Banks Are Approving Small Business Loans at Rates Not Seen Since Before The Great Recession

3D image of bank vault and gold ingots with red carpetGetty

Approvals of loan applications from small business owners reached post-recession high mark (26.9%) at big banks (assets of $10 billion+), while small banks granted more than half of the small business funding requests they received in November 2018, according to the latest Biz2Credit Small Business Lending Index™.

Overall, 2018 has been a good year for both borrowers and small business lenders. Because the economy continues to show strength and companies are doing well, small businesses in search of capital have been able to find it. For good reason, optimism among entrepreneurs remains high, according to the October NFIB Small Business Optimism Index, which has trended upward for the past two years.

Meanwhile, the Fed has continuously raised interest rates over the past 18 months. While there are signs that the increases may slow down, the hikes have made it more profitable for banks to loan money – especially when compared to the near zero interest rates that were in place during the post-recession credit crunch.

Technology has played an important role, too. Data analytics have become very advanced and have helped reduce lender risk. Thus, default rates on business loans are lower than ever before, according to Biz2Credit’s data. Further, banks and credit unions have been making SBA loans at record volumes.

SBA loans come with government guarantees against default that mitigates lender risk, thereby providing incentives for institutions to lend money to businesses that might not otherwise qualify for term loans. SBA loans help thousands of small businesses get off the ground each year, and I do not see an end to this trend anytime soon. SBA lending helps bolster the economy.

[“source=forbes]

Goldman Sachs: As long as consumers keep shopping, there’s hope for the economy

Shoppers carrying bags walk up Fifth Avenue in New York City. 

David Goldman | Getty Images
Shoppers carrying bags walk up Fifth Avenue in New York City.

For a market that’s become increasingly jittery over the U.S. economy, Goldman Sachs has a message: All is not lost.

Wall Street’s head-spinning volatility, which last week shaved more than 1,000 points off the Dow Jones Industrial Average, has pushed stocks into correction territory and raised fears for 2019. Although falling stocks and rising interest rates will continue to weigh on sentiment, those negatives are likely to be offset by higher wages and oil prices in retreat, Goldman said in a research note to clients Saturday.

“Three of the key drivers of consumer spending send a positive message for the near-term outlook,” the bank’s analysts wrote.

“First, real disposable income is likely to continue its strong growth due to accelerating wage growth, and recent declines in the oil price are likely to be a significant tailwind to spending in 2019,” Goldman said. November’s jobs data released on Friday showed lower-than-expected payrolls growth but wages growing at the fastest rate in nearly a decade.

“Second, the saving rate looks elevated relative to the high level of household wealth, even after the recent sell-off,” the analysts wrote. And with consumer spending — which comprises 2/3rd of the vast U.S. economy — still strong, “consumer sentiment is likely to stay elevated, reflecting strong underlying economic fundamentals as well as optimism about the labor market and income growth,” the firm said.

Jobs numbers show economy slowing to a more gentle growth, says economist

Jobs numbers show economy slowing to a more gentle growth, says economist   12:13 PM ET Fri, 7 Dec 2018 | 03:32

Goldman’s relatively upbeat assessment came against a backdrop of a market buffeted by internal and external risks — most notably the U.S.’ ongoing trade war with China. The Dow has erased its gains for the year, while the S&P 500 pulled back 2.3 percent to 2,633.08 and turned negative for the year.

The bank acknowledged that those sharp losses will translate into “some near-term restraint on spending,” as well as consumer lending. Rising interest rates will also dampen the outlook, the bank said, adding that growth will gradually decelerate from 2.8 percent in the first quarter to an average of 2.4-to 2.5 percent over 2019.

In a somber assessment of its own on Friday, Morgan Stanley forecast the market would remain “range bound” in 2019, citing “the elevated risk of an earnings recession. We expect topline growth to decelerate (due to decelerating GDP) and margins to come under pressure.”

With the Federal Reserve and the European Central Bank pulling back on loose money policies, “the good news is that tightening may be coming to a pause/end early next year which could bring relief to global asset prices particularly if China growth stabilizes,” Morgan Stanley’s analysts wrote.

Still, economists point to the sharp drop in crude prices, which recently fell below $50 per barrel, as a boost for consumers.

“The recent declines in the oil price, the high savings rate, and strong consumer sentiment, largely offset the drag from recent stock price declines, tightening lending standards, and higher rates,” according to Goldman.

“The bottom line is that even after recent declines in the equity market, we continue to expect strong but decelerating consumption growth over the next few quarters,” the bank said.

[“source=gsmarena”]

The Opening Bell: Where currencies start on Friday, November 30, 2018

FED FOMC minutes from the November 8 meeting just out:
– Almost all policy makers say rate hike warranted ‘fairly soon’.
– Many said it might be appropriate at some upcoming meetings to begin putting greater emphasis on evaluating incoming data.
Nothing else of note, and very little movement initially from it.

Yesterday the big news was the USD sell off after Powell’s speech, which stole some of the Meeting minutes thunder, with the highlight being the comment that they are just below the neutral rate. As the Market digested this yesterday the USD came back a little, as traders wondered if it got a touch ahead of itself.  Previously the Fed has stated that it is likely to go a bit above neutral anyway, so if the neutral rate is circa 2.5-3.5%, by definition we are indeed just below that. One hike this year and four next year still only takes us to a 3.5% Federal Funds rate, so maybe the comment was not as dovish, and not as big a change in the Feds thinking as it appears.

NZ Business confidence came out at -37.1, the same as last time. At the extremes this was really market moving, but for now has fallen somewhat to the background.

Australian Private Capital Expenditure missed, but it is a volatile data point, and there was little reaction.

Teresa May is out saying the analysis shows the negotiated Brexit Deal is the best deal, and the EU has made it clear it is the only deal. A fairly healthy dose of scaremongering one expects, and a few more headlines like this from May before the December 11th vote will be no surprise.

Nothing too major on the economic calendar for the weekend.

Global equity markets are mixed, Dow -0.24%, S&P 500 -0.19%, FTSE +0.49%, DAX -0.01%, CAC +0.46%, Nikkei +0.39%, Shanghai -1.32%.

