5 Bad Credit Card Habits to Break Now

8044873-largeWe’ve all heard the advice: Use credit cards wisely. Still, knowing what’s smart and doing what’s smart can be two different things. And with an increasing number of U.S. young adults putting purchases on plastic – 57 percent of 18 to 34-year-olds say they use credit cards today, versus 48 percent in 2013, according to Mercator Advisory Group’s recent Customer Monitor Survey – that advice is worth repeating.

Are you guilty of any of the following five bad credit card habits? If you’re guilty of having any of these habits, it’s time to change your ways. Otherwise, stay far, far away from these behaviors:

1. Mindless charging. Some people use credit cards with the mindset that “it doesn’t count” if it’s paid for with plastic instead of cash. You need to think before you spend. You don’t want to have more than $100,000 in credit card debt and not qualify for a mortgage for your new home. Even if you’re able to clean up your credit enough to close on a home, you could face the possibility of foreclosure when trying to balance your credit card debt and your living expenses.

2. Paying only the minimum amount due. It’s understandable that if money’s tight, you may not feel like parting with hard-earned cents to pay down your credit card debt.

But you’re just hurting yourself in the long run. If you pay the minimum on credit cards, you’re extending the time period on everything that you buy. This is the main reason that people can build extraordinarily large credit card balances that they can’t hope to pay off. If you’re going to use your cards and carry revolving debt, you at least need to know that it’s going to be paid off within a time frame that works for you.

3. Adding to your revolving debt by making nonessential purchases. All revolving credit card debt should be avoided, of course. But if you’re carrying revolving debt on a credit card, and then your car breaks down, and you don’t have the money to pay a mechanic, you can make a good argument for whipping out your credit card.

You need that car to get to work, or to shuttle your kids around, and if you live in the suburbs or countryside, you probably don’t have a bus service to utilize. So, yes, getting the car fixed is essential. But buying a pair of shoes when you already have a closet full of them or going out to eat with a credit card that has revolving debt is a) problematic and b) not essential, says Albert Williams, a personal finance professor at Nova Southeastern University in Fort Lauderdale, Florida.

“This pay-later [plan] is really creating a loan that is interest-bearing,” Williams says. “This is a bad practice but people do it often.”

In other words, if you’re still paying off that mechanic six months from now, you probably won’t hate yourself. You needed that car fixed. If six months later, you’re still carrying debt on cheeseburgers, fries and shakes, every time you look at your credit card statement, you probably are going to experience indigestion.

4. Using your credit card for a cash advance. If you’re short on cash and you really want some actual bills in your wallet, it may be tempting to take out a little cash. But you might as well just rip it up. In fact, if you take out a cash advance from a credit card, not only will you pay interest, you may get a transaction fee, which could be as much as 5 percent of the cash advance.

You can pay back your credit card immediately, of course, if you get a cash advance that you immediately come to regret. But no matter what, you’ll end up paying the interest accrued on that cash – as well as the transaction fee.

5. Having too many credit cards. There are good reasons to have some credit cards, but it’s difficult to justify having lots of them.

Researchers say that the average number for most people with credit cards is four. However, once you get a credit card, you really have to live with it, since canceling the card can hurt your FICO score. That’s because a great deal of it is based on the equation of credit used over credit available. Try to have cards that equal the amount of credit that you can use and more importantly, can manage.

Leslie Tayne, a New York City-based attorney, debt specialist and author of the new book, “Life & Debt: A fresh approach to achieving financial wellness,” agrees that having too many credit cards is a bad habit consumers develop, thanks to all the store cards out there.

“I often see people with over 20 credit cards, all of which have balances,” she says. “This makes it hard to keep track of that many cards, for issuing payments on time.”

And balances, she adds, can quickly add up. That’s not to say that if you can replace your bad habits with good habits, you can’t benefit from these cards. “Store card discount incentives can be great if someone has a plan to pay off the balance,” Tayne says. And having a plan to pay off the plastic is generally the key to creating and maintaining good habits with credit cards. If all else fails, remember the universal rule of credit card usage: If you don’t pay it now, you’ll really pay for it later.

Don’t forget about our free, online debt management tool, Debt in Focus. In just minutes, you will receive a thorough analysis of your financial situation, including powerful tips by leading financial experts to help you control your debt, build a budget, and start living the life you want to live!

Article source written by Geoff Williams of US News.

