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4 Ways to Take a Winter Vacation When You've Already Blown Your Travel Budget

Are you already missing those glorious days of summer, when your time was filled with sunshine and new adventures? You’re not alone. But, fear not, fellow wanderlusters — you can get that travel endorphin rush no matter the season. All you need is to decide on a destination and save the funds to pay for it.

“It might seem obvious, but it’s worth a reminder,” Clara Sedlak, the executive editor at online travel booking site, said. “Take a look at your expenses and find ways to cut back.”

Here are four ways to help you fund your winter vacation.

1. Scale Back on the Luxuries

Deciding where you want to spend your funds — whether on that cab ride home from your night out or on your vacation — is an important consideration.

“Consistently avoiding cabs when you could ride the subway and resisting the urge to drop $6 on a venti iced dirty chai, opting instead for your office’s Keurig, can save you loads in the long run,” Sedlak said.

2. Part With Items You Don’t Use

“Fall is a great time to do some housecleaning,” Sedlak said. “If you have a considerable amount of stuff you’re ready and willing to part with, try a good old-fashioned garage or stoop sale. If you have just a few things here and there, you can always turn to Craigslist or eBay. For clothing, try posting your wares on sites like Tradesy and Poshmark. If that doesn’t work, you can always pop into your neighborhood consignment shop.”

3. Separate Your Accounts

You may already have a savings account that is separate from your checking account, but you may want to consider setting one up that is just for travel funds.

“Having a separate account in addition to your regular checking and savings means there’s no chance of accidentally dipping into your travel reserves,” Sedlak said. “It also means you can easily set up automatic monthly transfers as if you were paying a bill, which, after a couple of months, will become so routine you won’t even realize it’s happening.”

4. Reap Credit Card Rewards

Sedlak advises that, if you use an airline rewards credit card to book your travel, you do your best to “book as early as possible [because] airlines make seats available as awards that they don’t expect to sell for cash. That’s especially difficult around Thanksgiving and Christmas, when planes are packed.” You can read about the best credit cards for travel here.

If you’re considering getting a travel credit card to fund a vacation, it’s a good idea to review your credit first, as these types of cards typically require you have a good credit score to qualify. You can see where your credit currently stands by reviewing a free snapshot of your credit report, updated every 14 days, on

What Kind of Deals to Look For

If you’re wanting to head out of the country, Sedlak recommends starting by thinking “about off-season destinations. Caribbean off-season runs through mid-December and most hotels slash their prices by almost half.”

If you’re looking to stay on the continent, you might want to “consider cities instead of resort destinations,” Sedlak said. “Hotel demand in the U.S. is at an all-time high this year, so rates overall are up. However, in many destinations — particularly cities — people often leave to see family elsewhere, so there are deals to be had.”

When to Book Your Travel

“The key is to start looking now, particularly for resort destinations,” Sedlak said. “Many hotels will shave off costs to get you to book early. If you see a good hotel deal, don’t wait … Travel fares will only go up and up as the holidays near.”

“Also, make sure to compare different date ranges for the best hotel rates,” Sedlak said. “Rates can drop dramatically from one weekend to the next. A room at a boutique hotel in Austin during Austin City Limits (September 30 – October 2), for example, can be up to twice as much as one in late October.”


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Americans Have Had Chip Cards for a Year. Here's How It's Going So Far

A new rule imposed by the credit card associations took effect Oct. 1, 2015, mandating that merchants accept chip cards or face increased liability for fraud. The date passed last year with a lot of fanfare and considerable frustration; many smaller merchants complained they weren’t ready.

Chip cards had been available for more than a decade, but the U.S. had long been a laggard — until a string of high-profile card database thefts, beginning with Target in late 2013, increased the urgency for conversion. Many consumers received new chip-ready cards soon after, but had no place to use them, as many merchants were reluctant to spend around $1,000 on new chip-read point of sale terminals.

But the 2015 liability shift deadline — which put merchants on the hook for any fraud that could be blamed on old-style magnetic card transactions — nudged many into making the change.

In a new report published to mark the anniversary, Visa said there were more than 363 million Visa chip cards in circulation in the U.S., and nearly 1.5 million chip-activated merchants.

More critically, the kind of fraud the chip cards are designed to thwart is predictably dropping fast.