Gold prices are up 0.2% trading at $1,224 an ounce. WTI Crude Oil prices have bounced from their lows, currently up 0.2% on this time yesterday trading at $51.88 a barre

[“source=gsmarena”]

Why is credit card usage on the rise?

Clockwise from top: Sumit Bali, Ranjit Punja, Surya Bhatia, and Vijay Jasuja

In the past couple of years, credit card outstanding has been increasing. It went up 35% in value during the April-October period in FY18. We ask experts about the increased focus on credit cards

Sumit Bali, senior executive VP and head-personal assets, Kotak Mahindra Bank

If you look at the overall lending market, there is hardly any demand from companies. A lot of repricing is happening, but there is no fresh demand coming in. It is the same story for home loans as well. These are two big segments going through a slowdown. On the large ticket loans, a lot of churn is happening. Borrowers with higher rates of interest are negotiating and getting lower rates or moving to other banks at a lower rate. Overall, that segment is not growing for the bank.

However, the unsecured piece has been growing. Over the last few years, we have seen systemic change in unsecured lending. Today, you have a lot of information from the (credit) bureaus. Fintech companies give you a lot of data about a customer. Even if you don’t have a customer’s credit history, you can still onboard her based on other data about her. Based on the transaction history from her savings account, though she is a new-to-credit customer, a bank is now comfortable to lend. Also, post-demonetization, acceptance of card has grown.

Another reason why personal loan is growing is that there is a segment now that is happy to consume now and pay later. Today if you want to go on a holiday or buy latest gadgets, the new generation is happy to take a loan. As consumers, you should use credit card sensibly because ultimately it will reflect on your credit history.

Vijay Jasuja, chief executive officer, SBI Card

Overall, credit card spends have increased 42% year-on-year. Our credit card outstanding growth has been 80% year-on-year. There are multiple reasons for the growth in spends. Firstly, the e-commerce boom has increased the spends on the cards. Secondly, the confidence level of consumers to use cards has gone up post-demonetization. Earlier, there was a concept that unless you have a credit history you will not be eligible for a credit card. But now individuals have a higher income in their first year of job itself. But they don’t have a credit history. Technically, they will be called new-to-credit customers. Another segment is the individuals in the tier 1 and 2 cities who see their peers using cards.

The question is, will the bubble burst if credit card spends go up significantly? In the credit card asset portfolio, the credit card outstanding amount is of people who are away from the due date. There are customers who get their high-value spends converted to EMIs, which has also increased the overall credit card outstanding amount. Then there are people who don’t have sufficient liquidity to pay. They pay a minimum amount and revolve the facility with high interest. This is the segment (that is) risky. About 20-27% of our customers fall in the last segment and it is consistently the same. That means additional and new-to-credit portfolio are not bringing in additional risk.

Ranjit Punja, co-founder and CEO, Creditmantri.com

Largely, since the last downturn in the economy, lenders have become careful about who they lend to. They typically only lend to those who have demonstrated a good credit score. They have clamped down on bad credit customers. However, today, with a general upsurge in income, the  whole advent of e-commerce, the ability to pay online and digitally savvy customers has led to utilisation of more income. Banks have started believing that newer fintech models are probably the way to go in terms of underwriting. At this point, it is a drop in the ocean. Banks are making the underwriting journey simpler. There is a lot of data available digitally.

Time will tell if that is a good way to look at lending. At this moment, the end users are enjoying the benefit. Typically, in the financial world, you see these ups and downs. You will see a bad credit cycle and then delinquencies. I am concerned with newer models that are not time tested.

As a consumer you shouldn’t spend beyond your means. Credit card and unsecured loans tend to do that to you, especially for people who don’t have the discipline to borrow and repay. Credit card is a simple way to overspend. And interest rates are very high. Being credit wise is critical for someone who has not used a credit card ever. Our advice is to start small, display discipline and make sure you service you debt.

Surya Bhatia, New Delhi-based financial planner

The push by the government has helped India convert to a cashless economy. Meanwhile, none of the banks want to miss out on the retail population. The people in the higher income bracket were already having a credit card. Digital banks like Patym Payments Bank will give this a further push. The bigger banks want to have the bigger pie, which includes the HNI segment and those in the higher income group. But the real money in terms of volume is the young population. Everyone wants to grab hold of that population. The young millennials are the people who want to spend, especially digitally.

There is also a bit of loyalty factor. For instance, I still hold the credit card that I got for the first time. In the last many years, I have bought two other cards and discarded them too. But my first credit card still continues. There is no specific reason why I hold on to it. Every bank wants to cash in on that population. The idea is to catch them young and to make them stick with you.

Consumers have also changed. They are now spoilt for choices. In the early days, they used to pay for credit cards. Now there is no concept of paying for cards. For instance, if you spend a certain amount, most of the card providers waive off the charges.

Logically, you should not have more than one card. And better still is stick to a debit card. Once you understand debit cards well enough, then may be opt for a credit card.

[“Source-livemint”]

PERSONAL FINANCE: Tightening the tax screws

Ferdie Schneider. Picture: SUPPLIED

Ferdie Schneider. Picture: SUPPLIED

The squeeze on individual taxpayers continued in this year’s budget with increased Vat and fuel levies, almost no fiscal-drag relief and a below-inflation increase in the medical tax credit that whittled away this benefit.

This year’s additional burden comes on the back of a steady increase in income tax and indirect taxes over the past few years.

South Africans’ personal income tax burden has risen from 8.3% of GDP seven years ago to 9.8% in the 2018 tax year, the Budget Review notes.

Add to this consumption taxes such as Vat increasing the price of many purchases by another percentage point, the fuel levy and road accident fund levy increasing the tax on fuel from 35.6% to 38.4%, and a two-percentage-point increase in ad valorem excise duty pushing up the cost of goods such as vehicles and cellphones.

Following an income tax rate increase in 2016 and the introduction of a 45% marginal tax bracket for high earners last year, personal income tax rates were not increased this year.

However, the screws will tighten on all taxpayers as national treasury chose, once again, not to fully address tax-bracket creep. This occurs when a salary increase pushes a taxpayer into a higher tax bracket.

