debt Archives - High Point FCU

Your Complete Guide to Santa Shock Recovery

The holidays are over, and with the start of a new year, we are often dealt a case of “Santa shock”. Its main symptoms are the result of the house and daily schedule being in disarray as well as those first post-holiday credit card statements haunting you as the ghosts of purchases past!

The good news is, all it takes is some self-care and planning to make a full recovery from Santa shock. Here are four ways you can bounce back from the post-holiday slump.

Declutter and reorganize

Get your house organized! To ease the overwhelm, move all the holiday clutter into one area. Then make a list of all you need to do to get your home looking liveable. Finally, enlist the help of all household members to divide and conquer it all. In no time, your living space will be looking neat and organized again.

Reestablish routine

Getting back into a normal post-holidays routine can be challenging, but the sooner you start, the easier it’ll be to get back into real life. Set a regular sleep schedule, plan balanced meals and reintegrate exercise into daily life. Returning to a structured routine will help you feel more grounded and reduce the disorientation that often accompanies the post-holiday season.

Help your budget recover

Get your budget back on track after the holidays with these tips:

Consider a no-spend month. Resolve to only spend money on what you truly need for an entire month after the holidays. This will help your budget get back on track quickly.
Assess your holiday spending. Take a look at how much you spent so you have an idea of how much you’ll need to pay off sooner than later.
Make a plan for any carryover debt. If you put a bit too much on credit (meaning “borrowed money”) during the holidays, make a plan to pay it off as soon as possible.
Consider opening a Christmas Club Account for next year. A Christmas club account will allow you to spread the cost of the holidays across the rest of year to help pay for all of the season’s expenses without taking on debt.

Prioritize self-care

The holidays can leave you feeling drained. To fully recover from Santa shock, prioritize self-care in the weeks after the holidays. This may mean reading a book, meeting friends for coffee or indulging in a spa day. Whatever revives you!

Follow the tips outlined here to recover from Santa shock and transition smoothly back into real life.

Money Tips for College Students

Hello, college, hello, money worries!

College life brings a sense of independence that extends to personal finances. Being in charge of your own money can seem like an impossible challenge, but it doesn’t have to be that way. If the thought of managing your money in college is stressing you out, dig into these tips for some help!

Create a budget

Living with a budget is a must for good financial wellness. First, track your income, including all earnings from part-time jobs, scholarships and student loans. Next, list your expenses, including tuition fees, textbooks, rent, groceries, transportation and entertainment. Set a realistic spending amount for each category, and your budget is good to go! Review and adjust as necessary.

Minimize student loan debt

Student loans can be a big financial burden after graduation. To minimize your debt, explore options such as scholarships, grants and part-time jobs to cover educational expenses. You can also get ahead on your debt by saving for your student loan payments before you graduate.

Live frugally

You can have your fun while in college, and your budget, too! First, buy used when possible. This goes for textbooks, sports equipment and your college car. Next, consider pooling some of your expenses with roommates. For example, you can split the costs of food items, cleaning supplies and more. Finally, get used to eating in and save big. Remember, every dollar saved can go toward your future.

Prioritize essential expenses

Life while in college is filled with temptations and social activities, so it’s crucial to prioritize your expenses. First, make sure your tuition, rent, utilities and groceries are covered and then you can spend money on fun! Having a good budget developed, and a regular review of it, will help you plan in some of that fun.

Build your credit

College is a great time to get your credit score ready for adult life. A strong credit score is essential for qualifying for large loans, getting favorable interest rates, securing a job and more. To build credit responsibly, consider getting a secured credit card or becoming an authorized user on a family member’s credit card. Use the card sparingly and make full payments on time each month.

Take advantage of campus resources

College campuses often provide many resources to help students manage finances. Take advantage of financial literacy workshops, counseling services and career centers at your college.

Use these tips to manage your money smartly in college.

The Post-Holiday Budget Recovery Guide

The holidays are in the rearview, but if you’ve gone over budget with your spending, it’s time to deal with the aftermath, which is coming head-on. Here’s how you can get your budget back on track for the new year.

Review your holiday spending

How much debt did this season’s spending set you back? Spend some time crunching the numbers so you have a better idea of what kind of recovery steps you need to take.

Choose your recovery process

If you’ve got multiple credit card balances to pay off, you may want to consolidate your debt by taking out a personal/unsecured loan and then using the funds to pay off your credit card debt. You’ll have just a single, low interest payment to make each month.

Another option is to pay off one credit card bill at a time, maximizing payments on the bill that has the highest balance, or the one with the highest interest rate, until it’s completely paid off. Once you’ve crossed one debt off your list, move on to the next until you’re debt-free.

Trim your budget

It’s time to cut that budget down to size! Consider underused subscriptions you can drop, inflated grocery bills you can trim and auto insurance policies that can be swapped for a cheaper plan. The more you trim, the more money you’ll free up for paying down debt.

