Fly now, pay later: Are travel loans a good deal?

By Amrita Jayakumar

THE ASSOCIATED PRESS

Dreaming of a spring getaway with white-sand beaches and a cool drink in your hand?

A search for airline tickets can bring your dream down to earth, if the steep fares charged by many airlines outstrip your savings.

What if you could book your trip today and pay for it later without maxing out your credit cards?

Major airlines including American Airlines, JetBlue, Southwest Airlines and United Airlines integrate buy-now-pay-later concepts into their online booking. Working with technology startups that provide the financing, they offer loans to travellers who would rather pay a fixed amount over time than dip into savings or use high-interest credit cards.

Financing a trip may be a reasonable option in a few situations for trips that are important and have inflexible dates, for example, or for emergency travel. But if you don’t know how you’ll pay, borrowing isn’t a good idea, experts say.

LOAN OR LAYAWAY

“We are trying to help people take the trips of a lifetime,” says Brian Barth, founder and CEO of UpLift, a Silicon Valley startup that gives travel loans through four major airlines’ websites.

Travel lenders say they appeal to people with average credit scores who may not qualify for travel reward cards that require excellent credit. The loans also can make sense for people who are building credit and prefer the discipline of fixed payments over credit cards’ revolving payments.

It’s not just airlines offering financing for travellers. Travel deal sites such as CheapAir.com, Expedia and Groupon Getaways offer loans through Affirm, a San Francisco-based online lender. Airfordable and FlightLayaway.com offer layaway-style plans, in which you pay off your ticket in online installments before you fly. Other sites like STA Travel market financing to college students.

Some experts advise against going into debt for travel at all, whether you use travel loans or credit cards. “Taking out debt (to travel) is risky and can be harder to pay off in the long run,” says Brett Snyder, president and founder of airline industry blog Cranky Flier.

THE COST OF CONVENIENCE

Even when a travel loan might make sense, know how you’ll pay it back, such as by carving money out of your budget or using a tax refund, Snyder says.

Before you choose a loan, understand all the costs, says Graciela Aponte-Diaz, director of California policy for the Center for Responsible Lending, a non-profit advocacy group.

The typical UpLift customer borrows $500 to $2,500, says Barth, and the company charges annual percentage rates from 8.99 per cent to 36 per cent, based on your credit profile. If you borrow $1,500, for example, and pay it back over 12 months at 17 per cent _ UpLift’s average rate for borrowers _ you’ll pay $137 per month and a total of $1,642.

Affirm charges 10 per cent to 30 per cent APR, and travellers borrow $1,400 on average, says spokesperson Elizabeth Allin. Airfordable charges a one-time service fee equal to about 13 per cent of the ticket cost, according to a calculator on the website.

Lenders may also charge cancellation and modification fees if your plans change, or try to sell you travel insurance.

THE CREDIT EFFECT

Both UpLift and Affirm say they perform soft credit checks _ essentially a background check of your credit report, which won’t hurt your score. If you are approved, the loan and your payment history will show up on your credit report. Paying on time can build your credit score; not paying will hurt it, and you may be charged late fees.

UpLift considers borrowers with average to low credit scores and looks at data beyond credit scores, such as the person’s travel history with an airline, says Barth. The lender has approved people with scores as low as 475, he says.

Affirm which targets those who are new to credit  says it may ask applicants for permission to scan checking account transactions to gauge financial behaviour. More than 70 per cent of Affirm travellers have credit scores between 620 and 729, says Allin.

ALTERNATIVES TO TRAVEL LOANS

Saving is the cheapest way to fund your dream getaway.

In some cases, charging the trip to your credit card and paying more than the minimum monthly payment may be cheaper than a travel loan with interest, as long as you pay it off within a fixed time frame, says Aponte-Diaz.

Still dreaming of that beach? Find an affordable version of it, says Snyder.

“You don’t have to go to Bali. Go to Florida without putting yourself into debt,” he says.

This article was provided to The Associated Press by the personal finance website NerdWallet. Amrita Jayakumar is a writer at NerdWallet. Email: ajayakumar?nerdwallet.com. Twitter: ?ajbombay.