Credit Cards Can Be Stolen Right Under Your Nose

635576298599917158-468266197-4-There are several things people freak out about when their wallets or purses have been stolen: knowing a thief has your ID (and your home address), losing irreplaceable gift cards or cash, and having to cancel your credit cards. That’s usually the first thing people do — call their banks — but it’s easy to act quickly when you realize you’ve been robbed. Sometimes, it’s not that simple.

Thieves steal credit and debit cards all the time without taking the physical card. The most common kind of card theft results from data breaches. Last year, millions of U.S. consumers had their cards replaced after their information was compromised in one of the massive cyberattacks on retailers, even if their cards didn’t show unauthorized activity. People have gotten used to the idea that data breaches are inevitable, but there are lots of daily activities that put your cards at risk for theft, without you noticing.

1. Drive-thrus

A Pennsylvania woman was recently arrested for allegedly swiping customer cards on a personal card reader while she worked the drive-thru at a Dunkin’ Donuts, WFMZ reports, reportedly using the information to create duplicate cards and charge more than $800 to the accounts.

That’s not the first time a story like this has popped up, and it’s likely to happen again, because the situation presents an easy theft opportunity to drive-thru workers: Customers hand over their cards and usually can’t see what the cashier is doing with it on the other side of the window. It’s not like you should avoid the drive-thru for fear of card theft, but it’s one of many reasons to regularly check your card activity for signs of unauthorized use.

2. Restaurants

How often do you see your server process your dinner payment? Usually, he or she takes your card away from your table and completes the transaction out of your sight. Many restaurant workers have taken advantage of this situation to copy customers’ cards and fraudulently use the information. Once again, regularly check your card activity for signs of unauthorized use.

3. On the Phone

People are pretty trusting when making orders over the phone, assuming that whoever takes the order is entering the credit or debit card number, expiration date and security code into a payment system, not just copying it down for their own use. On the flip side, it might not be the person on the other end of the call you should worry about — plenty of people read their card information aloud within earshot of strangers, making it easy for someone nearby to write down the numbers.

4. RFID Scanners

Most radio-frequency identification (RFID)-enabled credit and debit cards have a symbol (four curved lines representing a signal emission) indicating the card has the technology for contactless payment. If you have one of these cards, you have the ability to use tap-and-pay terminals found at some retailers, because your card sends payment information via radio frequencies, received by the terminal.

That same technology also allows thieves to use RFID scanners to copy your card data if they get close enough to it and your card isn’t protected. If you’re not sure your card has RFID technology, call your issuer, and if it does, use signal-blocking materials and products to protect it.

5. Card skimmers

Thieves have been installing copying devices at gas pumps and ATMs for years: They tamper with card readers to install skimmers that copy your card data when you swipe it, so a thief takes your credit or debit card information while you complete an otherwise routine transaction. Experts advise you look closely at card readers for signs of tampering, use ATMs serviced by your bank and check your card activity regularly for signs of fraud.

That’s really the best way to combat credit card theft: Watch closely for it. With online banking and mobile applications, it’s easy to check your accounts every day, making it more likely you’ll spot something out of the ordinary than if you only looked at card activity once a week or so. You can also check your credit score for sudden changes, which can be a sign of fraud or identity theft.

Don’t wait until it’s too late! Check out First Financial’s ID Theft Protection products – with our Fully Managed Identity Recovery services, you don’t need to worry. A professional Recovery Advocate will do the work on your behalf, based on a plan that you approve. Should you experience an Identity Theft incident, your Recovery Advocate will stick with you all along the way – and will be there for you until your good name is restored and you can try it FREE for 90 days!*

Our ID Theft Protection options may include some of the following services, based on the package you choose to enroll in: Lost Document Replacement, Credit Bureau Monitoring, Score Tracker, and Three-Generation Family Benefit. To learn more about our ID Theft Protection products, click here and enroll today!**

*Available for new enrollments only. After the free trial of 90 days, the member must contact the Credit Union to opt-out of ID Theft Protection or the monthly fee of $4.95 will automatically be deducted out of the base savings account or $8.95 will be deducted out of the First Protection Checking account (depending upon the coverage option selected), on a monthly basis or until the member opts out of the program. **Identity Theft insurance underwritten by subsidiaries or affiliates of Chartis Inc. The description herein is a summary and intended for informational purposes only and does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for terms, conditions, and exclusions of coverage. Coverage may not be available in all jurisdictions.

Article source courtesy of Christine DiGangi, Credit.com.

