The Latest Breaking News from CFPB

Closing an Old Credit Card Isn’t Always the Smartest Way to Simplify Finances

Closing an old credit card can feel like a clean financial reset. One fewer account to monitor, one fewer statement to open, and one less piece of plastic cluttering the wallet. But an old card can quietly serve another purpose: It can provide available credit and preserve a long record…

The Free Financial Advisor · Sep 19

Paying Interest Does Not Help Build Credit — So Why Do So Many People Think It Does?

Paying interest on a credit card does not help build a credit score. The money goes to the card issuer as the cost of borrowing, while credit scoring models focus on information such as payment history, balances and how much available credit you use.

The Free Financial Advisor · Sep 19

Why Your Available Credit Can Drop Even When You Never Miss a Payment

Your credit card can remain perfectly current while the amount you can borrow suddenly gets smaller. A card issuer can reduce your credit limit on an existing account, which immediately cuts your available credit even if every payment has arrived on time.

The Free Financial Advisor · Sep 19

The Dealer Says You “Need” GAP Insurance — Here’s When You Actually Do

The finance office has a way of making a car purchase feel like a game show. First comes the vehicle price, then the interest rate, then a parade of add-ons that can make the monthly payment mysteriously climb. GAP insurance often gets a starring role, especially when the dealer warns…

Clever Dude · Sep 17

What Happens to an Unused Credit Card If You Never Close It?

An unused credit card does not simply sit in a drawer forever, quietly waiting for retirement. If you leave the account open, the issuer may continue reporting it, and that available credit can affect your credit profile even when you never swipe the card.

The Free Financial Advisor · Sep 17

What Happens If a Company Deposits Money Into Your Account by Mistake?

A surprise deposit can make a bank balance look much healthier, but money that a company deposits into your account by mistake does not automatically become yours. A payroll department might enter the wrong account number, a business might send a payment twice, or a company could simply make a…

The Free Financial Advisor · Sep 17

You Have $20,000: Pay Off Student Loans or Put It Toward a House?

A $20,000 pile of cash can create a surprisingly awkward financial question: should it wipe out student debt or become part of a future down payment? Both choices can move a household closer to a major goal, but they solve very different problems. Paying off a loan can eliminate a…

The Free Financial Advisor · Sep 17

Your Credit Score Is 720. How Much Money Could Getting to 760 Actually Save You?

A 720 credit score already puts you in a respectable credit range, but pushing it to 760 can matter when a lender prices a major loan. The catch is that there is no magic “$X savings” attached to those extra 40 points. Your actual benefit depends on the scoring model,…

The Free Financial Advisor · Sep 17

The Dealer Says GAP Insurance Is “Only $15 a Month.” Ask for the Total Price

“Only $15 a month” sounds harmless when someone is sitting across a dealership desk with a stack of paperwork and a shiny new car waiting outside. But that little monthly figure can make a much larger cost disappear from view, especially when the dealer rolls GAP coverage into the auto…

Clever Dude · Sep 16

Can a Bank Take Money From Your Checking Account to Pay Your Credit Card?

A bank generally cannot simply reach into your checking account and grab money to cover an unpaid credit card balance, even if the bank issued both accounts. Federal law specifically limits a credit card issuer’s ability to offset credit card debt against money sitting in a consumer’s deposit account.

The Free Financial Advisor · Sep 16