This year even the lower income brackets were granted only partial bracket-creep relief — the bottom three income brackets were raised by a below-inflation 3.1%, while the four higher tax brackets were not adjusted at all.

This will cost personal taxpayers an additional R6.8bn in the 2019 tax year.

Individual taxpayers will also be squeezed for an additional R700m because medical tax credits rose by less than inflation.

They increased by a mere 2.31% (for the first two beneficiaries) and 2.45% (for remaining beneficiaries) — well below the increases in contributions that medical scheme members face, which are typically two to three percentage points above inflation (which was 4.4% for the year to the end of January).

The increases in contributions average 7.75% for nine large medical schemes, according to Grant Thornton Healthcare.

Middle-income earners were spared investment tax and estate duty increases this year, but high earners with estates exceeding R30m will face a higher estate duty rate of 25% — or should they try to donate assets exceeding this amount, they will pay donations tax.

Dividends tax was increased last year from 15% to 20% and the inclusion rate on capital gains tax increased in 2016.

The tax burden on individuals is often measured in terms of the number of days in the year the average taxpayer works to pay his or her tax obligation — known as tax freedom day.

Last year tax freedom day was on May 25 — five days later than it was in 2015 and six weeks later than it was in 1994, the Free Market Foundation reported last year.

Tax freedom day is calculated by taking total government tax revenue and dividing it by GDP.

But Ferdie Schneider, the national head of tax at BDO, says the calculation is misleading because it only considers an average effective tax rate, and these rates vary sharply.

Just in income tax, the Budget Review shows the 2019 average income tax rates will vary from 0% to 36.8%.

Tax freedom day also fails to take into account public services provided by the state.

If government fails to provide benefits such as health care, education, retirement savings and security, taxpayers need to fund these themselves.

Health care is not the only one of these costs rising at above-inflation rates. Recently Old Mutual warned parents to expect education costs to rise by 9%/year.

This means public school costs of R32,000/year last year could amount to R50,000 in five years, and private high school costs of R125,000 could rise to R197,000 by 2021. University costs of R54,000 last year would increase to R85,000 by 2021 and R176,000 by 2030, Old Mutual says.

Eugene du Plessis, director of tax at Grant Thornton, says a taxpayer earning R1m/year in the past tax year and paying R7,500/month in medical scheme contributions, R10,000 in private schooling costs, R5,000 in retirement savings and R1,360 for security had an annual income tax burden of R275,918.

Such a taxpayer would have needed to work 224 days out of 365 — or until August 13 — to cover tax, medical, security, retirement and education costs.

In the tax year that starts on March 1, assuming this taxpayer’s income and costs increase by 4.8%, his or her annual income tax liability will rise to R294,417, which means working an extra two days until August 15 to meet expenses.

Rhodes Business School tax professor Matthew Lester says last year’s tax statistics released by the SA Revenue Service show that just over 1m taxpayers earning more than R500,000/year pay 62% of personal tax, which amounts to 23% of total tax revenue, before they spend a cent on anything else.

The tax burden on these individuals could therefore be close to reaching a tipping point.

Schneider says too heavy a burden on taxpayers leads to an emigration brain drain, tax avoidance mechanisms, and capital or income-generating potential being moved to tax jurisdictions with lower rates.

[“Source-businesslive”]

Opinion today: The personal finance data trap

This article is from today’s FT Opinion email. Sign up to receive a daily digest of the big issues straight to your inbox.

The network effect keeps many of us hooked on social media platforms, and many businesses captive to online marketing platforms. What would happen to our autonomy online if each of us, as consumers, had to rely on the same company for our payments and our credit scores?

John Gapper argues in his column on Thursday that Alibaba’s Ant Financial is a risky experiment in just this dual online role, and one that will keep customers locked into a version of a video game, compelled to keep making purchases to chase good credit ratings.

With a potential valuation of $120bn when it goes public, the Chinese social credit experiment has 520m users already. Although John believes these private credit rating schemes are less sinister than the state’s ambitions towards monitoring all its citizens’ online behaviour (in order to then impose rewards and punishments on individuals) the private schemes are troubling, he says — not least because tech companies have a more lax attitude to data than banks.

But the most worrying aspect of this Chinese innovation is perhaps how it “gamifies” how customers achieve (very opaque) credit ratings — “a tournament in which people must compete to raise their numbers through activity, like a financial version of social networks and mobile games.”

Africa’s changing of the guard
David Pilling questions whether the new faces as heads of government in Angola and Zimbabwe, Ethiopia and South Africa, are anything more than a switch in personnel. The ruling elite may just have successfully perpetuated itself in spite of appetite and hopes of real transformation.

Trump boxed in by Mueller’s chess moves
Edward Luce argues that Robert Mueller is gradually ensuring Donald Trump is on the defensive about ties to Russia. If Watergate is any guide, the investigation may take two years and could corner the US president.

Pro-Brexit sums do not add up
Chris Giles analyses the promise of a 2 to 4 per cent boost to the UK’s national income after Brexit, included in this week’s paper from Economists for Free Trade. He concludes that the model they use is flawed, their assumptions are unjustifiable, and so the conclusions cannot be right. In short: “Put rubbish in, you get rubbish out.”

Should public galleries be selling art or buying it?
Tiffany Jenkins argues that acquiring new works is a crucial part of the mission of public galleries. But in an age of tighter budgets and political demands about social mission, some are instead becoming merely museums with fixed collections — or, worse, having to sell their treasures.

Best of the rest

Why the Jeremy Corbyn spy story won’t change minds and what could — Stephen Bush in the New Statesman

The slaughter in Syria should shame us all — Jonathan Freedland in the Guardian

Romney faces complicated path as he runs for Senate seat — Dan Balz in The Washington Post

The game-changing success of Black Panther — David Sims in The Atlantic

What you’ve been saying

Think very carefully before regulating speech — letter from Donald E Graham

Any call to regulate Google, Facebook, Amazon and Apple should be careful to say: what is it we are to regulate? I have lived through more than one time when a president would have preferred that fewer people read news stories in The Washington Post. I would suggest that voters in any country approach the idea of regulating speech on Facebook and Google with extreme caution. Readers should make up their own minds whether to read the Financial Times and government should have no role in their decision. The large technology companies must comply with laws that all companies must obey. They must pay their taxes. They must obey the antitrust laws and mustn’t overcharge consumers. But when it comes to what stories they publish on Google News or Facebook, or whose advertisements they accept, governments should keep their hands off.

