And we found that if you have a credit card, you’re almost guaranteed approval. So some Buy Now, Pay Later companies are more lenient than others. However, with competition and alternative data allowing modern lenders to look beyond simple credit metrics, you can obtain reliable financing without paying a high annual percentage rate (APR). Visit or call 51.Whether it’s Buy Now, Pay Later (BNPL) apps, or personal loans, a poor credit score can make it difficult to access credit. Securities offered through AW Securities, a Registered Broker/Dealer, member FINRA/SIPC. Retirement planning services offered through Allworth Financial, an SEC Registered Investment Advisor. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional adviser of his/her choosing, including a tax adviser and/or attorney. If you, a friend, or someone in your family has a money issue or problem, feel free to send those questions to are for informational purposes only and individuals should consider whether any general recommendation in these responses is suitable for their particular circumstances based on investment objectives, financial situation and needs. A fiduciary financial advisor can help her analyze the situation and choose the right course of action for her needs and circumstances.Įvery week, Allworth Financial’s Amy Wagner and Steve Sprovach answer your questions. Here’s The Allworth Advice: This decision can depend on your friend’s age, her late husband’s age, and a variety of other factors. (Note: These options only apply to Roth IRAs – inherited traditional IRAs come with their own rules and special considerations.) Of course, she could always take a lump-sum distribution which would be entirely tax free, provided the account has existed for at least five years. On the other hand, if she decides to transfer it to what’s called a Beneficiary Roth IRA (also sometimes called an Inherited Roth IRA), then she would have to take RMDs… not exactly the preferred option. The account will also continue to grow tax free. However, because your friend is a spousal beneficiary (and we’re assuming the sole beneficiary), she does not have to take any RMDs – as long she makes the Roth IRA her own by retitling it or rolling it in to her own Roth IRA. Now, in some cases, beneficiaries of Roth IRAs have to take Required Minimum Distributions (RMDs) over a certain amount of time even though the original account holder never would have had to take them. Does she have to pay taxes on any of that money?Ī: First, it’s important to mention no taxes are owed simply for the act of inheriting the account. in Norwood: My best friend’s husband passed away and left her his Roth IRA. On the other hand, as regular readers of this column know, we only support using credit cards if you can pay them off on-time and in-full every single month. The Allworth Advice is that we don’t like BNPLs because they encourage overspending (especially since no credit check is involved) and come with fewer perks and protections than credit cards. Because in both cases, you’re paying for something in installments – which means you actually can’t afford whatever you’re buying. So let us be clear: No matter if you’re using BNPLs or making interest payments on a credit card, we would argue that you’re living beyond your means. Just ask the 46% of Americans who Bankrate says are carrying the burden of credit card debt from month to month. Now this is not to say credit cards are perfect. And even if you use a BNPL responsibly, this behavior will not be reflected on your credit report, meaning it won’t improve your credit score. They also do not provide any kind of purchase protections. Additionally, unlike credit cards, BNPLs offer no chance to earn rewards. For instance, just like a credit card company can charge you late fees, BNPLs can also do so if you don’t pay on time. However, you also need to look past the interest rate because BNPLs also have some downsides. This is because, as you mention, BNPLs typically (but not always) charge 0% interest while the average credit card rate now hovers between 20 and 22% according to WalletHub. Question: Derek in Batavia: You guys say you don’t like buy now pay later programs, but aren’t they better than credit cards since there’s no interest?Ī :In theory, if you’re just comparing interest rates, buy now pay later (BNPL) services could be considered more financially sensible than credit cards. Watch Video: Allworth Advice: Keeping up with inflation
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |