Do 0% Interest Credit Cards Have a Dark Side?

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If credit card interest payments were merely a matter of mathematics, 0% interest would be a no-brainer. Given a choice between paying interest or not paying interest, of course nobody would choose to pay, would they? Common sense says paying ZERO dollars in interest is the best possible way to borrow money. So, why should you think twice before agreeing to a 0% interest credit card or balance transfer promotion? Two words: Fine. Print.

All that glitters is not gold.

There’s a marketing proverb that says, “Sell the sizzle, not the steak.” And make no mistake, 0% offers are most definitely sizzle! If utilized properly, these promotions can save you money. But if you don’t pay close attention to the details found in the fine print of cardholder agreements, those offers could wind up costing you more than you wanted to pay (which is sadly, often the case). With so many credit card companies offering 0% interest cards and balance transfer promotions, it’s difficult to compile an exhaustive list of potential pitfalls. So, rather than trying to cover all the caveats, let’s focus on the features that, if ignored – could quickly take the shine off any promotional offer.

  • Transfer fees.
    In many instances, transferring a balance from one credit card to another involves a fee (usually ranging from 3-5% of the balance). Depending on the amount you transfer, this additional fee could significantly lessen your overall savings. Not every balance transfer promotion includes a fee, so do your research before you accept an offer. It’s never fun to discover unexpected fees after you’ve already committed to an offer’s terms and conditions.
  • Steep interest charges after the introductory period ends.
    0% interest is a good thing. But unfortunately, the adage is true. All good things must come to an end. Most of these promotions include a limited-time introductory period of 0%, after which, the remaining balance will begin accruing interest—often at a high rate. If you plan to pay off your entire balance during the introductory period, the transfer can be a huge benefit. However, if you’re planning to carry the balance forward (or if you forget to pay your balance off before the 0% ends), it’s best to know when the interest charges will start and how much they will be. Once again, reading that cardholder agreement and fine print is key. After the 0% introductory period ends, some of these credit cards can have an APR of nearly 30% – and if your balance isn’t paid off by this time, you could be charged that insanely high interest rate for not only what you have left to pay off, but what you transferred over in full in the first place. We can’t say it enough: before you open a 0% interest credit card, be sure you understand the terms and conditions in full.
  • Higher interest rates on new purchases.
    Be careful. The 0% interest rate on your transferred balance also rarely applies to new purchases. The major credit card companies are in business to make money, and interest charges are their primary source of revenue. By charging a higher interest rate on new purchases, credit card companies can offset the interest they’re missing over the course of promotional introductory period. So, before you start racking up charges above and beyond the balance you transfer, take time to know exactly how much interest you’ll be paying.

First Financial’s Visa Credit Cards offer benefits that include 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!*

Click here to learn about our credit card options and apply online today.

*APR varies up to 18% for purchases, when you open your account based on your credit worthiness. The APR is 18% APR for balance transfers and cash advances. APRs will vary with the market based on the Prime Rate. Subject to credit approval. Rates quoted assume excellent borrower credit history. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. No Annual Fee. Other fees that apply: Cash advance fee of $10 or 3% of the total cash advance amount—whichever is greater (no maximum), Balance transfer fee of $10 or 3% of the balance—whichever is greater (no maximum), 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, or attends school in Monmouth or Ocean Counties.

+ No late fee will be charged if payment is received within 10 days from the payment due date.

5 Tips for Homebuyers in a Seller’s Market

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Just because it’s a seller’s market doesn’t mean buyers can’t get their dream home. It may just take a mix of pre-planning, patience, and timing.

Here are few ways buyers can fast track their way into a new home:

Have your own real estate agent.

It may be tempting to think you can get a better deal working with the listing agent. That’s not necessarily true. Neutrality among listing agents means they can’t help one side over the other. So who is there to help you?

Set a realistic budget.

When you set a budget, make sure you include more expenses than just the monthly mortgage payment, down payment, and closing costs. Have you planned for utilities, insurance, Homeowner’s Association fees, lawn care, pest control, and more? Can you still fund your emergency savings account, college for the kids, and retirement?

