Financial Advice

How to Choose a Health Care Plan

Choosing the best health plan for you and your family takes time and a little bit of work. But before getting lost in the details of each plan, sit down and take a close look at your family’s medical needs and expenses.

What medical services will you and your family need in the next year? Not sure? Take a look back at your health expenses in the previous year and use it as a guideline.

Did you visit the doctor often? Or just for standard check-ups? Does someone you love have asthma or another condition or disease that requires routine attention and care? Did you spend a lot on prescription drugs or hospital visits?

Tally up all of your medical expenses over the past year and look at the costs. Take the time to go through each month thoroughly. You want to have a firm grasp of your actual health care expenses before choosing a plan. Once you know just how much you spent on health care in the past year, it will give you a good estimate of what you are likely to spend on health care in the upcoming year.

healthcare costs

And, if there is an additional health care cost on the horizon, a possible operation, or medical procedure that may be needed, factor that into your future medical costs as well.

Once you know your medical costs and expenses and what you spent your money on, it’s time to look at health plans.

Finding the Right Plan

Some health plans offer greater choice of medical providers and tend to cost more. These more traditional health plans are called indemnity plans.

Indemnity plans tend to have higher out-of-pocket expenses and higher deductibles. After paying an annual deductible, most indemnity plans cover a percentage of a patient’s medical costs, often 80 percent. Most indemnity plans come with a cap of how much you would pay as the patient in an upcoming year.

With other health plans, you have fewer health provider choices. And you’ll need to select physicians within a specific network of care providers but the costs also tend to be lower.

These types of plans are called managed care plans, and include preferred provider organizations, (PPOs) or health maintenance organizations (HMOs). With a managed care plan, your choice of doctors and hospitals are more limited but you also tend to have lower out-of-pocket costs and lower premiums.

Of course, if you can find a doctor that you like within an affordable network of physicians, it can be the best of both worlds.

Managed care plans are available in many employer health plans and through

Think About Your Savings

Looking at your own personal savings is another important aspect of choosing a health plan.

Higher deductible plans mean you’ll pay more money out of your own pocket before the benefits and coverage of your health plan kicks in, but you’ll also pay a lower premium or payment amount each month.

Weigh the pros and cons of paying a little more each month out of your own pocket, with a lower deductible plan, but paying less if a serious medical condition or expense should occur. Would a higher deductible or lower deductible plan work best for your family?

An Uncertain Future

For people with health plans through the Health Insurance Marketplace, the future is not clear.

The new President-elect pledged to repeal Obamacare, but an all-out repeal will be difficult, without having 60 votes in the U.S. Senate. And Republicans have 51 seats, with a seat representing Louisiana to be decided in a run off election in December.

Sections of the Affordable Care Act that will be difficult to repeal or change are the reforms made to the Medicare program, the provision that allows young adults to be on their parents policies until the age of 26, and the provision that requires insurers to sell policies to everyone, including people with pre-existing health conditions.

Under the Affordable Care Act, those under the age of 26 may be added or stay on a parent’s health insurance policy even if the young person gets married, does not live with a parent, is not financially dependent on a parent, is attending college, or is eligible for an employer plan. And this may be a good option for families if other areas of the law are repealed.

There are portions of the Affordable Care Act that can be changed or eliminated through a process called reconciliation, and if Republicans vote along party lines in 2017 they have enough votes to make those changes.

These include ending the expansion of Medicaid coverage, eliminating the federal subsidies that make it more affordable to buy health care through the Marketplace and doing away with tax penalties for not buying health insurance. They also could eliminate a number of taxes that were created to pay for the Affordable Care Act under the Obama administration.

These were all provisions of a bill passed by Republicans in 2015 in the House and Senate and vetoed by President Obama.

When and if those changes take place is unclear. One bill proposed by Republicans in 2015, called for the end of the federal subsidies assisting people buying insurance through the Health Insurance Marketplace at the end of 2017. The deadline for enrolling in 2017 health plans in the Health Insurance Marketplace is Thursday, December 15.

Laws typically take a long time to change and implement, so it is possible there may be a year or more before changes to the Affordable Care Act take effect. But nothing is certain other than the new President’s plan to take apart Obamacare and replace it with something else.