New way of defining Alzheimer’s aims to find disease sooner

By Marilynn Marchione

THE ASSOCIATED PRESS

Government and other scientists are proposing a new way to define Alzheimer’s disease _ basing it on biological signs, such as brain changes, rather than memory loss and other symptoms of dementia that are used today.

The move is aimed at improving research, by using more objective criteria like brain scans to pick patients for studies and enrol them sooner in the course of their illness, when treatments may have more chance to help.

But it’s too soon to use these scans and other tests in routine care, because they haven’t been validated for that yet, experts stress. For now, doctors will still rely on the tools they’ve long used to evaluate thinking skills to diagnose most cases.

Regardless of what tests are used to make the diagnosis, the new definition will have a startling effect: Many more people will be considered to have Alzheimer’s, because the biological signs can show up 15 to 20 years before symptoms do.

“The numbers will increase dramatically,” said Dr. Clifford R. Jack Jr., a Mayo Clinic brain imaging specialist. “There are a lot more cognitively normal people who have the pathology in the brain who will now be counted as having Alzheimer’s disease.”

He led a panel of experts, working with the Alzheimer’s Association and the National Institute on Aging, that updated guidelines on the disease, published Tuesday in Alzheimer’s & Dementia: The Journal of the Alzheimer’s Association.

ABOUT ALZHEIMER’S

About 50 million people worldwide have dementia, and Alzheimer’s is the most common form. In the U.S., about 5.7 million have Alzheimer’s under its current definition, which is based on memory problems and other symptoms. About one-third of people over 70 who show no thinking problems actually have brain signs that suggest Alzheimer’s, Jack said.

There is no cure current medicines such as Aricept and Namenda just temporarily ease symptoms. Dozens of hoped-for treatments have failed, and doctors think one reason may be that the studies enrolled patients after too much brain damage had already occurred.

“By the time that you have the diagnosis of the disease, it’s very late,” said Dr. Eliezer Masliah, neuroscience chief at the Institute on Aging.

“What we’ve realized is that you have to go earlier and earlier and earlier,” just as doctors found with treating cancer, he said.

Another problem: as many as 30 per cent of people enrolled in Alzheimer’s studies based on symptoms didn’t actually have the disease they had other forms of dementia or even other medical conditions. That doesn’t give an accurate picture of whether a potential treatment might help, and the new definition aims to improve patient selection by using brain scans and other tests.

BETTER TESTS

Many other diseases, such as diabetes, already are defined by measuring a biomarker, an objective indicator such as blood sugar. That wasn’t possible for Alzheimer’s disease until a few years ago, when brain scans and spinal fluid tests were developed to do this.

They measure certain forms of two proteins amyloid and tau that form plaques and tangles in the brain _ and signs of nerve injury, degeneration and brain shrinkage.

The guidelines spell out use of these biomarkers over a spectrum of mental decline, starting with early brain changes, through mild impairment and Alzheimer’s dementia.

WHAT TO DO?

People may be worried and want these tests for themselves or a family member now, but Jack advises: “Don’t bother. There’s no proven treatment yet.”

You might find a doctor willing to order them, but spinal fluid tests are somewhat invasive, and brain scans can cost up to $6,000. Insurance usually does not pay because they’re considered experimental outside of research. A large study is underway now to see whether Medicare should cover them and when.

Anyone with symptoms or family history of dementia, or even healthy people concerned about the risk can consider enrolling in one of the many studies underway.

“We need more people in this pre-symptomatic stage” to see if treatments can help stave off decline, Masliah said.

‘Um… no’: Zuckerberg protects his own privacy in testimony

Even Mark Zuckerberg has limits on what he’s willing to share.

In a rare light-hearted exchange during his public grilling before U.S. senators Tuesday, the Facebook CEO told Sen. Dick Durbin that no, he would rather not share personal details of his life with the U.S. Congress.

“Mr. Zuckerberg, would you be comfortable sharing with us the name of the hotel you stayed in last night?” asked Durbin, an Illinois Democrat.