Comment from Leftie on Millennial insecurity is reshaping the UK economy

Times are hard for millennials because the dice of government policies are loaded against them. Government prefers to support the huge cost of pensioners’ healthcare and “triple-lock pensions”. Why’s that? The simple answer is that close to 90 percent of pensioners are registered to vote and they do vote. Whereas, millennials and many other pre-middle aged voters do not vote. Does that matter? Of course it does! Politicians are just like ordinary people, they want to hang on to their well-paid jobs. So they vie with each other to be the strong friends of pensioners and the over-fifties who actually make a difference to politicians’ careers.

Our presence in space is helping us manage climate change — letter from Robin Russell-Jones

Robin Russell-Jones is right to assert that solving climate change will involve a variety of Earth-bound commitments. He is wrong though to dismiss the improvement of access to space by private companies as pointless and harmful. The relevance of space-based technologies to climate change mitigation has been self-evident since the “Blue Marble” image of Earth, taken in 1972 by the crew of Apollo 17, helped give rise to the modern environmental movement. Since then our knowledge and understanding of the causes and effects of climate change on the planet, as well as how to better manage the consequences for its inhabitants, have been immeasurably improved because of our presence in space.

Today’s opinion

How can we protect workers from AI? FT readers respond Ideas and counter-arguments poured in after Rana Foroohar asked for your thoughts

Poland’s pollution gives Vogue a less glamorous backdrop Polish cities’ poor air quality regularly breaches European standards in the winter

Why Donald Trump will never escape Russia The US president is being outplayed by special investigator Mueller’s chess moves

Public art collections in an age of austerity and superwealth Museum and gallery curators are under pressure from politicians and soaring prices

Free Lunch: Intangible does not mean untaxable While rent extraction persists, at least capture it for the public good

Instant Insight: The gulf separating the two camps of eurozone reformists The German-led group remains opposed to the France and Italy contingent on sovereign debt

Instant Insight: The latest pro-Brexit analysis has got its sums badly wrongAssumptions used for the Economists for Free Trade paper are absurd

Africa’s power shuffle is a renewal, not a revolution The ruling elite has engineered a personnel change in the interest of self-preservation

FT View

FT View: A plan to make Warsaw pay for its defiance In principle EU funding should be conditional on respecting EU rules

FT View: Making progress against the American gun plague As the culture changes, incremental steps can help slow the killing

The Big Read

The Big Read: Driverless cars: mapping the trouble ahead Competition between companies is putting a brake on the highly complex 3D maps autonomous vehicles need to function

[“Source-ft”]

The New Sony Xperia XZ2 Has Tools for Small Business Content Marketers

  • The New Sony Xperia XZ2 Made for Creators
  • Sony (NYSE: SNE) announced the Xperia XZ2 at Mobile World Congress 2018, where the prevailing theme amongst smartphone manufacturers this year has been cameras and entertainment.
  • Hideyuki Furumi, Executive Vice President of Global Sales and Marketing for Sony Mobile Communications, explained in a press release, “If entertainment is your priority, then our new Xperia XZ2 and XZ2 Compact are your smartphones. We have pushed Sony’s boundaries even further with our new products for movie recording, viewing, and music listening.”
  • However, for content creators, particularly small business marketers, the XZ2 also has some noteworthy features which may persuade them to consider it as their daily driver, especially if the price is right.
  • The Xperia, Sony’s flagship phone, comes in two different versions. The XZ2 and the XZ2 Compact have been designed with quality cameras, display and audio technology content creators involved in small business marketers can take advantage of.
  • For small businesses operating in a creative field, the XZ2 is a smartphone packed with powerful features for creating and consuming content.
  • Sony Xperia XZ2 Specs
  • The specs both phones share include: a Qualcomm Snapdragon 845 processor, 4GB RAM, 64GB storage expandable up to 400GB with MicroSD card, 18:9 Full HD+ (1080×2160) HDR display, TRILUMINOS Display for mobile, 19MP rear camera and 5MP front camera, fingerprint scanner on the back, and Android 8.0 Oreo.
  • The XZ2 has a 5.7-inch display, Dynamic Vibration system, QI Wireless charging, 3180mAh battery, and is covered in a 3D Gorilla Glass surface.
  • The compact version has a 5-inch display, polycarbonate finish and a 2870mAh battery.
  • The standout features of both phones are fast connection speeds (up to 1.2Gbps) with second-generation Gigabit LTE, 4K HDR Movie recording, 960 fps Super slow motion video (FHD/HD), Predictive Capture (motion/smile), 3D Creator, Movie Creator and AR effect.
  • Price and Availability
  • The Xperia line is not the first brand customers think of when they are in the market for a smartphone. But if Sony prices this phone right — meaning much lower than the $1,000 price tag of other flagship phones — it has a great chance of getting more recognition.
  • Sony hasn’t announced how much these phones will cost when they become available globally in March, so a decision on whether small businesses can fit this device in their budget must wait. However, when the XZ1 launched it was $699 and the XZ1 Compact came in at $599. So if the latest Sony phones come in anywhere near this, they will definitely get the attention of many businesses and consumers alike.
  • [“Source-smallbiztrends”]

The No-Fear Guide To Getting Your First Credit Card

As countless headlines will tell you, my generation is waiting longer to get credit. The debt collection industry is on our hit list of beloved Boomer relics to kill, right behind Applebee’s, sex and the Toyota Scion.

This was never the case with me. I opened a credit card at 25, after years of pining for that rite of passage, the way late bloomers yearn to hit puberty.

I know people whose parents opened credit cards in their names while they were still in middle school; their credit grew for years — gradually, safely, without their knowledge. What fun! I imagine they all hang out together now, in whatever exclusive club bounces patrons with credit scores lower than 700.

But for many, that first credit card is such a high barrier to entry; annoyingly and paradoxically, you need credit to be able to build credit. And even if you do already have a credit history, the application process itself is often maddeningly opaque.