According to an email from a Visa spokesperson, “counterfeit fraud at chip-activated merchants dropped 47% in May compared to a year earlier.”

Still, there is plenty of room to improve. Chip transactions represent only 37% of Visa’s in-store payment volume, according to Visa’s numbers. As anyone who has struggled with the choice to swipe or insert their plastic when paying at a cash register knows, plenty of stores still haven’t turned on their chip-enabled point of sale terminals yet.

Meanwhile, many consumers complained that the new chip technology was slowing them down; chip transactions could take 10 seconds or longer, when the old swipe was relatively instantaneous.

In March, we reported that four out of five merchants hadn’t turned on their chip readers, mainly because of a backlog in certifications required by banks. A lawsuit seeking class-action status was filed against the associations, with some merchants claiming their fraud bills had soared because of the liability shift while they waited for certification.

But some of those bumps were smoothed. In the spring, long checkout line waits improved when “quick chip” technology was introduced. That shrunk the time needed to keep a card inserted to two seconds or less.

Then this summer, both Visa and MasterCard announced changes to their liability rules that eased off some of the chip card switch pain.

Effective July 22, Visa said it would temporarily prevent banks from forcing merchants to pay for counterfeit card frauds less than $25. Starting in October, banks will be limited to 10 counterfeit chargebacks per merchant account.

“These two changes together will significantly reduce the number [of] chargebacks that merchants are seeing,” Visa said in its statement back in July. “Following these changes, merchants can expect to see 40% fewer counterfeit chargebacks, and a 15% reduction in U.S. counterfeit fraud dollars being charged back.”

So what’s next for EMV? The chip cards were never designed to stop all fraud. They just help make a certain kind of fraud — counterfeit card fraud — much, much harder. Of course, this prompted some criminals to focus their attention on online fraud, as no one inserts a chip card when online shopping. So that may very well be the next frontier for fraud-fighters. Online shoppers will likely be safer when a long-promised “token” system is in place to add security to the so-called “card not present” transactions. Seeing how long chip card adoption took, don’t expect that change to happen in the next few weeks or months, though.

It’s important to remember that your credit card spending can have a big impact on your credit. You can see where your credit currently stands by viewing a free snapshot of your credit reports, updated every 14 days, on

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How Your Credit Score Affects Your Mortgage Rate

Without a high credit score, you won’t qualify for the best mortgage rates available, which could mean you’ll end up paying more money over the term of your mortgage. Even with rates at historic lows right now, the difference between 3.5% and 3.75% can add up, especially if you’re applying for a 30-year fixed-rate mortgage.

Why does your credit score matter to lenders?

Along with a low debt-to-income ratio and a strong financial history, a high credit score gets you a low mortgage rate. But why?

You’d probably be hesitant to lend money to a friend who usually takes forever to pay you back — or doesn’t pay you back at all. Lenders feel the same way when it comes to mortgages. They want to lend to people who have a record of on-time payments to creditors.

“If somebody has a high credit score, what that shows us is that they’ve been good on meeting their obligations, whether it be credit cards, car loans or other home loans in the past,” says Brian Hoovler, a loan production partner with People’s Home Equity in San Francisco. “It means we’re more likely to want to give you a loan, because we know you’re going to pay us back.”

Your credit score is calculated most often with the FICO scoring model, and is derived from the information on your credit reports, which are compiled by credit reporting companies. Your reports include a history of your payment habits with borrowed money.

Your credit score is “one of the most important parts to qualify,” says Michelle Chmelar, vice president of mortgage lending with Guaranteed Rate in New York. “But it is a part. You have to have the whole package: income, sufficient assets and credit.”

Best scores for conventional loans

“Typically, when you have a score of 700-plus, you’ll get a pretty good interest rate,” says David Lin, a former director of risk management for consumer credit at Barclays and Citibank. He says that while you can still qualify for certain loans if your score is under 680, the 700s are where you want to aim in order to pay the lowest rates.

If you’re at the top of the scale, say 720 or above, you’re in the territory known as excellent. As you move down toward 700, your score is considered good. Once you get to 680, you’re heading toward average, and if you’re closer to 640, you might have trouble getting a conventional mortgage from a bank or online lender, Chmelar says.

