Tag Archives: First Financial Federal Credit Union

Will Paying Off My Car Loan Help My Credit Score?

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Credit-Score-325x222There are a lot of different kinds of credit out there. One of the most common forms is the auto loan. Though we are all itching to pay off our long-term debts and own something free and clear, there are a few precautions to know about before racing to get that statement to read zero.

To determine if paying off your car loan will help your credit score, it is important to understand several factors that go into your credit score.

Multiple facets of FICO

First, it’s important to understand the components that make up your FICO credit score. There are five key elements that are used to makeup that all-important number:

  • 35% of your score is weighted toward your payment history
  • 30% is weighted toward the amounts owed on your credit cards
  • 15% is devoted to length of credit history
  • 10% is generated by new credit
  • 10% comes from types of credit used.

The relative importance of each category depends on the consumer themselves.

If you have an auto loan that you’ve been diligent about paying, you’ve benefitted from that 35% devoted to payment history. By paying it down, you are also contributing to that 30% element of amount owed, since theoretically you are decreasing your credit utilization rate. However, if you’ve been increasing the balance on other forms of credit, that may cancel out some of that good behavior.

If you have a 3 to 5 year car loan, you also have length of credit history going for you. The new credit category doesn’t really apply in this scenario.

Types of Credit

But what’s interesting is the 10% weighted to types of credit used. On a positive note, a car loan alters the types of credit you have, assuming you have things like credit cards or even a mortgage.  However, if you pay it off, you may eliminate this type of installment loan as a type of credit used (this is a very different type of credit than a credit card).

Your ability to pay installment accounts, in addition to others, demonstrates that you are responsible and diligent enough to plan your finances around all these different types of credit.

The Biggest Factor

Weighing against all this, however, is a large factor that requires you to look more holistically at your credit lifestyle. A general rule of thumb is that if you can pay off a debt of any kind, in full, do so (with the exception of a mortgage).

3 Ways Consumers Can Fall Victim to Identity Theft

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Identity-Theft-CreditThere’s really only one way to protect yourself from identity theft. Stop spending money and trust no one. It’s pretty easy.

OK, it isn’t easy. Talk to enough victims of identity theft, and you start to realize that it really can happen to anyone – and sometimes, no matter how careful you are, it can happen to you. That’s why it helps to study how people’s identities were stolen and learn from it. Here a few ways identity theft happens along with strategies to prevent it.

1. Information is out there for anyone to see. Of course you don’t want to leave credit card statements lying around in public places, and when you discard your financial paperwork, it’s smart to run it through a shredder. But sometimes when you’re out in the world, your information can’t help but become a little exposed. You type a PIN number onto a pad and realize someone might have been looking over your shoulder. You hand your credit card to a waiter, who disappears for a while with it. Or you’re in a crowded store, practically rubbing elbows with an identity thief.

Sarah Dugo, co-founder of College Savings Dolls, got an unwanted education on identity theft when she was at a crowded Best Buy and bought a big-screen TV for the Super Bowl.

“The cashier took my credit card and delivery information, but they left it all on the computer screen and walked away from the check-out area. I was at one of the checkouts in the smaller section of the store, not the main front exit,” Dugo says.

It turns out that the thief used Dugo’s credit card information to order the same big-screen TV – and had it sent to his address. “That’s how they caught him,” Dugo says. Still, the crook did enough damage to her credit report and credit score that it took two years for her to straighten it all out.

She was in one of those situations where the employee ringing her up was interrupted by a customer before finishing her transaction. Dugo isn’t positive, but she thinks that’s how someone was able to see her information and either jot everything down or snap a photo of the computer screen.

Dugo isn’t sure what she could have done differently, but she figures that if she is ever shopping on another crowded weekend, she may make her purchase at the main entrance, where department sales clerks aren’t likely to be pulled away from the register.

2. You put your wallet or handbag in a vulnerable position. “Several years ago, I was shopping at a Safeway near my house. I was in the shampoo aisle and a well-dressed man asked me to help him find a product his wife asked him to get,” says Caren Kagan Evans, CEO of ECI Communications. While Evans pointed to the top shelf to show him where the product was, another man took Evans’ wallet out of her handbag, which was in the top part of her cart.

“I didn’t realize my wallet had been stolen until I went to check out,” Evans says. “I ran home, contacted the credit agencies, contacted my bank and of course contacted my credit card companies.”

Unfortunately, her Social Security Number was printed on her health insurance card, so the thief now had that information as well.