Trump released an outline of his health care plans on Nov. 11. He has a very different plan for health care coverage in America, including a return to high-risk insurance pools and more Health Savings Accounts.

According to, “A Trump Administration will work with Congress to repeal the (Affordable Care Act) and replace it with a solution that includes Health Savings Accounts (HSAs) and return the historic role in regulating health insurance to the States. The Administration’s goal will be to create a patient-centered healthcare system that promotes choice, quality and affordability with health insurance and healthcare and take any needed action to alleviate the burdens imposed on American families and businesses by the law.”

The outline also calls for allowing people to purchase insurance across state lines and re-establish high risk insurance pools “for individuals who have significant medical expenses and who have not maintained continuous coverage.”

This article by Consumer Recovery Network first appeared here and was distributed by the Personal Finance Syndication Network.

Financial Advice

6 Ways To Prepare When Your Applying For A Mortgage

Looking to buy a home in the next year or more?  You’ll want to clean up your credit, pay down debt and build up your savings.

Here are six ways to get ready to apply for a mortgage.

Review your credit reports. Buying a home is the biggest purchase you are likely to make and it’s important to get your credit in tip-top shape before you apply.

So get a copy of your credit report and make sure there are no errors, and resolve any unpaid accounts.  Even an outstanding bill of less than $100 can hurt your credit, so pay off any forgotten accounts that you may find.

You’ll also want to clean up any errors and correct any mistakes on your credit report prior to applying for a mortgage.  You don’t want a mix-up on a credit report to slow you down when you are getting ready to buy a home and apply for a mortgage.  And these days, identity theft is a worry as well.  So check for accounts that someone else posing as you could have opened in your name.  You want your credit reports clean and reflective of your credit record over the past several years and no one else’s.

You can request a free copy of your credit report from each of the three major credit-reporting agencies by visiting You are entitled to a free copy of your credit report from each credit reporting agency each and every year so be sure to take advantage of this, especially in the ramp up to buying your own home.

You can order copies of your credit report one at a time or order all three at once.

Errors on credit reports take a bit of time to correct so be sure not to put this off until the last minute.  And because of the possibility of identity theft it is good idea to get in the habit of checking your credit reports at least once a year, anyway.

Pay off small bills.  Got credit card balances of a few hundred dollars or less?  Now is the time to pay off those bills. You want to lower your outstanding debt as you prepare to borrow for a mortgage.  So take care of any lingering balances you may have on store cards from say last Christmas.

Ease off on big purchases.  Put those credit cards away for a while.  Other than small purchases you can pay in full each month, such as cell phone bills, you’ll want to ease off those little plastic cards.  And you’ll want to put off other big purchases such as new furniture, another computer, a new car and stick with what you have until that mortgage gets approved.

Mortgage lenders evaluate your debt-to-income ratio when reviewing your mortgage application and you want your debt levels as low as you can get them prior to applying for a home loan.

Mortgage lenders want proof of income.

Be steady with your income.  As you hold off purchases, you will want to fortify your income. Got a good job? Stay there. Prior to applying for a mortgage is not the time to switch jobs or start a new business.  Lenders are looking for stability and will like that you’ve been at a steady job for a while. And they will be reviewing your employment record for the previous two years so you will need to explain any changes in employment.  Hopping around to multiple jobs does not look good. They want to be assured that you can make a mortgage payment each month, and demonstrating you have steady, reliable income each month will help to assuage those concerns.

If you are low on savings, you may even want to take on a second job for a while on the weekends to boost your income, because you will need money for the down payment for your home and for routine maintenance and repairs once you move in.

 Save. Save. Save.  Most lenders require down payments of 5 to 20 percent when you purchase a home. (Although, there are some lending programs available that require no money down.)

Saving money for a down payment means trimming your budget of extras for many months and boosting your income however you can.

If you make a down payment of less than 20 percent of a home’s purchase price, a lender may require that you purchase private mortgage insurance, which will increase your monthly payment each month.  Once you pay off 20 percent of the home’s purchase value through your monthly payments, you will no longer be required to pay PMI and you can cancel it.

Remember the more money you save on a down payment for a home, the lower your monthly mortgage payment is likely to be. And if you can put down 20 percent or more, it can save you from paying PMI altogether.