Put your holiday resources to work

Along with a pile of debt, the holiday season may have left you with some extra cash through work bonuses, tax returns and gift money. Put these resources to work by using a portion of this money, or even all of it, toward paying down your holiday debt.

Go on a shopping detox

Take a break from the mall this month and resolve to swipe the plastic only for essentials. At the very least, keep impulse purchases to a minimum until your budget recovers.

Make a plan for next year’s holiday season

When you open a holiday club account at High Point Federal Credit Union, you can set up an automatic monthly transfer from your payroll or checking account to feed your holiday savings all year long.

If you blew your budget this holiday season, take steps to help your finances recover. Use the tips outlined here to get started.

Step 12 of 12 Steps to Financial Wellness – Review and Tweak

Congratulations! You’ve reached the 12th and final step of the 12 steps to financial wellness. Here, we’ll review the previous steps and adjust this part of your financial health plan as necessary.

Step 1: Track your spending

Are you regularly tracking your spending? Knowing where your money is going will help you make more responsible spending decisions in the future.

Step 2: Create and stick to a budget

Budgets need to be reviewed and tweaked every few months or so to ensure they still work for present life circumstances. If your budget no longer works for you, tweak until it does.

Step 3: Pay down debt

Have you made as much progress in your debt-paying journey as you’d hoped to by this point? Can you beef up any payments to make debt disappear sooner?

Step 4: Talk money with your partner

Have you had the big money talk with your partner? Need to revisit any of the topics you’ve discussed, such as sharing accounts, dividing expenses and saving up for a shared dream?

Step 5: Spend mindfully

Review some of your recent purchases. Are you blowing money on stuff you don’t need instead of relieving stress in a healthier manner? If so, look for better ways to de-stress. Spending mindfully is one of the most important steps to financial wellness.

Step 6: Pay it forward

Are you remembering to pay it forward? The money, time and smiles we share are the only moments that are truly ours.

Step 7: Pay yourself first

Are you remembering to feed your savings? At this time, you may want to consider increasing the amount you’re regularly putting into savings by trimming some discretionary expenses.

Step 8: Know when and how to indulge

Are you remembering to work your just-for-fun expenses into your budget so you can indulge without guilt? Now is a good time to look back at your indulgences to figure out if they were really good uses for your money.

Step 9: Check your credit score

If you’ve been following the rules for boosting and maintaining a high credit score, like paying your bills on time, having several active cards, and keeping your credit utilization low, your score should have improved during these last few months.

Step 10: Think about retirement

Review your retirement accounts and assess whether your funds have reached the place you’d hoped they would by now.

Step 11: Start investing

Make sure your investments are performing well and that your assets are optimally diversified.

Step 12: Review your overall financial health

In this final step, you’ll review your steps to financial wellness on a regular basis, just as you’ve done here.

Reviewing your financial health on a regular basis is an important part of staying financially fit.

Step 3 of 12 to Financial Wellness: Pay Down Debt

You’ve tracked your spending, designed a budget for your monthly expenses, and you’re on a good path to financial wellness. In this next step, you’ll create a plan for paying down debt.

Consumer debt can be one of the biggest challenges to financial wellness. With some intentional action and commitment, reaching true financial wellness is possible.

Here’s how to pay down or off your debt in five simple steps.

1. Organize your debt

List every credit card you own along with an outstanding balance. Jot down the amount owed to each card issuer. Next, list the interest rate of each card. Repeat these steps for other loans you may have as well.

2. Choose your debt-crushing method

There are two approaches generally advised to folks who are seeking to get rid of their debt:

The snowball method involves paying off your smallest debt first, and then moving to the next-smallest until all debts have been fully paid.
The avalanche method involves getting rid of the debt that has the highest interest rate first before moving on to the debt with the next-highest rate until all debts are paid.

Choose the method that makes the most sense for your personal and financial circumstances.

3. Maximize your payments

Once you’ve chosen your debt-crushing method, find ways to maximize your monthly payments. You can do this by trimming your spending in one budget category and channeling that money toward your debt. You can also find ways to get some extra cash for your payments, such as freelancing for hire.

4. Consider a debt consolidation loan

When you consolidate debts to one low-interest loan, it’s a lot easier to manage the monthly payments. Plus, the savings in interest you won’t pay can be significant, especially if the new loan has a low interest rate. If this approach sounds right for you, consider taking out a personal loan from High Point Federal Credit Union.

5. Negotiate with your creditors

Many credit card companies will be willing to lower your interest rate once you prove you are serious about paying down debt. After kicking off your debt payment plan, it’s worthwhile to contact each credit card company to discuss options.

No matter which strategy you go with or the methods you use for paying off your debt, commit to not adding more debt onto your card while paying it down. Paying off a large amount of debt will take time and willpower, but living debt-free is key to financial wellness. Best of luck on your debt-crushing journey!

