5 Things You Should Never Put on a Credit Card

Credit cards can seem convenient and actually benefit your finances when used correctly. However, there are times when it’s best to avoid using a credit card as it can contribute to debt. And, there are some things you should never put on a credit card.

It’s not uncommon for the average American household to have several thousands of dollars worth of revolving credit card debt to deal with, which can be crippling to overcome. Credit card interest rates are pretty high and are why you should only use your credit card to pay for affordable purchases that you can pay off in full each month.

To avoid the pitfalls of debt, here are 5 things you should never put on a credit card.

1. A Down Payment

If you are financing something and putting money down, it’s best to use your own cash instead of a credit card. Financing a big purchase like a vehicle is already creating debt that you have to pay back plus interest anyway. Financing the actual down payment too with your credit card could just create additional debt after the loan. Plus, it may be a key indicator that you can’t afford the item you are trying to finance.

While a lot of places won’t accept credit card payments due to the high fee the card company charges to process the transaction, some may allow it and there may be the option to utilize a cash advance through your credit card company. Even if the option is available, it’s almost always not worth it in the end. Instead, plan to save up over time to pay for large purchases in cash, or save up at least 20 percent of the total purchase price to put down as a down payment if you choose to finance.

2. Medical Bills

Paying off medical debt with a credit card is not usually a good choice. Credit cards are attached to daily or monthly interest rates while most medical debt is not. If you feel overwhelmed by your medical debt, you can try to consolidate it or work out a payment plan with your health care provider’s accounting department to avoid having your account go to collections.

As long as you are willing to pay back your medical debt, your provider should be flexible with establishing a monthly payment plan that you can afford. This way, you can pay off all your debt interest free without having to use a credit card.

3. College Tuition

Paying for college with credit cards it not a good alternative to taking out student loans. While your credit card may have a 0% intro APR offer for the first 12-14 months, if you don’t pay off the balance in full before that period is up, you will start paying interest on the balance. The interest rates for student loans is often lower than credit card interest rates, so charging the tuition for your college education on a credit card could actually cost you more money than taking out student loans would. Not to mention, maxing out your credit card or spending more than 30 percent of your total utilization could make your credit score decrease.

If you don’t qualify for government grants or federal or private student loans, you can always apply for scholarships, go to a local community college for your first two years of college and pay for tuition in cash with the help of a part-time job, or obtain a job with a company that will offer financial assistance for higher education. Companies like Starbucks and Best Buy offer to pay a portion of employees’ college tuition as long as they meet certain requirements.

4. A Vacation

With so many travel rewards credit cards out there, it’s important to remember that the golden rule of thumb is to only use a credit card to fund your vacation when you can pay the bill off in full at the end of your billing cycle.

Earning cash back and travel discounts and rewards for spending a certain amount of money on your credit card sounds great, but if you can’t afford to spend the money in the first place, the offer can do more harm than good. For example, how great would you feel if your week-long summer vacation left you with $5,000 in credit card debt but allowed you to earn a bonus of $500 for travel? You’d still be in quite a bit of debt which could spoil your entire travel experience.

Try opening up a high-yield savings account to save money for travel each month so you won’t have to go into debt just for a vacation.

First Financial offers a Summer Savings Account where you can put aside money to save for a vacation or general summer expenses. There are no minimum balance requirements and dividends are posted annually on balances of $100 or more. You can also elect to have either 50% transferred in July AND 50% transferred in August OR 100% transferred in July.* Click here to learn more about our Summer Savings Account today!

5. Your Dream Wedding

Again, a wedding is another life changing experience that you shouldn’t charge to your credit card if you know you won’t be able to handle paying the bill. Starting your new marriage off with debt will not feel good and will delay your family’s financial progress.

If you are planning a wedding and your budget is tight, consider lowering your wedding expenses by cutting corners, starting with non-necessities or traditions that aren’t important to you. Some couples have their wedding during the off season and on an unpopular day to save money while others go so far as to cut their guest list down or doing away with extra elements like flowers or a D.J.

Ultimately, when you focus on planning a wedding that reflects your vision, your budget, and what you value, you probably won’t have to pick up your credit card to charge pricey expenses at all.

Use Your Credit Cards Wisely

If you’re going to use a credit card regularly, it’s important to know your limits and use the card wisely. Make sure your spending is not exceeding 30 percent of your utilization each month and you’re making purchases for items you actually need and can pay for, not things that you will regret later.

