Blog   Tagged ‘low interest rates’

Simplifying your credit

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When was the last time you downloaded your credit score? If you can’t remember or you have never checked it, you should consider taking a look at it soon. But you’re not alone. Two thirds of the population have not downloaded their credit report in the past year, despite the fact that the average American owes $118,000 in debt. This includes mortgage, student loans, credit card debt, etc.

Pie Chart Downloaded Credit Report in Last 12 Months

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Why do you need to know your credit score? High debt combined with little to no information about your credit score could put you in a risky financial situation. If you have so much debt that you can’t keep up with it and your regular monthly bills, you might end up paying a bill late or forget to pay it at all. This will lead to a lower credit score. Then when you go to apply for a home or car loan, you could be either denied or receive a higher than normal interest rate based on your lowered score.

Unfortunately, this has become a very common scenario. Many people are living month-to-month and often carry over their credit card debt each month just like their regular bills. One third of working adults don’t pay bills on time in part due to the number of accounts they have. Many have trouble keeping up with monthly expenses, requiring them to dip into savings to cover regular expenses.

Pie Chart Pay Bills on Time

Did you know that there are ways to reduce your loan interest rates and monthly payments? You can also reduce the number of payments you owe and even earn money with rewards points from certain credit cards.

To simplify your credit, consider the following options:

  • Use the bill pay option with your bank

    This saves time and you can go to one place to manage all of your bills and schedule them to pay once per month.

  • Consolidate your debt

    Consolidating your debt allows you to have one payment for all your debt and you can usually obtain a lower interest rate. This can allow you to pay your debt in less time for less money.

  • Reduce the number of credit cards you use

    This is another way to help you keep track of your spending and bills. Consider using a credit card that allows you to earn rewards. When you use the card you can earn points toward purchases, helping you save money.

  • Take advantage of low interest rates

    If you refinance your current mortgage to the low rates available now, you can save on your monthly payment. This is also true of auto loan rates.

If you feel overwhelmed by debt and monthly bills, take advantage of these ways to simplify your credit to help you work on becoming debt-free. Even if you don’t have much personal debt, it’s still a good idea to consider these tips to organize your finances, save money, and monitor your credit.

 

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


Mr. Burditt serves as senior vice president of customer experience in UMB’s Consumer Division. He is responsible for developmental and strategic direction of the UMB consumer customer experience. He joined UMB in 2011. Mr. Burditt earned a Bachelor of Science degree in agricultural journalism from the University of Missouri-Columbia. He also is a graduate of the Greater Kansas City Chamber of Commerce’s Centurions program.

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Easy Monetary Policy – “Morphine” for the Economy

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Quantitative easing. Low interest rate environment. Easy money. Kick the can down the road. We have all heard those phrases in recent years as the government continues its grand economic experiment in an effort to stimulate the economy.

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While the intention was to stimulate, I would argue that this continued easing has served as more of an “economic morphine” used to dull the pain of a slow-growth economic recovery desperately in need of surgery to repair years of unwise spending and unprecedented debt levels. This morphine has falsely propped up equity markets, pushed more risk into the system and created a lending environment where banks are throwing caution to the wind to create business. Though for many it feels like things are going well. That’s the morphine at work.

I recently talked with Reuters on the surge in commercial and industrial lending and the potential economic fallout. In the article, I emphasized the risks that some banks are taking as liquidity grows and the pressure and competition to make loans intensifies. With interest rates held historically low and liquidity high, many banks are willing to make riskier loans with little-to-no collateral, lax or reduced terms and collateral packages.

All this lending hasn’t led to economic expansion, but rather refinancing. The credit is simply moving from bank to bank. For those not refinancing existing debt, many are using these loans to replace equipment with near zero cost money.

At UMB, we continue to lend and believe in the strength of the private sector and the good of capitalism. We will continue to be prudent in our lending practices and maintain the necessary terms and standards for responsible lending. As a nation, we can no longer accept the morphine and avoid the reality of our economic situation. The time has come for surgery. This surely will be a painful process as rates normalize and necessary spending cuts are made. However, this is what is needed to ensure the long-term health of our economy and country.

 

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


Mr. Kemper is the chairman and chief executive officer of UMB Financial Corporation and UMB Bank, n.a. He joined UMB in 1997. Mr. Kemper is active in both civic and philanthropic endeavors. One of the causes he is most passionate about is the arts. He currently serves as a trustee and executive committee member for the Denver Art Museum and is a past board member for The Arts Council of Metropolitan Kansas City.

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