Tag Archives: Credit Cards

How to Manage Your Credit Card During Difficult Times

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Life can get expensive, especially during times like these. While your credit card has likely provided you with some additional freedom and flexibility lately, it’s important to remember that your credit card is not free money. You will have to pay it back eventually (and with interest)!

With U.S. credit card debt hitting an all-time high of $930 billion earlier this year, according to the latest data from the Federal Reserve Bank of New York, we could all probably use a reminder on how to effectively use and manage our credit cards. Here’s some important advice:

Try to pay your credit card off ahead of time.

There are many reasons you should always try to pay your credit card off ahead of time, but the most important is to avoid paying interest. Accounts that don’t run a continuous balance are given an interest-free grace period, which usually lasts until the next due date. If you can’t pay in full, be sure to pay as much as you can – in order to reduce your interest payments.

In addition to avoiding interest payments, paying your credit card off ahead of time can also help to improve your credit score – since it reduces the amount of your credit limit used. This, along with payment history – can account for the majority of your credit score.

Don’t strain your wallet.

You should avoid maxing out or spending anywhere near your credit limit, as it could cause long-term financial issues – like fees, debt, and damage to your credit score. A good practice is to use less than 40% of your available credit. Treat your credit card similar to a debit card or checkbook. If you don’t have the money currently or can’t save to pay it off later, that should be a sign that you really can’t afford to make a purchase.

Monitor your balance daily.

If you’re using your credit card for everyday purchases, it can be easy to forget how fast those daily transactions can add up. That’s why it’s crucial to regularly monitor your balance. One of the best ways to do this is to download your card’s mobile app. Also, be sure to set up daily or weekly account balance updates/notifications that can be sent directly to your phone or email. You can often do this right from the mobile app, or through your online account. Typically you can also set up monthly payment reminders here too.

Take advantage of your credit card rewards. 

Take full advantage of any rewards or benefits programs offered through your credit card. This can mean anything from retailer gift cards, cash back, electronics and airline miles. These perks can save you money! If you’re contemplating a new credit card, make sure to choose the credit card that best suits your needs and lifestyle – along with a low APR.

First Financial has great credit card options, lower APRs and no annual fee.* 

Let us help you find the right card for you! Check out our website or give us a call so we can answer any questions you may have. Or if you like what you see, you can apply online 24/7!

*APR varies up to 18% when you open your account based on your credit worthiness. These APRs are for purchases 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: Balance Transfer and Cash Advance Fees of 3% or $10, whichever is greater; Late Payment Fee of $29, $10 Card Replacement Fee, and Returned Payment Fee of $29. 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. See firstffcu.com for current rates.

Article Source: Jackson Bolstad for CUInsight.com

 

Is a Rewards Credit Card Right for You?

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Believe it or not, there isn’t a “one size fits all” credit card rewards program. For every card on the market, it seems like there are hundreds of different ways to earn rewards.

With all the options, the research can be overwhelming and you might not know where to start. Have no fear, because we’ve come up with a few ways you can choose the right credit card rewards program for you!

Is a rewards card right for you?

That’s the first question you need to ask yourself. A rewards card isn’t right for everyone. Here’s a handy checklist to help you decide whether or not a rewards credit card is a good fit for you:

  • You have a good credit score. Most card issuers are looking for consumers who have a FICO score of at least 670. Of course, a higher credit score will help you get a lower interest rate, but a that mid-600 range will get your foot in the door. FYI, the higher your credit score, the more lucrative rewards programs you’ll most likely have access to.
  • You can pay off your balance every month. Rewards cards sometimes have a higher-than-average interest rate. When you carry your balance over each month, you could end up paying more in interest charges than you earn in rewards.
  • You can maximize the value of your rewards. A rewards card can cost you money if you don’t maximize your reward-earning potential. If you don’t earn enough points, you can actually lose money if your card has an annual fee.

Now that you’ve determined if you could benefit from a rewards card, let’s talk about choosing the card with the program that best suits your lifestyle and spending habits.

Choosing the right card.

There are three main things to consider when choosing a card: your spending habits, personal preferences, and your credit score. If you don’t look at your spending habits and personal preferences, you could end up spending a lot of money and racking up rewards that aren’t right for you.

Let’s say you have a large family and your primary expenses are groceries and gas. It would make sense for you to have a credit card that offers bonus rewards on those types of purchases. But, if you’re single, have a small grocery budget or don’t have a car, those rewards wouldn’t make sense for you.

Use your cards for everything.

The more you use your card, the more rewards points you’ll earn. But, don’t let that be an invitation to start spending money on things you don’t need. Instead, use your credit card in place of cash or your debit card whenever possible.

