Should I Trade in my Car Now?

Q: I’ve heard that used cars can currently fetch a pretty penny from dealers because of a nationwide vehicle shortage. Should I trade in my car?

A: The auto market has been red-hot for months as manufacturers scramble to catch up on pandemic-induced supply shortages. While circumstances vary, this can be a great time to get top dollar on a used car. 

Here’s what you need to know about the current auto market for sellers.

How high did prices go?

According to online automotive resource Edmunds, the average transaction price for a used car in the second quarter of 2021 was $25,410, which is up 21% year-over-year. This was the first time the average list price for used cars in the U.S topped $25K. Also, fewer than 1% of used cars on dealership lots were priced below $15,000 during this quarter, compared to 18% offered below this mark the previous year. 

Why have prices of used cars increased so sharply? 

Several interconnecting factors have led to the increase in auto prices. 

First, the pandemic put a freeze on the production of new vehicles for nearly a full business quarter. Factory output at the time of the nationwide lock-downs was reduced by 3.3 million vehicles and sales dried up, which also reduced the volume of trade-ins. This led to a decrease in the available supply of used cars and led to a driving up of prices. 

With production on pause, chip-makers focused on the electronics industry instead of creating semiconductor chips for automakers. When production resumed, manufacturers faced a worldwide shortage of these chips, which experts predict will last well into 2022. Consequently, manufacturers have been limited in the number of new cars they can make. This, too, means there are fewer trade-ins and fewer used cars available for buyers, leading to an increase in prices.

A third factor that has influenced the fall in the supply of used cars is the months-long shutdown of business and leisure travel during the lock-downs. Car rentals were virtually unused at this time, prompting the agencies to hold onto the cars in their lots instead of selling them to used car dealerships. This, of course, led to a reduction in the number of used cars available for sale and contributed to the spike in prices.

Finally, the single factor unrelated to the pandemic that has decreased the supply of used cars is the fact that today’s used cars were manufactured during the Great Recession. During this time, automakers faced severe financial challenges and the number of cars sold during that time was far lower than average. Today’s dearth in used cars, then, is also a trickle-down effect of the Great Recession and now directly impacting the current auto market. 

Will the market settle down soon?

Auto prices are already showing signs of leveling off, with some used car prices dropping by as much as $2,000 over the month of July. Many drivers are eager to sell their cars at top dollar now, adding more used cars to the available supply. Car rental agencies are also recovering from their business freeze during the pandemic, adding their own vehicles to the available pool of used cars. While it will take some time for the market to recover completely, it does seem to be cooling off from its post-pandemic sizzle. 

Should I trade in my car now? 

If you plan on trading in your car sometime in the near future, you may want to do so sooner rather than later. With inventory still low, dealers are eager to get their hands on as many used cars as possible and will offer you more than you’d typically expect. Be sure to check what price you can get from several dealers before you sell. It’s equally important to note that those same inflated prices will work against you if you plan on buying a new car now. 

Used cars can fetch a pretty penny in today’s hot auto market, but it’s crucial to weigh all factors carefully before deciding if trading in your car now can work in your favor. 

Your Turn: Have you recently traded in your car? Tell us about it in the comments. 

Beware Cryptocurrency Scams

As one of the hottest investments on the market, cryptocurrency has been enjoying the spotlight for quite a while, and scammers are eager to cash in on the excitement. Cryptocurrency scams are particularly nefarious since the digital currency is not regulated by any government, and once it has transferred hands it usually cannot be reclaimed. Here’s what you need to know about cryptocurrency scams and how to avoid them. 

How the scams play out 

There are several ways scammers are using cryptocurrency to con people out of their money. 

