Credit Card Reform: What you need to know…
February 22, 2010 by Associated Press ©2010 · Leave a Comment
The new credit card law is finally here. Starting Monday, Read more
‘Get Your Money Right’ National Hip-Hop Summits Set
August 31, 2009 by AlumniUnit ©2010 · Leave a Comment
Financial Empowerment Summit to Share Financial Disciplines in a Troubled Economy Read more
Are You Saving?? Racial Disparities Exist in Retirement Savings
August 3, 2009 by AlumniUnit ©2010 · Leave a Comment
African-American and Hispanic workers are less likely to participate in their employer’s 401(k) and, when they do participate, save less for retirement than white and Asian employees, according to a new study released today. This results in a smaller nest egg for African-American and Hispanic retirement savers—even after controlling for age and income.
While 77 percent of white workers and 76 percent of Asian workers participated in their company’s 401(k) or a similar retirement plan in 2007, only 66 percent of African-American employees and 65 percent of Hispanic employees did, according to the study of 3 million employees at 57 large U.S. companies by the nonprofit Ariel Education Initiative and human resources consulting firm Hewitt Associates. Those that did sign up for their company’s 401(k) tucked away less of their salary for retirement. Asian workers managed to save 9.4 percent of their income in 2007, far more than whites (7.9 percent), Hispanics (6.3 percent), and African-Americans (6 percent).
That adds up to smaller nest eggs for African-American and Hispanic workers. For employees who earn between $30,000 and $59,999 annually, whites had an average account balance of $35,551 and Asians had tucked away an average of $32,590. That’s over $10,000 more than African-Americans ($21,224) and Hispanics ($22,017). The racial disparity is even more dramatic at higher pay levels. Hispanic employees who earn $120,000 or more annually have an average 401(k) account balance of $150,456, compared to $223,408 for white workers in the same pay range.
Investment strategies also varied by race. African-American workers were less likely than other employees to invest in equities. African-Americans generally had 66 percent of their 401(k) assets invested in the stock market, which is less than Asians (73 percent), whites (72 percent), and Hispanics (70 percent). African-Americans were also the most likely to take a 401(k) loan or hardship withdrawal from their 401(k) plan. Some 16 percent Asians had outstanding 401(k) loans in 2007, compared to 39 percent of African-American workers, 29 percent Hispanic employees, and 21 percent of white savers. Plus, 7.8 percent of African-Americans have taken 401(k) hardship withdrawals, versus just 2 percent of Asian workers – the group least likely to withdraw retirement funds early.
New student loan repayment program goes into effect July 1st
June 29, 2009 by AlumniUnit ©2010 · Leave a Comment
Those drowning in student loan debt may be able to get some relief with the aid of a new program. Read more
What credit card law changes mean for consumers
June 15, 2009 by AlumniUnit ©2010 · Leave a Comment
The Credit Card Holders’ Bill of Rights Act of 2009 was signed into law on May 22 promising relief to financially strapped Americans. More than half of us have at least one credit card, contributing to personal debt among U.S. citizens – for credit cards, auto loans and the like – of $2.5 trillion above and beyond home mortgages.
Government figures report that U.S. credit card debt has jumped 25 percent in the past 10 years, reaching $963 billion in January. And Web site creditcard.com says the average outstanding credit card debt for households that have a card was $10,679 at the end of 2008.
“Credit is going to be more expensive and harder to get,” said Mark Foster, Director of Education for CCOA. “Now, more than ever, it is important for consumers to focus on knocking down their credit card debt and building up their savings.”
The new regulations – which won’t take effect until the second quarter of 2010 – have been widely praised, yet most people aren’t sure exactly how the changes will affect them. Here’s a look at what the act – officially, H.R. 627 – means to credit card holders:
The Good:
Introductory rates will stay in place for at least a year. And after that, companies will have to give you 45 days’ notice – instead of the current 15 – before they hike your rate.
Companies will be required to mail statements at least 21 days before the due date.
Credit card payments will go toward debts with the highest interest first – it’s been the other way around previously.
Double-billing cycles, which essentially eliminates the interest-free period for consumers who move from paying the full balance monthly to carrying a balance, are no longer allowed.
Greater disclosure from the companies is required. A big plus for consumers is they will now be told how long it will take (and how much money it will cost) to pay off a debt making only monthly minimum payments.
No one under age 21 will be allowed to have a credit card without showing an ability to pay or getting a co-signer.
The Bad:
Since the law won’t take effect for several months, companies may see the time in the interim as an opportunity to “get while the getting is good.” Interest rates are predicted to rise soon, by at least two more points by year-end. Introductory rates will go higher since the companies won’t be able to raise them for a year after.
Credit card issuers say the change will cost them at least $10 billion annually in lost revenue. Accordingly, lenders may cut back on credit, a move that could further weigh down the sputtering economy.
Even those with great credit will be affected as companies are predicted to rein in great balance- transfer offers and/or cut credit limits to conserve their cash.
Lenders may bring back annual fees and other charges to make up for lost revenue that previously came in the form of late or over-limit fees. At present, only 20 percent of card issuers have annual fees, but experts think that will change soon.
Those with credit problems will be less likely to get unsecured cards, and have to turn to secured cards, which require a deposit.