Figure out what you want vs. need.

Do you want to be in a specific school district? Do you need a big backyard? It may mean compromising on other home wants such as hardwood floors or stainless steel appliances, which could be addressed later. What are you willing to compromise on? Having a clear idea will help in the homebuying process.

Get preapproved.

Want to show sellers you are a serious, qualified buyer? Take the extra step to be preapproved. A preapproval letter shows a buyer’s creditworthiness and ability to get a loan by the lender. But don’t stop there. Once preapproved, buyers should shop around to find the best deal. Don’t be afraid to review the different offers and negotiate with lenders to get the one that works with your budget.

Make a fair bid.

When there is a shortage of inventory, don’t miss out on your dream home because you failed to make a strong opening offer. If you find a home you love in the right location and price range, don’t wait to make an offer or try to lowball sellers. Buyers should be ready to submit a fair offer quickly, or they may risk missing out on the home altogether.

Looking to buy a home in the Monmouth or Ocean County area? If you have questions about the mortgage process or don’t know how to get started, we are here for you. Contact the Loan Department at 732-312-1500, Option 4 or learn more about First Financial mortgages on our website.

*APR = Annual Percentage Rate. Subject to credit approval. Credit worthiness determines your APR. Rates quoted assume excellent borrower credit history and are for qualified borrowers. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. Higher rates may apply depending on terms of loan and credit worthiness. Minimum mortgage loan amount is $100,000. Available on primary residence only. The Interest Rates, Annual Percentage Rate (APR), and fees are based on current market rates, are for informational purposes only. Rates and APRs listed are based on a mortgage loan amount of $250,000. Mortgage insurance may be required depending on loan guidelines. This is not a credit decision or a commitment to lend. If mortgage insurance is required, the mortgage insurance premium could increase the APR and the monthly mortgage payment. See Credit Union for details. A First Financial membership is required to obtain a Mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.

 

5 Inexpensive Ways to Keep Your Kids Busy This Summer

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Kids can be expensive. During the school year, everything from dance shoes to field trips, can feel like it costs an arm and a leg. Once school is out, your kids can sometimes be more expensive. If you’re looking to be frugal and still have fun, here are a few ways you can save and keep your kids busy this summer.

Throw backyard movie nights: Have a big TV or a projector? Add some cool yard lights and some blankets or patio furniture, and you’ll be ready to host every kid on the cul-de-sac. Or hold a family movie night outdoors, just yourselves.

Check out museums: Growing up, the word “museum” always seemed boring. But the museums they have now are far from dull! If your town doesn’t currently have one, here are some great options that may be within driving distance.

Cook something up: When the summer is heat is blazing, it’s always great to have things to do indoors. This is the perfect opportunity to teach your kids how to cook. Have them help prepare fun lunches and dinners, and one of these days you may be able to take a few shifts off from chef duty. Start with baking and you’ll be guaranteed to have some delicious treats around this summer.

Go to the park: Every town has a public park, and most of them have lots of things to do. There are also National Parks all over the country that can be educational and provide some exercise as well.

Head to the pool: A lot of neighborhoods have pools and if yours doesn’t, you probably know a friend or relative who does. Taking the kids swimming is a great way to allow your kids to burn off some energy, and also give you the chance to soak up some sun and relax.

Article Source: John Pettit for CUInsight.com

Are You Ready to Buy a Home?

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The transition from renter to homebuyer is a big one. Owning your own home gives you assurance that your monthly housing costs won’t go up, (assuming you get a fixed-rate mortgage), and that your rent won’t get jacked up when you are least expecting it.

Home ownership also comes with added responsibility. When something breaks in your rental unit, it’s a quick call to the landlord to get it fixed. Homeowners are always on the hook for both making and financing any repairs.

It’s a big financial leap to becoming a homeowner. Experts recommend asking yourself these questions before you start out on the house hunt:

Do you know how much you can afford?

Take the time to calculate how much home you can afford to buy. This isn’t the time to ballpark numbers. Overcommitting to a mortgage payment can leave you house poor, meaning there’s very little money leftover at the end of the month for other things.