The lending industry carves up the credit score scale into 20-point increments and adjusts the rates it offers borrowers each time a credit score moves up or down by about 20 points. For instance, if your score drops to 740 from 760, you’re likely to see a small bump up in the rate you’ll be offered. In the industry, this is called “loan-level pricing,” and every time you go down a level, there’s an increase in costs, according to Hoovler.

“If you have a score of 760 or above,” Hoovler says, “you’re pretty much golden. From there down, every 20 points you’ll start seeing small hits here and there.”

Chmelar offers up a scenario to illustrate a 100-point difference in credit scores:

A borrower with a 20% down payment is applying for a 30-year, fixed-rate, $300,000 loan to purchase a single-family home in Westchester County, New York. She has a 780 FICO credit score, which gets her a 3.5% rate. Out of pocket, that’s $1,347 a month.

If the borrower’s score dropped by 100 points to 680, her rate would bump up to 3.75%, and her monthly payments would increase to $1,389, an extra $42 a month, or $500 per year. “That’s a lot of fun at Starbucks,” Chmelar says.

The impact of the difference in the rates may not seem significant at first, but added up over years, you could end up paying a lot. For example, Chmelar’s 100-point-drop scenario has the borrower paying an additional $15,120 over a 30-year period.

If your score is already good, however, you should consider taking the rate you qualify for. “The difference between a 710 and a 750 score is not so huge that you should wait to raise it,” Hoovler says. If mortgage rates go up while you’re fine-tuning your credit score, “the increase is in all likelihood going to offset any benefit the higher credit score gives you.”

Other loan types

With conventional loans — those backed by Fannie Mae and Freddie Mac — a lot of focus is put on your credit score, according to Dan Keller, a mortgage advisor at New American Funding in Seattle.

Government-insured FHA and VA mortgages, on the other hand, may accept a score as low as 580. The impact of that lower score won’t be as substantial as it would be with a conventional loan, Keller notes. He says to get the best interest rate with an FHA or VA loan, the focus isn’t on a 760 score as it is with conventional loans — it’s on 700+.

So, there’s some leniency when it comes to credit scores and underwriting guidelines with government loans. But the loan fees are more expensive: You’ll have to pay private mortgage insurance, as well as an upfront and an annual mortgage insurance premium.

Jumbo loans — loans that exceed conforming limits imposed by Fannie and Freddie — have stricter credit score requirements. “Ideally you’d want to be at 760 or above for a jumbo loan,” Hoovler says.

But those credit score guidelines don’t tell the whole story. Most lenders have what are known in the industry as “overlays,” which are extra requirements or standards that allow them to require higher credit scores as a precaution, regardless of loan type.

Hoovler says these overlays vary widely from company to company, and if a borrower fails to meet overlay requirements with one lender, it doesn’t mean a mortgage is out of reach. “Just because one lender says you’re not qualified doesn’t mean you can’t get a loan,” he advises. “It just means you may have to do some more digging to find somebody who’s willing to work either with your credit situation as is, or is willing to help you find someone who can put you into a better credit situation.”

How to improve your credit score

Here are some of the best ways to improve your credit score:

  • Make payments, including rent, credit cards and car loans, on time.
  • Keep your spending to no more than 30% of your limit on credit cards.
  • Pay down high-balance credit cards to lower balances, and consider balance transfers to free up credit.
  • Check for any errors on your credit report, and work toward fixing them.
  • Shop for mortgage rates within a 30-day period — too many spread-out inquiries can lower your score.
  • Work with a credit counselor or a lender to improve your score.

“The number one way to improve your credit score is to look at your balance-to-limit ratio,” Keller says. “For example, if you had a credit card with a $10,000 limit, and I pull your credit and you’ve got $8,000 charged on that and your credit score is a 726, if I can get you to pay down that credit card to 30% or less — down to $3,000 — your credit score would jump substantially.”

Michael Burge is a staff writer at NerdWallet, a personal finance website. Email:

How to Choose an Investment Account

You’ve decided to open your first investment account. You compare commission costs and account minimums and — boom — mission accomplished. You’re ready to start investing in stocks. But then …

It could be anything, really: Surprise fees. Limited choice. An awkward interface. Or lousy customer service. One day you realize that the one-size-fits-most broker you’re using just isn’t a good fit.

You don’t have to settle for “almost right.” Some upfront financial self-analysis will steer your search for the right brokerage account.