5 Times Your Credit Score Matters Most

Credit - Arrows Hit in Red Target.Your credit score has a huge impact on the net loss or gain of some of life’s biggest financial moments: a good score gives you more options, better terms and bigger savings. Your credit score will follow you throughout your life and affect a variety of situations, but these five times are when your credit score really matters the most.

1. Financing a Car

There are three factors that determine how much financing a car will cost: how much money you put down, the length of the term of the loan and your credit score. On a $10,000, 60-month auto loan, a borrower with a low credit score could pay nearly $4,000 more in interest charges than a borrower with a prime credit score. If you have a less-than-stellar credit score, shop around for the best car loan rate available — the savings will be well worth the effort.

2. Buying a House

It’s common knowledge that your credit score matters when applying for a mortgage, but just how much your score costs you in the long run is often ignored. The difference between an excellent score and good score can cost you tens of thousands of dollars over the lifetime of a loan, and having a poor score can cost you your dream of homeownership altogether.

According to Informa Research Services*, the average national interest rate on a 30-year fixed rate mortgage for a consumer with a 760 or higher FICO score is 3.547% APR. If you take out a $200,000 mortgage loan at 3.547% APR, your monthly payment would be around $903. If you have a FICO score of 660, your rate could go up to 4.16% APR, which would raise your monthly payment by $70. The number seems negligible until you annualize those costs. The $70 increase adds up to more than $25,000 in additional interest on your home for the life of the mortgage.

3. Starting a Business

If you are a small business owner or have dreams of entrepreneurship, your personal credit is a major influence on the kind of capital you can access. Even if a business is set up as a corporation to limit personal liability, credit scores are often tied to the owner’s ability to personally guarantee the business’ debts; an analysis by the Federal Reserve estimated that 40.9 percent of all small business loans and 55.5 percent of small business borrowing is personally guaranteed.

4. Renting an Apartment

Though there are no official credit score requirements to rent an apartment, the higher your score, the better your housing options. A competitive credit score can give you the edge you need to rise above other applicants or take advantage of offers, like low down payment promotions for qualifying applicants.

Rental markets can be competitive, especially in large cities where many owners of multi-unit apartment buildings have a minimum score requirement to rent within the community. If you have a low score and have a hard time getting your rental application approved, you may have better success with a private landlord — your options will be limited but the requirements tend to be less strict.

5. Qualifying for Insurance

Insurance companies have standard practices for setting their rates, weighing various risk factors to calculate the exact rate to charge a customer, including their credit score. But the scores insurance companies use are different than the ones used by banks and financial services companies — these scores are called Insurance Credit Bureau Scores, or Insurance Risk Credit Scores.

Insurance scores consider credit information and previous insurance claim information, which allows insurers to determine how much of a risk someone is to insure. Actuarial studies suggests that someone who pays all of their bills on time, has a good credit history and hasn’t filed any insurance claims is less of a risk and a more profitable customer, according to the Insurance Information Institute. Therefore, a favorable credit score will not only get you a better rate on your insurance premiums, it could be the determining factor on whether you even get approved for coverage.

If you are looking to finance a vehicle, buy or refinance a home, or start your own business – be sure to contact First Financial for low rate loans and personalized service!**

*Calculations are accurate as of Dec. 8, 2014.

**A First Financial membership is required to obtain a First Financial loan and is available to anyone who lives, works, worships or attends school in Monmouth or Ocean Counties. Subject to credit approval.

Article Source: Morgan Quinn for gobankingrates.com, http://www.gobankingrates.com/personal-finance/5-times-credit-score-matter/

3 Ways to Deal with Your Holiday Debt Before it Gets Out of Control

holiday debtDo you have high credit card balances after all the holiday shopping you did in November and December and still haven’t made a dent in it yet? First, you might want to plug your information into First Financial’s credit card payoff calculator and see how much you need to put toward those bills each month to get debt free within a few months, or whatever your debt-payoff timeline may be.

1. Open a Low Rate Balance Transfer Card

If the debt you’ve accumulated resides on a credit card with a high interest rate, you may want to explore a lower rate financing offer by transferring your balance to another credit card. This strategy requires a little math and firm commitment to your plan.

Make sure you know exactly how much you’ll be paying in fees when you transfer the balance and how long you have this lower rate financing. You can use one of the debt payoff calculators mentioned above to determine how much you need to pay each month in order to eliminate your debt within that period.

During this payoff time, it’s crucial you not add to your balance, because that will only make your goal more difficult (and expensive) to achieve.