Also keep in mind, when you own the place the repairs and home maintenance are on you. There’s no landlord to call for help if something goes awry. So you also want to build up a savings fund for managing your home and taking care of repairs.

Get into the savings habit. Save for your down payment and open a separate savings account just for your down payment, and continue to use this account for home savings after you move in to your home.  Automate your savings by having a set amount of each paycheck moved to this account. Keep it separate from your other savings so you won’t dip into it.

Prep your documents.  When you apply for a mortgage, a lender is going to ask for quite a few documents. Gather them up in advance so you’ll be ready.

A mortgage lender may ask for:

  • Checking, savings, investment account statements
  • Pay stubs
  • Your employment history for two years
  • Information on your outstanding debts, including student loans, auto loans and credit cards
  • One to two years of tax returns, including W-2 forms and I-9 forms 


This article by Consumer Recovery Network first appeared here and was distributed by the Personal Finance Syndication Network.

Financial Advice

Discover a Higher FICO Score: Secured Credit Cards

I wrote a previous post on how to rebuild your credit score, mentioning the fact that I had signed up for a Discover secured card to get the ball rolling. In this post, I will walk you through what a secured credit card is, the pros and cons of
getting one, and how to best use your newfound secured credit to boost your FICO score.

What is a secured credit card?

A secured card is a credit card that is backed with cash as collateral. In other words, if you want a $500 secured card, then you’ll have to send the bank $500 in cash to “secure” a $500 credit line. Many banks are fully secured by the deposit, but some may allow a partial deposit, meaning that your credit limit may be higher than your initial cash deposit. An example is if you sent the bank a $200 deposit, but were allowed a $500 credit line.


  • It’s easy to get a secured credit card when you’re unable to qualify for an unsecured credit card due to poor credit worthiness.
  • A secured card can act as a tool to help build or rebuild credit over a period of time, if used properly, as most banks report your payments to the major credit bureaus.
  • If you default, the cash deposit you provided will be used to pay what you owe. This is also a drawback, see below.
  • You could earn a few bucks through cash back bonuses on your spending, depending on what bank you choose.
  • You may learn better spending habits. Keep purchases small and pay off your balance monthly.
  • Deposit is refundable if you close the account or graduate to an unsecured card (some banks do this automatically), assuming you paid your bills on time.


  • You have to provide a cash deposit to secure the card, which could be difficult for some people, however some banks offer secured cards with credit lines as low as $200.
  • There may be application fees, ATM fees or annual fees, so be vigilant in your research, and choose a card that won’t eat up your money before you have a chance to use it.
  • You can still end up in debt. If you don’t pay, the interest will pile up quickly. If you started with a $500 credit line (secured), and default, you could end up owing much more once you add in monthly interest, penalty APRs and late fees.
  • Be sure your bank reports to at least one of the three major credit bureaus, otherwise it will be impossible to meet your credit building goals. And, inquire as to whether they report the card as secured or unsecured, because that can definitely make a difference on your credit report.

I Used Discover to Raise My Credit Score

I chose the Discover It Secured Credit Card to meet my particular credit goals, which was a small secured credit card ($300-$500) to help rebuild my credit and FICO score, but I could have easily gone with Capital One. It was close, but Discover won me over with the bonuses and a review at around the 6-month mark for graduation to an unsecured card.

I have had my DiscoverCard since May of 2016. I chose to deposit $500, so that was my credit limit. I’ve used it semi-monthly to pay for a nice dinner out with my husband, which usually runs about $50, give or take a few dollars, which is equivalent to about 10% of my credit limit. This is a little low, but I paid it off each month, on time for six months, and it was sufficient enough to boost my FICO score by more than 125 points!

Raising Your Credit Score

At about the 6-month mark, Discover automatically reviewed my account and then automatically graduated my account to an unsecured credit card, unbeknownst to me, and sent me my $500 deposit back in the mail. I have to tell you, it was a fantastic surprise, being a few weeks from Christmas! That same week, Discover also sent a letter to inform me that my credit limit had been increased to $1250. Trust me, folks, this works, so let’s find you the perfect card!

You should first know what your credit needs and/or goals are before you decide which secured card to choose for yourself, but let’s compare some of the more popular ones, in no particular order.

*These are quick “snapshot” overviews. Please see the links provided (unaffiliated) for complete details on card security, features, current offers, APRs, and fees.