If you already have an idea … We’ve done extensive research into the top brokers, selecting the best for different types of investors, including: Best for beginners Best for stock trading Best for free stock trading Best for mutual funds Investor, know thyself (and your broker, too)

Let’s talk about your needs — a sort of investing for beginners — and what you should consider when shopping for your first investment account:

  • How much money you have. The type of account can dictate the minimum a broker requires to even open an account.
  • What types of assets you intend to buy. Individual stocks are standard fare. Exchange-traded and mutual funds are, too, but selection can vary widely. Check a broker’s lineup if you have a specific investment in mind.
  • How frequently (or not) you plan to transact. Buy-and-hold investors can put commission costs lower on the priority list than can active investors.
  • The level of service you need. First-time investors should consider the availability of educational tools, investment guidance, stock-trading research and access to real-life humans.
  • How well you and the broker “click.” The broker’s platform and reporting style should be intuitive and easy to navigate.

Misalignment on any of the above can quickly turn the broker-investor relationship sour. To avoid any future unpleasantries, try to identify potential problems before you commit to an online broker.

Here’s what to look for.

How much is required upfront?

A broker’s entry fee may depend on the type of account you’re opening. A $500 to $2,500 minimum for a regular account (aka, non-retirement) is not uncommon. However, the bar is often set a lot lower (as in a $0 minimum) when opening a retirement account, such as a traditional IRA or a Roth IRA. Some brokers waive the initial deposit requirement for customers who sign up for automatic monthly deposits.

Tip: If the initial balance requirement is the only thing standing between you and a broker that fits all of your other criteria, it may be worthwhile to postpone your investing start date until you’ve amassed enough to open an account.

» MORE: Best brokers for IRAs

Is there an investment minimum?

Paying the cover charge gets you in the broker’s front door. To move beyond the foyer, you must meet its initial investment minimum.

For stock investors, calculating the minimum required investment is easy enough: You have to pay the share price plus the commission. Same for ETF investors. It’s trickier with mutual funds, where a minimum initial investment requirement can run as high as $1,500 to $2,000, depending on the fund. That said, after meeting the fund minimum for your initial contribution, additional investments at lower dollar amounts are allowed.

Tip: If after calculating the investing costs and minimum requirements it turns out that your first choice is financially out of reach, don’t just walk away. It’s better to start investing something now (and get compound interest rolling) with a broker that fits your current and near-future financial reality than to put it off for too long.

What are the trading costs?

Buy-and-hold investors can afford to pay a bit more for commissions in exchange for access to other features they value more. That said, when you’re just starting out and building up a diversified portfolio of stocks, plan for higher trading costs upfront as you seed your account. After you’ve established your positions, the impact of commissions will dwindle.

Low commission costs are more important to those who plan on trading frequently (10 or more trades per month) on an ongoing basis. Placing 10 trades a month at $9.99 apiece adds up to $1,198.80 a year in commissions. At $4.99 per trade the annual tab is $598.80 — but you may “pay” for the difference elsewhere: Some deep-discount brokers may not offer research tools or robust customer support. Completely free trading apps are bare-bones services where dividends aren’t automatically reinvested and only taxable accounts (not IRAs) are supported.

There are other fees to consider, too: Annual or quarterly IRA administrative fees (for not maintaining a certain account balance or setting up auto-deposits), inactivity fees (for not placing a minimum number of trades during a specified period), add-on fees for data or premium reports ($5 a month to hundreds of dollars for premium reports), trading platform fees (mainly by brokers catering to options investors and futures and commodities traders).

Tip: Sign-up bonuses are a great workaround for investors who don’t want their initial deposit eaten up by commissions. Many brokers offer pretty sweet deals, like a bunch of commission-free trades or cash bonuses/account credits for opening a new account. The value of the sign-up bonus may be based on the initial investment amount or require customers to set up automatic monthly deposits. Finally, don’t be blinded by a pretty bonus: It’s what’s inside that counts for the long term. Make sure the broker will still be a good fit after the promotion period ends.

» MORE: Best discount brokers

Can you get the help you seek?

Customer service can be a lifesaver — and money-saver — for beginner investors. The simple act of clicking “buy” for the first time can be fraught with anxiety if you’re not sure you’re doing it right. All the research and tools on the planet are worthless if you don’t know how to use them.

