Category Archives: Credit Management and Credit Cards

Ways to Protect Your Credit Cards

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If you’ve ever been a victim of identity theft, you know it’s awful. Between the time it takes to get everything corrected and the stress it causes – it’s definitely a spot you’d like to avoid if you can. Though nothing is fool proof, there are several ways in which you can protect your finances. Here are a few that pertain to keeping your credit card information safe from fraud.

Secure all your cards: If your wallet is ever stolen and you lost every card, think about what a nightmare it would be to have to cancel and replace them all. Really consider this the next time you leave home. Try to only take the cards you absolutely need and keep the rest in a secure location like a safe or locked drawer. Try to also minimize the amount of cash you have on you as well and only bring what you need. This way if your wallet gets lost or stolen, you aren’t literally losing everything.

Pay attention: It might be difficult to keep track of a criminal’s activities in real-time, but you can check on your accounts regularly. Today’s smartphone banking and credit card apps really make it easy and fast to check on all your accounts and look for fraudulent transactions. If you’re keeping track of your spending and looking at your accounts daily, you’ll know the minute something happens that looks out of the ordinary. Checking on your accounts every day also helps you monitor your monthly budget and spending habits too.

Opt for being more high-tech: Have you ever used your smartphone’s digital wallet? Many retailers are set up to take payments via Apple Pay and Google Pay, and it’s very easy to use. EMV chips in your credit and debit cards also make transactions more secure and prevent card skimming as well. When shopping online, if PayPal or your phone’s digital wallet are options for payment over entering your card number – always go that route.

Using the above tips can help protect your financial information and really save you from an identity theft headache. Also be weary when using an ATM or paying for gas at the pump – be sure to check for any skimming devices before inserting your card. If something seems off to you, it probably is. Read about how to spot a skimming device in our guidebook here.

T.H.I.N.K First because There’s Harm In Not Knowing!

Article Source: John Pettit 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.

5 Ways You Should Never Use Your Credit Card

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We all know that credit cards can be a valuable tool. They can help you build credit when you’re just starting out, and can really benefit you in the case of a spending emergency. However – if you’re not careful, they can do more harm than good. When it comes to spending, here are five ways you should really never use your credit card.

To help you feel better: Yes, a new purchase can cheer you up, but if you’re looking to feel better – a mountain of debt probably will only make things worse in the long run. If you feel the need to splurge, use whatever cash you have in your wallet or make sure you’re spending from your checking account using a debit card instead.

Hospital bills: Credit cards are best to use on a purchase that you can pay off quickly. Medical bills typically aren’t small, so be sure to think about how long it could take you to pay off that amount of debt. This type of debt can quickly build up, being that you are probably paying a pretty high interest rate each month.

A cash advance: If you’re in a pinch, you might think taking a cash advance from your credit card is a good idea. However, you should first consider other options before going down this road. A cash advance may seem like a good option, but it may carry a higher interest rate than your normal credit card. You may want to do some digging into the fine print in your account disclosures before considering this.

Paying for college: This is probably one of the worst things you could ever put on a credit card. You may not be thrilled about student loans, but those usually come with much lower interest rates than a credit card ever could. If you’re having trouble paying for school and you don’t have a full time job yet, you may be sitting on this debt for years – if it’s on a credit card. It would not be a wise decision to begin your financial future with thousands in credit card debt.

To help start a small business: It’s great to follow your dreams, and if starting a small business is one of them – wonderful. However, charging your business equipment to a credit card is not the best idea. Try looking into a small business loan instead, rather than purchasing items on a higher interest credit card. No one wants to think about it, but what happens if your small business doesn’t make it and you’re still paying off thousands on equipment you can no longer use?

If you are looking for higher credit lines, lower APRs, no annual fees, a 10-day grace period, rewards (cash back or on travel & retailer gift cards), an EMV security chip, and more, check out First Financial’s Visa Credit Card options. Click here to learn more 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: John Pettit for CUInsight.com

 

4 Hacks to Raise Your Credit Score

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Your credit score. Chances are you either love it or hate it. It’s either the greatest thing in the world or a total hindrance. Or, maybe you don’t really know enough about your credit score for it to make an impact on your life.

