Bankrate

Add it to the list of ways the U.S. economy continues to surprise: Despite high interest rates, hot inflation and total credit card debt hitting more than a trillion dollars, Equifax data shows that the average cardholder is using 21.3% of their available credit, below the levels seen immediately before the pandemic. However, new Bankrate data suggests those figures could be masking some stress beneath the surface. Bankrate’s new Credit Utilization Survey indicates that nearly 2 in 5 cardholders (37%) have maxed out a credit card or come close since the Federal Reserve began raising interest rates in March 2022. This includes 20% who have maxed out a card and 17% who have come close. A higher utilization rate may just be a feature of a lower credit limit. But to have a high credit limit, Americans have to have a stronger credit score — which can sometimes be correlated with having more income to balance expenses. Certain groups are using even more of their credit, Bankrate’s survey found, including parents with young children, divorced individuals, Generation Xers and those earning under $50,000 annually. And it’s not because all of them are frivolously spending. Americans who’ve maxed out a card or come close are more than twice as likely to blame inflation than too much discretionary spending for their situation. Many Americans I talked to for my research cite their wages not keeping up with price increases as a key factor forcing them to rely on more credit, along with insufficient emergency savings. That all happened as the price of carrying debt on a credit card surged to the highest levels ever recorded. These findings highlight a key limitation of the Fed’s main inflation-fighting tool: It’s the Americans who were already hurt most by inflation who end up paying the biggest price. How are you gauging the health of the consumer ahead of a crucial holiday shopping season? Should we be paying more attention to these pockets of distress? https://lnkd.in/e5mVSwcY

Credit cards can be super fun. They can also be super boring, and that's OK too! In fact, boring might even be better. One boring card in particular can literally create thousands of dollars of wealth for you simply by using it for your existing everyday purchases. Seriously, I did the math. Anyway, here's a love letter to my current favorite credit card. (Also my first ever story for Bankrate!)

What issues will be top of mind when you vote in November? According to a new Bankrate survey, the top three economic issues for Americans in the upcoming U.S. presidential election are inflation (41%), health care costs (14%), and affordable housing (11%). When asked which of the two presidential candidates is best for Americans’ personal financial situation, the economy, and inflation, Former President Trump marginally topped Vice President Harris in all three categories within a few percentage points. https://lnkd.in/ewJfTvgw

STEM majors are more likely to lead to jobs with higher salaries and lower unemployment rates, according to a recent study by Bankrate. But what you study in college is ultimately a very personal decision and relies on multiple factors. Everyone has different boxes they check when selecting a major. Maybe it’s passion, maybe it’s a desire to make a difference in the world. Maybe it’s a higher salary. Whatever your boxes are, it’s also important to consider the financial tradeoff of going to college. I have a journalism degree, which is No. 84 on our ranking of the most and least valuable majors, and I’ve been able to translate it into a rewarding career that allows me to meet my financial goals. Here are my tips for picking the major that’s right for you and how you can maximize your return on investment (ROI): 1. Use the process of elimination and do a lot of research: Arm yourself with information about potential majors through online resources like College Scorecard and lean on academic advisors for advice. If you’re not set on a major just yet, a good place to start is ruling out subjects you aren't interested in and finding colleges that offer multiple subjects you are more likely to major in. 2. Consider how much you're paying for college: Higher tuition doesn’t always equal a better education, and how you’re financing your education may play a role in your decision, too. Some colleges offer more student aid or need or merit-based scholarships. One way to lower the upfront cost of college is by attending community college for general education classes, especially if you’re unsure of what college degree you want to pursue. Students can eventually transfer those courses to a four-year university to complete their bachelor’s degrees. 3. Try to strike a balance between earning potential, job security, your interests and your competitive advantages. That’s what will keep you motivated and committed to building a long-term career in that field. 4. Don’t rely solely on your degree to secure a job after graduation. In this job market, it will take internships, finding opportunities outside of the classroom, networking and building a portfolio to show employers your skill sets. Want to see where a specific major landed on our ranking? Read more: https://lnkd.in/efBk2dZt

  Keep your seatbelts fastened. The latest data on inflation and new unemployment claims proved more bumpy than thought. Claims appear to have been boosted by impacts from Hurricane Helene.   The basics: The CPI came in higher than expected with a 0.2% gain in the headline, making for a 2.4% year over year increase. This is the smallest increase since February 2021. As for the core, (excluding food and energy), it was up 0.3% on the month, up 3.3% year over year.   Food and shelter were responsible for most of the increase in the headline measure. Energy prices and gasoline specifically are down.   As for major contributors to the increase in the core rate on the month, they include shelter, motor vehicle insurance, medical care, apparel, and airline fares. Consumers haven’t been relieved of the burden of high prices, but wage gains continue to outpace inflation, broadly speaking.   Economists survey on future trajectory of inflation: The new Bankrate quarterly survey of economists finds that a majority of the respondents (71%) believe inflation will retreat to the Fed’s 2% target by the end of 2025. About 3 in 10 said inflation will remain above 2% until the end of 2026 or later.   Jobless claims: New claims for unemployment benefits spiked by 33k to 258k, the most since June 2023. Some of the increases are likely related to disruptions associated with Hurricane Helene, with North Carolina, Florida, Tennessee and South Carolina reporting surges in new claims. Continuing claims are above 1.8 million for the 18th consecutive week.   The Fed: The Federal Reserve isn’t yet in position to declare ‘mission accomplished’ in the battle against inflation, and the ride to the 2% target continues to be bumpy at times. As it has begun easing restriction, the Fed opted for a larger reduction of one-half of 1%. Mindful of its dual mandate prioritizing maximum employment and stable prices, it will be eager to see the next monthly jobs report in early November before the next announcement on rates. A safe bet for now is rate reductions of one-quarter of 1% at the final two meetings of the year.   Here's more on our latest economist survey via my colleague Sarah Foster https://lnkd.in/e7xKwUrz      