  • Blackmail. In this ruse, scammers send emails to their targets claiming they have compromising photos, videos, or embarrassing information about them. They threaten to go public with these unless the victim pays up in cryptocurrency. Of course, the scammer is lying about the materials they possess and this is illegal blackmail and extortion.
  • Social media. Here, a target receives a social media message appearing to be from a friend and asking them to send cryptocurrency immediately to help them out of an alleged emergency. If the target complies and sends cryptocurrency to their “friend,” they’ll never see that money again. 
  • Mining. In this scam, bogus websites lure targets into what appear to be opportunities for mining or investing in cryptocurrency. The site may even offer several investment tiers, promising bigger returns for a more significant investment. Unfortunately, any money invested through these sites can never be withdrawn. 
  • Giveaways. These “giveaways” appear to be sponsored by celebrities or big-name cryptocurrency investors, like Elon Musk. Victims are promised exponential returns for small investments in cryptocurrency, or for simply sharing some personal information. Of course, none of it is real, except the loss you’ll experience if you fall victim.
  • Romance. Through online dating sites, scammers convince victims they have met a legitimate love interest. As the “relationship” deepens, the victim’s long-distance date starts talking about fabulous cryptocurrency opportunities with incredible returns. The victim acts upon this advice, and sadly, loses their money to the person they believed was a new romantic partner. 

In each of these scams, the victim has no way of recovering the cryptocurrency they shared if an “investment” has been made. Scammers also use common spoofing technology to make it appear as if they represent a legitimate business or website. As always, when in doubt, opt-out. 

How to spot a cryptocurrency scam

Look out for these red flags to help you avoid cryptocurrency scams: 

  • You’re promised big payouts with guaranteed returns for a small investment in a specific cryptocurrency. 
  • A celebrity or famed cryptocurrency investor is sponsoring a cryptocurrency giveaway.
  • A friend contacts you on social media, claiming they are caught up in an emergency and need immediate rescue, but only through cryptocurrency. 
  • You’re promised free money in cryptocurrency in exchange for sharing some personal information.
  • A caller, new love interest, organization, or alleged government agency insists on payment via cryptocurrency.

Be sure to follow common safety measures when online and never share personal information or money with an unverified contact. If you are unsure whether you’ve actually been contacted by a friend or an authentic business, reach out to them to learn the real deal. Finally, if you’re looking to invest in cryptocurrency, never click on an ad or email; look up secure investment sites like Robinhood and Coinbase on your own.

If you’ve been targeted

If you believe you’ve been targeted by any of the above cryptocurrency scams or a similar scheme, immediately report the scam to the FTC. If the scam was pulled off on social media, let the platform owners know so they can take appropriate measures. Finally, let your friends and family know about the circulating scam.

Cryptocurrency offers unique opportunities for beginner and experienced investors alike, but scammers are exploiting digital currency for their own schemes. Proceed with caution to keep your money and your information safe. 

Your Turn: Have you been targeted by a cryptocurrency scam? Tell us about it in the comments. 

7 Reasons to Buy an RV or Campervan

If you’re thinking of road-tripping your summer getaway, think RVs. Recreational vehicles and their close cousin, campervans, are growing increasingly popular as more families hit the road for a true American adventure that’s easier on the wallet and heavy on the fun. When purchasing an RV, you can go all out with a fully loaded luxury vehicle, or go the less costly route by opting for a campervan, also called a Class B motorhome. 

If you’re still not convinced, here are seven reasons to buy an RV or a campervan: 

1. Save money

With a means of transportation and a place to stay all rolled into one, an RV helps you save significantly on your vacation costs. Plus, when you travel with an on-the-go kitchen, you can stock up on staples before heading out to cut down on the money you’ll spend feeding your family while on the road. In fact, despite the cost of fuel, a 2018 study conducted by the CBRE Hotels Advisory Group found that RV vacations were anywhere from 27-61% less expensive than conventional getaways. 

2. Privacy and comfort

Why fight for legroom on a crowded airplane when you can travel in a vehicle that gives you plenty of space to stretch your legs? Move around as much as you’d like (as long as you’re not in the driver’s seat), enjoy a private bathroom and catch a few winks in the sleeping area, all while traveling to your destination. No unpacking and repacking the vehicle when you stop at hotels along the way or sleeping with your face pressed to the window while stopped at rest areas. What more could you ask for while traveling? 