As a whole, Americans’ credit scores are beginning to increase but our knowledge of credit and how it works is declining. A recent survey from credit scoring company Vantage Score and the Consumer Federation of America, found that 32% of the people surveyed didn’t know they had more than one credit score.

Let’s forget about how many credit scores we have for a second and answer a very basic question: What is your credit score? 

Your credit score is a three digit number ranging from 300 (the lowest possible score) to 850 (the highest score). Lenders use your credit score to make decisions about whether or not to offer you credit – such as a credit card, car loan or mortgage. Your credit score is also used to determine the terms of the offer – such as what your interest rate will be.

Your credit score is calculated by looking at these categories:

  • Payment history
  • Your debt-to-income ratio
  • Total debt
  • Length of credit history
  • Types of open credit
  • Public records (such as bankruptcy)
  • Number of inquiries on your credit report
  • New credit

So, what is considered a good credit score? 

The average credit score in the United States ranges between 670 and 710. According to Experian, a “good” credit score is anything that falls between 661 and 780, which is about 38% of the population. Usually, if an applicant falls in that “good” credit range, they’re likely to be approved for credit at competitive rates.

Now that we know what a credit score is and what classifies as a good one, the next question to look at is: Why does your credit score matter? 

Think of your credit score like a report card you used to get while you were in school. Your report card measured your progress during the school year, and your credit activity puts you into a scoring range. But, unlike grades – credit scores aren’t stored as part of your credit history. Instead, your score is generated each time you apply for credit. Fact: It actually negatively impacts your credit score if you have multiple inquiries in a short period of time.

What are your major financial goals? Buying a home? Buying a car? Chances are, your credit is likely going to be a factor in framing that financing picture. Your score will actually tell a lender whether or not you qualify for a loan and how good the terms of the loan will be. For instance, the lower your credit score is, the higher your interest rate on a loan will be.

If you’ve looked at your credit report and you’re surprised to see it’s lower than you thought, there are simple ways to fix that:

  • Pay your bills on time. That goes for ALL your bills – not just credit cards and loans. Fact: Payment history is the most heavily weighted factor of your credit score. It makes up 35% of your total score.
  • Keep your credit card balances low. Credit history accounts for 15% of your credit score, so keep those old accounts open even if you don’t use them.
  • Space out your credit applications. Each time you apply for a line of credit, the inquiry is noted on your credit report. One or two inquiries aren’t a huge deal, but when you have a bunch within a two year period, it can cause your score to fall.
  • Mix up your credit. Your credit mix, or the types of credit accounts you have, makes up 10% of your credit score. Basically, lenders want to see that you can use different types of credit responsibly.

Credit doesn’t have to be scary or overwhelming. There are many responsible ways to start out slowly and build worthwhile credit for the future. First Financial can help! Are you looking to build or establish credit? We have a number of ways to start you on the right path. Stop by one of our branches today or give us a call. You can also check out our credit management guidebook on our website, for some additional tips.

3 Bad Choices that Could Damage Your Credit Score

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Your credit score is a big deal. That number decides what kind of loan you’ll be able to get and what interest rate you’ll have to pay. If your credit score is low, you’ll need to find ways to raise and improve it. If your score is good, here are three things you may want to avoid in order to maintain your high credit rating.

Cosigning a loan: You’re a nice person and you do nice things for people you care about. In reality, you should really never cosign someone else’s loan. If the borrower starts missing payments, your credit score will take a big hit. The last thing you want to do is be on the hook for someone else’s car payments, personal loans, or credit cards.

Closing a credit card account: Maybe you have a credit card that was just used to build credit or have in case of emergencies. You may have paid if off and decided to stop using it, but be sure you don’t close that account. That card’s credit history is good for your credit score. Also, closing the account will lower your amount of available credit which could negatively affect your debt utilization ratio. Closing a credit card account is one action that can damage your credit score in two different ways.

Not looking for errors: Always keep a close eye on your credit score. If you haven’t looked at yours recently, check out annualcreditreport.com. If you don’t keep an eye on your credit report, you could have your identity stolen and not even know it. Even if isn’t the case, there could still be inaccuracies. The day you find an error on your credit report that is negatively impacting your score, is the day you’ll be extremely happy you checked.

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

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.