Consider what level of service and guidance you want, and check whether there’s a cost to getting the support you think you’ll need. For example, broker-assisted trades can cost from $10 to $45. Some companies offer only phone and email support.

Tip: Client support can be delivered in a number of ways: FAQs, video tutorials, real-time chat, email, one-on-one in-person advice. Some of the bigger brokerages have physical branches where customers can schedule consultations and attend local seminars and investor meet-and-greets. Before you become a customer, stop into one of the branches and have a representative walk you through a test-drive of the broker’s trading platform.

How easy is it to quit?

Your first investment account doesn’t have to be your “forever” broker. It happens: Maybe you thought you’d trade stocks but then decided that index investing is more your speed. Or you couldn’t afford the investment minimum of your first-choice broker and later became flush enough to switch. Or perhaps after a year of training-wheels trading you’re ready to graduate to a more sophisticated investing strategy that’s costlier to execute at the broker you chose in your newbie days.

This first account may turn into the investing equivalent of a starter marriage. Only less depressing … and — bright side! — the uncoupling costs are lower, too.

If you know you’re going to be moving on in the not-too-distant future, do some upfront research into account transfer and liquidation fees. These can range from $20 for a partial transfer to $75 for a full transfer, and the amount is often based on account type, where moving IRA money is cheaper than transferring out of a regular taxable brokerage account.

» JUMP BACK: Revisit our picks of the best brokers » MORE: Use our tool to find the best broker

Tip: Let your next broker pick up the tab for transferring your account. All brokers will assist you in making a transfer, and some will even fully or partially reimburse your transfer fees.

Dayana Yochim is a staff writer at NerdWallet, a personal finance website: Email: Twitter: @DayanaYochim.

8-year-old author of 2 books on Amazon

When Annie Pryor was very young, she wrote a book, saved it and read it to daughter Katie as a toddler. Whether that inspired Katie or not, Annie’s not sure — but at 8, Katie now has written, illustrated and published two books, and is working on the third in her “Princess Katie” series.

“Katie started making up, then writing stories when she was very young,” said her mother. “I found that Amazon has a CreateSpace, where books can be uploaded for free, and they’re made when orders come in.”

She told her daughter, now a third-grader, that if she wrote and illustrated a complete book, they’d try out the site.

>>Need something to lift your spirits? Read more uplifting news  

“Last winter, she wrote the story and did preliminary drawings, then drew and colored a picture for each page over the summer. She worked so hard until it was finished — then I formatted and uploaded it to the Amazon site.”

Katie’s first book, “Princess Katie and the Fairy Tea Party,” is available on Amazon, and her second book,“Princess Katie and the Mermaid Lagoon,” was released Sept. 7. She’s already begun her third book, “Princess Katie and the Sweet Shop.”

“I like princesses a lot, so I made myself into a princess in the stories,” says Katie. “I had to work really hard, especially on the drawings. I use lots of pink, because that’s my favorite color.”

There are no boys in her books “because they wouldn’t want to come to a tea party or a mermaid lagoon,” notes the young author/illustrator.

“I am so proud of Katie and all of the hard work she’s done to publish her first two books,” says her father, Jonothan Pryor. ”All the hours she spent perfecting her illustrations and writing her stories has really given her a sense of accomplishment.”

“She has a list of about 10 books she wants to do,” said her mother. “All of them are about Katie, but there are other princesses in some of the books, all friends of Katie’s.”

After her first book was published, Annie helped Katie throw a tea party for her friends, and a few boys attended, including her two brothers, 6-year-old Michael and 12-year-old Jon. “Michael wants to publish books someday, too, but Jon wants to be a moviemaker and already has his own YouTube channel,” said Annie Pryor.

“My books are in the school library,” says Katie. “My teacher read my first book out loud to the whole class, and they liked it, especially the girls.

“I don’t know yet if I want to grow up and be a writer, but I do want to do more now because I have lots of titles in my head.” And, she has a bedroom full of princess items to inspire her. “I’ve got famous princess dolls from movies, and princess costumes – I’m usually a princess at Halloween, and will be this year, too.”

Katie’s books sell for $9.95 each on Amazon, and her royalty is $2 a book, which her mother says “is going to her college fund — or a pink castle.”

