Everybody knows that the economic crisis came about, in large part, because loans were given that could not be paid back. Since then, both the government and individual lending agencies have developed stricter lending policies in order to prevent the same thing from happening again.

In theory, this is a good thing.  Stricter lending laws seem to lead directly to the giving out of fewer bad loans, which in turn will not be sold as investments and will not tank the economy when they’re not paid back.

The downside of stricter lending, though, is that having fewer bad loans means having fewer loans in general, and that means less consumer spending and fewer new jobs in important sectors such as the construction industry.

While many of these stricter lending policies have to do with loans given out to individuals and families hoping to purchase a new home, some of them also target construction companies.  These companies are often being asked to put down double the down payment they had before the financial crisis, plus a deposit equal to a year’s worth of interest on the loan.  With this kind of up-front investment, it’s no wonder construction still only proceeds slowly.

Since the construction industry is one of the prime places where new jobs will pop up, holding it back means holding back the entire economy. Some economists say that this is worth it to deter another crisis, but others aren’t so sure.

And the stricter lending policies are hitting individuals, too. Take the new FHA lending rules, for instance.  Not only are they making loans harder to get, but they’re hurting condo prices across the country. It’s now harder than ever for a condo complex to qualify for FHA buyers, and that means the pool of potential purchasers for these condos is lower. With demand down, condo owners have to sell for less or hold out and hope things get better.

With every positive move, it seems, there are also negative repercussions.

Have you been hit by the new lending rules? How has it hurt (or helped) your situation?

Image courtesy of SliceofNYC.

The following is a guest post by the NerdWallet.com team. NerdWallet is a website that helps you compare and find low interest rate credit card offers. The Nerdwallet team of finance bloggers and experts write for Forbes Moneybuilder Blog, Huffington Post, the Christian Science Monitor and many other outlets.

Do you remember the CARD Act of 2009? If so, then you know it was created to protect American consumers from being held hostage by credit card companies.  This Act has done a good job in some respects, but there are some dirty tricks that you should be aware of before truly claiming victory.

Surveys show that the average American household has nearly $5,000 in unpaid credit card debt, most of whom are searching for ways to pay off these debts cheaply. If you’re like most, you have probably thought of transferring over your balance from higher interest cards to a card with a low introductory interest rate, but should you?

The Use of Balance Transfers Before the CARD Act

Let’s say you have the average household credit card debt of $5,000, and last year you responded to an offer from First Friendly Bank for a 0% APR on a balance transfer credit card. Likely you decided to do this (after reading the fine print of course), thinking that you could pay off your debt before the intro period ended and the higher 15% interest rate kicked in.

So you went ahead and got the credit card and transferred your balance over. You felt confident that you would be able to pay off the $5,000, and even used the extra room on the credit card to pay off an accumulating pile of other bills that was worth $1,000.

Eager to get rid of some of your debt, you decide to send in $500 as a first payment and it is applied to your balance. Now, you likely won’t see this noted on your statement, but your balance transfer is accounted for by your bank as a separate balance from your other bills, and the two incur their own separate interest rates.  Now, what will the bank do to split the $500 you sent in between the two balances?

Just think of these two balances as two different bowls.  The bank would previously have put your entire $500 payment in the balance transfer bowl.  During the pre-CARD Act era, the other bowl wouldn’t have seen any of that money until the other balance transfer bowl was completely taken care of. So you would be charged the full 15% interest on the $1,000 that you spent until you fully paid off the $5,000 from the other balance. If it ended up taking you a full year to pay this off, you would have generated $160 worth of interest on your $1,000 bowl. Then if it took more than a year, that $160 would continue to grow.

Are Balance Transfers Safer Post-CARD Act?

President Obama signed credit card legislation in 2009 that changed the way banks have to behave in situations like that above. Now, these credit card companies are required to apply payments made by consumers to the bowl with the higher interest rate first, no matter how many bowls you have and which have the biggest balances. Of course, this doesn’t mean that it is 100 percent safe – nothing ever truly is. There is a catch within the fine print so that only payments greater than the minimum payment have to be applied to the bowl with the highest interest. So they are still given the freedom to put minimum payments to any of the bowls they wish to.

If you’re only able to pay the minimum payments on your charge cards, all of those payments will be going to the balance transfer bowl. This means that you are going to continue paying off your low interest or 0% credit card balances while the purchases you make still get charged the higher APRs. This is why it is important for consumers to do everything within their power to pay more than just the minimum payment monthly.

Other Dirty Secrets to Know About

Other than the interest rates that are being charged by these banks and the methods they use for the balance transfers, financial institutions are charging upfront fees for transferred balances. A little over a year ago, these fees were typically around 3%, which means you’d pay about $150 upfront for your $5,000 balance transfer. Today, many of these transfer fees are even higher at 5%, which is $250 for a $5,000 balance transfer.

Then there is the problem with professional credit card schemes that banks have been employing since the CARD Act was established. These professional credit cards are none other than business credit cards, which aren’t protected by the Act. So if you decide to get one of these business cards for transferring your balance or in order to take advantage of deals on introductory purchase APRs, the bank has the freedom to put the payments you make on low-rate balances, while charging you the max interest rates from other balances.

If used responsibly, credit cards can indeed be a great way to manage money, but it’s important to keep an eye on the fine print. The only way that these credit cards will work favorably for you is if you are knowledgeable about mitigating the fees that you have to face at each turn, and if you are able to make full payments each month. Dealing with unnecessary interest fees can quickly trip you down a dark abyss, so try to avoid them as best you can, perhaps look at personal loans with fixed rates and payments as a more predictable alternative.