I’m bringing up credit unions, in general, because if you’re already a member of a credit union, it might be in your best interest to inquire about a secured credit card program with them first. Many will offer much lower APR’s and little to no annual fees.


  • The Good: Deposits are from $200-$2,500. Periodic account review to transition you to an unsecured card (deposit refund), no annual fee, 1% cash back on purchases (2% on gas and restaurants), free access to FICO score (TransUnion), reports to all three credit bureaus, and there’s no penalty APR. You should not be late on any payments, but the first time you are, you will not be charged a late fee. And, they have a cash back match for the first year (new customers only).
  • The Bad: Late fee of up to $37, but this or the APR won’t matter if you pay off your balance monthly, on time. Discover.


  • The Good: Deposits are $49, $99, or $200 for initial credit line of $200 based on credit worthiness. Reports to all three credit bureaus, no annual fee, no penalty APR, unlimited access to credit score (CreditWise), and after 5 months of on-time payments, you can get a higher credit limit without paying an additional deposit.
  • The Bad: Late fee of $35, but this or the APR won’t matter if you pay off your balance monthly, on time. At this time, CapOne does not graduate accounts to unsecured cards, but you may receive a limit increase. Capital One.


  • The Good: Deposits are $200-$3,000. This one tends to be more for those with really bad credit. That’s why there’s no credit check and no checking account required to make the initial deposit or qualify. They report to all three credit bureaus.
  • The Bad: Annual fee of $35, and look out for “inactive late fees” after the 12-month mark. Late fee of up to $27 and penalty APR of 21.75%, but this won’t matter if you pay off your balance monthly and on time. You can’t graduate to an unsecured card because they do not offer one. Open Sky.


  • The Good: Deposits are $300-$4,900. You may be able to qualify for a higher credit limit than you deposit (partially-secured card). Free access to your FICO score, a 12-month review that may allow you to graduate to an unsecured card, and reports to the major credit bureaus.
  • The Bad: Annual fee of $39. Penalty APR of up to 29.99% and late fee of up to $37, but neither will matter if you pay off your balance monthly, on time. Bank of America.


  • The Good: Deposits are from $300-$5,000. No penalty APR, reports to all three major credit bureaus, earns interest in a savings account (minimal), and you may be able to graduate to an unsecured card after a year, but you may have to call and request it.
  • The Bad: Annual fee of $29. Late payment of up to $37, but this or the APR won’t matter as long as you pay your balance off monthly, and on time. US Bank.


  • The Good: Deposits are $300-$10,000. Periodic reviews for account upgrades (if upgraded, your deposit will be refunded), and reports to the major credit bureaus.
  • The Bad: $25 annual fee. Late payment up to $37, but this and the APR will not effect you if you pay off your balance each month and pay on time. Wells Fargo.

Using Your Secured Card to Rebuild Credit

It’s important to remember WHY you’re doing this – for better credit. This goal can only be achieved by “playing the game”. The game is a small set of credit rules that insure a positive outcome. The bank gets what they want (money) and you get what you want – a better credit rating.

Rule #1 – Pay on time, every time (set reminders).
Rule #2 – Pay your balance in full every month (auto-pay may be an option).
Rule #3 – Keep credit utilization low, ideally 15-30% of your total secured credit line.
Rule #4 – Use the card frequently, but for small purchases only.
Rule #5 – DO NOT CARRY A BALANCE – EVER (to avoid interest and late fees).

If you’ve had any experience with any of the above-mentioned cards, have questions or tips to help others on their quest to improve their credit, please share below in the comment section.

This article by Consumer Recovery Network first appeared here and was distributed by the Personal Finance Syndication Network.

Financial Advice

Department of Education Forgives Student-Loan Debt Owed by a Wounded Veteran, but the IRS Sends Him a Tax Bill for $62,000

At age 40, Will Milzarski, an attorney, took leave from his state government job to return to the U.S. Army. After completing officer training, he served two tours of duty in Afghanistan. where he led more than 200 combat missions.

On his last day in combat, Milzarski was wounded in the face, which left him with a traumatic brain injury, hearing loss, and post-traumatic stress disorder. He was later determined to be totally disabled.