Beware of Debt Relief Scams

Big debt can be a big beast. One that takes huge bites out of your budget and destroys any chance you might have at strong financial wellness. Unfortunately, scammers know this, so they target victims with debt relief scams.

Here’s what you need to know about debt relief scams and how to avoid them.

How the scams play out

Debt relief scams target consumers who may have a lot of credit card debt under any or a combo of the following guises:

Debt repair service to greatly increase their credit score in no time
Service to remove negative credit report info
Promise to reduce credit card rates

The target, who is desperate to shed their debt, will pay any price for the promised outcomes. The scammer then fails to come through as promised, leaving the consumer even deeper in debt.

Red flags

These red flags can help you identify a debt relief scam:

Someone guarantees to bring your credit score up by a specific number of points within a short time.
The service promises to get rid of factual credit report information on your credit file.
They demand an up-front payment.
The service claims to be affiliated with a credit card company, but that company doesn’t recognize the service.
They tell you to cut off all communication with creditors.

The do’s and don’ts of credit repair

If you’re looking for a legitimate credit repair service, these tips can help.

Do:

Research the service you consider using. Look for a secure site with a phone number and street address, as well as positive reviews from past clients.
If the service claims to be affiliated with a credit card company, give the company a call to verify.
Ask for a clear explanation of all fees and conditions.

Don’t:

Never pay an upfront fee for a debt relief service.
Don’t believe a service that guarantees to bring up your score by a certain amount in a specified timeframe.
Don’t believe that a service can get rid of negative information on your credit file.

If you’re deep in debt, don’t despair. Let Olean Area Federal Credit Union help you get out of debt through a debt consolidation loan. Call, click or stop by today to learn more.

Your Complete Year-End Financial Checklist

As 2021 draws to a close, take a moment to go through this year-end financial checklist to ensure your finances are in order before the start of the New Year.

1. Review your budget

Is your current monthly budget working for you? Are you stretching some spending categories or finishing each month in the red? Take some time to review your budget and make any necessary changes.

2. Top off your retirement plan

Check to see that you are taking full advantage of your employer’s matching contributions for your 401(k). If you haven’t contributed as much as you can, you have until the end of the year to catch up, to a limit of $19,500. If you have an IRA, you have until April 15 to scrape together the maximum contribution of $6,000, with an additional $1,000 if you are 50 years or older.

3. Check your progress on paying down debt

Review your outstanding debts from one year ago and hold up the amounts against what you now owe. Have you shed any debt from one year ago, or is your debt growing? If you’ve made no progress, or your debt has deepened, consider taking bigger steps toward paying it down in 2022.

4. Get a free copy of your annual credit report

The end of the year is a great time for an annual credit checkup. You can only request a free copy of your credit report from all three credit reporting agencies once a year. Get your annual credit report here, and look for fraudulent charges and other signs of possible identity theft.

5. Review your investments and asset allocation

You may need to make some adjustments to your mix of stocks, bonds, cash and other investments to better reflect your personal financial goals and/or the current state of the economy and market.

6. Review your beneficiaries

Has your family situation changed during the past year? If it has, be sure to switch the beneficiaries on your accounts and life insurance policies to accommodate these changes.

7. Review your tax withholdings

Review your W-4 to see if the amount of tax withheld from each paycheck needs to be adjusted. If you’re not a numbers person, ask your accountant for help.

Use this checklist to make sure your money matters are in order before the start of 2022.

How do I Raise my Kids to be Financially Independent Adults?

Q: How do I help my kids become financially independent grown-ups?

A: Teaching your kids how to be financially independent will help smooth the transition into adulthood. It will also give them what they need to stay financially stable throughout life.

Here are some tips for raising kids to be financially independent adults.

Start with basic budgeting

Introduce your children to the concept of earning money and spending mindfully when they’re young, and build upon that as they grow up. Preteens can watch you work on an actual budget, and teens can even assist you in creating a budget for a large expense, like a family vacation. You can also help kids create a budget for how they plan to spend their own money.

Split the costs of “must-have” items

If your children are like most kids, they’re asking you for trending items they claim they must have; from a pair of designer jeans to the latest fad toy they insist everyone else already has.

A great compromise is to have your child pay half the cost of expensive trending items. They’ll likely quickly see that a “must-have” really isn’t when you’re footing half the bill.

Teach them about credit cards

If your child sees you using a credit or debit card often, teach them what’s behind that card. Show them your credit card bill when it arrives and talk about how you need to pay for all those expenses during the month, plus the possible interest. Teach them about debit cards, too, explaining how money is withdrawn from your checking account each time you swipe the card. You can also give older kids a quick rundown on credit scores, how they work and why they’re so important.

Talk openly about what they can expect in terms of support for the future

When your child is mature enough to talk about the future, discuss how much financial support you plan to offer while they attend college, immediately after graduation and into their adult years. Ask about their plans as well, paying attention to when they anticipate being financially independent.