Shutterstock

I put out the bat signal to a number of credit card experts and people my age who made it over the no-credit hump: How do you go about getting your first card? We’ve cobbled together a step-by-step guide to success. In the words of Leslie Nielsen from “Airplane!”: “Good luck. We’re all counting on you.” (You’ll do fine.)

1. What To Look For In Your First Credit Card

First of all, congratulations on this, your first foray into a complicated financial system that our parents were able to mindlessly navigate. Luckily, the first step in the process is also the most fun and least stressful: researching which credit card you want. You get to judge the credit card issuers before they judge you.

The best card for you will ultimately depend on your unique financial situation, but there are some broad-strokes principles that apply to pretty much everyone.

Here is a checklist of the non-negotiables you should look for in your first credit card:

No Annual Fees

Now is as good a time as ever to start getting indignant about paying money to spend your own money. (This rule also applies to ATMs, checking accounts and splitting meals evenly in a large group when you just had a salad on the side of your water.)

“Perhaps one day you’ll opt for a card that offers lots of perks, points and benefits in exchange for an annual fee, but now is not that time,” said Han Zeng, cofounder of InvestmentZen, a personal finance and investment news site. “You’ll have enough on your plate as you work toward building your credit history. Don’t complicate the matter further”

A Low Interest Rate

OK, so some level-setting: If this is your first credit card ever, it is likely that you have a low credit score or no credit at all. Because of this, you can’t expect to come out of the gate with a card that has an amazing interest rate.

That said, you should still be price-shopping cards by their annual percentage rates — the interest you’ll be charged on the balance you don’t pay off each month. For one, a lower rate is a lower rate, and this will matter if you ever need to carry a balance. (The dream, of course, is that you never will — that your credit card spending will be as judicious as if potential mates were monitoring it. But life sometimes happens.)

Second, comparing APRs will weed out out the really bad actors — the companies that know you’re shopping around with your lousy credit and are hoping to take you for a ride. Beware a much higher-than-average APR.

Here’s a good thing to know: the current average credit card rate. (Just Google that phrase — you’ll be greeted with countless websites aching to tell you.) According to Bankrate, as of early March 2018, the average APR for credit cards is 16.84%. Again, your first card’s rate will probably be higher than that, depending on your credit score — mine was in the mid-20s.

No Store Cards

Speaking of astronomical interest rates, stay away from retail cards, no matter how many times they’re offered to you at checkout.

“Retail cards — such as Target, Macy’s, Victoria’s Secret, Best Buy — are much easier to get than bank credit cards, but beware: These come with much higher interest rates,” said Holly Morphew, a certified financial health counselor and founder of Financial Impact.

Here’s something that isn’t in the big print on store card advertisements: Retail cards aren’t some magical variety of credit card — they’re just normal cards from normal banks. There is no Bank of Macy’s or Bank of Sunglass Hut.  The store partners with a financial institution you’ve probably already heard of, maybe even one that’s already turned you down; the retailer gets your business, and the bank works out the particulars, usually at a higher interest rate.

Catered Perks

Might as well try, right? The well can be fairly dry for first-time borrowers, but depending on your current credit score, you could qualify for a card that offers you cash-back, airline miles or other benefits.

And, obviously, if you’re in a position to choose among perks, you want the ones that best meet your spending profile, which you know better than anyone. Make sure you go through the fine print on a credit card’s rewards carefully, though; often, a card will offer rotating perks that change monthly or quarterly.

Incentives For Good Behavior

“Look for a card that rewards good behavior,” said Andrew Housser, a consumer finance specialist and co-CEO of Freedom Debt Relief. “Some cards offer a bonus each month when the bill is paid on time. Some offer a waived first late-payment fee, which should never have to be utilized in the first place; others offer no foreign transaction fees … which can be helpful for someone who often travels internationally.”

2. How To Apply (And Not Get Rejected)

If you’re just starting to build credit, you will probably get rejected — maybe even several times — in your quest to open a credit card. That’s fine, and it happens to many people.

Much like being bad at money in general, your temporary inability to get a credit card is not a moral failing.

That said, there are a number of things you can do to raise your chances of getting accepted — and keeping your credit score from dipping during the application process.

Check Your Credit Score Monthly

As tempting as it is to avoid the hairy truth of your financial situation, you need to know exactly what kind of credit you’re dealing with. This will help you calibrate your expectations for what tier of card you can apply for, and it’s also just a smart habit to develop; if you check your score regularly, you’ll be better positioned to triage it, if necessary. Plus, you’ll be able to spot and report any fraud as soon as it occurs.

It’s a good idea to always have a free, direct line into your credit score; you should be able to pull out your phone and check it at any time, within a month’s accuracy. And this is a pretty reasonable goal — many budgeting apps and bank accounts offer free credit score monitoring.

At the very least, pull your credit report as often as you can do it for free.

“Each of the three major credit reporting agencies — Equifax, Experian and TransUnion — is required to provide consumers a credit report once a year,” Housser said. That means you can pull a free report once every four months.

Important: annualcreditreport.com is the official, government-recognized website for pulling said credit reports. Almost any other site you find by Googling “free credit reports” will end up charging you money, no matter how much the word “free” is in the branding — take it from someone who once worked for one of them.

Apply For A Card That’s Within Your Credit Range

“The best tip I have to avoid getting rejected is to only apply for the cards you’re qualified for,” Lisa Rowan, a writer and savings expert at The Penny Hoarder, told me. “Generally, credit cards are designed to meet the needs of specific kinds of applicants. For example, some cards are for those who have an excellent credit score (750-plus) while others are designed for those who are still improving their credit scores.”

So, basically: Be realistic, not aspirational. Don’t get lured into applying for a preferred card with fantastic perks for which you have very little hope of getting accepted. There’s no essay portion in a credit card application — no way to demonstrate your unquantifiable value to an issuer. If your credit doesn’t qualify, it doesn’t qualify.

There are a number of good-faith, third-party review websites out there that will tell you the ideal credit score ranges for specific cards. Before you apply, look up this range — and if you don’t fall within it, keep looking.