Milzarski returned to civilian life with $223,000 in student-loan debt, most of it acquired to obtain a law degree from Thomas M. Cooley School of Law. In accordance with its policy, the Department of Education forgave all of that debt due to Milzarski’s disability status.

But then this wounded veteran received a surprise. The IRS considers forgiven debt to be taxable income, and thus it sent Milzarski a tax bill for $62,000.

Milzarski summarized his experience well. “One part of our government says, ‘We recognized your service, we recognize your inability to work,” Milzarski said. “The other branch says ‘Give us your blood.’ Well, the U.S. Army already took a lot of my blood.”

Nearly 400,000 disabled Americans have student-loan debt, and this obscure tax provision impacts nearly all of them. Although they are entitled to have their student loans forgiven due to their disability status, this forgiveness comes with a tax bill.

And disabled student-loan debtors are not the only people affected by the IRS forgiven-loans rule. More than 5 million student-loan debtors are in long-term, income-driven repayment plans (IDRs), and most of them are making monthly payments so low that they are not repaying the accumulated interest.

Under the terms of all IDRs (there are several varieties), college borrowers who successfully complete their 20- or 25-year repayment plans are entitled to have any remaining debt forgiven. But IDR participants, like retired Lieutenant Milzarski, will get a tax bill for the forgiven debt.

Obviously, this state of affairs is insane. President Obama recommended a repeal of the IRS rule when he was in office, but nothing came of his suggestion.

Surely a bill to repeal the IRS forgiven-debt rule would receive bipartisan support in Congress. Who could decently oppose a repeal? In fact, President Trump can probably reverse the rule that is persecuting Mr. Milzarski simply by signing an executive order.

I predict, however, that nothing will be done about this problem–either legislatively or by executive action. Washington DC is in so much partisan turmoil that almost nothing positive is getting done. Under current tax law, millions of student borrowers in income-driven repayment plans will have huge tax bills waiting for them when they complete their repayment obligations and have their remaining student-loan debt forgiven.

And unlike retired Lieutenant Milzarski, who is in his forties, most IDR participants will be in their sixties or seventies when their tax bills arrive in the mail. And if they can’t pay their taxes, that will not be the government’s problem. The IRS will simply garnish their Social Security checks.

Retired Lieutenant Will Milzarski (photo credit Matthew Dae Smith/Lansing State Journal via AP

Associated Press. Wounded Michigan vet gets student loan debt forgiven, but now IRS wants $62,000. Chicago Tribune, October 20, 2017.

Jillian Berman. Why Obama is forgiving the student loans of almost 400,000 people., April 13, 2016.

Judith Putnam. Student debt forgiven, but wounded vet gets $62,000 tax bill. USA Today, October 20, 2017.

Michael Stratford. Feds May Forgive Loans of Up to 387,000 Borrowers. Inside Higher Ed, April 13, 2016.

This article by Richard Fossey first appeared on condemned to debt and was distributed by the Personal Finance Syndication Network.

Financial Advice

FEMA Impersonators and Identity Theft

If you’ve been affected by a recent natural disaster has someone called asking to verify your FEMA registration even though you didn’t apply? Or have you tried to claim FEMA benefits or assistance, but were told you had already applied?

After receiving multiple complaints from people living in these affected areas, the FTC wants you to know about a scam involving FEMA impersonators and identity theft. Here is what people are reporting:

  • Someone pretending to be from FEMA is calling to ask people for their personal information
  • People’s identities have been stolen after a recent natural disaster
  • Someone has filed for FEMA benefits using people’s names

FEMA has tips to help protect yourself from disaster fraud. This includes what to do if you try to register for FEMA assistance online but get a verification error, and what to do if someone calls asking you to verify your FEMA registration even though you did not apply. You also can check out the FTC’s information on imposter scams, including people pretending to be from the government.

Has your identity already been stolen? Visit to receive a step-by-step personal recovery plan. And if you’ve spotted a disasterrelated fraud, please tells us about it at

This article by the FTC was distributed by the Personal Finance Syndication Network.

Financial Advice

FTC Obtains Court Order Halting Business Coaching Scheme

Defendants falsely claimed consumers could earn substantial income

At the Federal Trade Commission’s request, a federal court has temporarily halted an operation that took more than $14 million from consumers seeking to start their own online business. The operation misrepresented that its purported business coaching program would enable consumers to earn substantial income, such as “six figures in 90 days or less.”