You can bring up the topic of career paths, too. Help your child determine a basic budget for the lifestyle they plan to lead and assist them in narrowing down their career choices until they have just a few that will support their future life. Talk about student loans, too, and explain how crippling debt can be.

If you haven’t already, consider opening a Youth Savings Account for your child at High Point Federal Credit Union. This way they can get hands on experience with a financial account and understand the importance of putting money away. If they get an allowance, or are gifted money at some point, you can encourage them to put a certain percentage in their account. Stop by one of our branch locations, contact us, or call 800.854.6052 to discuss opening a Youth Savings Account.

Use the tips outlined above to help raise your child to be a financially independent adult.

6 Steps to Crushing Debt

Getting rid of high debt takes hard work and willpower, but it’s doable. Here’s six steps to help you start crushing debt today.

Step 1: Choose your debt-crushing method

There are two approaches toward getting rid of debt:

The snowball method involves paying off your debt with the smallest balance first and then moving to the next-smallest, until all debts have been paid off.
The avalanche method involves getting rid of the debt with the highest interest rate first and then moving on to the debt with the second-highest rate until all debts are paid off.

Each method has its advantages, with the snowball method placing a heavier emphasis on achieving results at a faster pace, and the avalanche method focusing more on actual savings to the borrower money in overall interest paid. Choose whichever method appeals to you more.

Step 2: Maximize your payments

Credit card companies are out to make money, and they do this by making it easy to pay just the minimum payment each month. Beat them at their game by maximizing your monthly payments. Free up some cash each month by trimming your spending in one budget category or consider freelancing for hire and channel those funds toward the first debt on your list. Don’t forget to continue making minimum payments toward your other debts each month!

Step 3: Consider a debt consolidation loan

A personal loan from High Point Federal Credit Union can provide you with the funds you need to pay off your credit card bills and leave you with a single, low-interest payment to make each month. Or, you can transfer your credit card balances to a single card having a low-interest or no-interest introductory period.

Step 4: Build an emergency fund

As you work toward pulling yourself out of debt, it’s important to take preventative measures to ensure it won’t happen again. You can do this by building an emergency fund. Start small, squirrelling away whatever you can in a special savings account and adding the occasional windfall to beef up your fund.

Step 5: Reframe your money mindset

What got you into this mess? Are you consistently spending above your means? Is there a way you can boost your salary or significantly cut down on expenses? Lifestyle changes won’t be easy, but living debt-free makes it all worthwhile.

Step 6: Put away the plastic

Credit cards are an important component of financial health, but when you’re working to free yourself from debt, it’s best to keep your cards out of sight and out of mind. Learning to pay your way with cash and debit cards will also force you to be a more mindful spender.

Best of luck on your journey toward financial freedom!

The Promises and the Perils of Buy Now, Pay Later

Gotta have it now, but don’t have the cash? Why not buy now, and pay later? (BNPL). It’s the perfect way for you to walk away with that overpriced exercise bike even if your wallet is practically empty, right?

Maybe. Or maybe not.

Let’s take a look at these programs, how they work and what to be aware of before you sign up.

How BNPL works

You’ll find a BNPL button when checking out at most online retailers. This option will usually link you to a BNPL app, such as Afterpay, Affirm or Quadpay. A brick-and-mortar store may offer you this option at checkout as well. Here, too, you’ll pay up through an affiliated app.

If you choose to go with a BNPL option, you’ll need to get approved. Apps will usually run just a soft credit check to confirm your information. Once approved, you can choose to link your debit card, checking account or credit card so the app can collect the payments when they’re due. Next, you’ll generally make a 25% deposit on the purchase, and the item is yours! Most BNPL plans require you to pay off the rest in three fixed installments, but payment schedules can vary.

When to choose BNPL

BNPL programs can be a good choice for items you urgently need, but can’t afford right now, like medical equipment that’s not covered by insurance. It can also be ideal for workers with an uneven income flow who may experience lean times of the year, but know that better cashflow is ahead.

Why BNPL can be a bad idea

It encourages overspending. It’s easy to think that, if you’ll only be paying a small part of the price today, why not buy it now instead of financing the full amount?
Missed payments are penalized. Some services slap an interest charge on your outstanding balance, with rates as high as 40%. Other programs will charge a one-time late fee, which can be as high as $39. Others will tack on an extra fixed fee to all subsequent payments.

It can kill responsible financial habits. If a consumer has purchased multiple items through BNPL programs, the monthly payments won’t be so minimal. The payments will need to be factored into a budget and can eat into other categories, like savings.

Buy now, pay later programs can be super-convenient, but they also present risks. Our best advice? Use with caution.

5 Steps to Take Before Making a Large Purchase

Bitten by the gotta-have-it bug? It could be a Peloton bike that’s caught your eye, or maybe you want to spring for a new entertainment system? Before you go ahead with the purchase, though, it’s wise to take a step back and follow these steps.