Image courtesy of  Steven Depolo.

...in more ways than one.

We just marked our 4th anniversary, and as we continue setting monthly loan origination records ($17.5 million in April), quickly approach $300 million in total loans issued, and have paid over $22 million in interest to investors, we’ve decided it’s time to move on up, out of Silicon Valley and into the heart of San Francisco.

Our new office at 71 Stevenson puts us right where we belong—midway between Web superstar Twitter in SOMA and traditional banking giants like Goldman Sachs and Citigroup in the Financial District.  We’re excited about the move and hope you’ll come visit our new office soon:

71 Stevenson Street, Suite 300
San Francisco, CA 94105

PS. As I tweeted the news earlier today, one of our avid brand loyalist and expert investor @investorjunkie funnily referenced "The Jeffersons".  Good one, IJ.

Well, ok.  That's a stretch, but the reality is you don't have to throw thousands of dollars at your wedding to make you happy.  In fact, scientist and statisticians have not found a clear correlation between how much you spend on your wedding and how loving and successful your marriage is.  What they did found is that one of the top reasons for couples to separate is money problems.  Perhaps overcharging your credit cards or overleveraging yourself with debt are not the right steps to get your marriage started on a good foot.

Who needs a lavish wedding?  Apparently the royalty do. The Royal Palace, Prince Charles, Queen Elizabeth II (on the Prince William side) and Kate Middleton's parents coughed up a bit of their respective fortunes to pay for the most anticipated wedding this year.  Unless you live under a rock, you will be hit with some pictures of the royal wedding today over the Internet and traditional news media, and many single ladies are looking at them thinking "my wedding will never be this posh".  Well, don't despair.  Here are 3 fun and fact-filled infographics that will help you think about wedding budgets differently.  Enjoy!

The Cost of a Wedding Knot by CreditSesame.com

Happily Ever Richer by RetailMeNot.com

The Royal Wedding versus The Average Wedding by InfographicsGenerator.com

@RobGarciaSJ

There comes a point in every life where something needs to change. In Western culture, this more-often-than-not involves making financial changes. If you’re at a point where you’d like your financial life to look differently than it does, or even if you’re just wondering what it could look like, here are some tips on getting through the process.

Where are You Now?

For some people, this is an easy question. But if you don’t have meticulous records and can’t account for every penny you’ve spent over the last several years, you can still figure out where you’re at.

First, look at all your account balances. Include any investment or retirement accounts. Then track your spending for a week. This will give you a good snapshot of how you typically spend.

Look at these items, along with any other relevant financial information you might have. For instance, if you know you’re getting a raise soon or you’re sure there will be money coming in from a trust fund or an investment, consider that, too.

Take your time with this process, until you feel like you have a good feel for where you are financially. You should know what you have, how you spend, and have a rough idea for what your financial future looks like before you move on to the next part of the process.

Where Do You Want to Go?

Make a list of everything you’d like to do that involves money. This is where you get to dream. Are there things you’ve always wanted to do but haven’t had the money? Are there things you would do if money weren’t a option? Add them to the list.

Consider practical things, too. Maybe you’d like to pay for your kids to go to college, help your mother pay for her nursing home, or start a new business. These things all go on the list, too.

When your list is done, take some time to look it over. While you probably cannot make every item on it an immediate goal, as you muse your way through it you’ll find that some of the things on the list are more important to you than others. If something stands out, mark it in some way.

Depending on how much discretionary income you have, you’ll want to whittle this list down until it contains only a few items that are very important to you. These are the things you’ll have the most motivation to go after.

Turn Your Dreams Into Goals

There are many methodologies for setting smart financial goals.  Here is how we recommend you do it:  now that you have a short list of items that mean a lot to you, translate these into goals. “Take the family to Fiji” isn’t a goal, because it’s too generic. Instead, break it down into smaller, concrete steps.

You could start with, “Save $100 towards Fiji trip every month for 6 months.” After that, you might try to save $200 or even $300 every month. You should also put, “Research Fiji trip,” on your list of goals, so you’ll know how much you’ll need to save.

Dreams often don’t come true because they feel too big and too far away. “Take the family to Fiji,” can feel like it’s impossible and impossibly far away, especially if you’re struggling just to make ends meet. But researching it, a much smaller task, feels completely do-able, as does saving $100, $50, or even just $10 this month towards the trip.

Once you’ve broken your dreams down into goals, set a realistic timeline for them. In the example above, it’s probably best to research the trip before you set a savings goal, so you know how much you’ll need to have. Similarly, make sure you give yourself plenty of time to save the money, so it doesn’t become something stressful.

Get to Work

When you have your dreams outlined into step-by-step goals, there shouldn’t be anything holding you back from starting towards them.  Follow your plan as best you can, knowing that things always come up. If you have to take one of your kids to the ER for stitches, you may not be able to save that month. That’s ok - just pick up where you left off the next month.  If you're having a hard time achieving your goals, you may want to revisit them and adjust them, or perhaps think about setting up an emergency fund with supplemental income.   The important part it to stick with your goals and make it a habit.

Though it may be slow, seeing real progress towards your goals and, therefore, towards your dreams, will help keep you motivated even when its hard going. It will also encourage you because, finally, your life is going in the direction you want it to go.

Image courtesy of Sabrina Eras.