Start looking for everyday situations where you can use your credit card instead of another payment method – gas, groceries, food, etc. But, always make sure you only spend what you can pay off every month.

What if a rewards card isn’t for you?

Rewards cards aren’t for everyone, and there’s nothing wrong with that. Maybe your credit score isn’t in the right range for a rewards card at the present time, or maybe you’re not interested in using your card to gain rewards. Maybe you’re just looking for a credit card for emergencies only.

Let us help you find the right card for you! Check out our website, stop by and talk to us or give us a call so we can answer any questions you may have. Or if you like what you see, you can apply online 24/7!

 *APR varies up to 18% when you open your account based on your credit worthiness. These APRs are for purchases 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: Balance Transfer and Cash Advance Fees of 3% or $10, whichever is greater; Late Payment Fee of $29, $10 Card Replacement Fee, and Returned Payment Fee of $29. 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. See firstffcu.com for current rates.

The Pros and Cons of Having Multiple Credit Cards

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Credit cards. You were probably pretty excited when you got your first one, and if you weren’t cautious with it, that excitement probably faded pretty quickly. But there’s no denying that a credit card can be a valuable tool. So how many should you have? Here are some pros and cons to having more than one credit card.

PRO – It can be great for your credit score: When credit bureaus determine your credit score they look at your debt utilization ratio (percentage of your available credit that’s in use). If you’ve got one credit card with a $5,000 limit, and you’ve spent $4,000 on it, then your debt utilization ratio is 80%. If you get a second credit card with a $5,000 limit and keep a zero balance, your debt utilization ratio is now 40%. Your credit score will thank you.

CON – It can be damaging to your credit score: While a larger debt utilization ratio might be good for your credit score, the act of opening the account can be damaging. Anytime you open a new line of credit, your credit score can take a small hit. Just make sure not to open two new accounts in a short period of time.

PRO – Don’t keep all your eggs in one basket: Occasionally you might have trouble with a card, and it’s always great to have a back-up. Let’s say you’re traveling and your card is lost or stolen. Having a second card stowed away somewhere will really come in handy.

CON – Large amounts of debt: If you’re not very good at keeping your spending in check, having multiple credit cards can potentially be a huge disaster. If you’re lacking self-control when it comes to credit cards, the less you have – the better.

If you’d like more insight into your credit score and managing your credit – view our credit and debt management guide here.

Article Source: John Pettit for CUInsight.com

 

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

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“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!

5 Ways to Keep Your Credit Card from Sabotaging Your Finances

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Understand the terms of the card.

You shouldn’t apply for a credit card without reading the terms. Evaluate the card based on the fees, interest rates, and possible rewards. The many cards available each fit different consumers. You have a lot of options and choosing the wrong card could threaten your financial health.

Pay in full.

Making only the minimum payment each month increases the amount of time it will take to pay off your debt. That increase in time allows the interest rate to add on to your debt. Always make sure to pay off as much of your balance as you can each month.

Don’t use your card on everyday purchases.

Using you credit card as a substitute for cash is a bad habit that can easily lead you down a path to debt. When you buy food, clothes, or gas, try to use cash or your debit card so you won’t overspend.

Don’t go over your limit.

If you’re getting close to your limit, clearly you are spending too much. The last thing you can afford to do is go over that limit and incur the additional fees that come with it. These situations are avoidable by responsibly monitoring your spending.

Understand how it effects your credit score.

Ideally you should be paying off your debt every month. If you are unable to do that, you have to make sure that you are paying off at least the minimum (but preferably more than the minimum). This will not damage your credit score, but it will not improve it either. If you miss a payment you can do major damage to your credit score. If you look untrustworthy to creditors it’s not beyond reason that the credit card company would lower your limit. It is a vicious cycle that can be easily avoided by paying in full each month.

First Financial’s Visa Credit Cards come fully loaded with higher credit lines, lower APRs, no annual fees, a 10 day grace period, rewards, and so much more!* Click here to learn about our cards and apply online today.

*APR varies up to 18% when you open your account based on your credit worthiness. These APRs are for purchases 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: Balance Transfer and Cash Advance Fees of 3% or $10, whichever is greater; Late Payment Fee of $29, $10 Card Replacement Fee, and Returned Payment Fee of $29. 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. See firstffcu.com for current rates. No late fee will be charged if payment is received within 10 days from the payment due date.

Article Source: Tyler Atwell for CUInsight.com

 

3 Money Mistakes that Can Land You in Debt

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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.

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.

Click here to view the article soure by Ann Hynek, published on September 6, 2013 for FOXBusiness.

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