First Financial’s Visa® Platinum Credit Card comes fully loaded with higher credit lines, lower APR, no annual fee, no balance transfer fees, 10 day grace period, CURewards redeemable for merchandise and travel and so much more!** Click here to apply online today.

*A $5 deposit in a base savings account is required for credit union membership prior to opening any other account. Account-holder will elect to have either 50% of the funds transferred in July and 50% transferred in August OR 100% transferred in July. All Summer Savings funds are deposited into a First Financial Checking or Base Savings Account. All personal memberships are part of the Rewards First program and a $5 per month non-participation fee is charged to the base savings account for memberships not meeting the minimum requirements of the program. Visit rstffcu.com to view full Rewards First program details, and to view the Tier Level Comparison Chart. Accounts for children age 13 and under are excluded from this program.

**APR varies from 11.15% to 18% 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.

Original article source courtesy of Chonce Maddox of Lending Tree.

Millennials: How You Can Avoid Credit Pain

bigstock-Young-Business-Man-Under-Stres-89718578-e1446206462272Millennials think they know a lot about credit. But the numbers tell a different story.

More than 7 in 10 millennials said they feel confident about their credit knowledge, according to a recent survey by Experian. If fact, millennials on average estimated they had a score of 654. But it turns out that for many 18-to-34-year-olds, even that was an overestimation. And millennials are less likely to check their credit reports, Experian said.

Here’s how it works: Thirty-five percent of your credit score is determined by your payment history, or whether you have made payments on time, 30% is your credit utilization, or the amount borrowed compared to the total credit available, 15% is determined by the length of your credit history, 10% comes from the number of applications for new credit and 10% is from the types of credit you have (i.e. revolving, installment, mortgage etc.).

Generally, credit companies prefer a mix of credit because the variety suggests you know how to use credit responsibly. A combination of car and student loans along with some credit card use, for example, helps build up your credit score as long as you pay on time over an extended period.

Scores range from 300 to 850. If your score is above 750, you’re considered to have excellent credit, which paves the way to the lowest interest rates and a better chance of getting approved for loans. If your score is on the lower side, it can cost you — that means higher interest rates on everything from credit cards to auto loans.

Here’s the breakdown:

800+ = exceptional
740-799 = very good
670-739 = good
580-699 = fair
Below 580 = poor

Financial advisors warn that a bad score may even hurt your chances of getting a job. Employers have access to your score and can factor it in to their decisions. Your credit score is a reflection of you and if your credit is bad, it could inject some doubt about your ability to handle personal matters and business matters.

With a lower score – you may still get a loan, but you will likely have to put more money down as a down payment and pay a higher rate, which can be costly.

For example, having a score of 650 versus 760 can cost you $125 more a month on a 30-year fixed rate mortgage for a $200,000 loan, according to credit tracking firm CreditSesame.com. That’s $1,500 more a year, or $45,000 over the life of the loan.

You are entitled to a free report from the three credit bureaus (Experian, Equifax and TransUnion) once every 12 months from annualcreditreport.com

Experts suggest checking your report regularly. Once a year is sufficient to get a gauge on your number, and check for any errors, like an incorrect payment status or delinquencies that have since been remedied.

Remember to keep an eye on the debt-to-limit ratio. What you borrow compared to the total credit available, also known as your debt utilization ratio, counts for a whopping 30% of your credit score. A debt utilization ratio greater than 30% will have a negative effect.

If you are borrowing too much, start a debt repayment plan to lower the ratio as much as possible.

Ideally, credit cards should be paid in full at the end of each payment period to avoid sky high interest. Paying in full each month also demonstrates that you are a responsible borrower. This will help build up good credit and save you money since the faster you pay down debt, the less interest you’ll pay.

Even if you don’t pay off all of your debt right away, make sure you are always paying on time. Set up automatic payments to avoid late payments. A missed payment will also hurt your score.

Ultimately, a credit score is one of the most important numbers you have. In the long run, a bad score could raise the cost of a car or home loan, increase you credit card interest from a single digit to double digits or even deny you credit entirely.

Not only does a good credit score save you money by lowering interest rates, it’s a reflection of you and your personal matters. So it is worth putting in the time to build up a good report. A credit score is one of the building blocks of your financial future and that has a big bearing on your entire life.

