Help – I spent too much on the holidays and I’m still paying for it months later!

tighten belt on dollar conceptIf the holidays have left your budget overstretched, there are ways to recover (even if 3 months have passed) … you just need to act as quickly as you can.

While it might be tough to admit it (case in point: you’ve ignored the debt you racked up over the last few months), the first step to reducing your post-holiday debt is realizing and prioritizing it. 

Beverly Harzog, author of Confessions of a Credit Junkie, says the best way to start a re-payment plan is to go after the debt on the highest interest rate card first and once that is paid off, go after the next one and so on and so on.

If you overspent this holiday season and know you won’t be able to pay off your credit card bills when they arrive next month, you need to adjust your spending habits ASAP.

Consumers should look at their spending categories and aim to shave small amounts off of each area (even if it’s $5 or $10 to start). Making many small cutbacks will be less painful than trying to find an extra $1,000 all at once to help pay off the credit card balance.

If you put a lot of your holiday gift spending on a high-interest rate credit card, Harzog recommends transferring the balance to a credit card with a lower interest rate. Even if you can reduce the interest rate just a little bit, it will help pay it down faster.

Did you know First Financial Federal Credit Union has a lower rate VISA Platinum Credit Card, great rewards, no annual fee, and no balance transfer fees? Apply today!*

If you are facing significant debt, it might be time to find new ways to generate extra income that is earmarked solely to paying off the debt. If you don’t want to get a traditional part-time job, review your talents and skill set to find alternative ways to make money, whether it’s giving piano lessons, fixing computers, catering, or doing web design.

Ed Gjertsen, Vice President at Mack Investment Securities, recommends the seven-day cash challenge to break an overspending habit. With this challenge, you estimate how much money you spend each week and then take out that amount of cash at the start of the week and see how long it lasts.

“When people do this, by Wednesday or Thursday they are usually out of money,” he says. “They don’t think of all the times they swipe that card. It gives them a reality check of how much they are spending.”

If you need an anonymous, online tool to help you get your debt in check – try Debt in Focus – First Financial’s free and anonymous online debt management tool. 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.

*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. 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: http://www.foxbusiness.com/personal-finance/2013/12/24/help-spent-too-much-on-holidays/

new%20ncua%20disclaimer-resized-600equal%20housing%20lender%20logo-resized-600

What’s the Worst Kind of Debt?

DEBT inscription bright green lettersWhat is the worst kind of debt to carry? Is it student loan debt, credit cards, a mortgage — or something else? Even the experts don’t always agree on which debt is “good debt” and which is “bad,” so imagine how confusing it can be to consumers who are dealing with debt!

Student Loan Debt

Why student loan debt is the worst: The loans are often given to young people with no credit experience and no clue how they will pay them back. Balances are often high, and the jobs borrowers counted on to make payments may be non-existent or take a really long time to acquire. Finally, unlike every other type of consumer debt, it is very difficult to discharge balances in bankruptcy.

And why it may not be: College graduates, on average, still earn significantly more over their lifetime than those without a college degree. In that sense, student loan debt can be considered an investment that pays off in future earning power. In addition, students may be able to defer payments on their student loans during times of economic hardship (usually at a cost), which makes them more flexible than other types of loans. In addition, borrowers may be eligible for reduced payments and loan forgiveness under the Income-Based Repayment Program or other loan forgiveness programs.

How does student debt affect credit scores? Large balances typically don’t hurt credit scores as long as the payments are made on time.

Looking to consolidate your student loans?  First Financial can help with our Student Loan Consolidation Product, cuGrad.  Get started today by clicking here.*

Credit Card Debt

Why credit card debt is the worst: With interest rates hovering around 15 percent on average — and more than 20 percent for some borrowers — credit card debt is often the most expensive kind of debt consumers carry. And with the low minimum monthly payments that issuers offer, cardholders can find themselves in debt for decades if they aren’t careful.

And why it may not be: While making minimum payments on credit cards is not a great idea over the long run, having that option can come in handy in a financial pinch. It can give cardholders time to get back on their feet without ruining their credit.