Step 1: Wait it out

Often, a want can seem like a must-have, but that urgency fades when you wait it out. Take a break for a few days before finalizing a big purchase to see if you really want it. For an extra large purchase, you can wait a full week, or even a month. After some time has passed, you may find that you don’t want the item after all.

Step 2: Consider your emotions

Before going ahead with your purchase, take a moment to identify the emotions driving the decision. Is this purchase being used as a means to fix a troubled relationship? Or maybe you’re going through a hard time and you’re using this purchase to help numb the pain. Be honest with yourself and take note of what’s really driving the purchase. Is it really in your best interest?

Step 3: Review your upcoming expenses

What large expenses are you anticipating in the near future? Even if you have the cash in your account to cover this purchase, you may need that money soon for an upcoming expense. Don’t spend money today that you’ll need tomorrow.

Step 4: Find the cheapest source for this item

If you’ve decided you don’t want to go ahead with the purchase, there are still ways to save money. In today’s online world of commerce, comparison-shopping is as easy as a few clicks. You can use apps like ShopSavvy to help you find the retailer selling the item at the best price.

Step 5: Choose your payment method carefully

Cash can be your go-to choice if you have the funds on hand now. A low-interest credit card may offer purchase protection, just make sure you can meet your monthly payments. Finally, a buy now, pay later program can be just what you need if you have 25% of the purchase price saved up and you can afford to pay off the rest in fixed installments.

If you’re ready to make a large purchase and need a loan, contact Olean Area Federal Credit Union to explore your options!

Spring Clean Your Finances

Are you ready to make your finances sparkle? Here are six ways to spring clean your money matters:

Sweep out your budget

It’s time to shake the dust from your budget! Pare down your spending until your budget’s looking neat and trim.

Freshen up your W-4

If you received an especially large refund this year, you may want to adjust the amount you withhold. The IRS’s tax withholding estimator can be a useful tool to help you determine the perfect number.

Deep clean your accounts

Do a Marie Kondo on your finances and get rid of any accounts you no longer need. For instance, are there dormant accounts at a financial institution you no longer use, or a 401(k) from your old job? Consolidate it. A minimalist approach to your finances will make it easier to manage your accounts, give your savings a greater chance at growth and help you avoid fees for unused accounts.

Toss out your debt

If you’ve been stuck on the debt cycle, make this spring the season to break free.

First, trim your budget, designating any extra funds for your debts. Next, choose a popular debt-busting approach, such as the avalanche method, in which you pay off debts in order from highest-interest to lowest, or the snowball method, where you start with the smallest debt and then move up your list. Going forward, maximize payments to the first debt on your list, making sure not to neglect minimum payments on the other debts. Before you know it, that debt will be gone!

Dust off your saving habits

Get into the habit of maximizing your savings with a tangible financial goal. You can also make savings an itemized line in your budget so you have funds set aside for this purpose. Finally, automate your savings by setting up a monthly transfer from your checking account to your savings account.

Make your investments sparkle

It’s time for a spring cleaning for your investments! Check if your allocation strategy is still serving you well, whether you need to adjust your diversification, and if your retirement accounts are on track for your estimated retirement timeline.

Follow our tips to make your finances shine!

How to Spot A Credit Repair Scam

Credit repair scammers tell you they can make credit repair quick and easy. Unfortunately, when they’re done, your score may still be low, you’ll have lost a nice chunk of change and may even be facing criminal charges.

Here are the warning signs of a credit repair scam:

1. Upfront payment

Under the Credit Repair Organizations Act (CROA), credit repair companies are forbidden to request or receive payment until they’ve completed the services they’ve promised.

2. Big promises

Scammers may claim they can remove negative information from your credit report, even information that is accurate and current. Don’t believe them; no one can do this. They might also promise to boost your score in just a few weeks. This, too, isn’t true. It takes at least 30 days for changes to be evident on your credit report.

3. Offers a “new credit identity”

In these scams, companies promise to create a new credit identity for a fee. After you pay, the company will provide you with a nine-digit number. They may refer to this number as a CPN – a credit profile number or a credit privacy number. Alternatively, they may direct you to apply for an EIN – an Employer Identification Number.

The company instructs you to use this form of ID to apply for credit, telling you it is legal. However, it’s not — and you’ve just been scammed. These companies are selling you a stolen SSN. They walk away with your money and leave you in hot water because you’ve just committed multiple federal crimes.

Falling for a credit identity scam could mean facing fines or prison time.

4. Tells you to dispute accurate information on your credit report

Disputing accurate information on your credit report is illegal.

5. Evasive when questioned

The Credit Repair Organizations Act made it illegal for credit repair companies to lie about your rights and their services. These companies must explain:

A written contract detailing your legal rights
Your three-day right to cancel the contract without charge
The anticipated time it will take until results are evident
The total cost you will pay for their services
Their guarantee

If you’ve hired a credit repair company that hasn’t lived up to its promise, you can choose to sue the company for your losses in federal court. Along with other victims, you can file a class action lawsuit against the company.