3. Increased flexibility

When you travel with your own means of transportation and a place to stay while on your vacation, there’s no need to be locked into specific dates for your getaway. Instead of working around the cheapest flights and hotel stays, you can come and go as you please and vacation on the schedule that works best for your family. 

 4. Explore more

Traveling by RV will give you the opportunity to take in the sights and sounds of each place you’ll pass through. You’ll enjoy every bit of picturesque scenery on your travels and have the leisure of stopping to watch a glorious sunset or a passing herd of deer. 

5. Bring your pets along

No need to arrange pet-sitters or to keep your furry friend in a carrier under an airline seat as your plane wings its way across the skies. When you travel by RV, you can bring your pets along and keep them nearly as comfortable as they’d be while at home. Plus, you’ll save on the cost of pet care while you’re gone, or footing the cost of an extra airline seat.

6. Tax benefits

In many states, owning an RV can mean enjoying significant tax benefits:

  • The homeowner’s deduction – if you claim your RV as your primary residence, you may be able to take the homeowner tax deduction for your vehicle.
  • Sales tax deduction – in many states, the sales tax you paid on the RV is tax-deductible for the year the RV was purchased. 
  • Interest deduction – you may be able to deduct the interest you pay on your RV loan from your taxes.
  • Business tax deduction – you may be able to claim this deduction if you work from your RV. 

Be sure to check with your accountant or tax advisor to see which of these tax benefits applies to you.

7. RV campgrounds are everywhere

You’ll find public, private and government-owned campgrounds near major attractions all around the country. Fees can be as low as $30 a night, or as high as $150 for upscale resorts with amenities. Look up RV parks near your vacation destination here

If you’re ready to take the plunge and purchase an RV or a campervan, look no further than Advantage One Credit Union! Our RV loans have affordable interest rates, reasonable payback terms, and easy eligibility requirements for qualifying members. Call, click or stop by Advantage One Credit Union today to take the first steps on the road trip of a lifetime!

Your Turn: Do you own an RV? Tell us about it in the comments!

Your Complete Guide to Secure Mobile Banking

In response to the rise of mobile banking scams, the Consumer Financial Protection Bureau (CFPB) recently published new guidance on unauthorized electronic funds transfers, or EFTs. With more people using electronic banking as a holdover from pandemic times, it’s important for consumers to be aware of its vulnerabilities and how to protect themselves from scams. Here’s what you need to know about the risks of mobile banking and how to stay safe. 

What are the risks of mobile banking? 

Banking through your mobile device is quick, convenient and efficient. There’s no longer a need to stop by the credit union on your way home from work to deposit checks, make a transfer or review your recent account history. Most banks and credit unions now allow you to do all that and more at any time, and from anywhere, using your phone and a mobile banking app. 

Unfortunately, though, like all transactions that take place over the internet, mobile banking has some inherent risks. First, hackers can break into a phone and an account to steal money and information. Also, phishing scams that target people over the phone can trick them into sharing login information with scammers who may then hack into the account. Finally, bogus emails and messages appearing to be from your credit union can lead you to unknowingly install malware on your device. 

Mobile banking scams can be difficult to spot and are frighteningly prevalent. In fact, according to a report by data science company Feedzai, the first quarter of 2021 saw a 159% increase in banking scams over the last quarter of 2020. This is likely due to the fact that the volume of banking transactions are returning to their pre-pandemic norm and many of them are happening online. 

