Credit Card Regret: It’s More Common Than You Think

“Regrets, I’ve had a few. But then again, too few to mention.” – Frank Sinatra

If you’re the kind of person who prefers to play it safe, there’s a good chance that, like Ol’ Blue Eyes, your list of regrets is mercifully short. But if you’re the adventurous type who’s more likely to yell “YOLO!” than take the time to consider the pros and cons, you may have made more unfortunate decisions than you care to admit. And if we’re being honest, some of them are probably related to finances.

Going into credit card debt is one of the most common financial regrets. According to a recent NerdWallet survey, “About 6 in 7 Americans (86%) who have credit card debt say they regret it.” With numbers that high, it’s safe to assume most of us would make different credit decisions if given a chance.

Common Reasons for Credit Card Regret

If you’ve ever opened a new credit card account and felt that distinctive twinge that tells you it was a bad decision, there’s a pretty good chance you filled out that credit application for the wrong reason. Bad reasons come in a variety of forms. Here are a few of the most common:

You wanted that sign-up swag. T-shirts. Koozies. Collapsible drink coolers. It doesn’t matter what it is, we all love free stuff. Credit card companies know this. Sure, free t-shirts are cool, but are they really worth opening a credit card that will charge you 26% interest on your purchases?

You can’t resist that one time discount.

“Would you like to save 25% on today’s purchase by applying for a store credit card?” If you’ve ever shopped at a retail store, there’s a good chance you’ve heard this sales pitch at the checkout register. If you took advantage of the offer and suddenly wished you hadn’t, you’re not alone. According to a recent survey, almost 75% of Americans have at least one store credit card. Not surprisingly, nearly half of them regret it.

You’re in a financial pinch.
When your checking account is running low, it can be incredibly tempting to sign up for a credit card just to get some temporary relief. However, credit cards don’t remedy poor financial habits, they tend to make them worse. If you’ve ever signed up for a new credit card “just to cover things until payday,” this regret may feel all too familiar.

OK, you signed up for a credit card and regretted it. Now what?
Before we go any further, it’s important to remember one thing: Just because you have a credit card doesn’t mean you have to use it. Even if your regrettable card carries a 26% interest rate, 26% of $0.00 is still $0.00. However, if you’re worried you won’t be able to resist using your card, you might be tempted to close your account immediately. This could certainly help you avoid charges you can’t afford to repay, but there may be a better approach.

Available credit and length of credit history are two of the main components of your credit score. Having an open, active account you don’t use could actually help you. If you were given a $1,000 credit line with your new card and you don’t make any purchases, you have $1,000 of available credit. If you close the account, you have no available credit. In this case, maintaining the credit line may be beneficial for your credit rating.

As for the length of credit history, that part’s fairly self-explanatory. The longer you maintain a satisfactory account, the more favorably it reflects in your credit score. With this in mind, you might be better off just removing the card from your wallet instead of closing the account altogether.

Good credit is one of the building blocks of your overall financial health. If you live, work, worship, attend school, or volunteer in Monmouth or Ocean Counties in New Jersey and you’re trying to find financing options that are right for you, contact First Financial to make an appointment with a representative. We can help you review your financial situation and recommend the best products and programs for your needs. We are happy to help with managing your credit — and finances in general, with no regrets!

The Pros and Cons of Store Credit Cards

We’ve all approached a register to complete a purchase and were asked if we’d be interested in applying for a store credit card. And with the holiday shopping season about to get in full swing, chances are – you are going to be asked more than usual. There are pros and cons to having a store credit account, so make sure you take a good look before you open one.

Pro: They are easier to get

Application requirements for store credit cards are generally less strict than regular credit cards, so chances are you’re more than likely to get approved. If you’re looking to get a card from a store you often visit, this should make you happy and save you some money (provided you don’t rack up a balance).

Con: They carry higher interest rates

The average store credit card is 8-10 points higher in interest than regular credit cards. This may not be a big deal if you’re only using the card sparingly, but a few big purchases that aren’t paid off completely by month end could come back to haunt you.

Pro: They help you build credit

If you’re young and haven’t had a chance to build any credit, a store credit card could be very helpful. It’s easier to be approved for one so you wouldn’t need much credit history to qualify. A purchase or two a month will put you on the road to good credit too. Just make sure you pay the card off each month.

Con: Their use is limited

Some store credit cards may allow you to use them at sister companies, but for the most part, you’ll only use them in the store that issues them. That might be fine if it’s a store like Target or another retailer that you often visit, but overall it won’t be a very versatile card.