Finally, it’s best to report the scam to your local consumer affairs office or to your state attorney general. You can also file a complaint with the Federal Trade Commission (FTC). File your complaint online at ftc.gov/complaint.

Feeling Stuck in Your Car Loan? Might Be Time to Shop Around!

Some bills can’t be changed. For other bills, though, a little legwork can make a big difference in your monthly payment. Your car payment is a great example. Refinancing your vehicle loan can lead to a lower monthly payment, a shorter payment term or both! It depends on various factors, including the value of your vehicle, how much you owe and your credit standing.

Read on for three common life changes that might mean it’s a good time to refinance your vehicle.

1. Your credit rating improves

One of the biggest factor determining your auto loan status is your credit score. When your lender builds a loan package, they pull a credit report as a central part of that process. That number can determine your interest rate, whether you’ll pay an insurance premium and what other fees your lender might charge.

Keep a copy of the documents your lender provided regarding your credit score. That can allow you to revisit what it was to see if your credit score has improved. Nine months of steady repayment can boost your credit score, resulting in a less costly loan.

If you didn’t have much credit history when you purchased, refinancing could do you a world of good. Interest rates as high as 18% are common for new borrowers. Just a few months of solid payments may cut that rate in half.

2. You didn’t shop around initially

Many people feel railroaded throughout the car-buying process. They choose a car, and then are told the price, the monthly payment and everything else. It’s almost like the lender for your car loan is predetermined.

Dealers usually have a smaller range of lenders with whom they exclusively work. Those lenders have limited exposure to competition, so they can charge higher fees and rates. Do your own comparison shopping. Dealer rates can be 1 to 1.5% higher than those offered at smaller lenders, like credit unions.

If you’ve never shopped around for a car loan, it’s worth doing now. Do your shopping inside a 15-day period, though; multiple checks on your credit could negatively impact your credit score.

3. You need to change your monthly payment

Your financial situation may have improved since you bought the car and you can now afford to pay more per month. You’ll save money in the long term by doing just that. Shorter-term loans usually have lower interest rates. Also, you’ll pay off the overall balance on your car faster.

If money is tight, consider refinancing for a longer term. Although you’ll pay more in interest, you’ll reduce your monthly payment and save the money you need now. You may also be able to reduce the monthly payment if your credit score has improved, interest rates have dropped or if you’re getting a better rate from another lender.

Contact Olean Area Federal Credit Union to find out how refinancing can improve your financial life!

Your Complete Guide to Using Your Credit Cards

Using your credit cards responsibly is a great way to boost your credit score and your financial wellness. Here’s all you need to know about responsible credit card usage.

Refresh your credit card knowledge

A credit card is a revolving line of credit allowing the cardholder to make charges at any time, up to a specific limit. Each time the cardholder swipes their card, the credit card issuer is lending money for the purchase. Unlike a loan, though, the credit card account has no fixed term. Instead, the cardholder must make payments toward the balance each month until the balance is paid off in full.

Credit cards tend to have high interest rates relative to other kinds of loans. The most recent data shows the average industry rate on new credit cards is 13.15% APR (annual percentage rate) and the average credit union rate on new credit cards is 11.54% APR.

Pay bills in full, on time

Paying bills in full and on time has multiple benefits:

Build an excellent credit score
Skip the interest charges
Stay out of debt
Avoid late fees
Enjoy rewards from the credit card issuer

Brush up on billing

There are several important terms to be familiar with for staying on top of credit card billing.

A credit card billing cycle is the time between credit card billings. It can vary from 20 to 45 days, depending on the credit card issuer. Within that timeframe, purchases, credits and any fees or finance charges will be added to and/or subtracted from the cardholder’s account.

When the billing cycle ends, the cardholder will be billed for the remaining balance, which will be reflected in their credit card statement.

Credit card bills will also show a payment due date, which tends to be approximately 20 days after the end of a billing cycle. The timeframe from when the billing cycle ends and its payment due date is known as the grace period. When the grace period is over, and the payment due date passes, the payment is overdue and will be subject to penalties and interest charges.

Make sure you read the disclosures for your credit cards to find important information that relates to each particular card.

Spend Wisely

Do:

When making a purchase, treat your credit card like cash.
Remember that credit card transactions are mini loans.
Pay for purchases within your regular budget.
Decrease reliance on credit cards by building an emergency fund.

Don’t:

Use your credit card as if it provides you with access to extra income.
Use credit to justify extravagant purchases.
Neglect to put money into savings because you have access to a credit card.

What do I Need to Know About Debt Consolidation?

Q: Help! I’m drowning in debt! I’ve heard about debt consolidation, but what do I need to know before moving ahead?

A: Debt consolidation is the process of moving multiple high-interest debts into a new loan or line of credit.

Here’s what you need to know about debt consolidation.

What are the benefits of debt consolidation?

Saving on interest payments. Moving your debts to a new loan or credit line with a low interest rate can translate into big savings.