How to bank safely online

Instances of online fraud may be mounting, but that doesn’t mean you need to give up the convenience of mobile banking. Follow these protocols for online safety and bank with high confidence: 

  • Use a VPN to hide your IP address. A VPN (virtual private network) will give you a private network, even when you’re using public Wi-Fi, thus preventing scammers from tracking and hacking your mobile device. It’s important to note that some VPNs can work so well that your own credit union won’t recognize you, so be sure to choose one that provides each user with a designated proxy IP. This enables select accounts to recognize the user while providing protection from hackers. 
  • Always choose multi-factor authentication. Most money apps will require this, but if your chosen app allows you to make this choice, be sure to say yes to multi-factor authentication. 
  • Never share your password or save it to your device. All of your passwords should be confidential, but the password you choose for an online banking app must be top secret. Don’t share your password with anyone. Follow suggested guidelines for choosing a strong password, including alternating between uppercase letters, lowercase letters, numbers and symbols; and choosing a unique password you don’t use elsewhere. Also, choose a security question that cannot be answered by searching through the personal information you post on your social media platforms. 
  • Brush up on your knowledge of scams. It’s important to keep yourself updated on the latest banking scams and to know how to recognize a scam if you’re targeted. Never answer a text or email that asks for your account details, even if it appears to be from your credit union. Finally, always be wary of unsolicited phone calls and banking alerts. 
  • Protect your phone. With the wealth of sensitive information it holds, a smartphone should be protected just like a desktop and laptop computer. Consider installing an antivirus app on your phone as well as a location-tracking app so you can find your phone if it gets lost. Be sure to lock your phone after using it, log out of the mobile banking app when you are done and always keep your phone in a safe place. 

Mobile banking scams are on the rise, but by simply following the tips shared above, you can use your phone to bank with confidence, knowing your money and your information are safe.

Your Turn: How do you bank safely online? Share your tips with us in the comments. 

Making Your Home Safe for Older Residents

Whether an older relative is moving in with you, or you’re planning on aging in your own home, it may be time to check out how safe and accessible your home is.

Stairways and bathrooms can be risky places for able-bodied people, but throw mobility or cognitive issues into the mix and those areas of the home can create life-threatening mishaps.

Let’s take a look at how to make your place safer from the outside in:

Walkways and entryways

Illuminated and flat walkways will provide safety for an older relative who may use a walker or wheelchair. Take a look at yours, and repair cracked or uneven sidewalks, add anti-skid strips and consider motion-sensor lights for extra protection.

Install rails on both sides of stairways and use color-contrasting treads for added visibility. Create a no-rise entryway with a ramp. Eliminate thresholds in the entryway into the home, as well as throughout the home, since they are known to be trip-and-fall hazards.

Bathroom

Do not skimp when it comes to creating a safe bathroom. Make sure bathmats are non-slip, and install non-slip strips in the bath and shower. Get some extra protection with non-slip rug tape.

Installing grab bars in the shower or bath and near the toilet will help prevent falls. Seniorliving.com advises using vertical or U-shaped grab bars, as opposed to diagonal bars, which are conducive to slipping. The walls also need to be reinforced to support the weight of the person using the bars.

Extra lighting in the shower, as well as a height adjustable hand-held shower sprayer and shower seats or benches will also help.

An elevated toilet with ample space for maneuvering a walker or getting into a wheelchair are recommended for those with mobility issues. Ageinplace.org also suggests installing a lower sink with knee clearance.

Bedroom

Make sure there is enough space to maneuver a wheelchair or walker. Lighting should be ample and reachable from the bed. Rocker light switches near the headboard are recommended. Create closet space with a doorway that can accommodate mobility equipment and lower shelves for easy access.

Kitchen

To keep things safe in the kitchen, the name of the game is preventing bending or crouching, especially when hot food and appliances are involved.

Appliances should be well-lit with easily readable dials and buttons. Seniorliving.com recommends wall ovens and microwave drawers to avoid lifting heavy and hot items over the appliance door.

Make pantry items accessible with lower shelves, and place frequently used items front and center. Lazy susans and roll-out shelves are ideal.

Make sure the water pressure is well adjusted and the water heater is set at 120 degrees F to avoid burns.

With these safety measures in place, both you and your loved ones can have peace of mind.

Your turn: How have you made your home safer for older occupants?

Beware Back to School Scams

As the store aisles fill up with pencils and crayons and the frantic back-to-school shopping season begins, scammers are ready to strike. Whether you’re a college student preparing for the fall semester, a high school student ready to make the most of the coming school year or the parent of a student of any age, beware of these trending back-to-school scams.