Wells Fargo May Have Opened Unwanted Accounts For You


It sounds like a Hollywood script. Thousands of employees at a major financial institution create false accounts in their customers' names and shuttle money around temporarily to cover their tracks, all to gain larger bonuses and meet sales goals. These employees even go so far as to create fake PINs and contact information for these unauthorized accounts. Meanwhile, after the scam is discovered, the boss retires with a $125 million golden parachute and the CEO defends the bank, blaming employees. Unfortunately, we do not need Hollywood to think up this scenario. It was recently revealed that employees at Wells Fargo created over 2 million unauthorized credit card accounts and bank deposit/debit card accounts. Carrie Tolstedt, the head of Wells Fargo's community banking group, retired in July with a compensation package reported to be as high as $125 million. The March proxy statement praised Tolstedt for record deposit levels and success in increasing the...

Millennials’ Retirement Savings Goal Could Change in Slower Economy

Millennials’ already stretched finances could face a new stress: slower growth of the U.S. economy. Compared with their parents, today’s younger workers may need to save more of their income for retirement, according to a new NerdWallet report.

A number of analysts predict that the continuing pattern of slower growth that has taken hold since the Great Recession could cause stock market returns to fall from 7%, the annual average since about 1950, to a possible 5% in the decades to come. And that could hurt investors saving for retirement.

The new goal for retirement

The difference of two percentage points in broad stock market returns has big implications for younger adults who are just starting to save for retirement and also for those who’ve been investing for about a decade. NerdWallet’s analysis shows that millennials, who could earn a 5% return over the bulk of their investing lifetimes, may be required to save 22% of their annual income to make up the gap. Many retirement experts currently recommend saving 15% of annual income.

“The era of supernormal returns is over,” says Martin Small, the head of U.S. iShares for BlackRock, the world’s largest asset manager. “Over the longer term, younger investors should expect yields and equity market returns to be low.”

NerdWallet’s analysis

To help a millennial investor prepare for the future, NerdWallet analyzed the saving needs of a 25-year-old earning $40,000, the median salary for ages 25-29, according to the U.S. Census Bureau’s 2015 Current Population Survey.

Based on the 7% average in stock market returns each year since 1950, a 25-year-old earning $40,000 can meet a common retirement goal of replacing 80% of his or her income by age 67 by saving 13% of annual income.

But if average annual stock market returns fall to 5%, NerdWallet’s analysis shows a 25-year-old will have to set aside 22% of annual income to save the same amount. That’s an increase of $3,400 this year — equivalent to over three months of rent, based on the median monthly rent of $937 for 25- to 29-year-old households.



How millennials can start preparing now

Start saving. In addition to saving more income, lower investment returns mean millennials may need to start contributing earlier to a retirement savings account than their parents did, or plan for longer careers. Use a retirement calculator to assess progress toward retirement goals and identify potential gaps.

Take advantage of tax benefits and employer matches. Estimates show a quarter of employees aren’t contributing enough to get the full 401(k) match. That match is free money that gets you closer to your savings goals.

Those who don’t have a 401(k) can get a tax deduction by making contributions to a traditional IRA.

Don’t stash your retirement money in a savings account. Focus first on earning your employer’s 401(k) match and setting aside at least $500 in case you need quick cash. Then, consider opening a Roth IRA account and start funneling savings into that. By investing in low-cost vehicles like exchange-traded funds and index mutual funds tied to the overall stock market, like the S&P 500 Index, your money will go to work for you over the decades rather than collecting the low interest rates of most savings accounts.

Jonathan Todd is a data analyst at NerdWallet, a personal finance website: Email: Twitter: @yontodd.

Why Free Shipping Isn’t Always Free

Every online shopper has probably experienced it: You’ve added all the items you need to your cart, and a box pops up that says, “You’re only $11 away from free shipping!”

There are many ways to get your stuff shipped gratis. Some retailers offer it to shoppers who spend a certain amount of money; thresholds often fall between $25 and $99. Other stores, such as Amazon, give it to users in exchange for an annual subscription fee. And members can claim rebates to reimburse their shipping costs at cash-back site

But consumers’ demand for free shipping comes with at least a few unintended consequences.

Our fascination with free shipping

Shoppers have come to expect free shipping, thanks in part to the rise of online commerce, says consumer psychologist Kit Yarrow, a professor at Golden Gate University and author of “Decoding the New Consumer Mind: How and Why We Shop and Buy.”

