student loanWells Fargo was cited $4 million Monday for illegal private student loan servicing practices that cost student borrowers more money in fees, leading to a host of solutions the bank must implement to improve its practices.

Most of the money to be paid by Wells Fargo through the order by the Consumer Financial Protection Bureau goes to the CFPB with a $3.6 million penalty. The bank must provide $410,000 in relief to borrowers.

The federal agency found that the bank failed to provide important payment information to consumers, charged illegal fees, and failed to update inaccurate credit report information.

How Wells Fargo erred

The consent order includes a number of things Wells Fargo must do, starting with providing at least $410,000 to compensate consumers for illegal late fees.

To get their refund for such fees, students shouldn't have to do anything. The refunds include payments for the bank failing to disclose its payment allocation practices across multiple loans in a borrower's account, as well as for not informing consumers that they could instruct the bank to allocate payments in a different way.

Refunds will also happen for illegal fees that were charged because the bank didn't combine partial payments made in the same billing cycle, and for fees improperly charged when borrowers made a payment on the last day of the grace period.

Misinformation on partial payments

As any borrower can do with a loan, a partial payment can be made — though they'll likely have to pay a late fee. Still, a partial payment will help a borrower avoid some interest charges, and is better than no payment at all.

For students with multiple loans from a bank, a partial payment can satisfy at least one loan payment in an account, meaning they'd be late for other loans but not the one where the partial payment was made. ...continue reading

6 Things to Consider Before Getting Your First Credit Card

Plastic money, free money, emergency fund – are all terms that people to describe credit cards.

Credit as a system has been around for quite a while. It's thought that credit really began with general stores giving farmers equipment and supplies on credit until they could be paid after harvest. In 1950s though is when the first credit card was created. Credit cards didn't really become popular though until the 1980s.

There are good ways and bad ways to use credit and credit  cards, and a lot of people mistakenly treat credit cards as free money. This is how some consumers end up in thousands of dollars of credit card debt. Some families live off of credit cards to get by, while others spend extravagantly whether they can afford it or not. If you are thinking about getting your first credit card, here are some things to think about before you sign the dotted line.

Good Uses of Credit vs. Bad Uses of Credit

There are some good reasons to have a credit card, like helping you build your credit score. If you want to purchase a house or something else significant, you need to have a decent credit score in order to qualify for a loan.

You can establish one through student loans or utilities, but a line of revolving credit, like a credit card, will help keep your score high. The higher your credit score, the better chance you have at securing a loan with a low interest rate.

A bad use of credit is having several lines of credit open with none of them being paid off. This could lower your score and lessen the chance you’ll have a getting a loan. Even if you do qualify for a loan, you may have to pay a higher interest rate.

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college freshmanThis is it! You are finally a college freshman, a young adult and are able to do your own thing. Going to college is the ultimate pinnacle of doing your own thing with no one to tell you where to go and how to be (most of the time).

Heading off to college for the first time is exciting, but there are a lot of supplies you are going to need for your firs time away from home.

If you do an online search to see what you need as a college freshman, the lists and advice out there may convince you that you need to spend a small fortunate just to outfit your dorm room. But the truth is, you don’t need all of that. If you are a college freshman, here are a few things you don't need!

1. A Television

You might think I'm crazy for saying you don't need a television, but hear me out. Most likely you’ll have your laptop or tablet with you when you head off to college, so you don’t need another piece of expensive equipment laying around to get stolen or broken. Plus your roommate or new best friend will have one, so you can always watch theirs.

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