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WalletHub featured Lubin Professor Larry Chiagouris in "2021 Capital One Savor Review"

02/19/2021

WalletHub featured Lubin Professor Larry Chiagouris in "2021 Capital One Savor Review"

Larry Chiagouris

Ph.D., Professor of Marketing, Lubin School of Business, Pace University

Why do you think bonus credit card rewards for dining and entertainment are becoming increasingly popular?

Because this is still a relatively new initiative from the credit card industry sector. Innovations always bring an increase in consumer interest and trial.

Do you think people generally assume the best (a broad definition) or the worst (strict limitations) when faced with vague rewards categories such as “dining” and “entertainment”?

It depends on the individual. Some are optimists. Some are pessimists. But generally, when there is any ambiguity or vague rewards, most consumers that the rewards are not worth their effort. Remember that there is quite a lot of inertia in the adoption of a new service or credit card.

How should people choose between two versions of a credit card offer, when one has better rewards but charges an annual fee?

It is all based on their expected level of usage. Heavy users will experience overall savings even with an annual fee. Light users are better off choosing a no-fee or low-fee option.

Read the full WalletHub article.

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WalletHub featured Lubin Professor Paul Kurnit in "Ask the Experts: Cashing in on Credit Card Rewards"

11/02/2020

WalletHub featured Lubin Professor Paul Kurnit in "Ask the Experts: Cashing in on Credit Card Rewards"

What would you say the best cash back credit cards all have in common?

Cashback! 

Do you think cash back is the best credit card rewards currency?

There are many reward forms in the credit and charge card business. The best of them extend benefits that are effortless and immediately appealing to cardholders. Cash is a great benefit because it represents discounts and money in the bank. For many, that’s first prize. But, other benefits, especially travel perks, are appealing because they represent incentives and rewards that can be banked and cashed in later for personal pleasures – leisure activities, getaways, and pampering.

What limitations do even the best cash back credit cards tend to have?

Limitations of any rewards program deal with complexity and catch. The key is to be frictionless. The cash benefit has got to be clear, communicated, and very visible when the incentive is rewarded.

Which cash back credit card(s) would you recommend to consumers?

I like Discover because they make it clear that there are no fees, ever. It is simple, clear, and trustworthy. I started using it years ago as the go-to card for my gas purchases as prices skyrocketed. It was a perfect marriage of a specific expenditure for which a discount – i.e. cashback – for an increasingly rising cost commodity was very welcome.

Read the WalletHub article.

 

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WalletHub featured Finance Professor P.V. Viswanath in "What are the long-term implications of taking a short-term loan in the context of the current economic crisis?"

06/18/2020

WalletHub featured Finance Professor P.V. Viswanath in "What are the long-term implications of taking a short-term loan in the context of the current economic crisis?"

The coronavirus pandemic has deeply disrupted the U.S. economy, which in turn has hurt the incomes of many Americans. Businesses have been forced to lay off workers as they struggle to survive, which has led to nearly 39 million Americans losing their jobs since the start of the pandemic. While all state economies have begun to at least partially reopen, it will take a long time to reverse the economic damage done by COVID-19, and consequently there has been a surge in the number of Americans who need to borrow money to stay afloat.

Americans who are having trouble with their finances during the COVID-19 pandemic are searching for all sorts of options to relieve the pressure, from home equity loans to payday loans. However, people’s interest in getting these types of loans varies from state to state. In order to determine the states where people are searching for loans the most during the pandemic, WalletHub compared the 50 states and the District of Columbia across four key metrics. These metrics combine internal credit report data with data on Google search increases for three loan-related terms.

Greater interest in getting a loan indicates that more people in the state are struggling to make ends meet. It also implies there may be more strain on the state’s public assistance programs in the near future, and the state may experience a deeper recession than others will. Below, you can see WalletHub’s ranking of the states and D.C., along with a full description of our methodology.

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Wallethub featured Lubin School of Business Professor Paul Kurnit in "Ask the Experts: Tips for Filling Up Your Rewards Tank"

06/12/2020

Wallethub featured Lubin School of Business Professor Paul Kurnit in "Ask the Experts: Tips for Filling Up Your Rewards Tank"

What types of people should consider applying for one of the best gas rewards credit cards?
Using a gas rewards credit card is a good idea for anyone with good credit and not too many credit cards.

How much higher of a gas rewards earning rate do you think is needed to warrant committing to a particular gas station chain?
The commitment to a particular gas station should be carefully considered because gas prices keep fluctuating and today’s best rates may be significantly better at another chain tomorrow.

Does it make sense to get even one of the best gas rewards credit cards when gas prices are low?
Higher or lower prices should not be a factor in deciding to use a dedicated credit card for gas. The two best incentives are best prices or rewards and having a card that can segregate fuel spending from other personal purchases for accounting purposes.

Read the Wallethub article.

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Wallet Hub featured Lubin Professor of Finance P.V. Viswanath in "What are the long-term implications of taking a short-term loan in the context of the current economic crisis?"

06/04/2020

Wallet Hub featured Lubin Professor of Finance P.V. Viswanath in "What are the long-term implications of taking a short-term loan in the context of the current economic crisis?"

What are the long-term implications of taking a short-term loan in the context of the current economic crisis?

If you have a 403(b) or 401k plan that allows borrowing, there may be no problems, since the interest rates are going to be minimal for such borrowing. Obviously, with such borrowing, as for borrowing from any other source, it is important to have in mind how one will repay the loan. Especially if interest rates are high, implications for future cashflow might be severe. Hence it is crucial to try and plot out scenarios as to what will happen going forward. If your job situation is relatively secure (or you feel that you will be able to get another job once the situation improves), then you can feel more comfortable about borrowing.

What are the safest borrowing options for people in need of quick cash for financial emergencies?

Borrowing from family members is safest from a financial point of view since such loans are likely to offer more flexibility (of course one has to take into account social/personal issues which may be important). Credit unions may have low-interest loans available. Credit cards are always available (mostly), but interest rates are likely to be high and will require a lot of deliberation before going on that path.

As the coronavirus pandemic has put millions out of work and overwhelmed the unemployment offices, what policy interventions can be taken by local authorities in order to help those in need financially during this economic downturn? 

Local (anonymous) food pantries, putting together funds with local contributions that would be used for short-term lending, facilitating the creation of community groups (including on WhatsApp), setting up volunteer groups that would call up/check physically (with social distancing) on families, particularly those that are known to be older.

Read the full WalletHub article.

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Wallethub featured Lubin Professor Larry Chiagouris in "Ask the Experts: Grocery Credit Card Shopping Tips"

04/17/2020

Wallethub featured Lubin Professor Larry Chiagouris in "Ask the Experts: Grocery Credit Card Shopping Tips"

Which do you think is likely to benefit the average person more: a credit card with great rewards on groceries or a credit card with great rewards on travel?

Travel always wins out over groceries. The reason is that consumers are always searching for opportunities to save on what might be considered life's luxuries, such as travel. Luxuries and the opportunity to experience them always win out over necessities in the minds of most consumers.

Why don’t all the major grocery store chains have their own co-branded store credit card?

Many grocery store chains consist of a very low-profit margin business model. They cannot, in turn, further shrink their profit margin by sharing some of it with the banks. They have to do so when a credit card is provided to them but even now, they still prefer cash and do not want to lose cash sales. However, those with larger profit margins possess great potential for offering their card. Whole Foods and Trader Joe's benefit with a card offering.

Read the full Wallethub article.

 

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