Do rich people pay less for car insurance?

And more of this week's best financial advice

A clean driving record doesn't necessarily mean a lower insurance rate.
(Image credit: iStock)

Here are three of the week's top pieces of financial advice, gathered from around the web:

Car insurance favors wealthy drivers

You'd think having a clean driving record would mean paying less for car insurance, but "earning a fatter paycheck may make more of a difference," said Jonnelle Marte at The Washington Post. In a recent study, the Consumer Federation of America requested quotes for two hypothetical drivers: one with a high-paying job and a master's degree who had either caused an accident or been arrested for a DUI, and the other a middle-income person with a high school degree and a clean driving record. In 20 out of 38 cases, the higher-income driver received a lower rate, despite a troubled driving history. Industry representatives say insurance companies do not request income when issuing quotes, but they "are not required to disclose the statistics they use."

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How to start a charitable fund

There is no minimum financial requirement to start a foundation, charity, or memorial fund in honor of a friend or loved one, but "the process can be laborious," said Abby Ellin at The New York Times. Costs and responsibilities often include setting up a board with regular meetings. However, there are ways to streamline the process. Crowdfunding platforms like Deposit a Gift and GoFundMe can be used to raise the initial donations, and organizations like Scholarship America "will design and manage scholarship programs and memorial funds." Another option is to create a donor-advised fund, administered by a charity like the New York Community Trust that "will file paperwork, direct the money to a chosen charity, and simplify the process, for a fee."

New rules for prepaid debit cards

More protections are coming for prepaid debit card users, said Darla Mercado at CNBC. The Consumer Financial Protection Bureau (CFPB) announced new regulations last week that require more transparency around fees and forbid excessive overdraft charges. The new rules, which go into effect Oct. 1, 2017, require card providers to disclose "all of the fees that may apply to consumers" prior to their opening an account. "In a bid to make comparison shopping easier for customers," the CFPB also requires companies to post their card agreements online. The new rules cap the total amount of overdraft coverage fees that can be charged in one year at 25 percent of the card's credit limit. About 23 million people use prepaid debit cards, which are a popular alternative to traditional checking accounts, "particularly for those who are unbanked."

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