The student tax scam

In this scam, a crook posing as the IRS calls a college-bound student informing them that they have failed to pay the student tax. If it is not paid up immediately, the “agent” says, the student will not be allowed to attend school and may even face jail time.

IRS scams like this one can happen at any time of year, but are especially common before the start of a new school year. Here are three things to know to help you avoid this scam: 

  • The “student tax” does not exist. 
  • The IRS will never initiate contact with a taxpayer through a phone call.
  • The IRS will never demand payment through a prepaid debit card or wire transfer.

Scholarship scams

Another school-related scam that can be more prevalent this time of year, the scholarship scam cons students and their parents into paying money for government student loans or financial aid, or promises a scholarship for a fee. Follow these rules to avoid falling for scholarship scams: 

  • Never pay to apply for a government student loan or financial aid. There is no fee for applying for government aid and there is help available for filling out the Free Application for Federal Student Aid (FAFSA) forms at fafsa.gov
  • There’s no way to guarantee a scholarship or grant. If you’re targeted by a company promising to get you approved for either one by paying a small fee, you’re being targeted by a scam. 
  • There is generally no fee necessary to receive a scholarship. If you are offered a scholarship for a fee, opt out. 

School supply giveaways and freebies

Between backpacks, new clothing and loads of supplies, back-to-school shopping can cost a lot. Messages promising a free back-to-school shopping spree can be most welcome, if they’re legit. Unfortunately, they too often are not.

Back-to-school giveaway scams will ask the victim to visit a website and provide their email address to claim their prize. The victim will then be rewarded with an endless stream of emails, texts, robocalls and more from the company that now has their information and other companies they’ve sold this information to, with no true rewards or prizes in sight. 

In some cases, the scam is a lot more nefarious, and the “company’s” website will infect the victim’s device with malware. Or, the scammer may demand a “processing fee” before the victim can claim their supposed prize. 

Protecting yourself from a giveaway scam is easy when you remember this simple rule: If it sounds too good to be true, it probably is. Also, legitimate contests will rarely select a winner at random; you’ll have to enter it first by providing your email address or another way the company can contact you if you win. They are also not likely to make you jump through hoops or provide all sorts of information before claiming your prize. Finally, there is generally no payment necessary for claiming an authentically won prize. 

Social media scams

In these scams, victims are targeted through their social media platforms and offered incredible deals or offers on school supply shopping. This can be presented in the form of deeply discounted gift cards at favored stores, expensive technology at bargain prices and more. Of course, these deals are bogus and if the victim clicks on the embedded link, their device will be infected with malware. 

Here, too, stay alert and remember that if it sounds too good to be true, it’s almost certainly a scam. No, you won’t be scoring an iPad for just $19.99 and you can’t buy a $1000 gift certificate to Abercrombie for just $250. Ignore all ads like these and, if you can, opt out of receiving them in the future. 

It’s back to school season, and the scammers are at it again. Follow the tips outlined above and stay safe!

Your Turn: Have you been targeted by a back-to-school scam? Share your experience with us in the comments.

What to Buy and What to Skip in August

Q: I’d love to pick up some great bargains as the summer winds down, but I’m not sure what I should be buying this season. Which products typically go on sale in August and which should be pushed off for another time?

A: As host to the second-biggest shopping season of the year, the tail end of summer brings some fantastic finds, but some overpriced products as well. Here’s what to buy and what to skip in August. 

Buy: Outdoor toys 

Outdoor toys, like sandboxes, bikes, inflatable pools and more, typically get big discounts in August. Check out sites like Overstock, Wayfair and look for markdowns on playground sets at retailers like Lowe’s and Home Depot. 

Skip: Major household appliances and mattresses

If you’re in the market for a new oven, mattress or another major household purchase, you’re best off waiting until September. Retailers tend to slash the prices on these items by 30% or more during Labor Day weekend sale events. Plan ahead by checking out upcoming sales in the weeks leading up to Labor Day. Doing so will help you land the best prices on your purchases.