Pro: They provide in-store rewards

A lot of cards will reward the user with discounts and promotions which can provide great value. Free shipping for instance, is a perk that is appreciated. Just be sure these benefits don’t cause you to overspend either!

First Financial’s Visa Credit Cards offer benefits that include higher credit lines, lower APRs, no annual fees, no balance transfer fees, a 10-day grace period, rewards (cash back or on travel & retailer gift cards), an EMV security chip, and more!* And they can be used anywhere Visa is accepted.

 Click here to learn about our credit card options and apply online today.

 *APR varies when you open your account based on your credit worthiness. These APRs are 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 Fees. 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 Credit Card and is available to anyone who lives, works, worships, volunteers, or attends school in Monmouth or Ocean Counties. No late fee will be charged if payment is received within 10 days from the payment due date.

Article Source: John Pettit for CUInsight

9 Things to Remember When Using Your First Credit Card

Getting your first credit card is a significant financial milestone. After sorting through an endless array of program options and promotional offers, you made your choice, filled out the application, and saw those two magic words: You’re approved!

After the initial excitement wears off, it’s important to remember that just like your first car, your first credit card comes with a lot of responsibility. While it may be tempting to grab some friends to take the new plastic for a test drive, it’s a good time to exercise a little restraint. The financial decisions you make now will have long-term effects. It only takes a momentary lapse in judgement, to make a mistake that could follow you for years to come.

Before you start exercising your newfound financial freedom, here are a few tips to make sure your first credit card experience is a positive one:

1. Pay attention to the fine print. Even if you don’t need reading glasses, you may want to have a pair handy. The big credit card companies tend to sneak stuff in the small print. Introductory interest rates can be attractive (like 0% APR for a certain amount of time), but once those offers expire, you could be left paying higher interest on your purchases. Not to mention, if you are carrying a balance when your 0% offer expires – you could be left to pay an extremely high APR on that balance.

2. Don’t be a card counter. If you have multiple cards, it can be tempting to spend more than you intended. Also, it makes your wallet pretty large – which makes for uneven seating or a heavy purse. Simplify your life – stick to a single card, and keep the credit limit sensible.

3. Consistency pays off. This simple step will help you avoid additional interest charges, and it’s an effective way to build an excellent credit rating.

4. Always pay your bill on time. Late payment charges are usually more expensive than your minimum payment, which can make it hard to keep up with your bill. If you’re worried that you’ll forget the due date, most cards offer an automatic payment option. Use it. Or set a recurring reminder for yourself on your phone or a computer calendar.

5. It’s your budget, don’t fudge it. Try to think of your credit card as for emergencies only. Do your best to continue using your checking account or cash to cover everyday expenses. Your credit card is like that friend you call when you need help moving or a ride to the airport. There when you need it, but not to be overused.

6. Steer clear of cash advances. These advances usually charge a higher interest rate than regular credit card purchases. The convenience isn’t worth the cost.

7. Keep your monthly credit card payments to less than 20% of your income. Once your bill exceeds that amount, it becomes exponentially more difficult to stick to a sensible, reasonable budget.

8. Review your credit card statements each month. In addition to being a smart way to track your spending, regular monitoring is the most effective way to combat credit card fraud and identity theft.

9. Be honest with yourself. If you find that your spending gets out of hand, there’s no shame in putting your credit card away (or getting rid of it all together), until you correct your bad financial habits.

Credit cards can be useful tools for emergencies, and when used properly, they can help you maintain a strong credit rating. But with so many card options available today, it is essential to choose the one that’s right for you.

If you haven’t secured your first card yet and are wondering where to find a trustworthy offer, First Financial Federal Credit Union offers a variety of Visa Credit Cards to meet your financial needs. If you’re looking to build, establish, or re-establish credit – our Secured Visa is a great place to start. We also have a low rate Visa Platinum Card, where you’ll earn rewards points on all your purchases, or our cash back Visa Signature Card.* If you live, work, worship, attend school, or volunteer in Monmouth or Ocean Counties in NJ – we’ve got the perfect credit card to fit your lifestyle. Learn more here, and apply online 24/7.

 *APR varies up to 18% when you open your account based on your credit worthiness. These APRs are 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 Fees. 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. Visa Signature Card Cash Back: Your First Financial Visa® Signature Credit Card will earn cash back based on your eligible purchase transactions. The cash back will be applied to your current credit card balance on a quarterly basis and be shown cumulatively on your billing statement. Unless you are participating in a limited time promotional offer, you will earn 1% cash back based upon eligible purchases each quarter. A First Financial membership is required to obtain a VISA Credit Card and is available to anyone who lives, works, worships, volunteers, or attends school in Monmouth or Ocean Counties.