First Financial has a great Visa Platinum Card with a really low rate, no balance transfer fees, no annual fee, plus rewards for purchases!* As a first time user, if approved – you may also be eligible for an introductory APR of 2.9% on all purchases and balance transfers for the first 6 months.** Get started by applying online today.

2. Get Your Money Back

If for some reason you never gave out all your gifts, you may want to consider returning some.  In the likely event you already distributed your gifts, take a look at your own haul. You don’t want to insensitively get rid of gifts someone thoughtfully picked out for you, but if you find yourself with things you don’t need or gift cards you don’t plan to use, consider selling them to help pay off your debt. Even exchanging an unwanted item for something you need could help you save money, if you were thinking of buying it anyway. Any way you can cut back on spending in the coming months will help you repay your credit card debt faster.

3. Take Out a Personal Loan

If you’re looking at several months or years of debt repayment, you may be better off consolidating the high-interest credit card debt with a personal loan at a lower interest rate. Again, it’s crucial you not add to the debt during or after you’ve repaid it, because that will drag out your debt issues and cost you more money in interest. It’s not always necessary to consolidate credit card debt, but sometimes that’s the best way to make repayment manageable.

First Financial also has personal loan options available, with fixed payments, plus several other great benefits.*** Apply online today!

*APR varies from 10.90% to 17.90% when you open your account based on your credit worthiness. This APR is for purchases, balance transfers, and cash advances and will vary with the market based on the Prime Rate. Subject to credit approval. Rates quoted assume excellent borrower credit history. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. No Annual Fee. Other fees that apply: Cash advance fee of 1% of advance ($5 minimum and $25 maximum), Late Payment Fee of up to $25, Foreign Transaction Fee of 1% plus foreign exchange rate of transaction amount, $5 Card Replacement Fee, and Returned Payment Fee of up to $25. A First Financial membership is required to obtain a VISA Platinum Card and is available to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.

**The 2.9% promotional rate will apply to purchases and balance transfers only for six statement cycles from the new account holder’s initial balance and/or initial transfer to the First Financial VISA Platinum card. The balance transfer promotional rate does NOT apply to purchases or cash advances.

***Subject to credit approval. A First Financial membership is required to obtain a personal loan and is available to anyone who lives, works, worships, volunteers, or attends school in Monmouth or Ocean Counties. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan.

Article Source: Christine DiGangi for http://blog.credit.com/2015/01/3-ways-to-deal-with-your-holiday-debt-before-it-gets-out-of-control-104906/

5 Credit Assumptions You’ve Got All Wrong

Credit Inscription on Red Billboard.Let’s face it – when it comes to credit and credit scoring, there’s a lot of misinformation out there. As a result, many people make assumptions about their credit that are incorrect. Here are 5 common examples of false credit assumptions, and the truth behind each one.

1. Paying a late fee means you won’t get reported to the credit bureaus.

If you slip up and pay a bill late, getting hit with a late fee probably seems like punishment enough. After all, forking over an extra $25-$35 for your forgetfulness feels like a sufficient slap on the wrist.

But if your payment is more than 30 days overdue, you could expect a negative mark to land on your credit reports, regardless of whether or not you’ve coughed up a late fee. This is a good reason to prioritize paying on time – if you don’t, it could be costly in a number of ways.

2. Your credit utilization ratio is 0% if you pay your balance in full each month.

Paying off your credit card in full each month is a good habit to get into. But as you’re patting yourself on the back for avoiding interest charges, don’t forget to remain diligent about keeping track of your credit utilization ratio.

Here’s why: Your credit card issuer could send a balance report to the credit bureaus at any time during the month – not necessarily right after you’ve paid your bill. Consequently, keeping your balance below 30% of your available credit on all your cards throughout the month is key to maintaining a solid score.

3. All of your monthly bill payments are being reported to the credit bureaus.

Personal finance experts commonly recommend that we pay all of our bills on time. This is certainly important for avoiding late fees (see above), but it causes many people to assume that all of their bill payments are being reported to the credit bureaus.

This usually isn’t the case. Rent and utility payments are typically not reported unless you become seriously delinquent. You still should always pay on time, but these payments generally won’t give your score a boost.

4. Avoiding credit cards will help your credit score.

In an effort to avoid getting into debt, some people choose to forfeit credit cards altogether. While it’s true that maxing out a card will do damage to your credit score, avoiding plastic entirely usually isn’t a good idea, either.