“This was a large group of people that were doing this kind of thing up and down the East Coast,” she says. “In a matter of just an hour, the team had used my cards at gas stations, Target, and other locations. They also were able to get checks printed since they had my social, and thousands of dollars disappeared from my checking account.”

Evans says she was lucky because she got her money back and was able to fix everything relatively quickly. “I have heard stories of people who had their identities stolen where the perpetrator took out mortgages on properties, and stories of people who literally spent years getting everything straightened out,” she says.

As for where Evans went wrong, she says it is easy to look at the situation now and realize her handbag was vulnerable. It was in the top part of the cart, and she was never planning on leaving it out of her sight. So you could take away from this story that you should never trust a stranger, even one who simply wants some help finding shampoo – or, better yet, remember to keep your eye on your purse or wallet since somebody else otherwise will.

Evans also says she no longer signs her credit card receipts, reasoning that a thief can study the receipt and later fake her signature. Sales clerks don’t push her to sign for merchandise, she says – they’ll just ask to see her identification. “And when they do, I thank them,” Evans says. “I appreciate it.”

3. You trusted someone a little too much. Everyone knows the importance of vetting people who work for you, and yet you can never say it enough.

Arthur Gregory is a serial entrepreneur. He’s a partner in two restaurants and owns EatUsa.net. The printer who made his menus overheard Gregory tell a colleague that he was looking for a bookkeeper.

“I do that,” the printer said. And Gregory, who liked how his menus were made, figured he’d give him the job.

As it turns out, the man was trustworthy when it came to menus, but not when it came to bookkeeping. “He stole my identity,” Gregory says.

And he didn’t just go out to a department store and buy things in Gregory’s name. He took out corporate credit cards in Gregory’s name and tried to take over his business, contacting vendors and doing a ton of damage. He now keeps all of his personal information in a lock box, so not even his current bookkeeper can see it.

Gregory, unfortunately, is also a case study in why it’s impossible to prevent identity theft. Even if you were willing to live out the rest of your life on a deserted island or in a cave to wall yourself off from problems, you could still discover you’re already a victim of identity theft.

As you can see, identity theft is an immense problem throughout the world and only becoming more and more frequent. As previously stated, there is no way to completely prevent identity theft, but there are certainly ways to minimize your risk and protect your finances.

Article source courtesy of Geoff Williams of US News.

How to Plan for Your Child’s Financial Future

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Piggybank family isolatedIn this economy and time period, every parent shares a mutual fear. You think to yourself, “What if my son or daughter isn’t financially stable in their lifetime?” You may be nervous that your child will not be able to pay off college loans or purchase a home when they are older. You might also be worried that your child will struggle to meet car payments, or that they won’t be able to save up money in case of emergencies or for when they grow older.

Read the tips below to learn how you can relieve your fears and help prepare your children for their financial future.

  • Teach financial responsibility. It’s natural to fear that your children will take on too much debt or be unprepared for financial emergencies when they reach adulthood. But you don’t have to wait until they make a mistake to prepare them to be financially responsible. It’s important to remember that it’s never too early to start talking to kids about money and saving. When your kids are young, you’ll want to start with simple conversations about money (sharing tips about your purchase decisions with them when you shop), and as they get older introducing more complex money matters (such as the value of having an emergency fund and saving for unexpected events).
  • Use an allowance as an educational tool. An allowance is an ideal way to teach about responsible spending and saving. Provide your children with the opportunity to save and spend their allowance as they please (with some guidance). This flexibility will allow them to learn early on that spending money as fast as they earn it can have consequences. Depending on the age and maturity of your child, you may choose to share with them a financial mistake you made in the past and how you recovered from it.
  • Plan for college. As college tuition increases, many parents worry about how their children will afford to attend, or how you as a parent can possibly save enough to pay for your child’s college education. As parents, consider beginning to save into a 529 Plan early in your child’s life. When it comes time to make college decisions, help your child evaluate the tuition and other college expenses (travel home, club dues, entertainment costs, etc.) for each college he or she is considering. Make sure to educate yourself on current student loan lending practices and options and help your child determine a realistic amount of student loan debt he or she can take on if necessary.
  • Prepare for life’s big purchases. Even for young adults with a responsible mindset, a lack of financial knowledge can be detrimental for large purchases like a car or home. As a parent, you can offset this concern by being open to discuss these things as your child grows older and begins managing their own money.
  • Reframe your money mindset. Changing the way you think about money can go a long way to alleviating your financial fears for your children and, at the same time, help your children learn to make smart financial decisions. The real question you should ask isn’t, “Can we afford this?” but rather, “Do we need this, and if so, is this the best deal we can get on it, and should we wait and buy it when we have saved the money for it?” These may seem like small differences, but they aren’t. How our children think about money will make a huge difference in their ability to wisely manage it and consequentially will have a huge impact on their quality of life.