As far as credit scores are concerned, as long as cardholders keep balances low (usually below 10 to 20 percent of their available credit), and make minimum payments on time, credit card debt should not hurt credit scores. Bills

Transfer your high rate credit card balances to First Financial’s low rate Visa Platinum Credit Card with rewards, no annual fee, and no balance transfer fees!  Get started today.**

Mortgage Debt

Why mortgage debt is the worst: If you wonder how bad mortgage debt can be, just ask the owners of some $8.8 million homes that CoreLogic said had negative or near-negative equity as of the second quarter of 2013. That means those owners owe close to, or more than, what the property is worth. That also means they can’t sell those houses without shelling out money to pay off their mortgage or doing a short sale that damages their credit scores. Even for those who aren’t under water, rising taxes and/or insurance premiums, the cost of maintenance and loans that typically take 30 years to pay off can make one’s home feel like a financial prison at times.

And why it may not be: Over time, homeownership remains one of the key ways average Americans build wealth. If you are able to keep up with your home loan payments, eventually the home will be paid off and provide inexpensive housing or rental income. Equity that has built up can be accessed through a reverse mortgage or by selling the house, or it can be passed along to heirs — sometimes tax-free.

When it comes to credit scores, this type of loan will generally help, as long as payments are made on time. Even large mortgages shouldn’t depress credit scores, unless there are multiple mortgages with balances. That’s usually a problem that affects real estate investors however, not homeowners with one or two homes.

Refinance your mortgage with First Financial!  We’ve got a great 10 year fixed rate mortgage that might be perfect if you are looking to refinance. Click here to learn more.***

Tax Debt

Why tax debt is the worst: If you owe the Internal Revenue Service or your state taxing authority for taxes you can’t pay, you can suffer a variety of painful consequences. If a tax lien is filed, your credit scores will likely plummet. In addition, these government agencies usually have strong collection powers, including the ability to seize money in bank accounts or other property, or to intercept future tax refunds.

And why it may not be: The IRS offers repayment options that may allow a tax debt to be paid off over time at a fairly low rate. (Similar programs are available for state tax debt in many states). And unlike applying for a loan, you don’t have to have good credit to get approved for an installment agreement.

The good news when it comes to credit scores is that tax debt itself isn’t reported to credit reporting agencies; a tax lien is the only way that it may show up. By entering into an installment agreement, you may be able to get a tax lien removed from your credit reports, even before you’ve paid off what you owe.

Auto Loan Debt

Why auto debt is the worst: The average auto loan now lasts five and a half years, and some 12 percent last six to seven years, according to Edmunds.com. That means payments will last long after that new car smell has worn off and well into the years when maintenance and repair costs start creeping up. Even more troubling, these borrowers may be stuck if they need to sell their vehicles since they may be “upside down,” owing more than what they can sell their car or truck for.

And why it may not be: Many consumers budget for a car payment, and as long as they aren’t hit with unexpected expenses, they are able to make this payment a priority. In addition, borrowers may be able to refinance their auto loans and lower their monthly payments. Plus, cars often get people to work, where they can earn the money they need to pay off debt.

Vehicle loans that are paid on time can help credit scores, and are rarely a problem unless someone has several car loans outstanding at once or misses a payment.

If you’re thinking about refinancing your auto loan – look no further than First Financial!  We may be able to save you money each month on your current car payments by refinancing.  Ask us how much we might be able to save you today.****

The Worst Kind Of Debt

When it comes down to it, the worst type of debt is … (drumroll please), the one you can’t pay back on time. If that happens, your credit scores will suffer, your balances may grow larger due to fees and interest, and you may find yourself borrowing even more as you try to keep up with your payments.

Want an anonymous, online tool to help you get your debt in check?  Try Debt in Focus – our free and anonymous online debt management tool. 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: http://www.huffingtonpost.com/creditcom/whats-the-worst-kind-of-d_b_4220046.html

*The cuGrad Private Student Loan Consolidation is available to borrowers who are carrying private student loan debt. Federal student loans cannot be consolidated with the cuGrad Private Student Loan Consolidation. If you are seeking a federal student loan consolidation, you can learn more details about the process here: http://www.loanconsolidation.ed.gov/   

**APR varies from 7.90% to 17.99% 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. 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.