“Um… no,” Zuckerberg said after pausing, then smiled as the room laughed.

“If you’ve messaged anybody this week, would you share with us the names of the people you’ve messaged?” Durbin continued.==

“Senator, no, I would probably not choose to do that publicly here,” Zuckerberg replied.

“I think that maybe is what this is all about,” Durbin said.  “Your right to privacy. The limits of your right to privacy and how much you give away in modern America in the name of quote, ‘Connecting people around the world.”’

Durbin was among many senators who grilled Zuckerberg on what the social network collected on its users, following revelations that the Donald Trump-affiliated data mining firm Cambridge Analytica scooped up data on millions of Americans without their knowledge.

How not to run out of money in retirement

By Liz Weston

THE ASSOCIATED PRESS

Americans aren’t terrific at saving for retirement. Many are even worse when it comes to figuring out how much to spend once they get there.

An actuary who’s studied the issue for three decades recently proposed a relatively straightforward strategy that can help. In its simplest form, the “Spend Safely in Retirement ” plan suggests waiting until age 70 to claim Social Security and using the IRS’ required minimum distribution table to determine how much to withdraw from savings each year.

Even those who stop work earlier can use the strategy, or a version of it, to figure out when they can afford to retire and how much they can spend, says Steve Vernon, a research scholar at the non-profit Stanford Center on Longevity in Stanford, California. Vernon worked with the Society of Actuaries to study nearly 300 different retirement income approaches. The strategy was the best way for middle-income people with $100,000 to $1 million saved to create an income stream, Vernon says.

Most people nearing retirement don’t consult a financial adviser, and only about half try to calculate how much money they’ll need to retire comfortably, according to surveys by the Employee Benefit Research Institute. Instead, retirees typically take one of two approaches, Vernon says:

_ They try to minimize withdrawals, viewing their retirement savings as an emergency fund that must be conserved, or

_ They wing it, using retirement savings as a checking account to pay their current living expenses without much thought for the future.

“These approaches really aren’t ideal,” says Vernon, author of several books on retirement. The winging-it crowd often burns through their money too fast, while the conservers may spend too little.

Traditionally, financial planners have recommend the “4 per cent rule” _ withdrawing 4 per cent of retirement savings in the first year and increasing the amount each year by the rate of inflation. Recently some researchers have questioned that approach, saying it may not be safe enough for retirees who could be facing a lower-return environment than previous generations.

Another way to set up a retirement income is to buy an immediate annuity, which offers a stream of payments in exchange for lump sum, from an insurance company. Many retirees, however, don’t want to give up a chunk of money that they won’t be able to access in an emergency or leave to heirs.

Social Security, on the other hand, is a kind of annuity that can be a solid foundation for most people’s retirements, Vernon says. Benefits increase with inflation, don’t fluctuate with the market and can’t be outlived.

If people can delay claiming benefits until they are 70, they’ll get the largest possible check. (For married couples, only the higher earner needs to wait until 70, Vernon says. The other spouse can begin Social Security checks at full retirement age, which is currently 66.)

Once maximized, Social Security benefits likely will make up 75 per cent or more of the typical retiree’s income, Vernon says. With the bulk of their income guaranteed, retirees can keep their savings invested in stocks to reap inflation-beating growth. A balanced index fund or a target-date fund can be an easy, low-cost way for them to invest, he says.

Those who want to quit work earlier, say at age 65, can use some of their savings as a “transition fund” to replace Social Security checks.

“There’s some judgment involved in the size of the transition fund,” Vernon says, since carving out too much could leave too little to live on later. People may need to reduce their living expenses and consider working part-time.

Withdrawals can start at age 65, using an initial 3.5 per cent withdrawal rate. At age 70, people can switch to the IRS’ required minimum distribution table, which dictates how much people must take from most retirement accounts at that age. The withdrawal rate at 70 is 3.65 per cent and it increases slightly every year after that; by age 90, for example, it’s 8.7 per cent.

The spend safely strategy won’t make up for inadequate savings, and some people may need to supplement their income by tapping their home equity, either through a reverse mortgage or by selling their house, Vernon says.