One monthly payment. Say goodbye to scrambling to keep track of and make all your monthly payments!

Fixed payment timeline. How does knowing when you’ll be debt-free sound?

Boost your credit score. Amp up your score with a balance transfer or loan.

What are the disadvantages of debt consolidation?

May stretch out the payment timeline. More time in debt? No thanks.

Won’t eliminate irresponsible spending habits. You won’t turn into a budgeting beast just because you’ve relocated your debt.

Lower interest rate may not last. Many low- or no-interest credit cards only offer these features as a temporary promotion. Once time is up, the high interest rates hit. Ouch!

How can I consolidate my debt?

Unsecured loan — This will allow you to pay off all your outstanding loans immediately and move your debts to one low-interest loan.

Unsecured loans usually have origination fees and other charges. Also, the interest rates on these loans can be sky-high.

As a member of High Point Federal Credit Union, though, you have access to unsecured loans with lower interest rates than you’ll find at most banks.

HELOC — Use your home as collateral for an open credit line.

The drawback here is that you risk losing your home if you don’t pay up. Also, repayment terms can be upward of 10 years.

On the flip side, interest payments on HELOCs will be affordable and possibly tax-deductible.

Balance transfer — Move your debt to a new credit card with a low interest rate or a zero-interest offer.

The disadvantage with putting more plastic into your purse is that you may rack up a new credit card bill. Also, the low interest or no interest may not last.

As a member of High Point Federal Credit Union, you can take advantage of our low APR credit cards to help you get out of debt quicker.

* APR = Annual Percentage Rate. You can explore current deposit and loan rates by clicking here.

Want to learn more about debt consolidation? Call us at 800.854.6052, or click here to send us a message.

Simple Steps to Start Saving

If you’re ready to start saving but you don’t know where to begin, High Point Federal Credit Union can help.

Let’s get started!

Step 1: Set a goal

What’s your secret (or not-so-secret) financial dream? Do you want to open your own business? Explore the Australian Outback? Buy a boat?

What are your long-term financial goals? Do you want to make your friends jealous and retire before you hit 50? Do you dream of sending your child to college?

Choose your goals and assign a target dollar value to each one.

When you really start saving, first prioritize building an emergency fund that has three to six months of living expenses. Thinking of your bigger personal goals now will help keep you focused.

Step 2: Start tracking your expenses and income

You’re about to turn into one of those budgeting geeks.

For three months, keep a record of your expenses and all income. At the end of the three months, tally up your totals to figure out the average of each.

Step 3: Trim your expenses

If you find that your income exceeds your expenses by a fair amount, give yourself a high-five and skip to the next step.

If you spend more than you earn, or your numbers are too close for comfort, look for ways to trim your expenses, and save that extra cash.

Step 4: Create a budget

Don’t freak out — this isn’t as hard as it sounds. Just take your averages from step 2 and use them to designate a specific dollar amount for each monthly expense. Don’t forget to include savings in your budget!

Step 5: Choose your savings tools

It’s time to choose a place for your savings to call home. For long-term savings, look for an option that offers an attractive earnings rate, like a share certificate at High Point Federal Credit Union.

Keep that emergency fund and other short-term savings in an account that allows you to make withdrawals without asking too many questions, like a checking account at High Point Federal Credit Union.

Step 6: Make it automatic

Is this the first time you decided to start saving? Yeah, we didn’t think so. Make it the time you actually carry out your plans by setting up an automatic monthly transfer from your checking account to your savings account.

Contact High Point FCU to open a Savings Account today!

Five Steps to Take After a Financial Setback

As we sail into 2021, many Americans are struggling with the aftershocks of financial setback. Whether it’s due to a layoff, a smaller workload, medical expenses or a change in family circumstances, the financial fallout of COVID-19 has been distressing.

Recovering from a financial setback, due to a pandemic or any other reason, is never easy; however, with hard work and the ability to look forward, it can be done. Here’s how.

Step 1: Assess the damage

Evaluate exactly how much financial recovery you need. Are you thousands of dollars in debt? Do you need to find a new job? What are the long-term financial implications?

Crunching the numbers and putting it all on paper will make it easier to take concrete steps toward recovery.

Step 2: Accept your new reality

Shock and denial are valid stages of grief for any major loss or setback, but for recovery to be possible, it’s important to reach a place of acceptance. You can vent to a close friend, express your feelings in a journal, de-stress with your favorite low-cost hobby and then let go. Constantly harping on what could have been will only drain you of the energy you need to move on.

Step 3: Outline your goals

Clearly defining your goals will make it easier to go forward. Are you looking to rebuild a depleted emergency fund? Find gainful employment? Pay down your medical bills?

As you work through this step, choose goals that are SMART:

Specific

Measurable

Attainable

Realistic

Timely

Step 4: Create a recovery plan

Your plan should consist of consecutive steps that lead to a life of complete financial wellness. Here are some steps you may want to include:

Trim your spending until you can spend less than you earn.
Build a small emergency fund to help get you through an unexpected expense.
Seek new employment or new income streams.
Start paying down debts.
Save more aggressively, with one eye toward your retirement and another toward a large emergency fund with up to six months’ of living expenses.

