3 Ways to Consolidate Debt

Debt can be overwhelming, but there are definitely ways you can consolidate. The idea of putting all of your debt in one place, with one simple monthly payment can be a big relief.  So, what are your best options for consolidating your debt? Here are three to consider, that you may not have thought of.

A balance transfer credit card: If you’re looking at this option, you’ll want to first make sure that you find a card that will have a high enough limit to contain all of the debt you want to consolidate. If you can find a card with a zero percent introductory rate, this is ideal for paying off debt. If you have $3,600 in debt, and zero percent interest for 18 months – you can pay $200 a month for 18 months, and be completely debt free without paying a cent of interest. However, be advised that if you continue to use this card and rack up even more debt and you don’t pay it off in time – that interest rate could potentially sky rocket at the end of 18 months, and you could really dig yourself into a hole (which is what you were trying to get out of in the first place). This option only works if you stick to your plan, don’t use this card, and continue to pay off your debt during the introductory period.

You also want to transfer your existing balance(s) to a credit card that doesn’t have a balance transfer fee. First Financial has 3 great Visa Credit Card options that have no balance transfer fees and no annual fee either!* Learn more here.

A home equity loan: After the introductory rate on a balance transfer credit card ends, the interest rate can be pretty high – as mentioned above. A home equity loan uses your home’s appraised value and what is still owed on your mortgage, and will provide you with a lump sum that you will agree to pay back over a set fixed rate term (this type of loan is also called a second mortgage). The main benefit of a home equity loan, is that the interest rate will be much lower. You will want to be careful if you go this route – if you default on the loan, you could put your home at risk.

To learn more about First Financial’s home equity loans and lines of credit options, and apply online 24/7 – click here.**

A personal loan: If you don’t like the idea of risking your home (or any other form of collateral), perhaps a personal loan might be the best option for you. If you have a good credit score, you’ll receive a favorable interest rate that is often lower than a credit card’s. If you think this may be a good option for you, ask your local credit union about any debt consolidation loans they have available.

First Financial’s personal loans have a fixed monthly payment, flexible terms, and are a great way to save money instead of opting for the high cost of retail financing.+ Get started here.

*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. 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.

**First Financial will waive closing costs at inception of loan. If loan is terminated within the first 2 years of opening, closing cost waiver is revoked and the borrower(s) will be required to pay back closing costs in full to FFFCU. A First Financial membership is required to obtain a home equity loan, and is open to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. See FFFCU for details or visit firstffcu.com for all current rates. Nationwide Mortgage licensing System & Registry ID # 685814

+APR = Annual Percentage Rate. Actual rate will vary based on creditworthiness and loan term. Subject to credit approval. A First Financial Federal Credit Union membership is required to obtain a Personal Loan, and is open 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: John Pettit for CUInsight.com

5 Reasons You’re in Debt

Are you in debt and not sure how you got there? Some of these reasons may be the culprit.

1. You justify your purchases

Don’t try to rationalize unnecessary purchases. On some level, we are all guilty of this. Between “I deserve this” and “I need this,” we’re constantly making excuses for spending money. This doesn’t mean you can’t treat yourself, but do it affordably and make sure you budget for it.

2. You refuse to address your debt

The first stage of grief is denial, and dealing with debt can look very similar. Do not ignore your debt. As difficult as it is, you need to face your debt head on. Understand what you owe and create a plan of attack.

3. You are an impulse spender

With next day shipping and one-click shopping, this has never been a more prevalent issue for consumers. These purchases are beyond trying to justify, and that impulse is what is hurting your wallet. Try holding off on some purchases unless you’ve given them some thought, or saved up first.

4. You assume you are going to make more later

A great example of this is taking on student loans. Most students don’t have a choice if they want to go to college, and are now graduating with debt upward of $40,000 in hopes that they can land a job that will pay them enough to pay it back. In other cases, people are making purchases because they think they will be up for a promotion or have a raise around the corner. Even if all of these things do come to fruition, you will still be paying more in interest than if you’d waited.

5. You often dip into savings for expenses

J.P. Morgan once said, “if you have to ask how much it is, you can’t afford it.” When you look at a price tag and immediately start thinking about how to move money around, take a step back. Once that money goes into your savings, it should disappear from your thoughts. The only time you should ever spend money from savings is when there’s an emergency and you need to use your emergency fund.

Article Source: Tyler Atwell for CUinsight.com