Is Overdraft Protection Real? A Look at the Big 4 Banks

IMG_3167Overdraft fees originated as a way for wealthy bank clients facing a liquidity problem to borrow money from the bank as a line of credit and pay it back with some interest. Today, overdraft fees often target those on the low end of the socioeconomic ladder, while wealthy bank clients can easily get overdraft fees waived or aren’t charged for overdraft protection. It’s easy for personal finance experts to flippantly say, “Don’t buy what you can’t afford.” But for those on the bottom of the totem pole, basic necessities need to be met, and sometimes that means overdrawing an account and in turn being hit with a fee from the bank.

What does overdraft mean?

Overdraft or non-sufficient fund (NSF) fees are charged when a customer overdraws on an account, causing it to become negative. Bank fees and thresholds for overdraft vary, but the Big 4 Banks – Bank of America, Citibank, Chase and Wells Fargo – all charge above $30. Bank of America and Chase also charge extended overdraft fees for customers who cannot get accounts out of the red within five consecutive business days. As a safeguard, each bank also offers overdraft protection.

Get a deep dive into the overdraft policies of the Big 4 Banks on US News & World Report.

Posted in US News' My Money Blog Tagged with: , ,

Broke Millennial Turns Two

10371386_10152602888021137_4816257953668449161_nOn Saturday, Broke Millennial turned two. While I still feel like a bit of a novice, blogging years are somewhat like dog years and making it to two is about the equivalent of a sweet 16. I spent my real-life sweet 16 going to prom, so this version is much cheaper.

I founded this blog to answer questions I heard my peers asking about money and to improve my own knowledge. About eight months into blogging I interviewed for a job with a public relations agency who works for Bank of America. During one of the seven interviews I went through, an interviewer asked me, “Why did you start writing your site? I find people often begin side projects when they’re feeling unfulfilled at work.”

Frankly, I’d never thought about a lack of creativity and enjoyment at my then-job to be an impetus for me starting this site. But it was. I missed writing (I studied journalism in college) and I felt I could be doing something productive with my downtime. I had never read another personal finance blog. I had never heard of the term “side hustle”. I never thought this could turn into a money maker or more importantly, completely change my career.

Luckily, I didn’t take the job staying in PR with Bank of America as a client. In fact, I turned it down because when they offered me the job, I was informed I’d have to deactivate Broke Millennial and cease all freelance writing.

Many readers have probably seen a drastic drop off of in posts in the last six months. In large part it’s because I’m more satisfied at work and do a lot of writing and editing during the day. However, in year three of Broke Millennial, I’d like to focus back on building this site and expanding my freelance work.

Now, let’s give me a moment to #humblebrag about some of my favorite moments from 2014.

Highlights from this year

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FinCon gals

  • Got nominated for and had a great time losing at the Plutus Awards

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Favorite Posts

Post I Was Embarrassed To Publish

Top Two Most-Viewed Posts

Most Importantly…

THANK YOU so much to you, you person reading this right now,  for reading/subscribing/following/commenting/emailing/making this site become a community and afford me a platform to discuss the importance of millennials understanding money. 

Posted in About Broke Millennial Tagged with: ,

A Credit Card Reward for the Environmentally Conscious

St. James ParkEnvironmentally conscious Americans routinely look for ways to reduce their carbon footprint. They carry water bottles to avoid buying one-time plastic receptacles. Some bike or take public transit to reduce emissions from a car (or simply to save money). Others compost. And some make the more radical decision to protest fracking or drilling for oil.

Those who prefer a slightly more passive approach to being environmentally friendly now can reduce their carbon footprints with credit card rewards.

Rewarded with Carbon Offsets

Sustain:Green, the rewards program creator, launched a biodegradable MasterCard offering carbon reduction rewards; the credit card is issued by Missouri-based Commerce Bank.

Carbon offset programs allow environmentally conscious individuals to fund the planting of trees, building renewable energy alternatives or other sustainability projects. Carbon offsets through Sustain:Green will go towards Mata no Peito, an initiative to protect and replant forests in Brazil and combat deforestation, which accounts for 60 percent of the nation’s greenhouse gas emissions.

The Value of Carbon Offsets in Cash-Back Terms

Read on at DailyFinance to find out the value in cash-back terms and if it’s really a good deal.

