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Tips For First-Time Credit Card Users

August 18, 2020

Responsible young man using a credit card.Credit cards are a powerful financial tool and as the saying goes, “with great power comes great responsibility.” If you are looking to get your first credit card, these tips can help you use it in a smart, financially-sound way. If you abuse your credit card, intentionally or unintentionally, you could find yourself in financial distress.

Credit cards can help build your credit score. Good credit scores can, in turn, allow you to access better loans and mortgage rates, higher limits on future credit cards and more. Credit cards can also damage your credit score if you use them unwisely. Avoid maxing them out, always pay your monthly statement on time and pay more than the minimum if you can. Try to pay in full whenever possible.


1. Consider Becoming An Authorized or Joint User First

Not comfortable with having your own credit card yet? See if a relative will let you become an Authorized or Joint User on their card. If you become one, you will be issued a card with your name on it but the primary cardholder will be held accountable for charges and payments. Some credit card companies may report credit activity for you as the Authorized or Joint User, and if the card is being used wisely by all parties, you could earn good credit yourself.


2. Treat It Like Cash

If you don’t have the money now or won't in the near future to pay off the purchase, you may not want to put it on your card. You'll increase your risk of accruing interest and expanding what you owe. This can put you into debt which can be hard to get out of and hurt your credit score.


3. Pay The Balance In Full Or Close To It Every Month

Make sure you pay off your purchases at the end of every billing cycle. This way, you’ll avoid paying interest, possible late fees and avoid damage to your credit score. Making only the minimum payments will cause the interest to really add up, costing you more money in the long run.


4. Use It To Build Your Credit

When you pay off your balances every month, you establish a positive credit history. You demonstrate to credit agencies and lenders that you can handle the responsibility of credit. This will become important when you want to buy a car, rent an apartment, or buy a home. Your credit score shows how financially responsible you are and is used by those checking to predict your future responsibility. On the flip side, late or consistently missed payments can damage your credit score, making you a higher risk to future lenders.


5. Always Check Your Statements

Unfortunately, credit card fraud is a very real thing. Check your statements every month to make sure there aren’t any unrecognizable charges. If you see a purchase that you didn’t make, report it to the credit card company immediately.


6. Avoid Scams and Fraud: Don’t Share Your Info With Anyone

Credit Cards are private and one way to help you avoid fraud is by never sharing your card information with others. Don’t let others use it, even close friends or family members. Beware of phishing scams where someone calls pretending to be the credit card company and asks you for personal information to “verify who they’re speaking with”, such as the security code on the back or your billing zip code. Your credit card company will already know this information and will not call you asking for it.


7. Look For A Good Rewards Program

A rewards program is designed to give card holders everything from merchandise to miles and even cash back, just for using that card. While cards for first-time users may not have a breadth of rewards available, it can’t hurt to look. Every card’s rewards formula is different, so make sure you understand what your rewards options are before you decide.


Pay Smarter

With a First Source credit card, you get the purchasing power of Visa®, for safe and secure transactions thanks to the EMV chip technology. We offer great options like non-variable rate cards and variable rate cards with reward options.

Learn more about our credit card options and benefits to see if one is right for you. If you‘re ready to start the application, click “Apply Now.” If you have more questions, feel free to give us a call at 315-735-8571.

Apply Now

Article adapted from BALANCE Financial Fitness Program.

Posted in: Credit Card

A Shift In Savings Strategies

July 29, 2020

A woman reviews her finances from her home.Forming New Spending and Saving Habits

COVID-19 has caused shifts in many of the things we do that make up our daily lives. One major shift has been with money management. 

What have you noticed about your spending habits in the past few months? With stores, restaurants, venues, attractions and so many other places closed during lockdown and beyond, the options to spend money outside of our home, other than online shopping, or for essentials, were few and far between. In that time at home, away from our usual daily stops, we were given the opportunity to reflect upon our past spending habits.

We’ve been able to look at that daily cup of coffee we used to get on the way to work, the places we’d go to on our lunch breaks, and meeting friends out on the weekends with a different view. All of a sudden that money wasn’t being spent. It was being, more or less, saved. People are now spending less, saving more, and planning ahead. 

Statistics show that over the past 5 months, including both during quarantine and post quarantine, entertainment, social activities, traveling (even gasoline) and impulse buying are all down. That’s just the tip of the iceberg. According to CUNA Mutual Group’s Trends Report, indicating COVID-19 impacts, personal spending fell 13.6% while savings balances in credit unions rose 4.7% in April. Consumers, it seems, have been sticking to purchasing essentials only- and only when needed.

This shift in spending, along with stimulus checks and relief loans, have helped to ease the financial burden of furlough and layoffs, enabling many of us to get by. Even for those that may have been fortunate enough to continue working in an essential industry, we still see those consumers driving less, eating out less, traveling less, shopping less, etc. This has helped increase the balance of their savings. 

