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The smartest money moves to help Black Americans in Financial Distress
Advertiser disclosure You're our first priority. Each time. We believe that everyone should be able make financial decisions with confidence. Although our website does not contain every financial institution or product that is available, we're proud that the guidance we offer, the information we provide and the tools we create are impartial, independent easy to use and completely free. So how do we make money? Our partners compensate us. This can influence the products we review and write about (and where they are featured on the site) However, it in no way affects our suggestions or recommendations, which are grounded in thousands of hours of study. Our partners cannot promise us favorable ratings of their goods or services. .
The smartest money moves for Black Americans in Financial Distress
By Sean Pyles Senior Writer | Personal financial and financial debt Sean Pyles leads podcasting at NerdWallet as the producer and host of NerdWallet's "Smart Money" podcast. The show "Smart Money" Sean talks with Nerds across NerdWallet's NerdWallet Content team to answer listeners' personal finance questions. With a focus on shrewd and practical advice on money, Sean provides real-world guidance that can help consumers better the financial situation of their lives. In addition to answering listeners' financial questions on "Smart Money," Sean also interviews guests outside of NerdWallet and also creates special segments that explore subjects like the racial inequality gap and how to begin investing, and the history of college loans.
Before Sean took over podcasting at NerdWallet He also covered issues that dealt with consumer debt. His work has appeared in USA Today, The New York Times as well as other publications. When Sean isn't writing about personal finance, Sean can be found playing in his garden, taking walks, or taking his dog for long walks. Sean is located at Ocean Shores, Washington.
Updated Feb 5, 2018.
Editor: Hanah Cho. Cho is Vice President Personal finance Hanah Cho is Vice President of Content. She managed multiple NerdWallet teams that focused on personal finances before being promoted to director and deputy director. She began her career at NerdWallet as a writer covering small-scale businesses. In the past, she was a reporter covering business and startups at The Dallas Morning News, and was previously a Business writer at The Baltimore Sun. She also was treasurer of the Texas Chapter of the Asian American Journalists Association.
Many or all of the products featured here are from our partners who pay us. This influences which products we review and where and how the product is featured on a page. However, this does not affect our assessments. Our views are our own. Here is a list of and .
Record-level credit card debt and fluctuating incomes create financial problems for many American households, particularly those with lower incomes. These effects can be particularly acutely felt in households of blacks which are a victim of systemic and historical racial discrimination has led to higher disparities in wealth as well as debt.
But there are moves that families in such a situation could take to improve their financial position, which includes improving their credit profile and looking for alternatives to risky products such as .
Widely-rooted inequalities between wealth and debt
The disparities in wealth and debt can be a source of friction according to Pamela Chan, project director of human insights at Prosperity Now, a non-profit located in Washington, D.C.
"If you're a person with a lack of wealth ... then , when emergency situations arise, that usually makes people rely on debt to make it through those periods," Chan says. "Then after someone has taken on credit, even if they do not have money, they're more vulnerable should something happen when they're trying pay off your debt."
Discrimination in the workplace against black generations of Americans and its far-reaching consequences has led to black families having greater financial difficulties than white families, Chan says.
The wage gap is just one illustration. In 2015, black men earned 22 percent less than whites who, for instance, had the same education, experience and location of residence, a 2016 report from Economic Policy Institute Economic Policy Institute found.
In 2016, the average wealth of white families was more than 10 times that of the median wealth of black families$171,000, compared to $17.600 -- according to the Federal Reserve's Survey of Consumer Finances.
How to improve your finances in order to build wealth
is the first step towards making money. Before you take action, Michigan-based accredited financial coach Weslia Echols recommends planning a long-term plan.
"The first thing I advise clients to do is take deep breaths. When you do that and evaluate the situation fully it is unlikely that you will seek an instant answer such as an payday loan," Echols states. "Getting free of financial debt can be a lengthy process."
Echols recommends establishing a clear budget and payoff schedule. Here are some suggestions to enhance your financial situation.
Improve your credit score: Your credit score and report is among the top crucial elements of your personal financial situation. If they're in good state, you'll become more appealing to lenders, which increases your chances of getting credit with lower interest rates. NerdWallet offers both a credit score and credit score that is updated weekly.
Begin by examining your account for any incorrect information, such as accounts that aren't yours which could lower your score.