Posted in DailyFinance Tagged with: , ,

Practical Tips How I Save (and You Should Too)

This post is part of the TaxACT How I Save blog tour, which teaches you ways to keep more money in your pocket. Last year, TaxACT saved America over $240 million on tax preparation. How much can you save? To learn more about tips and strategies on saving, click here

Tin CanI grew up as a saver. I’m not sure if it’s coded in my DNA (my parents are both savers) – but from a young age I started hoarded money away in a candy tin hidden in the back of my closet. Later I upgraded to a checking account and way later a savings account.

My early years were spent earning money through odd jobs like building a pet-sitting empire and recording voices for video games in Japan. It wasn’t until I repatriated to the United States and went to college that I got something resembling a “real” job.

My Strange way of automating savings

In college I spent three years working as a resident assistant. Lots of residence life programs pay their employees in free room and board, but ours gave you the choice of applying income towards tuition or into your bank account. With my college degree already covered between scholarships and the generosity of my parents, I opted for the bank account.

The job paid in six $1,000 stipends over the school year, three per semester. By my sophomore year in college I knew I wanted to move to New York City after college and decided I need to have a sizable nest egg saved up by graduation. This goal motivated me to tuck away 50 percent of my paycheck each time I got paid.

My method, however, was a bit strange. I would actually have my Dad transfer $500 per paycheck into his bank account. We kept a running tally of how much he was holding for me, but this way I had a checks and balance in place. Before I could splurge, I needed to ask my Dad to transfer back some money. He never refused to send me my own money, but it did give me pause before I could make a rash decision.

Today, nearly four years out of college, I continue to automatically tuck away a portion of each paycheck (unfortunately I can’t afford 50 percent anymore). Except now it goes into my savings account and not to the Bank of Dad.

In order to stay within a budget and save money each month, I created a few routine habits.

Practical Ways I Pinch Pennies

Cooking in bulk

IMG_2889I don’t love cooking. If my wallet and waistline could afford for me to eat out at every meal I would. Unfortunately, neither of those things will accommodate my desire. Instead, I save time and money by cooking in bulk on the weekends. Sometimes it’s a crockpot meal, other times it’s a bit more time intensive, but most weekends I take a few hours to make two meals. I freeze some for future weeks and the rest are consumed as lunches and dinners during the week.

No, it doesn’t bug me to have a rather monotonous meal plan. I also do easy dishes like scrambled eggs loaded with veggies on nights I don’t feel like eating one of my bulk meals.

Avoiding the common New Yorker trap of only having restaurant menus in my kitchen saves me a couple hundred bucks a month.

Ebates, Mr. Rebates and RetailMeNot

My feelings towards shopping are about as warm and fuzzy as my feelings towards cooking. It’s something I have to do when an item of clothing or a pair of shoes wear out, or I need more bath products or when birthdays and Christmas rolls around.

On the occasions I do shop, I do two simple things.

  1. Check cash back portals like Ebates and Rebates* to see if I can get money back for a purchase I need to make.
  2. See if there are coupon codes or other discounts on sites like RetailMeNot.

The extra three minutes of time it takes to check out these sites can save (or earn) a couple of bucks or sometimes even closer to $10 or $15, especially if I can stack cash back.

Recently, I bought a pair of TOMS shoes online. They were already on sale and Ebates was offering 10% cash back plus free shipping by clicking through their portal. I got the shoes for $60, free shipping and earned $6 cash back (so I paid $54).

Now, here is where this can really save you money. When cash back portals pay out, put the money in savings! And if you save money from a RetailMeNot coupon, PUT THE MONEY IN SAVINGS! Otherwise, you’re not really saving it, are you?

Secondary income

Like most other bloggers, I do freelance writing on the side to earn extra income. Every penny I earn from freelancing goes directly into my savings account. Part of the reason is due to taxes. I don’t want to be caught with my pants around my ankles when Uncle Sam comes calling. The other reasons are because it pads my emergency fund and gives me extra money to invest.