If you have been able to create some pockets of extra funds, now is the perfect time to consider looking at your budget and deciding more strategically on what it is you really need. It is a time to scrutinize your own past habits and channel those funds to what is really important. Use our Budget Calculator to find out your net monthly and yearly income.

Paying owed bills is certainly a great start. Paying off loans is yet another. Once loan payments are more manageable, or possibly gone quicker than you were expecting, you can take the money you were using to make those payments and use it for something else- like building up your savings again. 

If this experience has taught us anything about our spending habits, it’s to consider planning ahead with serious, realistic goals of saving. 

To help you get going on starting a new savings strategy, try a Term Share Certificate or Money Market Account. These are great places to save that can earn higher dividends.

Can you refinance and consolidate your debt? Rates are very low right now on car loansmortgageshome equities and more.

Use this helpful Savings Goal Calculator to find out how long it will take you to reach your savings goal.


Save Smarter

We are here to help you plan for the future with our Savings Account Options. If you have any questions, give us a call at 315-735-8571. If you are ready to get started click below.

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Should You Buy Used, New, or Lease?

July 23, 2020

Cars in a dealership lot.Pros And Cons To Paying For Your Next Car

Looking for your next car can be exciting! Before getting behind the wheel for a test drive, or even beginning your search, knowing the varying factors of purchasing one is helpful to keep in mind, as that can greatly influence your financial position.

When it's time to purchase your next vehicle, there are generally three options: buy used, buy new, or lease. Here are some pros and cons for each.


Used Cars

Pros: 

  • Used cars are generally less expensive up-front and they have the added benefit of not drastically depreciating when they leave the lot. 

  • Buying a used car, offers a pretty good-sized savings percentage compared to purchasing that same car brand new. Therefore, it may be easier to afford a higher class of car than you normally could have. 

  • Also, car insurance rates and registration renewals are typically lower for used cars. This can save you hundreds of dollars, or more, over the life of the car.

Cons: 

  • While today’s cars are much more efficient and can go longer between scheduled maintenance visits, if you choose to buy used, there are some additional costs to consider. For example, you’ll want to have the car checked out by a trusted mechanic to determine when maintenance work or repairs would be necessary.

  • You may have to pay additional money to have the car certified.

  • Depending on the age of the vehicle, you may possess it for less time, which means spending more on a another vehicle sooner.


New Cars

Pros: 

  • Buying a new car may present you with more financing options from a seller, as well as new-car incentives such as cash rebates and great interest rates. You may also be able to spend less than the first-market price after negotiations, incentives and rebates. 

  • New cars are also likely to provide the latest in tech features for performance, safety and comfort. 

  • A brand new car offers peace of mind without the need to take it to a mechanic before buying. If issues arise, most warranties will cover the cost of repairs for the first few years.

Cons: 

  • New cars are expensive and you may have to put a large amount down up front. They also depreciate as soon as you leave the lot. In some cases, the value of the car drops as much as 20 percent right when you pull away! That means a $25,000 car will lose $5,000 within the first few minutes of ownership.


Leasing A Car

Pros: 

  • When you lease, you don’t pay the full purchase price of the car, rather, you pay the depreciation of the car. This means if you lease a $25,000 car for 3 years, and the anticipated value of the car at the end of the 3 years is $15,000, you only make payments on that $10,000 difference. If you had purchased the car, you would make payments on $25,000.

  • Leasing is also often available with no money down or a much smaller amount than when buying the car outright.

  • A major benefit of leasing is that you get to drive a brand new car every few years. This means the latest in safety and technology.

Cons: 

  • A drawback of leasing, is that the money you're spending isn’t investing in an asset, it’s simply spending money. Like renting instead of buying, you are not purchasing any equity in an asset you can later sell.

  • Other considerations are mileage fees and potential damage to the vehicle. If the car is damaged or you drive it over the mileage limit, you may end up with hefty fees.

  • Leasing often costs more than buying in the long run, as you typically drive a purchased car for longer than 3 years.


Drive Smarter

When buying your next car, consider the various financial choices, your driving habits, and your personal preferences of owning a car. Before deciding, visit our Car Loan page to learn how we can help you get on the road with a car that's right for you. 

If you‘re ready to start the application, click “Apply Now.” If you have more questions, we’re happy to help. Give us a call at 315-735-8571 to discuss your options.

Apply Now


Article adapted from Banzai.

Posted in: Car Loan

How to Lower Holiday Spending

October 18, 2019

Stay thrifty while keeping the holiday spirit

Holiday spending is often a budget-buster. The expenses can be numerous: presents, wrapping paper, cards, decorations, food, and travel, to name a few; and very few people have an unlimited holiday budget. If you don’t have the funds to buy everything you want, not to worry. A little bit of creativity and energy can get you through the holidays without draining your wallet.


Homemade Gifts

If you have the skills, making your own gifts is a great way to save, since supplies usually cost less than the finished product. Not only are homemade gifts cheaper, but many people appreciate them more than store-bought gifts because of the effort that goes into making them.