This article has been on my calendar for about a month, but I'll admit the timing is a little eerie. 🔮 🌀 Representative Spencer Roach was kind enough to speak with me about the two property insurance bills he and Rep. Hillary Cassel attempted to pass this year. For an example of something that could potentially devastate the Florida property market and erase any positive strides made in the last few years, he said that Tampa Bay was long overdue for a direct hit from a hurricane and that if it got one this year, they would need to go "back to the drawing board." Weeks later, here we are with #HurricaneMilton. As someone who grew up in hurricane country, I understand the back-and-forth "do we go, do we stay?" Knowing it may be safer to leave but dreading the endless traffic, the fear of getting stuck on the highway and 9 times out of 10, it was for nothing. But that is why spending time on an article about two bills that didn't get enacted makes sense. We can't keep doing this; it isn't sustainable. The concept of #Florida having universal windstorm coverage might not be realistic or very popular, but at least it is something different. An action that would force massive change, not just minor adjustments to the same formula that consistently gives us the same disappointing results. My latest Bankrate article takes a deep dive into universal windstorm coverage. With insight from Dr. Charles Nyce from Florida State University - College of Business, we navigate what works, what doesn't and what needs to happen for homeowners to see significant decreases in home insurance premiums. I also explore changes to financial rating score requirements for insurance companies with takes from Joseph Petrelli of Demotech, Inc., Peter Giacone of KBRA and Dr. Martin Weiss of Weiss Ratings. Give it a read, and let me know what you think! #florida #homeinsurance

Renters insurance: the forgotten middle child of the insurance industry🚗 ❓ 🏡 As any middle child can relate, renters insurance is often forgotten and pushed aside for its older sibling, the golden child (#homeownersinsurance) and the louder and bratty younger sibling (#autoinsurance). But just like middle children are often the unsung hero of their family, the glue that keeps everyone together, #rentersinsurance can be an affordable safety net, offering financial stability and peace of mind in a world full of evolving perils. Bankrate's Extreme Weather Survey examined the financial readiness of homeowners and renters to highlight the importance of renter insurance and the vulnerability we all face from extreme weather damage. Our findings revealed some surprising similarities. Within the past five years: •7% of renters and homeowners moved to an area at lower risk from extreme weather. •4% of renters and 9% of homeowners invested in weatherproofing strategies. •6% of renters and 8% of homeowners lowered their auto/home/renters insurance deductible •10% of renters and 13% of homeowners admit they don't know an insurance deductible. However, overall, renters say they feel much less prepared for the potential cost associated with extreme weather damage than homeowners. •41% of renters say they feel unprepared for the costs associated with extreme weather damage, compared to 26% of homeowners. •Only 13% of renters have reviewed their renters or auto policies to ensure proper coverage over the past 5 years, compared to 39% of homeowners •71% of renters have not done anything to protect against property damage from extreme weather compared to 43% of homeowners Even if you don't own the dwelling you live in, your home and the belongings inside still have value. Renters should make sure they are comfortable and familiar with their levels of personal property protection and loss-of-use coverage. Renters who live in areas prone to flooding may even be able to secure a flood policy through NFIP for a fraction of what homeowners pay. If you see this post and are a renter, have you checked your renters insurance policy lately? Do you have a policy? Agents, have you checked in with your renters to make sure they understand how their policies work or to offer more coverage? Let me know! https://lnkd.in/g4ccb6cf

What is more taboo: talking about your political views or your finances? According to a new Bankrate survey, talking about money is more taboo than politics and religion, with 62% of U.S. adults saying they are uncomfortable discussing their bank account balance with family members or friends, compared to political views (22%) and religious views (19%). Additionally, only 14% say money is a normal topic of discussion at holiday gatherings with friends and family. In terms of other taboo topics, Bankrate’s survey dives into how Americans feel about regifting and their experiences lending money to family and friends. "It's important to take the stigma out of discussing money matters,” says Bankrate Senior Industry Analyst Ted Rossman “Not that you need to bare all of your financial details to strangers, but especially with people we're close to, it's good to be able to talk about things like your money goals and challenges.” What personal finance topics do you consider taboo?? https://lnkd.in/eFv5YBK3

How valuable is your college degree? According to a new Bankrate study, the 15 most valuable college majors are all STEM (science, technology, engineering, and mathematics). The study ranked 152 majors based on median annual income, unemployment rate, and the percentage of people with advanced degrees. Overall, Bankrate’s study found that electrical engineering is the most valuable college major. Workers who hold a bachelor’s degree in electrical engineering have a median salary of $115,000 annually, as well as an unemployment rate of 1.9%. On the other hand, studio arts landed in last place in Bankrate’s ranking with a median salary of $40,000 annually and an unemployment rate of 4.6%. If you’re still on the fence about picking a major, Bankrate Analyst Alex Gailey notes “getting a four-year degree is a significant investment and choosing a major is tricky, so it’s important to strike a balance between interests, strengths, earning potential, and job opportunities. Being proactive is key to entering and succeeding in the field you choose. Students should do as much research as possible early on, consult their academic advisors, and investigate job prospects for the majors they’re interested in.” Where does your major fall in the rankings? https://lnkd.in/ee6CNm76