***APR = Annual Percentage Rate. Subject to credit approval.  Credit worthiness determines your APR. Available on primary residence only. A First Financial membership is required to obtain a mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties. Equal Housing Lender.

****APR = Annual Percentage Rate. Subject to credit approval. Credit worthiness determines your APR. A First Financial membership is required to obtain an auto loan and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.

3 Money Mistakes that Can Land You in Debt

ccdebtWe’ve all heard the following personal finance advice:

  • “Don’t spend more than you make.”
  • “Pay your credit card off at the end of every month.”
  • “If it sounds too good to be true, it probably is.”

While it’s all good advice, following these basic budget rules is easier said than done. Incurring debt can happen quickly (unexpected medical bills) or gradually over time (spending more than you make each week), and hurt your credit score and your financial future.

Here are three major money mistakes to be avoided at all costs.

Money Mistake #1: Making Money Decisions Not Based on Facts

It can be alluring to transfer outstanding credit card debt to a card offering a 0% annual percentage rate (APR) to help lower the payments and make it easier to pay off the balance. However, experts warn 0% cards often come with added and fees and charges that make the process even more costly.

“There’s also an excellent chance the APR going forward, after a particular grace period, is going to be at least as high as it was before,” says Mike Sullivan, chief education officer at Take Charge America.

“People need to be honest with themselves,” he adds. Before transferring any debt, take the time to read all the fees, rate hikes and charges and then do the math to determine if transferring balances will actually save money.

Money Mistake #2: Not Having the Right Credit Card

Making rash decisions without taking into account the long-term monetary implications is also a source of trouble.

We’ve all been on an airplane when the flight attendants come down the aisle with a stack of credit card applications that promise enough miles for a free flight just for signing up today, right this minute. The same thing happens when you’re at the checkout counter at any retailer and you’re offered a discount and “loyalty rewards” if you sign up for the company card. Sounds good enough—both offers will save you money, right? That is the wrong assumption, says Sullivan.

“There’s a psychological factor that explains this behavior,” he says. “The less people know about a given topic, the more they assume they understand it fully. It’s human nature, and it could end up costing you a fortune if you’re not careful.”

Having the right credit card for your situation is critical to your financial success. For instance, if you are an avid traveler, you might want a card that doesn’t add foreign exchange fees, or if you drive a lot, look for one that offers bonus points for fill ups.

Experts say the best way to get the right card is to compare rates, benefits and services that best fit your needs. There are a variety of websites that help compare credit cards and don’t be scared to call a company and ask about certain cards if you have questions.

Here at First Financial, our VISA Platinum Credit Card comes fully loaded with rates as low as 7.9% APR, no balance transfer fees, no annual fees, CURewards redeemable for travel, merchandise items, and merchant gift cards, and so much more! Apply online or stop into any one of our branches to get started today.*

Money Mistake #3: You Don’t Take Out Responsible Loans

Certain purchases tend to require taking out a loan: college, a home and a car. And not all debt is considered bad debt, unless of course, you take out an irresponsible loan.   

According to Sullivan, a major mistake many people make is financing their auto loan through a car dealer.

“In all likelihood, you’re not getting the best deal through the dealer,” he says. “People tend to skip the research and just go with whatever the car dealer says is the best deal. You’ll likely end up spending a lot of extra money paying for even more money.”

The same goes when taking out a mortgage. This lending process can be long and complex, and oftentimes people don’t understand the terminology or the lending terms.  Many people aren’t entirely aware of what a “point” is, says Sullivan, and this can hurt them. When it comes to mortgages, “discount points” are a type of pre-paid interest in which one point is equivalent to one percent of the total loan amount. The idea is to reduce the interest rate on a loan and get a lower monthly payment in exchange for an up-front payment. But in reality, you could end up paying more than you would for a loan with a higher interest rate.”

The goal is to be completely aware of your financial situation, and to make decisions based on facts about what you can and can’t spend. Do your homework and know all of the available options before selecting one option over another. And don’t forget to agree to a loan that you understand and can afford.

