Skimm Money: Credit Crunch, AI Co-Workers, And Cash Back

Eyes On

A Potential Credit Crunch

The recent string of bank failures has some economists worried about a credit crunch. Aka when banks implement stricter lending practices, which makes borrowing $$$ more expensive and harder to do. In a credit crunch, banks could prioritize having cash on-hand to fulfill withdrawal requests. So, buyers looking to finance homes, or businesses wanting to hire employees, may have difficulty securing loans. A credit crunch isn’t a certainty, but here’s what you need to know, just in case.

Your move:

• Keep your $$$ in an FDIC-insured bank. Regulators stepped in to cover deposits at SVB and Signature Bank, but they may not repeat the move if other banks fail. At FDIC-backed banks, up to $250,000 per depositor is insured in the event of a bank failure.

• Maintain your creditworthiness. If you’re planning on taking out a loan, make your credit profile as attractive to lenders as possible. Ex: Not financing a new car or not making a big purchase on your credit card so your debt-to-income ratio stays low. 

• Wait it out. If making big financial moves (hi, house hunting) becomes too costly because of stricter lending requirements, delay if you can. Things will eventually settle down. 

Related Stories

• What Happens During a 'Credit Crunch' — and How You Can Prepare for One

• How the Banking Crisis Could Ripple Through the Economy

• The Fed Sees a Looming Credit Crunch. What's That?

For the Group Chat

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Highs and Lows

After a tense hearing last Thursday with TikTok’s CEO, it appears likely that Congress will seek to ban the app on US soil. Though not everyone agrees with the move, some legislators believe that TikTok poses a national security risk. The proposed law could potentially be used to ban other Chinese tech companies, including popular ones like WeChat, which could be a blow to Chinese stocks. However, TikTok’s misfortune could also be a boon for US tech rivals like Meta and Snap.

5-Minute Money Tip

Score cash back on your spending.

Inflation is high, but cutting back on everyday necessities like groceries and toiletries isn’t always an option. Enter: A free cash-back service like Ibotta or Rakuten. By downloading an app or browser extension, you can start racking up rewards on everyday purchases at retailers like Target and Walmart and redeem them as either cash or gift cards. It’s like coupon cutting but more sophisticated. No scissors required.