According to the FTC, the defendants induced consumers to pay for a series of tiered memberships with increasing fees, falsely claiming that consumers would learn how to make substantial income with an online business. They promised consumers they would receive individualized coaching from successful marketers that would provide what they needed to build a successful business, but, in reality, these were merely salespeople selling higher membership levels in the defendants’ program.

The defendants promoted their scheme via webpages and social media platforms, including Facebook and Instagram, and offered their marketing materials for consumers to use in posting their own ads touting the scheme. The FTC’s complaint states that most of defendants’ customers never earn substantial income, including some people who were charged more than $50,000.

The defendants are Digital Altitude LLC, Digital Altitude Limited, Aspire Processing LLC, Aspire Processing Limited, Aspire Ventures Ltd, Disc Enterprises Inc., RISE Systems & Enterprise LLC (Utah), RISE Systems & Enterprise LLC (Nevada), The Upside LLC, Thermography for Life LLX, also doing business as Living Exceptionally Inc., and Michael Force, Mary Dee, Morgan Johnson, Alan Moore and Sean Brown. They are charged with violating the FTC Act.

The Commission vote authorizing the staff to file the complaint was 2-0. The U.S. District Court for the Central District of California issued a temporary restraining order against the defendants on February 1, 2018.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Financial Advice

Help is Here for People With Severe Disabilities Struggling With Student Loans

Tens of thousands of disabled veterans and hundreds of thousands of people living with severe disabilities are now eligible for new student loan protections starting this year. 

What’s new for borrowers with severe disabilities and student debt?

Due to a recent change in federal law, borrowers whose student loans are forgiven on or after Jan. 1, 2018, due to “death or total and permanent disability” no longer have to pay federal income taxes on those forgiven loans.

Now, when the Department of Education or a private lender forgives a student loan due to a borrower’s death or disability, the amount of forgiven debt no longer counts as income and does not cause a borrower’s federal taxes to go up. Prior to this change some borrowers with disabilities faced financial distress driven by a tax bill because they qualified for debt relief. A Catch-22.

What are my rights if I’m severely disabled and have student debt? 

Since the beginning of the federal student loan program, borrowers who are considered totally and permanently disabled (TPD) have been eligible to have their federal student loans forgiven. 

This includes:

Additionally, some private student lenders also offer disability discharge options for borrowers with disabilities. Lenders that offer these programs may use guidelines that differ from the Department of Education to determine eligibility, so borrowers should contact their private student loan servicer to find out more information. 

Hundreds of thousands of student loan borrowers with severe disabilities could benefit

In 2016, the Department of Education worked with the Social Security Administration to proactively identify borrowers with disabilities who were eligible for the TPD discharges of their federal student loans. They found 387,000 borrowers with disabilities, who collectively owed over $7.7 billion in federal student loans. Roughly half of those borrowers were in default on their student loans.

The Department of Education sent these borrowers letters alerting them to their eligibility for discharge while also warning them about the potential tax consequences. Now, the borrowers with disabilities that are stilled burdened by student debt can receive loan forgiveness without incurring any tax penalties.

Additionally, there are likely to be tens of thousands of severely disabled veterans who don’t yet know that they qualify for federal student loan forgiveness. According to the VA, more than 800,000 severely disabled veterans are unemployable due to a service-connected disability. 

While we don’t know how many of these veterans have student loans, even just a small percentage could mean there are tens of thousands of disabled veterans with billions of dollars in forgivable federal student loans hanging over their heads. The Departments of Education and Veterans Affairs recently put into place some of the tools necessary to automatically identify these severely disabled veterans who qualify for federal student loan forgiveness.

Are you a servicemember or a veteran with questions about credit cards, auto loans, or debt collection? We also provide help for servicemembers, veterans, and military families at every stage of their military career and beyond. See our guides for navigating financial challenges.

Seth Frotman is the CFPB’s Student Loan Ombudsman. To learn more about our work for students and young consumers, visit

Patrick Campbell is the CFPB’s Deputy Assistant Director for the Office for Servicemembers Affairs. To learn more about our work for servicemembers, visit

This article by was distributed by the Personal Finance Syndication Network.