Don’t “Spray And Pray”

“Each time you apply for a new line of credit, your credit score drops — if you have one — about 10 to 15 points for about one to two months,” Morphew said. “You can get around this by doing all your ‘shopping’ within a 30-day period. By doing this, your credit score is only impacted one time.”

Be intentional and realistic. You’ve done your research on the credit cards you want and you know roughly what you qualify for; time to pick your best bet. Don’t apply for more than one card at a time; wait till you get rejected to apply to your second choice.

Try Your Luck With Legacy Connections

Consider looking at a financial institution that already has some of your business — you could be grandfathered into a credit card account, based on how reliable a customer you’ve been for them.

“Start by going to where you bank to apply for your first credit card,” Morphew said. “Since you have no credit history, they can evaluate your ‘risk’ by looking at your bank accounts. How long you have had your account open, history of overdrafts and average balance will be factored into their decision to give you a line of credit.”

Do this in person — an online application might not give you the opportunity to note that you’re already a customer — and don’t pin all your hopes on this. In my experience, banks and credit unions will indeed take sides against the family if your credit is that bad.

List Multiple Sources of Income

Credit card issuers like to see that you make a steady stream of income — and, unfortunately, size matters. This means freelancers and lower-income applicants will have a tougher time getting approved, especially if they don’t have credit.

There’s no way around this, but you should make sure that you’re reporting all applicable sources of income — you’re allowed to calculate more than just your base salary into the final amount you put down.

“State your income accurately,” Housser said. “Along with reporting salary/employment income, applicants over 21 generally can also list non-employment sources such as investments, spousal and child support, retirement benefits and government benefits.”

Additionally, as of 2013, a married person can also include a spouse’s income — as long as there is a reasonable expectation of access to it. (Thank our beleaguered brothers at the Consumer Financial Protection Bureau for that one.)

3. What To Do If You Get Rejected

Chin up. Remind yourself of your good qualities outside of your creditworthiness.

But also: You now basically have two viable options for moving forward.

Wait And Build Credit Another Way

Option one: You are free to diminish, and go into the West, and work on building your credit through other methods. Then, in a year or so, you’ll apply again with a better chance of getting accepted. Think of this as your gap year.

There are several ways you can build credit without ever going near a credit card application:

  • Are you the person who got stuck paying the utilities in your house or apartment? You might be able to get credit for that. Make sure they’re in your name and that you’re paying them on time. (That second part is just garden-variety good advice, if only to avoid getting disgruntled calls from your power company.)
  • Consider opening a credit builder loan.
  • Do you have auto, personal or student loans? Those all count toward a history of repayment.
  • Can your parents add you as an authorized user on one of their credit cards? This is probably the easiest way to get a good credit score without doing a single thing. Side note: It doesn’t benefit your parents at all, and only opens them up to risk, so: Tell them to form an orderly queue.

Get A Secured Card

If you don’t want to wait a year or so before your second attempt, great news: There is a type of card for which everyone is qualified, regardless of credit history. It’s called a secured card, and it comes with one catch.

“You give the credit card company a certain amount of money — say $300,” Morphew explained. “In exchange, they give you a $300 credit card which is secured with your $300, which they have put in an account to hold for you until you have established you are a responsible card holder — meaning, you pay on time each month. After a period of time, usually 12 months, your bank will give you back the original $300 and you now have a line of credit.”

If you’ve exhausted all other avenues, a secured card is the way to go. You’ll have a card immediately that will effectively function like a checking account, you’ll get to build credit for a year and your bank will, at some point, transfer you to a non-secured credit line, elevating you to the ranks of cardholders everywhere.

4. How To Use Your First Credit Card To Build Credit

Once your application for a credit card is, at long last, accepted, it’s time for your “Pretty Woman” moment. Those other issuers that didn’t want to give your cruddy credit a chance? Big mistake. Huge. You’re going shopping now.

Actually, you’re just going to be putting one or two monthly bills on your card and setting up automatic payments to clear the balance every month. The best revenge is an ascendant credit score.

It’s not hard to build credit once you have a card; most of being good at credit is biding your time, paying bills relatively promptly and keeping your debt down.

To get more technical, FICO scores — which are the industry standard for lenders — use five factors to calculate your credit; your job for the life of this credit card is to do your best to stay on top of them.

Here they are, in order of priority:

  • Payment history (35%): On-time payments make up more than a third of your credit score, which means missing even one can put you in a deep hole. At the very least, make minimum payments each month. If your checking account is replenished often, set up an automatic payment schedule. The more mindless it is for you to stay on top of this bill, the better.
  • Amounts owed (30%): This factor largely has to do with your credit utilization ratio, which is how much of your credit limit you’ve used up and not paid off. The easiest way to get full marks in this category is to pay off your balance every month; if you can’t do that, try not spend more than 30% of your available credit.
  • Length of credit history (15%): To be honest, there’s nothing you can do about this except wait patiently. FICO scores are weighted toward people who have been using credit longer, and you just got your first credit line. Let the inexorable passage of time do its work.
  • Credit mix (10%): This is one example where you might know what’s better for you than a credit scoring conglomerate. FICO privileges people with different types of credit — both revolving (that would be this credit card) and installment (auto loans, student loans, mortgages, etc.). If all you have or need right now is a credit card, that’s fine; there is no universe where you should take on debt just to raise your credit score.
  • New credit (10%): FICO keeps a tab on how many new accounts you open, as well as hard inquiries. Keep it simple: Stick with the one credit card for now.

Building credit is mostly about forming good money habits: Don’t spend more than you can pay off, keep credit available for emergencies and circle payment due dates on your calendar. The rest should, hopefully, take care of itself.

Follow me on Twitter for money tips and personal financial mishaps that I’m passing off as teachable moments. You can also find more writing at my site, On We Blindly Stumble.

[“Source-forbes”]

Jewelry We Hope to See at the Royal Wedding — Straight From Queen Elizabeth’s Collection

<p>After receiving an aquamarine necklace and pair of earrings from the president and people of Brazil in honor of her coronation, the Queen had Garrard amp Co., the former Crown Jeweler of the United Kingdom, make this matching tiara in 1957. She’s continued to update it through her reign, adding even more aquamarines and diamonds to the (already stacked) piece.</p>

After receiving an aquamarine necklace and pair of earrings from the president and people of Brazil in honor of her coronation, the Queen had Garrard amp Co., the former Crown Jeweler of the United Kingdom, make this matching tiara in 1957. She’s continued to update it through her reign, adding even more aquamarines and diamonds to the (already stacked) piece.