Your Savings Doesn’t Exist

Ultimately, the best piece of advice I could share is to create a mentality that your savings isn’t there. I know sometimes Peach or my friends get annoyed when I say, “sorry, I don’t have enough money to do [insert activity] this week.” Yes, technically I do. I could pull money out of savings. But instead, I focus on what’s left in my budget/checking account. If an activity would overextend me I pretend my savings doesn’t exist. It’s there for emergencies. It’s there for buying a car. It’s there for a down payment on a house. It’s there for retirement. It’s not there because I want to see Cabaret this weekend and then go to Le Cirque.

Readers – Save some money and make your tax preparation this season easy by getting the software for free. TaxACT is giving away 10 copies of TaxACT Deluxe 2014. Sign up here:a Rafflecopter giveaway!

*Ebates and Mr. Rebates links are referral codes. If you sign up, I will receive a kick back (which I’ll of course save).

Posted in Saving money Tagged with: ,

ChexSystems: You May Not Know Them, But They Know You

Rejected - Ally Savings Large copyMany Americans possess an elementary understanding of both credit reports and credit scores and how each plays a significant role in a person’s financial life. A bad credit report can prevent you from getting a job. A low credit score can drastically increase how much you’ll pay for a loan or result in a rejection for a credit card. But fewer Americans understand the importance of another consumer reporting agency: ChexSystems.

ChexSystems operates as the credit bureau of the banking world. Your banking behavior is reported to the organization, which keeps a file on you and can send a report to a bank when you apply for an account.

So, if you left Bank A without repaying outstanding overdraft fees and attempted to open up an account with Bank B, the latter would see your negligence reflected on your ChexSystems report and likely reject you.

Some banks -– like Capital One –- are moving away from focusing on ChexSytems to determine whether or not to approve a new customer with a history of bounced checks or overdrafts. So one derogatory mark on a report may no longer prevent you from opening a new checking or savings account.

When Do You Get a ChexSystems Report?

Read the rest over on DailyFinance.

Posted in DailyFinance Tagged with: ,

My Big Issue With The Teen Rumored to Have Made $72 Million in the Stock Market

IMG_2514Between when I penned this on Monday evening and Tuesday morning, the New York Observer already debunked Mohammed Islam’s fiction. However, the point of my post goes beyond my great skepticism of his initial claim, so I’ve decided to publish it as is.

Unless you’re one of those people who avoid the news – yeah, yeah it’s depressing – and swore off social media you’ve probably heard about Mohammed “Mo” Islam. The media is already going bonkers calling him everything from the investment wunderkind to Wolf of Wall St Jr. (not a moniker I’d want). In case you’re unfamiliar with Mo, he’s a 17-year-old student in New York City who is rumored to have made $72 million trading. Now, Mo has denied the $72 million figure, but confirmed his net worth is in the high eight figures*.

If Mo’s story is true – which I sincerely doubt – then he’ll be the greatest investor of all time. Yes, beating out the almighty Buffet.

The sensational story of Mo broke in New York Magazine earlier this week and spawned a ton of articles proving journalists were merely regurgitating tidbits from New York Mag instead of doing their due-diligence. Both Yahoo! Finance and Business Insider stepped up to be something of a voice of reason. Yahoo! Finance reporter Jeff Macke wrote, “What Islam is claiming lies somewhere along the lines of Charles Ponzi’s scheme and stories of Paul Bunyon forming Minnesota’s 10,000 Lakes with his massive footsteps.”

But the poor reporting and the ridiculous rumor aren’t what bother me. If Mo did indeed build even a million dollars playing the market all by himself at the age of 17, without seed money from his parents, then good for him.

No, what bothers me is that Mo is a boy.

Story, after story, after story of remarkable investors, entrepreneurs and financial wunderkinds focus on men. A fact I’ve already grown remarkably sensitive to as of late, was further reinforced when I started doing some digging on Mo.

This isn’t the first time Mo earned media attention. In November of 2013, Business Insider published The 20 Under 20: Meet The Teen Traders Trying to Take Over the Finance World. Mo made this list, along with 19 male peers. Not a single girl or young woman in 2013 counted as a teen trader to watch. Where are all the women in finance?

Take a poll of most articles in finance highlighting the movers and shakers. It’s rare to read about a woman and even when you do, it’s more rare to read about one with investing chops.