Then start raising your score by making on-time payments on all accounts, including the credit card and loans Paying history is the largest single aspect that affects the score. Credit bureau Experian advises keeping your -- or the amount of the credit limit you have credit limit below 30%..
Be aware of your debts: It's 2017 and the Survey of Consumer Finances shows that families with black parents tend to have debt-to-income ratios -- that's how much debt you have compared to your income that exceed 40%, which is a sign of financial distress according to the Federal Reserve. Nine percent of black families were carrying DTIs higher than 40%, while it was 6percent for white households.
Manage your debt as cost-efficiently as possible as you can and repay it quicker by lowering your interest rate. Transferring the balance onto a zero-interest credit card could be an alternative for those who have good credit.
If you're not eligible for this kind of card, look into whether a will help you to pay down your credit card debt faster and cheaper. If your monthly payments for debt exceed half your income it is recommended to seek out legal advice about whether makes sense for you. Although it won't eliminate all types of debt but it can give you an opportunity to start over and assist you in achieving other financial goals, like savings for retirement. Information sources such as LawHelp.com will direct you to local legal aid.
Beware of risky products A majority of black Americans are likely to use high-interest loans, like payday loans as opposed to 21% of white Americans, according to an analysis from 2016 by the Financial Industry Regulatory Authority. These loans can carry interest rates up to 300% and could lead to repeated borrowing, trapping the person who is borrowing in a cycle of debt.
If you require cash, you can find more favorable loan rates at a local credit union. And apps like Earnin can give you an advance on your pay without fees or interest. If you're in a bad credit situation, a -- also offered by several credit unions will provide you with the money you need while you improve your credit.
To get more assistance, you can tap the free advice of an organization that is not for profit, such as for instance the National Foundation for Credit Counseling.
The article was written by NerdWallet and was first published through The Associated Press.
The author's bio: Sean Pyles is the executive producer and host of NerdWallet's Smart Money podcast. His work has appeared in The New York Times, USA Today and elsewhere.
In a similar vein...
Dive even deeper in Personal Finance
For more information about $255 payday loans online same day bad credit check out the page.
Beware The Instant Same Day Payday Loans Online Scam
The smartest money moves to help Black Americans in Financial Distress
Advertiser disclosure You're our first priority. Each time. We believe that everyone should be able make financial decisions with confidence. Although our website does not contain every financial institution or product that is available, we're proud that the guidance we offer, the information we provide and the tools we create are impartial, independent easy to use and completely free. So how do we make money? Our partners compensate us. This can influence the products we review and write about (and where they are featured on the site) However, it in no way affects our suggestions or recommendations, which are grounded in thousands of hours of study. Our partners cannot promise us favorable ratings of their goods or services. .
The smartest money moves for Black Americans in Financial Distress
By Sean Pyles Senior Writer | Personal financial and financial debt Sean Pyles leads podcasting at NerdWallet as the producer and host of NerdWallet's "Smart Money" podcast. The show "Smart Money" Sean talks with Nerds across NerdWallet's NerdWallet Content team to answer listeners' personal finance questions. With a focus on shrewd and practical advice on money, Sean provides real-world guidance that can help consumers better the financial situation of their lives. In addition to answering listeners' financial questions on "Smart Money," Sean also interviews guests outside of NerdWallet and also creates special segments that explore subjects like the racial inequality gap and how to begin investing, and the history of college loans.
Before Sean took over podcasting at NerdWallet He also covered issues that dealt with consumer debt. His work has appeared in USA Today, The New York Times as well as other publications. When Sean isn't writing about personal finance, Sean can be found playing in his garden, taking walks, or taking his dog for long walks. Sean is located at Ocean Shores, Washington.
Updated Feb 5, 2018.
Editor: Hanah Cho. Cho is Vice President Personal finance Hanah Cho is Vice President of Content. She managed multiple NerdWallet teams that focused on personal finances before being promoted to director and deputy director. She began her career at NerdWallet as a writer covering small-scale businesses. In the past, she was a reporter covering business and startups at The Dallas Morning News, and was previously a Business writer at The Baltimore Sun. She also was treasurer of the Texas Chapter of the Asian American Journalists Association.
Many or all of the products featured here are from our partners who pay us. This influences which products we review and where and how the product is featured on a page. However, this does not affect our assessments. Our views are our own. Here is a list of and .