<p>Weighing nearly 19 carts, this diamond is shaped like a heart and is surrounded by a platinum web that ends in a border of pavé diamonds. It was originally part of a stomacher designed for Queen Mary in 1911.</p>

Weighing nearly 19 carts, this diamond is shaped like a heart and is surrounded by a platinum web that ends in a border of pavé diamonds. It was originally part of a stomacher designed for Queen Mary in 1911.

<p>The Delhi Durbar was India’s answer to a coronation, a massive gathering to celebrate the succession of a new Emperor or Empress of India. And just like at a coronation, there are jewels aplenty – including this diamond-and-emerald necklace made for Queen Mary for the event.</p>

The Delhi Durbar was India’s answer to a coronation, a massive gathering to celebrate the succession of a new Emperor or Empress of India. And just like at a coronation, there are jewels aplenty – including this diamond-and-emerald necklace made for Queen Mary for the event.

<p>This item is a sentimental one for the Queen – she wore it at her 1947 wedding to Prince Philip. And it’s as fragile as it appears: On the Queen’s wedding day, it broke before the ceremony and had to be quickly repaired for wear.</p>

This item is a sentimental one for the Queen – she wore it at her 1947 wedding to Prince Philip. And it’s as fragile as it appears: On the Queen’s wedding day, it broke before the ceremony and had to be quickly repaired for wear.

<p>This brooch features diamonds, rubies and sapphire “flowers” and was a gift to the Queen from her parents following the birth of Prince Charles in November 1948.</p>

This brooch features diamonds, rubies and sapphire “flowers” and was a gift to the Queen from her parents following the birth of Prince Charles in November 1948.

<p>Originally purchased for the future Queen Mary by a committee of girls from Great Britain and Ireland to celebrate her 1893 wedding, this tiara is now a staple in Queen Elizabeth’s rotation – many even say it’s her favorite. It’s been through many changes in its life: There were originally pearls on top of the points, which now are a part of the Cambridge Lover’s Knot tiara, and it can be worn both with or without a base. The Queen received the tiara as a wedding gift from her grandmother in 1947.</p>

Originally purchased for the future Queen Mary by a committee of girls from Great Britain and Ireland to celebrate her 1893 wedding, this tiara is now a staple in Queen Elizabeth’s rotation – many even say it’s her favorite. It’s been through many changes in its life: There were originally pearls on top of the points, which now are a part of the Cambridge Lover’s Knot tiara, and it can be worn both with or without a base. The Queen received the tiara as a wedding gift from her grandmother in 1947.

<p>This diamond-and-pearl tiara is a relic of a lost monarchy: It originally belonged to Grand Duchess Vladimir, the aunt of Nicholas II, the last tsar of Russia. She was temporarily separated from the tiara after fleeing St. Petersburg during the Russian Revolution, but was reunited with the piece a few years later when a British Secret Intelligence Service member rescued her jewels from Russia. After all that, she gave the tiara to her daughter, Princess Nicholas of Greece, who sold it to Queen Mary after her mother’s passing. When Mary died, the Queen inherited it – and still wears it today.</p>

This diamond-and-pearl tiara is a relic of a lost monarchy: It originally belonged to Grand Duchess Vladimir, the aunt of Nicholas II, the last tsar of Russia. She was temporarily separated from the tiara after fleeing St. Petersburg during the Russian Revolution, but was reunited with the piece a few years later when a British Secret Intelligence Service member rescued her jewels from Russia. After all that, she gave the tiara to her daughter, Princess Nicholas of Greece, who sold it to Queen Mary after her mother’s passing. When Mary died, the Queen inherited it – and still wears it today.

<p>Also known as the Cullinan III and Cullinan IV, these two stones weigh a massive 94.4 and 63.6 carats respectively, and held together, they make a brooch. Since they were frequently worn by Queen Mary, Queen Elizabeth’s grandmother, they earned the nickname Granny’s Chips.</p>