Now, there are notably successful women in business who’ve received a decent amount of press: Sophia Amoruso, Sara Blakely, and Sheryl Sandberg to name a few. But it irks me that the financial world – especially investing – remains largely a boys club. (Seriously, try Googling “best investors in the world” and see who pops up).

Even when you take a quick poll of personal finance blogs, women (myself included) tend to stick to more emotional, less hard-hitting subjects. Instead of dishing out investment advice, we write about how to budget for a family, or handle gift giving or pinchpennies to help pay down debt. (Yes, I’m painting with a broad brush for the sake of argument.)

Why is that?

Personally, I don’t feel qualified to give investment advice. I don’t have a degree in finance. I haven’t taken a Series 65 or Series 6 or Series 7 nor Series 63 exam. I’m neither a CFA nor a CFP. Simply put, all I know of investing is what I’ve read and done myself. I also prefer to keep my net worth and specific investment decisions off the worldwide web.

But perhaps this is where gender roles and stereotypes come into play.

I’ve noticed plenty of male bloggers who don’t have any qualifications other than investing their own money still write about how to invest. And lots of women bloggers who have experience in the field still relegated themselves to the “softer” subjects.

Is it that women don’t feel confident enough to give advice unless we’ve passed a series of tests and certifications while men don’t wrestle with such thoughts? Sexist as though that statement may be, I’m curious why those of us with a double-X chromosome seem less likely to really do a deep dive into a investing and why so few women seem keen on joining the ranks of stock brokers or hedge fund managers?

We push STEM fields now and promote toys, games, stories and educational courses to encourage girls and young women to enter male-dominated fields. Why aren’t we doing this with finance? Why not encourage young girls and women to play in the stock market, become stockbrokers, analysts, or overall mavens of industry?

So, I implore parents to encourage their daughters to consider finance and economics. I implore men to recognize their sexism and encourage women to join their ranks in investing. I request other women writing on financial issues to consider taking on heftier topics. And I hope journalists also start featuring women in articles other than those offering budget tips, or debt repayment strategies or how to afford vacation for a family of four.

And if anyone brings Janet Yellen into this as an argument, that’s the same as saying racism is over because Obama is the president.

*Then back tracked and came clean about earning $0.

Posted in Women in Finance Tagged with: ,

Buyer’s Guide: Your Store Strategy for Holiday Shopping

“Whether you’re battling the crowds on Black Friday or squeezing your shopping in a few days before the holidays, you have to get your mind, body and most importantly — wallet — ready for the challenge.”

I’m on video!

Screen Shot 2014-12-08 at 11.58.37 PM

[You try getting a good still of of yourself talking!]

Click over to DailyFinance to check out the video I filmed for AOL!

Posted in DailyFinance Tagged with:

Are You Really Saving Your Money?

Tin CanOn Black Friday, I mentally high-fived myself when I used cash-back rewards money to buy several pieces of clothing I needed for my winter wardrobe. I thought to myself, “I just saved $100.” But really, I didn’t. While $100 didn’t leave my checking account, it didn’t go into my savings account, either.

We all routinely brag about a way we saved money. You’ll hear people wax poetic about cutting the cord and no longer paying for cable, or couponing to save a few bucks on groceries, or using credit card bonuses to pay for a vacation. But here’s the big question: are they really saving?

While we claim to be saving, is that extra $40 a month from cutting cable actually going into savings or just being reallocated to justify eating out or going to the movies?

A Penny Really Saved

Abigail Perry, founder of I Pick Up Pennies, realized her mistaken assumption about saving and decided to make a simple change.

Read the rest on DailyFinance.

Posted in DailyFinance Tagged with:

Frugal Find Friday: Stacking Cash Back Rewards

I’m not much of a gamer when it comes to churning credit cards for rewards, travel or cash back. (I’ve only once applied for a credit card in order to get a free flight — which I still haven’t cashed in on because I’m saving up for Hawaii.) But I recently wandered into the wonderful world of stacking cash back rewards.

Full disclosure: this won’t be a long-term game for me because I’m really cashing in on Discover’s 5% cash back for online shopping this quarter and I do most of my holiday shopping online.

For all you rookies to stacking cash back, it goes a little something like this:

1) Find a referral code site like Ebates or Mr. Rebates*. Screen shot 2014-12-04 at 8.19.49 PM

2) Click through their site to your intended shopping site (ie: Amazon, Sephora or TOMS).