*Original article source written by Landon Dowdy of USA Today.

A Simple Guide to Paying Off Lingering Debt

www.usnewsIf you find yourself collecting more and more debt while struggling to figure out how you will ever pay it all off, it might be time to develop a step-by-step strategy. Paying off debt starts with making a budget and continues with changing your habits and rewarding yourself for progress. A few contributors to the U.S. News My Money blog offer a guide to get rid of the debt that’s been following you around for too long:

1. Create a budget.

“The first step to solving your debt problem is to establish a budget,” says Money Crashers contributor David Bakke. You can use personal finance tools like Mint.com, or make your own Excel spreadsheet that includes your monthly income and expenses. Then scrutinize those budget categories to see where you can cut costs. “If you don’t scale back your spending, you’ll dig yourself into a deeper hole,” Bakke warns.

2. Pay off the most expensive debt first.

Sort your credit card interest rates from highest to lowest, then tackle the card with the highest rate first. “By paying off the balance with the highest interest first, you increase your payment on the credit card with the highest annual percentage rate while continuing to make the minimum payment on the rest of your credit cards,” says retail analyst Hitha Prabhakar.

3. Pay more than the minimum balance.

To make a dent in your debt, you need to pay more than the minimum balance on your credit card statements each month. “Paying the minimum – usually 2 to 3 percent of the outstanding balance – only prolongs a debt payoff strategy,” Prabhakar says. “Strengthen your commitment to pay everything off by making weekly, instead of monthly, payments.” Or if your minimum payment is $100, try doubling it and paying off $200 or more.

4. Take advantage of balance transfers.

If you have a high-interest card with a balance that you’re confident you can pay off in a few months, Trent Hamm, founder of TheSimpleDollar.com, recommends moving the debt to a card that offers a zero-interest balance transfer. “You’ll need to pay off the debt before the balance transfer expires, or else you’re often hit with a much higher interest rate,” he warns. “If you do it carefully, you can save hundreds on interest this way.”

5. Halt your credit card spending.

Want to stop accumulating debt? Remove all credit cards from your wallet, and leave them at home when you go shopping, advises WiseBread contributor Sabah Karimi. “Even if you earn cash back or other rewards with credit card purchases, stop spending with your credit cards until you have your finances under control,” she says.

6. Put work bonuses toward debt.

If you receive a job bonus around the holidays or during the year, allocate that money toward your debt payoff plan. “Avoid the temptation to spend that bonus on a vacation or other luxury purchase,” Karimi says. It’s more important to fix your financial situation than own the latest designer bag.

7. Delete credit card information from online stores.

If you do a lot of online shopping at one retailer, you may have stored your credit card information on the site to make the checkout process easier. But that also makes it easier to charge items you don’t need. So clear that information. “If you’re paying for a recurring service, use a debit card issued from a major credit card service linked to your checking account,” Hamm suggests.

8. Sell unwanted gifts and household items.

Have any birthday gifts or old wedding presents collecting dust in your closet? Search through your home, and look for items you can sell on eBay or Craigslist. “Do some research to make sure you list these items at a fair and reasonable price,” Karimi says. “Take quality photos, and write an attention-grabbing headline and description to sell the item as quickly as possible.” Any profits from sales should go toward your debt.

9. Change your habits.

“Your daily habits and routines are the reason you got into this mess,” Hamm says. “Spend some time thinking about how you spend money each day, each week and each month.” Do you really need your daily latte? Can you bring your lunch to work instead of buying it four times a week? Or perhaps you can start cooking more at home. Ask yourself: What can I change without sacrificing my lifestyle too much?

10. Reward yourself when you reach milestones.

You won’t pay down your debt any faster if you view it as a form of punishment. So reward yourself when you reach debt payoff goals. “The only way to completely pay off your credit card debt is to keep at it, and to do that, you must keep yourself motivated,” Bakke says. Just make sure to reward yourself within reason. For example, instead of a weeklong vacation, plan a weekend camping trip. “If you aim to reduce your credit card debt from $10,000 to $5,000 in two months,” Bakke says, “give yourself more than a pat on the back when you do it.”

Don’t forget about First Financial’s 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 Stephanie Steinburg of US News.

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.

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.