Visit First Financial’s website resources tab to view a list of free financial calculators and resources that you and your children can utilize to help save for college and future big ticket purchases like a car, home, and how to save money.

The 10 Commandments of Saving Money

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saving moneyThere are thousands of savings tips that can help you grow your nest egg. Whether they involve brown-bagging it to work or using coupons at the supermarket, these are generally useful savings habits that can give you a leg up on ending each month in the black.

But there are only a few super-sized savings rules that can truly transform your finances. Rules so big they deserve to be etched in stone. So, here are the “The Ten Commandments” of saving.

1. Thou Shalt Know Where Thy Money Goes

When generals go to war, they need an overview of the battlefield. Maps, exploration and data show them where the enemy is susceptible. In the battle for savings, the first thing you have to know is where your money is going.

Sites like Mint.com allow you to connect all your bank accounts, credit cards and loans to cloud-based software so you to track your finances on one screen, in real time, with just the click of a button. They also analyze your expenses and highlight areas where you might be wasting money. Best of all, it’s free.

2. Thou Shalt Eliminate Debt with Extreme Prejudice

Debt is bad, but it’s the interest on that debt that’s like kryptonite to your savings goals, and the sooner you eliminate it, the sooner you can become a savings Superman.

Moving debt from high-interest instruments, like credit cards, to lower-interest instruments, like a line of credit, is a start. Consolidation loans can be a help as well, but the easiest way to get out of debt fast is to take the interest expense you save and put it directly toward your debt’s principal amount.

First Financial’s Visa Platinum Cash Plus Credit Card has one of the lowest APRs around! It’s a good idea to check the APR on your current credit cards to see if it’s time to switch.  You can apply for a balance transfer by stopping into any branch or by calling 732.312.1500, Option 4.*

3. Thou Shalt Read the Fine Print

Most people would be shocked at the amount of money that they waste on service charges, convenience fees and annual dues hidden in financial contracts. If that low-interest credit card charges you $99 annually no matter if you use it or not, is it really that great of a deal?

Make sure if you transfer a balance to a lower-interest credit card that there is not a transaction fee attached. And if you rarely or never use that credit card with the annual fee, think about applying for a card that better suits your financial well-being.

4. Thou Shalt Pay Attention to Timing

At the risk of sounding like a ’60s folk-rock star, to everything there is a season, and waiting for the right season to purchase big-ticket items can save you a bundle. For example, car dealers will discount their inventory when the new model year arrives to free up room on their lots, so If you are in the market for a new car, that’s the season to buy.

Many big-box retailers and department stores have semi-annual sales where you can pick up appliances, electronics and home goods at a discount. The key is to fight against the urge for instant gratification on your purchases.

5. Thou Shalt Keep an Eye on Interest Rates

Even if you are able to pay off your credit cards and loans, the one debt most people can’t pay off is their home mortgage, which is why you should watch interest rates. When interest rates move down, it can be an opportunity to refinance your home loan and save money on your monthly mortgage payment.

But remember, if you just take the money you save and spend it, you’re not saving at all. Earmark the difference between your new mortgage payment and your old one for your bank account, or if you plan to live in your home for the life of the loan, put the extra toward your principal and own your home sooner.

6. Thou Shalt Find Money in Thy House

Most people would be surprised to learn just how much money they have laying around their house. Those books you’ve already read can be sold on Cash4Books or Amazon.com, and your old phones and mobile devices can be sold to companies like Gazelle.

Cleaning out the clutter in your home doesn’t just feel good but provides you with an opportunity to feed your piggy bank by having a garage or yard sale. And what about those figurines you inherited or your comic book collection? Do you still really want them? If not, try listing them on eBay.

7. Thou Shalt Use Technology to Find Deals

The Internet makes saving money so easy that your grandmother would likely throw her coupon box at your head if she knew. Sites like Groupon and Living Social will send deals on goods and services in to your inbox, and apps like Out of Milk can alert you to store sales just by driving by them.

The Internet also is a great resource for finding free activities for you and your family to do on weekends, holidays and school breaks.

Subscribe to our First Scoop Blog and receive free, fun financial education straight to your inbox – at the beginning of each month we post a budget-friendly activity list for that month in Monmouth and Ocean Counties, NJ!