“It’s funny,” she says. “People go to the post office or UPS and they have no trouble paying for shipping fees. They totally understand the value of a shipping fee. But when it comes to buying something, it does not compute for consumers.”

An overwhelming 88% of consumers say free shipping would make them more willing to shop online, according to the 2016 Walker Sands Future of Retail report. Consumers found this perk more persuasive than streamlined returns processes or same-day shipping.

David Bell, marketing professor at the Wharton School of the University of Pennsylvania, says that Amazon Prime is driving the perception that shipping should be free. Among other benefits, Prime provides members free two-day and even free same-day shipping on a variety of items for a $99 annual fee. This encourages shoppers to place smaller orders, and more of them, rather than waiting until they want enough items to qualify for free shipping based on the amount spent.

“If I qualify for free shipping all the time, that’s going to make me order more,” Bell says. “And even if some of those orders the company loses money on, over the life cycle of my orders, they’re making money on other ones, so it probably evens out.”

Retailers can attract more frequent orders with low free shipping minimums, or bigger orders with higher free shipping minimums, he says.

» MORE: How to use coupons effectively

You may be charged more for free shipping

Retailers that already have high margins — that is, the profit from the sale of the item exceeds the cost of producing it — can generally absorb the cost of shipping, according to Yarrow. But other stores raise their prices in order to give online shoppers free shipping.

“Low-margin retailers are saying, ‘Somehow or another we’ve got to get these costs back into the hands of consumers.’ Otherwise they won’t stay in business,” Yarrow says.

She has noticed that items eligible for free shipping are often more expensive than those that don’t qualify. She recommends consumers compare prices on Google Shopping, which calculates taxes and shipping costs, before making purchases.

We used the website to compare prices on the Echo Design EO30-1720 “Crete” square embroidery decorative pillow. The lowest price came from Macy’s, a store that did charge for shipping. Stores with free shipping on the pillow tended to charge more for the item itself.

For example, in mid-September, Macy’s charged a $27.97 base price with $9.95 shipping for the item, while Bed Bath & Beyond listed a $39.99 base price with free shipping.

Bell, too, recommends vigilance. If a retailer you already frequent begins offering free shipping, check for price inflation.

You may be paying more for free shipping

Even if a retailer doesn’t charge you more for free shipping, you could be paying more of your own volition.

As Yarrow points out, people spend money to get free shipping; it’s tempting to add something else to your virtual cart when you’re only a few dollars from that threshold. But you’ll be spending more than you intended and possibly more than shipping would have cost. It’s rare to find an item that costs exactly the difference, so you’ll likely pay more than the minimum required for free shipping.

In his research, Bell found that consumers prefer free shipping to a $10 discount on their orders. “I think it’s because people feel like it’s an extra you shouldn’t have to pay for,” he says.

Take free shipping offers with a grain of salt, and if you find yourself throwing things you don’t need into your cart to get no-cost delivery, take pause.

“Just like our grandmas told us, nothing in life is free,” Yarrow says. “Such a bummer, but it ended up being true.”

Courtney Jespersen is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @courtneynerd.

'Air Rage' Is a Thing & It's Happening More Often

Tap! Tap! Tap!

Hear that? It’s the sound of the passenger behind you banging on your seat, and if you end up in an argument over their refusal to stop, you wouldn’t be alone. A new study by the International Air Transport Association (IATA), an airline industry body, found that “unruly passenger incidents,” as they were described in a recent press release, are on the rise.

In reviewing 10,854 incidents reported to IATA by airlines worldwide last year, they found the majority of disruptive behavior involved “verbal abuse, failure to follow lawful crew instructions and other forms of anti-social behavior.” A vast number (11%) of the reports detailed “physical aggression towards passengers or crew or damage to the aircraft,” while drug or alcohol intoxication, the majority of which were “consumed prior to boarding or from personal supply without knowledge of the crew,” affected about 23% of the cases, IATA said.

Alexandre de Juniac, IATA director general and CEO, called on airlines and airports to ratify the Montreal Protocol 2014, which he said aims to streamline the legalities of handling unruly passengers. “To date, six states have ratified the Provision needed in order to have a consistent global approach to this issue,” de Juniac said.

IATA also supports a code of practice that focuses on preventing passenger intoxication, especially excessive drinking, prior to boarding. Ideally, staff in airport bars and shops should be “trained to serve alcohol responsibly” and take steps to prevent binge drinking, IATA said.