Add up all your spending, including current rent, food, transportation and discretionary expenses like travel, eating out and entertainment. Don’t forget to include debt like student loans and car payments. Once you know how much you have coming in and going out each month, determine a number you can afford to spend on housing.

Generally, personal finance experts recommend aiming to spend around 28% of your monthly income on housing. Getting preapproved for a loan will also help give you a sense of your housing budget. But note that just because a bank agreed to give you a loan, doesn’t mean you have to (or should) spend that much.

Do you have a down payment?

You don’t need a 20% down payment to get a mortgage loan. But putting more down can work in your favor. It can help you get better loan rates, beat out the competition in hot housing markets, and will lower the amount of interest you pay over the life of the loan.

You can get a mortgage with as little as a 3.5% down, but anything less than 20% means paying private mortgage insurance (PMI), which will increase your monthly payment.

Working to save for a large down payment shows financial responsibility and gets you used to living on a strict budget.

Will you have money left over after closing?

Your bank account shouldn’t be zero after closing. You should still have an emergency savings fund that will cover around three to six months of living expenses, on hand.

In addition to the emergency fund, it is recommended that you have six to nine months of mortgage expenses available. First-time homebuyers are typically looking at older homes because of their lower price point, and they require more work. You should have a back-up fund in savings, in case the A/C or heater goes.

Is your credit in good shape?

You want to get your credit score as high as possible when shopping for a mortgage. The higher the score, the better the lending terms and rates.

A credit score of 750 and up is generally considered excellent and will make you the most attractive borrower.

Have you paid down other debt?

Your debt-to-income ratio plays a major role in the health of your finances.

You can calculate your debt-to-income ratio by adding up all your monthly debt payments and dividing it by your gross monthly income.

The general rule of thumb is your debt should not exceed 43% of your available credit, in order to take out a mortgage.

Where do you see yourself in five years?

If you don’t plan on staying in an area for more than a couple of years, buying a house might not make financial sense.

The huge upfront investment including the price of the home, plus the added expenses like taxes, closing costs, and escrow fees, might take a while to pay off.  Be ready to make a long term commitment to a home and area, if you are taking out a mortgage.

Looking to buy a home in the Monmouth or Ocean County area? If you have questions about the mortgage process or don’t know how to get started, we are here for you. Contact the Loan Department at 732-312-1500, Option 4 or learn more about First Financial mortgages on our website.

*APR = Annual Percentage Rate. Subject to credit approval. Credit worthiness determines your APR. Rates quoted assume excellent borrower credit history and are for qualified borrowers. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. Higher rates may apply depending on terms of loan and credit worthiness. Minimum mortgage loan amount is $100,000. Available on primary residence only. The Interest Rates, Annual Percentage Rate (APR), and fees are based on current market rates, are for informational purposes only. Rates and APRs listed are based on a mortgage loan amount of $250,000. Mortgage insurance may be required depending on loan guidelines. This is not a credit decision or a commitment to lend. If mortgage insurance is required, the mortgage insurance premium could increase the APR and the monthly mortgage payment. See Credit Union for details. A First Financial membership is required to obtain a Mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.

 Article Source: Kathryn Vasel for Money.cnn.com

 

4 Tips for Saving Money on Spring Painting Projects

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Painting is a popular spring do-it-yourself project, especially since it’s one of the easiest ways to refresh the appearance of your home. If you’re trying to sell, new paint can also improve your home’s appeal to potential buyers. Depending on the size of your project, primer, paint, and supplies can get expensive fast. To help you stay on budget, here are a few tips to help you choose paint, find good deals, and ultimately get the greatest return on the time and money you invest in your spring painting projects.