Getting a credit card as soon as you can and using it responsibly (which means paying your bill on time and in full every month), is one of the easiest ways to start establishing a solid credit profile. The longer you go without establishing credit, the harder it will be to do so.

The takeaway? Using a credit card to build your credit doesn’t have to result in debt if you make a budget and track your spending carefully. Usually, the benefits of doing so outweigh the risks.

Try First Financial’s Visa Platinum Credit Card for a great low rate, rewards on purchases, no annual fee, and no balance transfer fees!*  Apply online today.

5. A bankruptcy will affect your credit for the rest of your life.

It’s true: Declaring personal bankruptcy will have a serious, negative impact on your credit. But don’t let Internet rumors or sensational media reports warp your thinking – a bankruptcy won’t actually trash your credit for life.

In most cases, a bankruptcy will stay on your credit reports for 10 years, and the effect of this event on your credit score will lessen over time. This is not to say that you should treat bankruptcy lightly, but it’s important to know that no negative mark has to affect your credit forever. By letting some time pass and cleaning up your credit habits, there’s always a way to bounce back.

*APR varies from 10.90% to 17.90% when you open your account based on your credit worthiness. This APR is for purchases, balance transfers, and cash advances and will vary with the market based on the Prime Rate. Subject to credit approval. Rates quoted assume excellent borrower credit history. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. No Annual Fee. Other fees that apply: Cash advance fee of 1% of advance ($5 minimum and $25 maximum), Late Payment Fee of up to $25, Foreign Transaction Fee of 1% plus foreign exchange rate of transaction amount, $5 Card Replacement Fee, and Returned Payment Fee of up to $25. A First Financial membership is required to obtain a VISA Platinum Card and is available to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.

Article Source: https://www.nerdwallet.com/blog/tips/credit-score/credit-assumptions/

Bad Credit Makes Everything Harder: How to Fix it and Start 2015 Off Right

07232014_Woman_Dollars_Lasso_Women_originalHaving poor credit definitely makes your life more expensive. Mortgages, car loans, insurance policies and a host of other items all carry higher rates if your credit score is low – which is why achieving and maintaining a solid credit score is a must for anyone who wants to improve their financial situation.

But higher expenses aren’t the only way a bad credit score can cost you. Renting can be more difficult, as landlords commonly pull a potential tenant’s credit score as part of the rental application process; many will dismiss renters with low credit scores without a second look. Finding the right credit card could also be a struggle, as there are fewer options for those with poor credit.

Here are three other lesser known ways that poor credit makes life more difficult – plus five tips to dig your way out of that:

1. Setting up utilities is more complicated.
For those with good credit, setting up utilities usually requires a simple phone call or two – but people with poor credit have to take extra steps. If your score is really awful, you may need to put down a deposit with each utility company to get your services started.

2. Getting a new job or promotion is more difficult.

Potential employers can’t view your actual credit score, but they can request an employment credit report, which omits your account numbers and personal information yet includes your payment history and loan information. In today’s employment market, a poor report could be the reason you’re rejected for a job or a promotion.

3. Starting a new relationship can be – complicated.
Not even your romantic life is safe from a bad credit score. Savvy consumers who are financially responsible know the potential impact of a partner’s bad credit on their own finances. According to a 2014 NerdWallet analysis, 53 percent of single adults over age 25 say they are “somewhat less likely” or “much less likely” to go out with someone with bad credit.

Though bad credit can be a heartbreaker in more ways than one – you can fix it. Here are five ways to raise your credit score:

  1. Pay your bills on time – no exceptions, no excuses. This is far and away the most important thing to build and maintain good credit.
  2. Avoid using more than 30 percent of the available credit on your cards during the month, say many experts. Monitor your balance carefully throughout your billing cycle and make a payment if you start to get too close to that threshold.
  3. Start using credit as soon as you can. The easiest way to do this is to get a credit card and use it responsibly and consistently.
  4. Only apply for credit you actually need – too many hard inquiries in the span of just a few months will ding your score.
  5. Use AnnualCreditReport.com to obtain a copy of your three credit reports once per year. Review them, carefully, for accuracy; if you spot an error, start the process of having it corrected as soon as you can.

Don’t forget about our free, online debt management tool, Debt in Focus. In just minutes, you will receive a thorough analysis of your financial situation, including powerful tips by leading financial experts to help you control your debt, build a budget, and start living the life you want to live. Feel free to check out our interactive financial calculators – we even have ones for Credit Cards and Debt Management!

Original article source by Lindsay Konsko of The Fiscal Times.