Buy: Swimwear

Stores and online retailers need to clear out their summer stock to make room for the autumn and winter line, which gives you the perfect opportunity to snag a super swimsuit deal! You can walk away with great finds at ridiculously low prices you won’t find next spring. Stash your treasures for next year’s beach season, or keep them for a winter getaway to warmer climates with sunny shorelines. 

Skip: iPhones

If you’re looking to update your iPhone, you’re best off waiting it out a month or two. The new iPhone 13 is expected to be released in mid-September. Older models typically see a price cut when new models hit the market. So, whether you want to score the best price on an older phone or you’re willing to pay anything for the latest and greatest in iPhones, put the brakes on that purchase until September. 

Buy: School supplies and kids’ clothing

With back-to-school shopping seemingly starting almost as soon as school is out for the summer, August is already late in the season. It’s also when school supplies and kids’ clothing tend to see generous markdowns. Stock up on supplies to last all year long and get your kids outfitted for the coming season at rock-bottom prices in August.

Skip: TVs

Don’t run out and buy a new TV just yet. If you need a new flatscreen, you’re best off waiting for Black Friday to get the best deal.

Buy: Office supplies and furniture

Back-to-school sales means you can also cash in on office supplies and furniture. If you’re one of the many Americans working from home, you may need to restock your home office with basic supplies or to upgrade your office chair or desk. Why not save on these purchases by paying for them in August?

Skip: Fall clothing

Fall apparel will just be hitting the stores in August, so you likely won’t be seeing any steep discounts on fall wear until October at the earliest. It’s best to buy just a few autumn basics during the Labor Day sales and fill out the rest of your wardrobe later on in the season. 

Buy: Patio furniture 

Those wicker table-and-umbrella sets can get pricey! Pick up a sweet deal on patio furniture by buying your sets and single pieces at the end of the season. While you’re giving your patio a facelift, you’ll also find grills, outdoor decor and more on sale in August.

The final dog days of summer bring a flurry of marked-down products and end-of-season sales, but there are some items that are best purchased during another time of year. Stay ahead of the retail game by using this guide to learn what to buy and what to skip in August.

Your Turn: Have you picked up any great deals in August? Tell us about them in the comments. 

7 Tips for a Budget-Friendly Road Trip

With many indoor attractions still closed or operating only at a limited capacity, there’s never been a better time to pack up the car, RV or camper van and set out on the road trip of a lifetime. However, without careful planning, a road trip can get pricey, especially with soaring gas prices and the rising costs of food. For this reason, we’ve put together seven solid tips for a budget-friendly road trip. This should help you hit the road in style without breaking your budget.

1. Save on food costs 

Food can quickly turn into the biggest expense of your trip unless you plan ahead. And no, this doesn’t mean dining only on canned baked beans or instant soups for the duration of your trip. Here’s how to save on food costs during your road trip: 

  • Stock up on staples while at home. Shop your local stores for basics before setting out. Once you’re on the road, you won’t have as many choices for food shopping, which may stimulate overspending. 
  • Get your “kitchen” into gear. Unless you’re road-tripping in an RV or camper van that comes with a fully equipped kitchen, you’ll need to gear up for basic food prep on your trip. A good knife, cutting board and small cooking appliances, like a portable grill, panini maker and plug-in burner, can be great starting points. 
  • Plan a mix of meal types. You likely want to eat some meals out during your trip, but overdoing the dining out will quickly kill your budget. Instead, mix it up, alternating between home-cooked meals, dining out on fine cuisine and tasting local street foods. 
  • Only eat out at places you don’t have at home. For further savings, save the dining out for delicacies that are unique to your current location. Think fresh seafood on the Oregon coast, authentic Korean food in K-Town of Los Angeles or Cajun food in New Orleans.

2. Camp out instead of sleeping in hotels

Sleeping under the stars whenever possible will add another layer of awesome to your trip. Check out recreation.gov, where you can book accomodations at 3,600 facilities and 103,000 individual sites across the country. Lots of camping spots will run just $20 a night.