3) Make your purchase on intended site with a cash back credit card.

Confused? Let’s break it down with a real example.

Peach has been harping about wanting a very specific type of gloves. After a few unsuccessful attempts to find them in a brick-and-mortar store (silly millennial), I opted for Amazon. Within a few minutes I found what he wanted, but instead of checking out right through Amazon I went to Ebates. Ebates was offering 6% cash back on Amazon purchases.

Once on Ebates, I clicked through to Amazon. When I made my purchase, I used my Discover It card, to cash in on that  5% cash back for online shopping this quarter.

So, my $16 purchase received 6% cash back from Ebates plus an additional 5% cash back from my Discover card.

Sure, it was on a paltry $16, so I only earned $0.96 from Ebates and $0.80 from Discover for a staggering $1.76, but say I make a $100 purchase. That’ll be $11 in cash back on a single purchase. Not too shabby.

As with all things related to credit cards and gaming a system, there are catches.

Screen shot 2014-12-04 at 8.06.26 PMFor starters, referral sites don’t give you cash back on any purchase. Right now, Ebates and Mr. Rebates are offering cash back on Amazon for purchases in children’s, women and men’s fashion, home & kitchen, toys & games and Amazon local. The amount of cash back also fluctuates rather quickly. During Black Friday, you could score 8% back on Ebates, but now it’s down to 4%.

Second, your cash back card might not offer cash back on a site you’re going to through a referral. I recently bought a pair of shoes on TOMS.com, and earned $6.56 back through Ebates for the purchase, but Discover didn’t count it as shopping online, so I didn’t get the extra 5%.

If you have a flat-rate cash back card like Quicksilver, Fidelity or Citi Double Cash, then you’ll be guaranteed some level of cash back above 1% — but I don’t have any of those cards.

Some of you may be wondering how these referral sites work. I admit they sounded a little sketchy to me at first.

Basically, you can think about it just like a credit card reward. Credit card companies offer you a piece of the interchange fee they charge merchants in order to incentivize you to use their cards. That’s why (and how) companies offer cash back deals! And why you should be skeptical of of cash back above two percent — but that’s a post for another time.

These referral sites receive a kick back from retailers for sending you to the retailer’s online store. As a repayment, the referral site offers you – the customer – a little piece of the kick back.

You’re not going to get rich using these sites, but if you believe every dollar counts and you’re already going to be buying something online, it’s probably worth the extra two minutes of your time to see if you can get some cash back!

If you’d like to read a full (and extensive) review of Ebates and Mr. Rebates, then hop on over to MagnifyMoney’s blog where I recently compared the two.

*If you sign up for Ebates or Mr. Rebates with my referral code and make a purchase then I will receive a referral bonus.

Posted in Frugal Find Friday Tagged with: , ,

Dear Millennials, Let’s Be Friends. Sincerely, The Stock Market

2159087073_b2425e73ea_zDear Millennials,

I fear something is amiss in our relationship. A week doesn’t go by without me reading an article or watching a news segment about your utter distrust in me and disdain for those I work with – or in your minds, my puppeteers.

I do apologize for the scare I gave you in 2008 and the subsequent recession. I understand some of your loved ones may have been hurt by my failings (and fallings). It gave me no pleasure to see so many retirement accounts, index funds, mutual funds and other investments take a tumble. It terrified me to watch my Dow Jones peak at14,164 in 2007, and then fall to a mere 7,882 a year later.

You spent years hearing phrases such as “crisis,” “depression,” “TARP,” “bailout,” “too big to fail,” “subprime” and “collapse.”

Some of you were just graduating college and entering a difficult workforce, while others saw your parents’ savings and college funds significantly reduced. Undoubtedly, my erratic behavior impacted you all in some way, which is why today you aren’t interested in me as a bedfellow or even a friend.

I empathize with you that I may seem untrustworthy. But, despite all this, let’s be friends.

Read the rest on US News and World Report.

***

Long-time readers – yes, this is a refresh of a post I did in 2013. However, it’s completely different.

Picture from Michi W. on Flickr

Posted in US News' My Money Blog Tagged with: ,

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