Friday Reading: Credit Unions Are Not The Solution
Related to what I wrote about prepaid debit cards for the unbanked and underbanked, I read this discussion on The Atlantic about whether credit unions can replace payday lenders:
Round 2 on Predatory Lending: What Are Credit Unions Good For?
The author is skeptical. So am I.
From the comfortable vantage point of a middle class life (or better), credit unions seem to be a good solution for the unbanked and underbanked. They are not, unless credit unions make radical changes to their business model.
If I must watch my balance down to the last dollar on a weekly basis, a bank or credit union won’t be of much use to me. I would use cash and a prepaid debit card myself. The bank or credit union probably don’t want me either because I wouldn’t pass their credit check.
*****
The High Cost of Convenience from Five Cent Nickel
Nickel found out that the same margarita mix is double the price at a liquor store on the way home than at a slightly out of the way grocery store. Yes if you want convenience you will have to pay.
$4 extra on a margarita mix is really nothing compared to many other things. If you want the convenience of not having to understand investments, a broker will help you buy some 5% front-load funds. If you want the convenience of having access to your bank’s branches and ATMs everywhere, you lose the right to complain about fees.
Vanguard is great but it isn’t as convenient as a local person. Credit unions are cheaper than top 10 banks but they are not as convenient. I say this even though I’m a Vanguard customer and a member of a good credit union myself. They are great, but they sure aren’t as convenient as other choices. I’m willing to take that tradeoff. Others take a different tradeoff because they value convenience more than I do.
*****
Adjusting Portfolios Based On Valuation – Are We Expecting Too Much? from Michael Kitces at Nerd’s Eye View
Mr. Kitces says requiring a strategy to get the exact top or bottom is asking for too much. I agree. You don’t have to be right twice.
*****
Joe at Joe Taxpayer said we should Kill the Flexible Spending Account. Andrew in the FSA administration business gave reasons for Why to Save the Flexible Spending Account.
What do you think? I think we should kill it even though I personally benefit from it. Like all small tax breaks, we are much better off with a lower rate on a larger base as opposed to a higher rate and then chipping off what that rate applies to. Selectively favoring one group of people — in this case employees of large employers — simply doesn’t make sense.
*****
8 Reasons to Avoid Whole Life Insurance (and 4 Reasons To Consider It) from The White Coat Investor
Whenever you say something against cash-value life insurance, you will get insurance sales people muddying the water. I certainly got a fair share on my post on VUL. Here White Coat actually included 4 reasons to consider whole life insurance. It’s a true testimony to that quote about people won’t understand something if their livelihood depends on their not understanding it. In addition, they get to practice their persuasion skills.
Blog of the Week
2.2% Rewards Card $444 Bonus
Earn 2.2% toward travel on all purchases with Barclaycard Arrival World MasterCard. No caps and no foreign transaction fees. 40,000 bonus points if you make $1,000 or more in purchases in the first 90 days. $89 annual fee waived in the first year (40,000 bonus miles pay for 5 more years after that). Learn More
Software picked, likely related posts:
Comments
Tell me what you're thinking, but please don't spam. See comments moderation policy.
Buy My Book
Connect
Follow @TheFinanceBuff