1. When choosing paint brands, compare key qualities.

There are scores of paint brands to choose from these days, ranging in price from $8 per gallon to more than $30. The price of some brands corresponds with their quality, but that’s not always the case. To choose the best paint for your project, you need to look at more than just the price tag. Here are five key qualities to look for:

  • Coverage: Many higher-end paints have built-in primers and get the job done in fewer coats than economy brands.
  • Stain resistance: Depending on what you’re painting, you may want to choose a paint with better stain resistance (for instance, high-traffic living areas).
  • Scrub resistance: Some paints dull when you scrub them, so if you’ll be using extra elbow grease on the walls, prioritize this quality.
  • Paint pros say acrylic latex paints are more resistant to the effects of temperature and moisture over time than oil-based alternatives.
  • Volatile organic compounds (VOCs) are the solvents paint releases into the air as it dries. A typical paint has about 150 grams of VOCs per liter; low-VOC paint has 50 g/l or less. If you’re concerned about paint fumes, this is something to pay attention to.

A great place to find all this information in one place is Consumer Reports, but you’ll also find useful reviews on non-biased handyman and do-it-yourself sites.

2. Consider what you’re painting.

Deciding which of these qualities to prioritize is easier when you keep in mind what you’re painting. Areas that won’t be seen or trafficked don’t require top-of-the-line paint, but if you want the paint job to look professional and last longer, you may want to spend a little more.

Also, consider the color change you’re making. If you’re painting over a very dark color, it could mean the difference between two coats of a high-quality paint versus three to four coats of an economy paint.

3. Use expert tips to make inexpensive paint look spectacular.

Even though the quality of paint you use matters, how well you paint can also make a huge difference. Failing to prep your surfaces properly and follow good painting techniques, can make even the most expensive paint look bad. On the other hand, using expert tips with mid-range paint can result in a professional looking job. If you’re an amateur painter, look for expert tips or — better yet, get a seasoned pro to help you.

4. Find deals on paint.

Investing in quality paint won’t be cheap. Stretch your budget a little further by looking for coupons (DIY retailers like Home Depot run regular sales). The best time to shop for paint is in the months of May, July, and September, right before the major summer holidays.

If you’re not picky about the shade of your paint, check out the miss-tint section at retail stores, where you’ll often find $35 gallons discounted as low as $15. There’s nothing wrong with this paint – it just didn’t turn out the way a customer expected.

You might be surprised to learn that you can get even get paint for free from recycling centers, where businesses tend to drop off excess paint from their renovation projects. Even if the paint is a few months old, the shelf life of paint is much longer – up to 8 years!

Like many things in life, what you put into painting is what you get out of it. Even if you’re just trying to spruce things up for your own benefit, it doesn’t hurt to use these tips to get the best possible results and save a little money in the process.

Article Source: Jessica Sommerfield for moneyning.com

The Pros and Cons of Buying Out Your Car Lease

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If you leased your car and really enjoy driving it, it’s tempting to consider buying it when the lease ends. Keeping your car has advantages and disadvantages you should consider before you sign on the dotted line.

Advantages of Buying Your Leased Car

There are a few reasons to buy your car:

  • Unlike another used car, you know this vehicle’s history. You are the only one who has owned it, so you are aware of past accidents and maintenance.
  • In theory, you have already paid for the depreciation of this vehicle as part of your lease. Purchasing it may be more cost effective than leasing a new one.
  • After you’ve paid off your car, you’ll own the vehicle.
  • If you love your car, this option allows you to continue driving it after your lease is up.

Disadvantages of Buying Your Leased Car

A few reasons this might not be the best choice for you:

  • You have limited room to negotiate on the price of the vehicle and may not get as good a deal as you would on another used car.
  • You may have to pay a lease purchase option fee if your contract specifies it. This fee can be a few hundred dollars, depending on the terms of your lease.
  • The cost to buy out the lease may be more than your car is actually worth.

Deciding If You Should Buy Out Your Lease

Like any major financial decision, it’s important to think carefully about buying your leased vehicle. Follow this process to help you make the choice that’s right for you.

1. Find the Residual Value in Your Lease Agreement

When you lease a car, you are paying the car company for the predicted depreciation of that vehicle. Your monthly lease payment includes this depreciation and a fee that goes to the leasing company and covers administrative costs. At the end of your lease, you will have paid the car down to its “residual value.” This residual value is the car company’s prediction about what the car will be worth at the end of your lease term, and it’s usually the starting point for price negotiations when you buy out your lease.