8. Thou Shalt Not Forget to Prioritize Your Retirement

This is a tough one, because it’s hard to save money now that you don’t expect to use for 30 or 40 years. But like it or not, there is going to come a time when your earning years are over and we will all need a retirement fund to bankroll the golden years. So if you don’t want yours to be bronze years, you have to make retirement saving a priority.

The good news is that you have many years to accumulate those funds and to let them grow, which means that small amounts of savings directed toward it can go a long way. For example, you can take a percentage out of every saved dollar, say 25 percent, and earmark it for your retirement. This is an easy and painless way to create both a short-term and long-term savings fund.

To set up a no-obligation appointment with our Investment & Retirement Center to go over your retirement and investment portfolio or to get started with one, call 732.312.1500 or email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com.**

9. Thou Shalt Not Try to Keep Up With the Joneses

A huge part of winning the saving game is changing your mindset about how you think of money and what its function is. Too often we get caught up in the game of keeping up with the Joneses and buy things we don’t really want — and certainly don’t need — just to keep up appearances.

What many people don’t take into account is that that boat, RV, ATV, third car or giant flat screen that their neighbor bought probably comes with a loan or a high-interest credit card payment. Before making that next impulsive purchase, ask yourself if you really want it and if it will bring you that same warm fuzzy feeling that a full savings account will.

10. Thou Shalt Act Like Thy Don’t Even Have It

We can’t spend what we don’t have, so the more you act like you don’t have it, the more you will be able to save it. Have retirement and college savings funds automatically deducted from your paycheck before you ever see it. Schedule a “secret” payment from your checking account to your savings account each week.

When you come across found money — like a rebate, an overpayment refund or even $20 in your pants pocket — just act like you never had it and put it right into your savings. With practice, you can get pretty good at this, so much so that if you have an unexpected windfall — say from an investment or an inheritance — you’ll forget it even happened. Only your savings account will know.

*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.

**Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

How to Save Money By Simplifying Your Life

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save-money-travel-photo-ccNearly half of households in the United States are “liquid asset poor,” meaning they have less than three month’s worth of savings in the bank, according to a report this year from the Corporation for Enterprise Development, a nonprofit that tracks household financial security. Surprisingly, 25% of those who are considered “liquid asset poor” are in the middle class with earnings of $56,113 to $91,356 annually. What’s even more surprising is that 89% are employed.

Statistics like these might make you wonder how we got here. The fact is, modern life has become more difficult and complicated than ever. We not only have more inconveniences and responsibilities than previous generations, but we also have more bills to pay. We work more, relax less, and spend most of our time planning for the future instead of enjoying the present. Everything costs more than it did generations ago, which is another reason so many Americans are living paycheck to paycheck. And when you’re living a hand-to-mouth existence, it can be next to impossible to break the cycle.

Breaking the Cycle in 5 Simple Steps

But what if someone told you it didn’t have to be that way? What would you do if you discovered that merely simplifying your life could help you save and prepare for a brighter future? The truth is, a simpler existence might be exactly what it takes to transition from a lifestyle of struggle into one where you’re able to enjoy life a little. It may not be easy, but change might just be within your reach.

Here’s how:

  • Pare down your possessions. If you’re struggling to keep up and feeling bogged down by life’s ups and downs, it might be time to lighten your load. The truth is, many of the belongings that bring you joy could also be a source of stress either because they require upkeep, take up too much space or come with additional financial costs. So, instead of holding on, figure out what you can sell and take the necessary steps to do so. You’ll not only simplify your life, but you’ll also rake in some extra cash in the process.
  • Cancel unnecessary services. Many monthly bills are non-negotiable, including things such as utilities, insurance, mortgage or rent payments, and transportation costs. But the rest? You can typically do without it. If you really want to simplify and get ahead, consider canceling services that aren’t necessary. This could include things such as cable television, expensive gym memberships (when there are many more affordable monthly plans out there), pricey cell phone contracts, or other unnecessary monthly subscriptions (magazines, movie rental/streaming services, etc.). Eliminating or cutting even a few of your monthly expenses can make a huge difference in your bottom line over the months and years. Plus, who doesn’t want fewer bills to pay?
  • Pay down debt. If you’re like most people, you have a few lingering debts from the past. The bad news is, those monthly debt payments might be part of the reason you’re struggling. They might even mean the difference between mere survival and getting ahead. Unfortunately, the only real way to escape the grasp of your debt is to make a commitment to become debt-free. Use the money you’ve freed up by paring down your possessions and eliminating unnecessary services to work toward becoming debt-free once and for all. It may take a while, but it will be worth it.
  • Make a commitment to save. When you’re living paycheck to paycheck, one surprise bill or emergency is all it takes to knock you completely off track. That’s why it’s absolutely crucial to begin saving for the future and for any unexpected expenses that might arise. Saving money might seem like a lofty goal, but it can be done if you make the commitment to never give up. Your future self will thank you.
  • Make it automatic. If you’re worried you’ll fall off the savings wagon in a hurry, the best thing you can do for yourself is make all savings automatic. This generally means setting up an automatic account transfer on payday or at the end or beginning of the month. Making it automatic helps you accomplish your savings goals in two ways: First, it ensures you’re saving on a regular basis by forcing you onto a savings schedule. Second, it forces you to live on less than what you earn, which is required if you truly want to get ahead and stay ahead.

