, you can always cut your losses by stopping your services whenever you get chargeback alerts.

 

Getting your merchant services streamlines is a great relief.

Most of All: Make the Shift to EMV Technology Today!

Magnetic strips on credit cards are just too easy for thieves to copy. Beyond this fact, credit card issuers now levy fees—often in the form of chargebacks—on merchants who do not use EMV technology. They want their customers to feel protected by offering the best, most secure, products. But this system doesn’t work if the merchants refuse to hold up their end.

When considering your options for taking credit cards, know that you’ll need a merchant services processor or merchant service account to safely process your transactions. A+ rated First Financial specializes in high-risk merchant accounts. Simply click here to apply and you’ll be able to start taking credit cards within 48 hours!

 

 

First Financial

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