Medical debt can be crushing: 43 million Americans have overdue medical debt on their credit reports. If you have health insurance, the deductibles can be high: For families with a bronze health plan, the average deductible is $10,545. Given that 62 percent of Americans do not have enough money saved to handle a $500 emergency, medical debt can quickly become a big problem. The problem is even worse for the 12.9 percent of people who do not have health insurance. If you enter an emergency room without insurance, you are going to be charged obscenely high rates. It is not uncommon for people to leave the hospital with $100,000 or more in medical bills. If you find yourself in a medical emergency, here are four things to consider to help manage the situation.
1. Try to Reduce the Bill When It First Arrives
If a big hospital bill arrives that you cannot afford, you should immediately try to negotiate the rate down. Nonprofit hospitals are required to offer financial assistance programs. But even for-profit hospitals are often willing to agree to a payment plan. But you need to talk to the
This week’s question is about credit monitoring and ID theft prevention, something many Americans pay for monthly. Even if you don’t use one of these services, you’ve almost certainly seen the ads. Here’s the query:
“My question is: I now pay $9.95 each month to Tru-Credit, which purchases access to my credit report and credit score any time I want. In addition, I receive an email weekly, outlining any “activity” (or lack thereof) in my credit account. “Fraud Alert” is included in the $9.95 cost. I would appreciate your opinion on this service and it’s cost. Thanks for the very helpful, down to earth, Money Talk News!!! – Jim”
Thanks for the kind words, Jim! And for the great question. Here’s your answer.
Converting Fear Into Fees
They say sex sells, and I’m sure they’re right. But I doubt it outsells fear. From burglar alarms to bomb shelters, Americans shell out billions annually to protect against all manner of evil: some real, much greatly exaggerated. But wherever fear can be churned up, you can bet there’s someone not far behind making a buck. Such is the case with credit monitoring.
Credit monitoring is a
What do you do when you and your spouse can’t agree on how to spend your money? The best answer, of course, is that you talk about it until you do agree. But is that what you really do?
As Bethany Palmer, who, with husband Scott, wrote First Comes Love, Then Comes Money: A Couple’s Guide to Financial Communication, recently told me, “Money touches each and every part of our lives — where we go to school, what we eat, where we work, how we live. You have to make sure you’re talking about money.”
But that doesn’t mean communicating is easy, and after writing a few WalletPop posts about managing money with your spouse, I thought it might be a good idea to find an expert or two who could offer advice to spouses who can’t quite get on the same page when it comes to their finances. Here are some of their top tips:
Talk about your finances regularly. At least once a month, says Scott Palmer, you should sit down and go over the finances with each other. Thanks to the ease of parting with our money — ATM
It’s a question we’ve all heard when shopping: “Credit or debit?” It seems straightforward, just the cashier asking you what type of payment card you’re using, but there’s actually a lot more history to that question than you might think.
Debit and credit transactions are processed differently: Here’s how MasterCard (MA) explained it in an emailed statement to Credit.com: “When you use a debit card and your PIN (personal identification number), the transaction is completed in real time, also known as an online transaction — you authorize the purchase with your PIN and the money is immediately transferred from your bank account to the merchant. With a credit card, or using a debit card as credit, it’s an offline transaction. The funds for offline transactions are deducted after the merchant settles the purchase with the credit card processor and typically take two-three days to be reflected in your account balance.”
Issuers used to charge merchants different fees for accepting credit cards than for accepting debit card transactions with a PIN. Before the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed, Sen. Dick Durbin added a provision, now called the Durbin amendment, that restricted interchange fees to 12 cents
Savvy consumers know that credit card debt is something to banish from your financial home if you can. But just how bad is your debt situation compared to others’?
Getting a definitive answer can be a challenge. Sources have different ways of gathering and looking at “average” credit card balances. For instance, MagnifyMoney.com recently released survey data that showed that 42.4 percent of Americans carry credit card debt:
- $10,902: Average balance for those with credit card debt.
- $8,864: Average credit card balance for millennials.
- $12,026: Average credit card balance for Generation X.
Those numbers, while based on a survey of 1,435 people in April, are not far off from numbers reported by NerdWallet.com that are based on government data, including Federal Reserve statistics.
- $7,087: Average household credit card debt.
- $15,191: Average balance for households that have any credit card debt.
In NerdWallet’s analysis, households with zero credit card debt skew the overall average lower, and households with debt skew higher because of a relatively small number of households with extremely high credit card balances.
In 2013, CreditCards.com studied average credit card debt with different variables. For example:
- $5,047: Average balance per American adult with a credit card.
- $2,720: Average
Mullainathan got 300 actors to pose as prospective clients seeking investment advice from financial planners. They had four distinct objectives. One group pretended to be invested in index funds, another in cash, another said they were seeking the next hot market sector and the final group said they held a third of their portfolio in company stock.
The results of their interviews were remarkably consistent. The financial planners verified these clients’ biases and told them what they wanted to hear. For investors who rely on the “independent” advice of financial planners, this is disturbing news, because a good financial planner should bring objectivity to the process. Here’s my six-point litmus test for financial planners.
- They work on a fee-only basis. Financial planners cannot provide unbiased advice if they have a financial incentive to steer you toward buying some financial products and discourage you from purchasing others. You should not retain a financial planner who won’t agree to either an hourly or fixed project fee. Typically, the fee is determined as a percentage of assets under management. Investors should also be wary of paying commissions, including trading commissions. This arrangement encourages trading, which increases costs. High costs are the
There are few things more disappointing or infuriating than lending money to someone who doesn’t pay you back. Besides the financial setback, you are forced to deal with the emotional wreckage of being taken advantage of by someone you trusted. Also, you are forced to take actions that you’d prefer not to do.
If someone puts you in this uncomfortable position, don’t be troubled. There are five steps you can take to significantly increase your chances of getting every dime back from the deadbeat.
1. Remember, It’s Just Business
The person you lent money to will try desperately to make this a personal issue. He or she will whine about losing a job, running into unforeseen financial trouble or — when all else fails — blaming you.
The person who welched on the debt will continue to make this a personal issue as long as possible. Fiddlesticks. Don’t fall for it and don’t even participate in any conversation that is personal in nature with respect to this unpaid debt.
Your job is to focus squarely on the business side of this issue and let the personal side of the equation go. Let the borrower know that you are prepared to go to any