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. We also have our First Score Credit Counseling program; a low cost, interactive session ($30) with a First Financial expert, which simulates your credit score with various “what if” scenarios. You can email us at firstscore@firstffcu.com or call 866.750.0100, Option 2 to get started.

Click here to view the article soure by Ann Hynek, published on September 06, 2013 for FOXBusiness.

*APR varies from 7.90% to 17.99% 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. 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.

new%20ncua%20disclaimer-resized-600equal%20housing%20lender%20logo-resized-600

How to Manage Multiple Sources of Debt

CreditCard_With_MoneyAs young adults struggle to get out from student loan debt, which averages a whopping $26,000 per student, according to The Project on Student Debt, they’re shying away from taking on other forms of debt.

A recent study released by the Federal Reserve Bank of New York found that college graduates are now less likely to take on a mortgage or even an auto loan by the age of 30—reversing a historic trend of home ownership.

But what do you do if you are already shelling out monthly student loan payments but also want to buy a house or car? Taking on multiple types of debt is a balancing act and it can be easy to get financially overwhelmed.

The first thing you should do when thinking about taking out another loan is to determine your total monthly payments for current outstanding debt and the amount you’re looking to borrow. Then, figure what percentage of your monthly income would go towards paying off that debt.

“We recommend that no more than 30% of your take-home pay go toward housing costs [like a mortgage, taxes, and insurance] and no more than 20% of your pay go toward servicing other debt [such as a car loan or credit cards],” says Gail Cunningham, vice president of membership and public relations for the non-profit National Foundation for Credit Counseling.

Exceed these percentages, and you could find yourself burdened with a crippling amount of debt. “Make sure that the additional debt is absolutely necessary,” Cunningham stresses.

Before taking out a loan, experts suggest having a repayment plan in place.

Everyone’s pay-back strategy is different, so find one that best fits your financial needs and lifestyle to make the plan sustainable.

Some borrowers find that it’s motivating to pay extra towards the smallest loan in order to quickly eliminate it. For example, if you have a car loan that has an outstanding balance of $5,000, and you also owe $27,500 for a student loan, pay extra each month on the auto loan to rid yourself of it as soon as possible.

But if paying the least amount of interest over time is the most important thing, focus on paying off the loan or credit card with the highest interest rate first while meeting the minimum obligations on the others.

If you already have an auto loan or credit cards, before taking on additional debt, you may want to consider refinancing the loan or getting a lower rate credit card by doing a balance transfer. For example, if you took out an auto loan when rates were higher, refinancing it at a lower rate may make sense depending on the balance and time remaining.

Likewise, you can pay down the principle of a higher rate credit card faster if you transfer the balance to a lower interest rate credit card, provided you continue to make the same monthly payment (and it’s more than the minimum due). As an example, a $200 payment on a card with a $50 monthly minimum will reduce principle for a card with 3% interest faster than one with 15% interest. Just be sure to read the fine print regarding the cost to transfer the balance and when the introductory rate will end.

Did you know First Financial has no balance transfer fees? Transfer your high rate credit card balances over to a First Financial Visa Platinum Credit Card – fee free!* And, if you are looking to refinance your current auto loan – give First Financial a call at 866.750.0100, Option 2 or stop into any branch location to see what you may be able to save on your monthly payments.**

Finally, if you discover yourself getting overwhelmed by the repayment process or find that you can no longer meet your monthly repayment obligations, consider talking with the company or meet with a credit counselor to consolidate debt, reduce interest rates or create a new repayment schedule, or even possibly getting some of your debt forgiven.

For a FREE and anonymous online debt management tool, try 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!

Click here to view the article source.

*APR varies from 7.90% to 17.99% 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. 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.

**First Financial membership is required for an Auto Loan and it’s available to anyone who lives, works, worships, or attends school in Monmouth or Ocean County. $5 savings account required for membership. Verification of your identity is required. Income verification is required. Subject to credit approval. Credit worthiness determines your APR. Certain restrictions apply. Contact the credit union for details of the offer.

equal%20housing%20lender%20logo-resized-600 new%20ncua%20disclaimer-resized-600