Though we can’t guarantee that you’ll have a smooth flight, there are some ways to enhance the experience, at least from your wallet’s perspective. A good place to start: travel rewards cards. Not only do some of these bad boys waive irksome baggage fees, if you play your cards right and manage them responsibly, you may earn rewards to redeem for free flights and upgrades. Just remember, a good credit score is your golden ticket to the world of rewards, so if your credit’s not up to snuff, it’s time to start beefing it up. You can see where your finances currently stand by viewing a free snapshot of your credit report on

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The 5 People Who Make Your Mortgage Refinance a Reality

Refinancing your mortgage involves fewer people than when you first bought your home, but it still takes a village to accomplish the task.

Meet the 5 people 1. Loan officer 2. Loan processor 3. Underwriter 4. Appraiser 5. Title company representative or notary

You’ll likely meet just a couple of these people face to face when you refinance your mortgage. Most of the back-and-forth happens with your first point of contact — your loan officer — by email or phone.

Here are the main players involved in the refinance process:

1. Loan officer

The loan officer is the face of the refinance transaction, says Alex Margulis, vice president of residential lending at Perl Mortgage in Chicago. This person will explain the loan process upfront, negotiate the terms of the loan and act as your main point of contact throughout the process.

Your loan officer will collect all of the documents needed to get the application started, including W2s, pay stubs and a copy of your most recent mortgage statement.

Aimee Renkes, a senior loan officer with Midwest Lending Corp. in Chicago, says your loan officer will also help you determine if refinancing makes sense for you.

“Your loan officer should be your go-to if you have any questions or concerns at any point in the process,” she says. “That’s why you want to make sure you’re working with a loan officer you’re comfortable with, and who’s experienced and is going to take care of you.”

Many loan officers have assistants or coordinators who might also contact you during the process for more documents.

2. Loan processor

Once your loan officer gets the ball rolling, she’ll pass along your refinance application to the loan processor.

Karli Spahr, a sales manager with New Penn Financial in Minneapolis, says the loan processor gathers things like verification of employment, verification of deposit and title work. This person packages all this information and sends it to the underwriter for review.

3. Underwriter

Like the loan processor, the underwriter works behind the scenes and never interacts directly with you. This person is like the “enforcer,” Spahr says. He validates your documents, making sure that everything meets the guidelines of the loan that you’re applying for. The underwriter is the person who gives final approval to your application.

4. Appraiser

The appraiser is assigned by the lender through a third-party appraisal management company. This usually happens during underwriting.

If all your interactions with your loan officer have been through email or phone up to this point, the appraiser is the first person whom you’ll meet face to face.

Matt Gougé, a senior loan officer with Mountain West Financial in Sacramento, California, says the appraiser will reach out to you directly and arrange a time to come to your home. He or she will evaluate the condition of your home and grab comparable sales from the area, then report to the lender.

5. Title company representative or notary

Early in the refinance process, the title company gives the lender all of its fees for the initial disclosure, Gougé says. The title company runs a preliminary title report to make sure your home is free of liens and other title issues, and often holds the escrow account that funds your final loan. Your lender is in contact with the title company until the very end, making sure everyone is clear on fees before your loan officer sends you the final disclosure.

The title company conducts the closing process. Depending on what state you live in, you’ll meet either a title company representative or a notary face to face, either at the title company’s office or a location of your choosing. An attorney might also be present, again depending on where you live. The title company will send all the signed documents back to your lender.

You have three days after signing to change your mind — this period is known as a right of rescission. If you’re still on board after those three days, a funder at the lending company authorizes your new loan and sends it to the title company. The title company then pays off the existing loan.

How you can help the refinance process run smoothly and quickly

Most lenders give a timeframe of 30 to 40 days to complete a mortgage refinance. Depending on the volume of applications a lender is handling, it may take a bit longer. Here are some things you can do to help the process run as smoothly and quickly as possible:

  • Send your loan officer the information she requests in a timely manner.
  • Don’t make any big purchases, like a new car.
  • Don’t take out a new line of credit.
  • Don’t leave your current job.

More from NerdWallet How to refinance your mortgage Compare mortgage refinance rates Find a mortgage lender

Michael Burge is a staff writer at NerdWallet, a personal finance website. Email:

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