3. Find free attractions

Who says you need to pay for your fun or it doesn’t count? Most tourist hotspots will have a wide selection of free activities and sights to see at no cost, like the Smithsonian in Washington, D.C. and city street art in Pittsburgh, PA. Check out local websites or ask around on the street to find the best-kept secrets at each location. 

4. Map out your route for greater savings

Instead of blowing money on gas, create a detailed schedule of all your stops before setting out, choosing the most efficient and inexpensive route. Look up local attractions in the areas you plan to stop at to book reservations in advance when possible. In many places, you can save a tidy bundle of cash just by pre-booking. Also, keep in mind that many attractions still require reservations as a COVID-19 precaution, so be sure to plan accordingly. 

5. Download GasBuddy

With gas prices hitting $4 a gallon in some parts of the country, your car’s tank can take a huge chunk out of your road trip budget. Download the Gas Buddy app before hitting the road to find the stations selling the cheapest gas throughout your journey. You can save hundreds of dollars on gas costs by leveraging this game-changing app.

6. Check in on a Sunday

For those nights when you must have a hot shower and comfortable bed, you’ll likely be checking into a hotel. If you can swing it, check in on a Sunday. According to a study conducted by the travel app Kayak, hotel reservations are at their lowest rates on Sundays. 

7. Explore more and drive less

Hit the brakes and get out of the car! Spend some time covering miles on foot by hiking through local trails or even backpacking through city streets. You’ll enjoy an enriching experience and save on gas costs at the same time. 

Your Turn: Do you have more tips for budget-friendly road trips? Share them with us in the comments. 

Is Plaid Safe?

Q: When using peer-to-peer payment apps, banking apps and free-trading apps, I’m often redirected to the Plaid network, where I’m asked to input personal information. Can I feel safe using Plaid?

A: The instinct to be wary of any service that’s asking you to share sensitive information is appropriate and commendable. Most financial apps will ask you to share your banking information, and some will even ask you to share your Social Security number. But it begs the important question; Should you be sharing this information?

While the safety and security of each financial app is individual, apps that are powered by Plaid are safe to use. Plaid is a reputable company that uses encryption and industry-standard security measures to protect your sensitive information.

Here’s what you need to know about Plaid.

What is Plaid? 

Plaid is a financial technology company that serves as an intermediary between financial services and their users. Apps like Venmo, You Need a Budget and Robinhood use Plaid to securely link their users’ financial accounts to their own platforms. This way, the financial apps do not have access to their users’ information; they instead rely on Plaid to supply it for them.

Plaid works by using a universal Application Programming Interface (API) to share users’ data with other applications. APIs are software intermediaries that allow two different applications to communicate. Plaid has developed an API that can be used by any financial institution or application, making it simpler and safer for users to share their financial information digitally.

How does Plaid work?

When you sign up for any of the 3,000+ financial applications currently powered by Plaid, you’ll be asked to choose your financial institution from a list that’s provided by Plaid. Next, you’ll enter your banking login info and password. Some apps will have you create a new password at this point. Once you’ve logged in, Plaid securely shares the information you’ve chosen to link, such as your checking account number, with the app you’re using.

It’s important to note that Plaid itself does not move money around. The technology merely enables other financial apps and their users to send funds from one account to another. Plaid holds onto your encrypted password information without touching your money, while the linked financial app can move your money, but cannot access or know your login credentials.

Is Plaid safe?

Sharing personal information with an app can be unsettling — and it should be. However, you can rest easy, knowing that Plaid uses the highest levels of security possible. When you link your checking account with a financial application by using Plaid, the company instantly encrypts the sensitive data and then shares it with the application using a secure connection.