Step 5: Make it Happen

Put your plan into action! If you were careful to set goals that are SMART, you should be able to take the first steps in your plan immediately.

Debt Consolidation: Not A Silver Bullet, But Still A Good Idea

Using a personal loan to refinance your existing debt can make your debt more manageable. You’ll have one monthly payment at one interest rate instead of many smaller bills due on different days of the month.

Will personal loans work for you?

1. Have I fixed the debt problem?

Think about why you’re in debt. If a medical bill, job loss or some other temporary hardship describes your situation, the fact that you have a job or have paid the medical bill means you’ve solved the problem that caused the debt in the first place.

If, on the other hand, you accumulated debt by overspending on credit cards, a debt consolidation loan may not be the answer just yet. First make a budget you can stick to, learn how to save and gain responsibility in your use of credit. Getting a debt consolidation loan without doing those things first is a temporary solution that can make matters worse.

2. Can I commit to a repayment plan?

If you’re struggling to make minimum monthly payments on bills, a debt consolidation loan can only do so much. It’s possible that the lower interest rate will make repayment easier, but bundling all of that debt together could result in a higher monthly payment over a shorter period of time. Before you speak to a lender, figure out how much you can afford to put toward getting out of debt. Your lender can work backward from there to figure out terms, interest rate and total amount borrowed.

If you’re relying on a fluctuating stream of income to repay debt, it may be difficult to commit to a strict repayment plan that’s as aggressive as you like. You can still make extra principal payments on a personal loan, so your strategy of making intermittent payments will still help. You just can’t figure them into your monthly payment calculation.

3. Is my interest rate the problem?

For some people, the biggest chunk of their debt is a student loan. These loans receive fairly generous terms, since a college degree should generally result in a higher-paying job. Debt consolidation for student loans, especially subsidized PLUS loans, may not make a great deal of sense. You’re better off negotiating the repayment structure with your lender if the monthly payments are unrealistic.

On the other hand, if you’re dealing with credit card debt, interest rate is definitely part of the problem. Credit card debt interest regularly runs in the 20% range, more than twice the average rate of personal loans. Refinancing this debt with a personal loan can save you plenty over making minimum credit card payments.

4. Will a personal loan cover all my debts?

If you have more than $50,000 in credit card debt, it’s going to be difficult to put together a personal loan that can finance the entire amount. It’s worth prioritizing the highest interest cards and consolidating those instead of trying to divide your refinancing evenly between accounts. Get the biggest problems out of the way, so you can focus your efforts on picking up the pieces.

Debt consolidation doesn’t work for everyone, but it can do wonders for many people. The ability to eliminate high-interest debt and simplify monthly expenses into one payment for debt servicing can change a family’s whole financial picture. Gather your account statements and your paycheck stubs, and contact High Point Federal Credit Union today!

How Do I Give Myself an End-of-Year Financial Review

Q: With 2020 drawing to a close, I’d love to give myself an end-of-year financial review. Where do I begin?

A: Giving yourself an end-of-year financial review is a great way to start the new year with your finances in top shape. Here’s all you need to know about this end-of-year ritual.

Step 1: Review all your debts and create a payoff plan

List all of your debts and their interest rates. Have you made any real progress toward paying them off this year?

If your debt needs some help, you have two primary options for how to proceed:

The avalanche method. Focus on paying off the debt with the highest interest rate first. When it is paid off, continue onto the debt with the second-highest interest rate. Move through the list until you’ve paid off all debts.
The snowball method. Work your way through your debts, starting with the lowest-balance debt, and then move to the next, applying what you would have paid to the previous debt. Repeat until all are paid off.

Step 2: Automate your savings

Make savings easy by making it automatic. Give us a call at to set up an automatic monthly transfer from your checking account to your savings account. This way, you’ll never forget to put money into savings again.

Step 3: Review the progress you have (or haven’t) made on financial goals

Have you made measurable progress toward your financial goals in 2020?

Take a few minutes to review your goals, taking note of your progress and determining how you can move toward better achieving those you didn’t quite achieve.

Step 4: Review your retirement account(s) and investments

As you work through this crucial step, be sure to review the following variables:

Your employer’s matching contributions. Are you leaving money on the table?
The maximum IRA contribution limits for 2021. You will likely need to make adjustments.
Management fees and expense ratios for your investments. Fees should ideally be less than 0.1%.
Your stock/bond ratio and investing style. Do you want to make any changes?

Step 5: Set new financial goals for 2021

As you finish reviewing your financial progress for the past year, look forward to accomplishing greater financial goals in the coming year.

Set goals that are SMART:

Specific

Measurable

Attainable

Realistic

Timely

Wishing you a financially healthy New Year!