Record-level credit card debt and fluctuating incomes create financial problems for many American households, particularly those with lower incomes. These effects can be particularly acutely felt in households of blacks which are a victim of systemic and historical racial discrimination has led to higher disparities in wealth as well as debt.
But there are moves that families in such a situation could take to improve their financial position, which includes improving their credit profile and looking for alternatives to risky products such as .
Widely-rooted inequalities between wealth and debt
The disparities in wealth and debt can be a source of friction according to Pamela Chan, project director of human insights at Prosperity Now, a non-profit located in Washington, D.C.
"If you're a person with a lack of wealth ... then , when emergency situations arise, that usually makes people rely on debt to make it through those periods," Chan says. "Then after someone has taken on credit, even if they do not have money, they're more vulnerable should something happen when they're trying pay off your debt."
Discrimination in the workplace against black generations of Americans and its far-reaching consequences has led to black families having greater financial difficulties than white families, Chan says.
The wage gap is just one illustration. In 2015, black men earned 22 percent less than whites who, for instance, had the same education, experience and location of residence, a 2016 report from Economic Policy Institute Economic Policy Institute found.
In 2016, the average wealth of white families was more than 10 times that of the median wealth of black families$171,000, compared to $17.600 -- according to the Federal Reserve's Survey of Consumer Finances.
How to improve your finances in order to build wealth
is the first step towards making money. Before you take action, Michigan-based accredited financial coach Weslia Echols recommends planning a long-term plan.
"The first thing I advise clients to do is take deep breaths. When you do that and evaluate the situation fully it is unlikely that you will seek an instant answer such as an payday loan," Echols states. "Getting free of financial debt can be a lengthy process."
Echols recommends establishing a clear budget and payoff schedule. Here are some suggestions to enhance your financial situation.
Improve your credit score: Your credit score and report is among the top crucial elements of your personal financial situation. If they're in good state, you'll become more appealing to lenders, which increases your chances of getting credit with lower interest rates. NerdWallet offers both a credit score and credit score that is updated weekly.
Begin by examining your account for any incorrect information, such as accounts that aren't yours which could lower your score.
Then start raising your score by making on-time payments on all accounts, including the credit card and loans Paying history is the largest single aspect that affects the score. Credit bureau Experian advises keeping your -- or the amount of the credit limit you have credit limit below 30%..
Be aware of your debts: It's 2017 and the Survey of Consumer Finances shows that families with black parents tend to have debt-to-income ratios -- that's how much debt you have compared to your income that exceed 40%, which is a sign of financial distress according to the Federal Reserve. Nine percent of black families were carrying DTIs higher than 40%, while it was 6percent for white households.
Manage your debt as cost-efficiently as possible as you can and repay it quicker by lowering your interest rate. Transferring the balance onto a zero-interest credit card could be an alternative for those who have good credit.
If you're not eligible for this kind of card, look into whether a will help you to pay down your credit card debt faster and cheaper. If your monthly payments for debt exceed half your income it is recommended to seek out legal advice about whether makes sense for you. Although it won't eliminate all types of debt but it can give you an opportunity to start over and assist you in achieving other financial goals, like savings for retirement. Information sources such as LawHelp.com will direct you to local legal aid.
Beware of risky products A majority of black Americans are likely to use high-interest loans, like payday loans as opposed to 21% of white Americans, according to an analysis from 2016 by the Financial Industry Regulatory Authority. These loans can carry interest rates up to 300% and could lead to repeated borrowing, trapping the person who is borrowing in a cycle of debt.
If you require cash, you can find more favorable loan rates at a local credit union. And apps like Earnin can give you an advance on your pay without fees or interest. If you're in a bad credit situation, a -- also offered by several credit unions will provide you with the money you need while you improve your credit.
To get more assistance, you can tap the free advice of an organization that is not for profit, such as for instance the National Foundation for Credit Counseling.
The article was written by NerdWallet and was first published through The Associated Press.
The author's bio: Sean Pyles is the executive producer and host of NerdWallet's Smart Money podcast. His work has appeared in The New York Times, USA Today and elsewhere.
In a similar vein...
Dive even deeper in Personal Finance
For more information about $255 payday loans online same day bad credit check out the page.