According to the Plaid website, the company uses these measures to keep your information secure:

  • End-to-end data encryption. Plaid uses a combination of the Advanced Encryption Standard (AES-256) and Transport Layer Security (TLS) to keep your personal information completely safe.
  • Multi-factor authentication.  An extra login step adds another layer of security.
  • Cloud infrastructure. Plaid uses secure cloud infrastructure technologies to enable quick and safe connection.
  • Robust monitoring. The Plaid API and all related components are continuously monitored by a security team.
  • Third-party security reviews. Security researchers and financial institutions regularly audit Plaid’s API and security controls.

When using an application that is powered through Plaid, practice standard online safety measures. Check the URL to ensure you have the correct site, look for the lock icon and the “s” following the “http” in the address. Also, make sure the security settings on your device are updated and set to their strongest levels. Finally, if you need to choose a new password for the app, be sure to choose a strong, unique code and not to share it with anyone.

In a world that is increasingly mobile, Plaid safely connects users to thousands of financial apps and 11,000 financial institutions across the country. Follow basic online safety protocol, keep your login info private, and you can use Plaid knowing your information is secure.

Your Turn: What steps do you take to keep your data safe? Tell us about it in the comments.

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5 Steps to Take Before Making a Large Purchase

Have you been bitten by the gotta-have-it bug? It could be a Peloton bike that’s caught your eye, or maybe you want to spring for a new entertainment system, no matter the cost. Before you go ahead with the purchase, though, it’s a good idea to take a step back and follow the steps outlined here to be sure you’re making a decision you won’t ultimately regret.

Step 1: Wait it out

Often, a want can seem like a must-have, but that urgency fades when you wait it out. Take a break for a few days before finalizing a large purchase to see if you really want it that badly. For an extra-large purchase, you can wait a full week, or even a month. After some time has passed, you may find that you don’t want the must-have item after all.

Step 2: Consider your emotions

A bit of retail therapy every now and then is fine for most people, but draining your wallet every month to feed negative emotions is not. Before going ahead with your purchase, take a moment to identify the emotions driving the desire. Is this purchase being used as a means to fix a troubled relationship? Or to help gain acceptance among a group of friends, neighbors or workmates? Or maybe you’re going through a hard time and you’re using this purchase to help numb the pain or to fill a void in your life. Be honest with yourself and take note of what’s really driving you to make this purchase. Is it really in your best interest?

Step 3: Review your upcoming expenses 

What large expenses are you anticipating in the near future? Even if you have the cash in your account to cover this purchase, you may soon need that money for an upcoming expense. Will you need to make a costly car repair? Do you have a major household appliance that will need to be replaced within the next few months? By taking your future financial needs into account, you’ll avoid spending money today that you’ll need tomorrow.

Step 4: Find the cheapest source 

If you’ve decided you do want to go ahead with the purchase, there are still ways to save money. In today’s online world of commerce, comparison shopping is as easy as a few clicks. You can use apps like ShopSavvy and BuyVia to help you find the retailer selling the item at the best price.

Step 5: Choose your payment method carefully

Once you’ve chosen your retailer and the item you’d like to purchase, you’re ready to go ahead and make it yours! Before taking this final step, though, you’ll need to decide on a method of payment.

If you’ve saved up for this item and you have the funds on-hand for it now, you can pay up in cash or by using a debit card. This payment method is generally the easiest, and if it’s pre-planned, it will have little effect on your overall budget.

If you can’t pay for the item in full right now, consider using a credit card with a low interest rate. Most credit card payments have the added benefit of purchase protection, which can be beneficial when buying large items that don’t turn out to be as expected. Before swiping your credit card, though, be sure you can meet your monthly payments or you’ll risk damaging your credit score.

Another option to consider is paying for your purchase through a buy now, pay later program. Apps, like Afterpay, allow you to pay 25% of your purchase today, and the rest in fixed installments over the next few months. This approach, too, should only be chosen if you are certain you can meet the future payments.

Large purchases are a part of life, but they’re not always necessary or in the buyer’s best interest. Follow these steps before you finalize an expensive purchase.

Your Turn: What steps do you take before finalizing a large purchase? Tell us about it in the comments.

Learn More:
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