Not an experienced crafter? Write a letter or make a collage representing what the person means to you, or frame a memorable photo. If you can bake, standard cookies or brownies can be dressed up with sprinkles and ribbons in holiday colors. You can find great ideas on sites like YouTube or Pinterest. 

Offering your services is another great cost-saving gift, since it only costs time. Offer a free night of babysitting, or a month of lawn-mowing. Create a coupon the recipient can redeem at a later date.


Give the Gift of an Experience

Plan an outing with your family members or friends instead of a gift exchange. Everyone pays their own way, and you can keep the experience as simple and fun as the group’s budget can handle. Outdoor activities, or a local play or museum are a few examples. If you don’t want to strain anyone’s expenses, have a cozy potluck gathering at home. Remember to take fun photos, which can make great framed gifts in the future.


Gift-wrapping

People underestimate the cost of wrapping gifts. Skip the fancy wrapping paper and bows, and find alternatives. Newspaper (especially the comic section) can work, as can computer paper, or paper shopping bags. Use inexpensive craft supplies, such as glitter, paint, or pattern stamps, to add decorative touches.


Cards

Store-bought cards can cost $4 or more each. Sending them to 20 people would cost you $80, not including postage! Create your own cards using simple supplies, or create and send cards electronically to avoid additional costs. Make your own or use one of the many free services online. If you want to send physical cards, consider trimming your mailing list to save, or hand delivering them for a personal touch.  


Decorations

Save on store-bought decorations by seeing what you can use from around the house. Make a garland out of popcorn, and use local natural supplies like pine cones and acorns. To save on store-bought decorations, plan ahead for next year and only buy them after the holidays, when they’re at a deep discount. Garage or yard sales and thrift shops are also a great place to find discounted seasonal decorations throughout the year.


Food

If you host holiday dinners or parties, you may find yourself spending significant money on food. Potluck dinners are an easy way to shift some of the burden of buying all of the food yourself. If you don’t want to ask your guests to bring food, consider options like eliminating a full dinner and having only appetizers and desserts. Shop for less expensive food, available in some bulk-food stores.


Travel

Airfare is generally more expensive during the holidays, since that is when everyone flies. To save, consider having a “holiday” dinner during an off-peak time of the year, when airfare is cheaper. Whenever you do fly, being flexible can usually help you save; you probably won’t have to spend as much if you fly at night or have a layover.


You can have a great holiday season without spending a great deal of money. Be creative with your purchasing and avoid straining your finances, so you can celebrate during the holidays, and afterward as well. Still need some assistance with your seasonal finances? Start by learning about a Holiday Loan.
 

Learn More: Holiday Loan
 

Article adapted from BALANCE Financial Fitness

Posted in: Holiday Loan

5 Steps to Creating and Staying True to a Holiday Budget

October 18, 2019

Enjoy the holidays by planning ahead

The holidays are a time for seasonal cheer, catching up with family, and for some—financial panic.
If you recently looked at the calendar and realized gift-buying season is closer than you thought, don’t worry. You can organize your finances by making an effective budget. Follow these 5 steps to better avoid going into debt this season.


1. List All of Your Expenses

Are you buying presents for everyone? Hosting a party? Attending a holiday concert or event? Write a list of everything you intend to spend money on (and how much each costs), then prioritize. You don’t have to cross anything off just yet, but make a mental note of which items are more important.


2. Set a Limit

Next, review your income and any money you’ve set aside for holiday expenses. Your goal is to figure out what you can afford without going into debt. If you have to dip into your savings, make sure to keep a cushion for any emergency costs that might come up. Now you can decide which expenses are important, and which ones can be crossed off your list.


3. Research Seasonal Sales

Sales go hand in hand with the holidays. This is when many retailers make a large portion of their annual revenue, so they want to attract as much business as possible. Find the best deals by signing up for email alerts and following brands on social media. You’ll be among the first to find out about those special seasonal sales. Also watch for Black Friday and Cyber Monday promotions.


4. Comparison Shop

Unless you’re searching for a unique gift, your desired item is probably available from multiple retailers. Fortunately, the Internet makes comparison shopping easy, especially during the holidays when every company is trying to compete for your business. Make sure you visit different websites and do some research to find the best deals.


5. Pros and Cons of Payment Methods

Shopping online can make it easier to track your purchases afterward, though spending cash gives you immediate feedback about how much (and how often) money is leaving your wallet. During the holidays, when you’re purchasing many items at once, the cash method helps you realize how much you’re spending, though online shopping gives you an easier way to see all your purchases at a glance. Try using cash for some of your shopping, and see how that affects your budget. You’ll have the chance to shop in person, support local businesses, and possibly reign in some of your impulse purchases.


Follow these simple rules, and keep your holiday spending in check. If you still need some assistance with your seasonal finances, start by learning about a Holiday Loan.
 

Learn More: Holiday Loan
 

Article adapted from BALANCE Financial Fitness

Posted in: Holiday Loan

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