How much people withdraw can vary considerably every year with the rising and falling of the stock market. But the method allows people to squeeze as much income as possible from the savings they have without running out, he says.

“We really didn’t set out to find a simple solution,” Vernon says. “But compared to the others, this is the best.”

This column was provided to The Associated Press by the personal finance website NerdWallet.

SUVs to steal the New York International Auto Show

By Tom Krisher:

Yes, there will be a few cars, but SUVs will capture most of the headlines at this year’s New York International Auto Show.

Automakers will be shoring up gaps in their SUV lineups and revamping models that already are popular in the hottest-selling part of the U.S. market.

Leading the way is Toyota with an all-new RAV4 compact SUV, which last year was the most popular vehicle in the U.S. that isn’t a truck. There are also new SUVs coming from Subaru, Volkswagen, Acura, Cadillac and Lincoln.

There won’t be many cars. Nissan will show off a redesigned Altima midsize sedan, while Toyota will roll out a new Corolla hatchback. Kia will unveil a new K900 big luxury sedan, among others.

But SUVs, which hit a record 43 per cent of U.S. sales last year at just over 7.3 million, according to Kelley Blue Book, will steal the show. Here are some wheels to watch:

CADILLAC XT4

The compact SUV is now the largest part of the U.S. market, and Cadillac hasn’t had a product to offer _ until now. The General Motors luxury brand rolled out the new XT4 SUV at a pre-show event in New York Tuesday night. It’s built on underpinnings specifically designed for the Cadillac brand and comes with sculpted looks and an interior that Cadillac says is luxurious and spacious. The company says it will have segment-leading back-seat legroom. It’s powered by a 237 horsepower 2-litre turbocharged four-cylinder engine with a nine-speed automatic transmission that will get an estimated 30 miles per gallon on the highway. The XT4 is available in the fall and starts at $35,790 including shipping.

VOLKSWAGEN ATLAS CROSS SPORT CONCEPT

Volkswagen broadens its growing SUV lineup with a five-seat version of the three-row Atlas. The company calls the Atlas Cross Sport a concept, but it’s almost ready to be built at the automaker’s U.S. factory in Chattanooga, Tennessee. The new version is 7.5 inches shorter than the seven-seat Atlas. The concept is powered by a 355-horsepower plug-in hybrid system with a V6 gasoline engine and a battery that can take it 26 miles on electric power. The hybrid concept can go from zero to 60 mph in 5.4 seconds, VW says. There’s also a “mild hybrid” with 310-horsepower from a V6 and a smaller hybrid battery. The SUV is due in showrooms sometime next year. Mileage and price were not announced.

TOYOTA RAV4

Toyota sold almost 408,000 RAV4 compact SUVs last year, making it the new American family car and the top-selling vehicle in the nation aside from Detroit’s popular big pickups. In an effort to stay on top, Toyota is revamping the RAV for the 2019 model year. The fifth-generation comes on all-new underpinnings that the company says will give it better handling and a smoother ride. It’s also slightly wider and a little lower. New looks are more chiseled and athletic, and the distance between the wheels grows by 1.2 inches for more passenger and cargo space. It comes standard with Toyota’s safety system that includes automatic emergency braking. It’s powered by a 2.5-litre four-cylinder engine and an eight-speed transmission, or a 2.5-litre gas-electric hybrid system with a continuously variable transmission. Horsepower, gas mileage and price weren’t released. The new RAV hits showrooms in the fall.

LINCOLN AVIATOR

Ford’s luxury brand finally gets an Explorer-like midsize SUV with three rows of seats to compete in the hot luxury SUV market. The company was to unveil the Aviator Wednesday. Few details were given, except that it will have a twin-turbo engine of undisclosed size as well as a plug-in hybrid option. Ford says it will have tapered lines and a roomy interior. It also gets standard safety features such as automatic emergency braking and can be opened and started with a smart phone. The Aviator goes on sale sometime next year. The price wasn’t disclosed.

March 8th marks International Women’s Day, a worldwide celebration of the incredible achievements of women around the world.

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