It’s true that modern life has become burdensome and overly complicated in some ways, but it’s also true that our decisions often make it worse. Fortunately, the key to escaping a lifetime of struggle is often within reach if you’re willing to look hard enough. All it takes is a fresh perspective, a willingness to live on less, and the fortitude to make it happen. A simpler and more prosperous life can be yours if you want it.

*Click here to view the article source by Holly Johnson of US News.

5 Budget Killers You Can Avoid

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budgeting-money-to-conquer-debtCreating a budget is the first step in taking control of your finances. Sticking to your budget is another challenge altogether.

Even when you believe you have factored in every cost you may encounter by week, by month or by year, somehow you end up needing more money than you allocated – right? If this sounds like you, you are likely encountering a budget killer (or several). Below are some of the most common costs that can cause you to veer off your budgeting course.

1. Account Maintenance Fees: Some big bank accounts and credit cards tack on fees if you don’t maintain your account or meet specific requirements. Some charge you extra if you don’t maintain a certain balance, if you write too many checks, or if you don’t make enough transactions. These can add up quickly. Make sure when choosing an account or credit card, you read the specifics of your account agreement carefully. Look into which checking accounts and credit cards offer services that fit your lifestyle.

Be sure to check out the variety of flexible Checking Account options that we offer here at First Financial. Plus, if you’re on the hunt for a great new maintenance-free credit card with rewards, click here to learn more about our low-rate Visa Platinum Cash Plus Credit Card and apply online.

2. Subscriptions: While seemingly low monthly fees can be attractive, subscription magazines and online services (think Netflix, Hulu, etc.) add up. These costs are hurting your budget if you are not using the services or if you could find them elsewhere online for free. Eventually, these just become another add-on to your monthly payments so it’s a good idea every so often to re-evaluate whether yours are worth keeping.

3. Credit Card Interest: Credit cards have several attractive features: allowing you to buy now and pay later, providing cash back, and helping you earn points toward a new car, vacation or night out. Paying installments on your purchases over time may appear to be a great way to buy all your monthly and superfluous purchases. However, high interest rates add up over time if you carry a balance and you can find yourself deep in debt before you know it. You may think you are paying off your purchase when all you are doing is treading water by paying off the interest. To avoid this, it’s important to know the interest rates of your credit cards, pay off your balance in full every month, and save before you purchase. Carrying a lot of debt can have longer-term implications on your credit scores too.

Did you know that our Visa Platinum Cash Plus Credit Card has one of the lowest interest rates around and offers rewards?* It’s a good idea to check the APR of some of your current credit cards to see if it’s time to switch! You can apply for a balance transfer by stopping into any branch or calling 732.312.1500, Option 4.*

4. Excess Phone, Cable & Utility Bills: Many households are paying hundreds of dollars for TV, Internet, cell phone, and utility expenses each month. No matter how comfortable these tools make us, they are taking up valuable space in our budgets. Look through your bills carefully and try to scale back from services you aren’t using or do not need to use, from running the air-conditioning while you are at work to paying for a DVR on a second TV you never even watch. Also, be sure you are not paying for a level of service you don’t need. If these alterations don’t bring a big enough impact on your budget, consider alternatives like prepaid phone services and switching cable providers.

5. Convenience Fees: Certain businesses tack on “convenience fees” when you utilize their goods or services as a way to make up any added expenses that can incur during your transaction. Be wary of these types of fees before you make various transactions, to see if there is a less expensive way for you to do so.

Having an emergency fund can be a big help when you come in over budget. This money can save you from stress when you have fallen victim to these and other budget killers. It’s a good idea though to deal with the root issue instead of repeatedly ruining your budget and having to dip into your emergency fund. If you do have to use that money, it’s important to replace it and frequently evaluate your budget to match your changing lifestyle.

Article source courtesy of Fox Business.

*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.