<p>This piece was created way back in 1820 for the coronation of King George IV. Now, people may recognize it from the State Opening of Parliament – Queen Elizabeth wears it in the procession to the event every year.</p>
This piece was created way back in 1820 for the coronation of King George IV. Now, people may recognize it from the State Opening of Parliament – Queen Elizabeth wears it in the procession to the event every year.
<p>A tiara was commissioned by the Queen herself to go with this set of earrings, pendant and necklace given to her by her father as a wedding present. The original suite was created in 1850, but the tiara – and a matching bracelet – were not added to the set until 1963.</p>
A tiara was commissioned by the Queen herself to go with this set of earrings, pendant and necklace given to her by her father as a wedding present. The original suite was created in 1850, but the tiara – and a matching bracelet – were not added to the set until 1963.
<p>This diamond-and-ruby necklace with floral detailing was another wedding gift to Queen Elizabeth from her parents, King George VI and Queen Elizabeth (and all your parents got you was a blender). It was frequently worn by the Queen in her younger years.</p>
This diamond-and-ruby necklace with floral detailing was another wedding gift to Queen Elizabeth from her parents, King George VI and Queen Elizabeth (and all your parents got you was a blender). It was frequently worn by the Queen in her younger years.
<p>This oversized brooch features diamonds set in silver and gold, formed in a bow shape, and is another piece from Queen Mary’s collection that Queen Elizabeth inherited after her death in 1953.</p>
This oversized brooch features diamonds set in silver and gold, formed in a bow shape, and is another piece from Queen Mary’s collection that Queen Elizabeth inherited after her death in 1953.
<p>This Cartier-crafted piece was given to Queen Elizabeth, again as a wedding present, by a dignitary. It was most recently seen on Princess Kate during an event at the National Portrait Gallery in London.</p>
This Cartier-crafted piece was given to Queen Elizabeth, again as a wedding present, by a dignitary. It was most recently seen on Princess Kate during an event at the National Portrait Gallery in London.
<p>This piece is a stomacher – best described as an enlarged brooch worn on the front of a dress. Queen Mary handed it down to her granddaughter, then-Princess Elizabeth, as a wedding present back in 1947, although due to changing fashions, the entire stomacher is rarely worn nowadays.</p>
This piece is a stomacher – best described as an enlarged brooch worn on the front of a dress. Queen Mary handed it down to her granddaughter, then-Princess Elizabeth, as a wedding present back in 1947, although due to changing fashions, the entire stomacher is rarely worn nowadays.
<p>This three-carat diamond solitaire ring may be impressive for an engagement ring, but for the Queen it’s pretty small compared to the other gems in her collection. However, it has impressive origins: The diamonds in the ring were taken from a tiara owned by Philip’s mother, Princess Alice.</p>
This three-carat diamond solitaire ring may be impressive for an engagement ring, but for the Queen it’s pretty small compared to the other gems in her collection. However, it has impressive origins: The diamonds in the ring were taken from a tiara owned by Philip’s mother, Princess Alice.
<p>This star-like diamond with strings of diamonds attached was made for Queen Victoria in 1856 by Garrard amp Co. from diamonds she had been given by the Sultan of Turkey. The brooch has been worn by every Queen that has followed her, including the Queen Mother and of course, Queen Elizabeth.</p>
This star-like diamond with strings of diamonds attached was made for Queen Victoria in 1856 by Garrard amp Co. from diamonds she had been given by the Sultan of Turkey. The brooch has been worn by every Queen that has followed her, including the Queen Mother and of course, Queen Elizabeth.
<p>At the center of this floral brooch is the Williamson Diamond – one of the most precious pink diamonds in the world. This, like many other pieces in her collection, was a wedding present for Queen Elizabeth, given to her by the man who discovered it, Dr. John Thoburn Williamson. It wasn’t for another six years, however, that it was placed in the brooch – and before it was, many guessed it would be mounted for the Queen’s coronation.</p>
At the center of this floral brooch is the Williamson Diamond – one of the most precious pink diamonds in the world. This, like many other pieces in her collection, was a wedding present for Queen Elizabeth, given to her by the man who discovered it, Dr. John Thoburn Williamson. It wasn’t for another six years, however, that it was placed in the brooch – and before it was, many guessed it would be mounted for the Queen’s coronation.
[“Source-people”]

The 3 Ways That Artificial Intelligence Will Change Content Marketing

In many ways, artificial intelligence (AI) is already influencing digital marketing in general, and content marketing in particular. But the truth is, there is so much more to come – so many more changes and improvements that AI will surely bring to content marketing.

In this blog post, I’m going to explore some of these changes in order to try to understand what the future holds – read on to discover the 3 ways that artificial intelligence will change content marketing.

What exactly is artificial intelligence?

Before I can discuss the effects of artificial intelligence – also known as AI, machine intelligence and in some cases, machine learning – on content marketing, it’s important to first understand what exactly artificial intelligence is.

So, what is AI, exactly?

Techopedia defines it as “an area of computer science that emphasizes the creation of intelligent machines that work and react like humans. Some of the activities computers with artificial intelligence are designed for include:

For example, such a machine would be a self-driving car: a car that doesn’t need any humans to operate it in order to safely drive itself. Or, a computer that can play chess with you and take on-the-spot decisions as needed. Or, a simple every day example and something that many can relate to – the content that Netflix suggests you watch (all based on machine learning).

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In other words, AI permits machines to learn from data and use that knowledge to perform human-like tasks.

And unsurprisingly, AI has also already started to make an impact on marketing, from AI content curation to chatbots – but how exactly is it (and will it be) impacting content marketing?

More Personalized Content

One of AI’s main functions is its ability to analyse huge amounts of data – and interpret them. That is an incredible feature and something that can have huge effects on content marketing and even marketing in general.

One of these effects is that it will help content marketers understand exactly who they’re targeting. Not in a creepy way, but rather in a way that many consumers expect: a Salesforce study, for example, found that 76% of consumers expect companies to understand their needs and expectations.

After all, many of today’s most popular products and services offer highly personalized experiences – like, of course, Amazon.

Content is no different than other forms of marketing when it comes to the need for personalization; consumers want a personalized experience, including only seeing content that is directly relevant to them.

So, how exactly will artificial intelligence help us create this type of content?

It’s all about the data and segmentation: AI can absorb huge amounts of data and help you segment it easily.

When it comes to audiences, AI can help you understand who exactly forms your audience, what platforms they use predominantly, what other content they read, what types of content they prefer, and so on.

Build Better Content Marketing Strategies With An AI Marketing Assistant

Geometric facade of 51 Astor Place (the IBM Watson Building) at Astor Place in Manhattan, New York CityGetty Royalty Free

One of the ways that AI is already heavily impacting content marketing is with AI marketing assistants – like IBM Watson’s Lucy.

Lucy is an incredibly powerful tool that marketers can use for research, segmentation and planning – and it’s so powerful that it can do more in a minute than an entire team of marketers can achieve in months.

So, how exactly does an AI marketing assistant like Lucy work?

To start with, Lucy can absorb and analyse literally all of the data your company owns, or that has commissioned or licensed. What’s more, once it absorbs all of this data, you can ask it any question you might have, no matter how complex, and it will find the answer for you:

  • Which regions should I first target?
  • What mix of content should I create for my audience for maximum results?
  • What are my competitors up to?
  • What are the main personality traits of my audience?

These are questions that companies need to answer in order to put together a strategy that works. But finding these answers is not exactly easy when you don’t have a tool like Lucy on your side – gathering and interpreting these vast amounts of data would be a difficult, if not almost impossible task without help.

And the possibilities of marketing assistants like Lucy don’t end here:

  • You can create clear and complex segments of your target audience so that you can create highly personalized content
  • Plan your content marketing (and other marketing) strategies by seeing how different strategies would work and what results you can expect

Systems like Lucy will have a huge impact on content marketing as they become more affordable and more popular. They will help companies better understand their audience and their data in general and what’s more, they will help marketers put together more effective strategies as well as help them understand what types of outcomes they can expect.

[“source=forbes]