According to Bankrate, car companies are generally accurate when predicting residual value. However, knowing this residual value is an essential part of deciding whether to buy out your lease. Look for the residual value in your original lease contract.

2. Learn the Market Value of Your Car

Now that you know the residual value, you need to compare that figure to your car’s market value. There are several sites that can help you find used car values. Simply input your car’s make, model, and year and provide additional information about mileage and condition. Be sure to specify that you want the market value, rather than a trade-in estimate. It’s a good idea to get value estimates from multiple sources so you have an accurate idea of how much your car is worth.

3. Compare the Market and Residual Values

If the car company was correct in its prediction, your car’s residual value will be very close to its market value. However, there’s sometimes a significant difference in these two numbers. This comparison can help you decide whether to buy your car.

  • If the residual value is greater than the market value, your car is not worth as much money as it would cost to buy out your lease. Unless you love your car, you should walk away.
  • If the residual value is less than the market value, buying out your lease may represent a great deal. You should consider this option.
  • If the residual value and market value are fairly similar, you’ll need to take other factors into account when making your decision.

4. Take Other Factors into Consideration

Now that you have a pretty good idea of the financial situation regarding your lease buyout, you’ll need to consider a few more things:

  • Factor in the purchase option fee if there is one. Check your lease agreement to see if you have this fee and how much it will add to the cost of your car.
  • Think about the condition of your vehicle. Have you maintained it regularly? Has it been in any accidents? If it isn’t in great condition, you may be better off shopping around.
  • Consider reliability. Have you had any trouble with the car? Does it have a good reputation? When buying any used car, reliability is a very important factor.
  • Think about mileage. Have you gone over the mileage limits in your lease? If you have, this may reduce the market value of your car without changing the residual value. In addition, you’ll need to pay the fees specified in your lease for going over the mileage limits.
  • Figure out the average annual cost to own your car. This figure will change as the car ages, and if you’re comparing a lease buyout with a new lease, it will be important information for you to consider.
  • Give some thought to the emotional aspects of the decision. Do you really love your current car? If so, you may be willing to pay slightly more than market value for the privilege of continuing to drive it.

5. Do the Math

Finally, sit down with a car payment calculator and figure out exactly how much you’ll need to pay each month if you buyout your lease. Talk to your local credit union to see if they can help you find the best interest rate on a car loan or lease buyout loan. Think about the purchase option fee, the residual value, your down payment, and your interest rate. Compare this figure to leasing a new car or buying a different used vehicle.

Examples to Consider:

Each situation is unique, and it’s important to go through the process of making this important decision for yourself. However, it can help to consider examples of situations where a lease buyout is clearly a good idea or a bad idea.

Highly Desirable Car

Some cars are especially in demand due to factors the car company didn’t predict. For instance, if gas prices go up and your car is extremely fuel efficient, it may be worth more money as a used vehicle. This means the market value for your car will be extra high compared to the residual value, and buying out this lease is a good idea.

Vehicle With Low Miles

Perhaps you have a car you didn’t drive often. You were allowed 36,000 miles as part of your three-year lease, but you only drove 10,000 miles. The residual value for this car was based on it being driven 36,000 miles, but a car with low mileage like this may be worth considerably more than its residual value. Provided all other factors are in agreement, buying out this lease would be a great decision.

Car Prone to Break-Downs

Generally, your car will be under warranty during the lease period, which means that if it breaks down, you don’t have to pay for major repairs. However, once the lease period ends, your factory warranty may too. If the car has been breaking down while it’s still fairly new, it’s likely to cost you a great deal of money in future repairs. Even if the residual value is lower than the market value, buying this car is probably a bad choice.

Make the Best Choice for Your Situation

Deciding whether you should buyout your car lease involves doing your research and carefully examining your lease contract. If you give appropriate thought to this decision, do the math, and take emotional factors into account, you’ll make a choice that is financially and practically best for your unique situation.