Three Things To NOT Use a Credit Card To Pay For

Credit cards can be valuable tools to help cover unplanned expenses and can help really boost your credit score when used correctly.  At the same time, though, credit card debt can spiral out of control easily leading to a damaged credit score, a lot of stress, and hefty interest on a large balance.  Here's three things to avoid using your credit card to pay for:

1.     Down Payments – If you are looking at a large purchase that requires some sort of down payment, it’s best to opt for your own cash instead of a credit card or cash advance.  With purchases that require down payments, you are likely going to have a loan with a monthly payment and interest already, so paying interest on the down payment too only hurts you in the long run. 

2.   College Tuition – College debt is a very real situation for many students, but avoiding credit cards as part of that debt will help you graduate to the best financial situation possible.  Opt for student loan options that typically have lower interest rates, more manageable monthly payments, and offer the flexibility of waiting until after graduation to begin repayment. 

3.  Special Events – Whether it’s a big family vacation or a wedding that you are faced with financing, take a look at other finance options before swiping that credit card.  Don’t damper your special event from the get go with the interest rate that comes along with many credit cards.  If you don’t have the cash to pay for that vacation or wedding, look at other ways to finance like a secured fixed rate loan or even a home equity option that could give you a clearer repayment plan and often much lower interest rate.

A best practice on using credit cards is to only use them to purchase items that you know you can pay off in full.  We know that can sometimes that can be easier said than done though, so if you find yourself in a credit card situation that you aren’t sure how to handle give Honor a call.  Debt consolidation and balance transfer options might be an option that your local credit union, like Honor, can offer to make credit card repayment a realistic and manageable goal. 

Don’t forget to follow us on twitter @honorcu and let us know what you want to hear about next week using #askhonorcu! 

Money Savvy Tips For Recent Grads

 

If you’re a recent grad, you’re probably basking in the glory of wrapping up your school career, earning your degree, and jumping headfirst into the real world. But with that real world comes the jolt of real financial responsibilities. Here are some tips to help get you through that initial shock of pure adulthood.

1.      Begin paying your student loans!  Most student loan lenders give you six months after your graduation date to begin paying back student loan debt.  If you need this time to get settled and find a job, of course take it.  But if you have a job lined up and find yourself with a little extra cash each month, slap it in your student loan!  You can start getting that principal balance down little by little so that when that six month grace period is up you are in even better shape than you would have been otherwise!

2.      Keep your expenses as low as possible! Just because you graduated and may have a job right away, doesn’t mean you can now go out and purchase that brand new car you’ve been eyeing up. Also, don’t feel like you need to take on big expenses or purchases right away. If you don’t have to move out of your parents’ house yet, don’t! If you can stick it out in your shabby little apartment for the time being to save a couple hundred bucks a month, do it! This is a great time to start socking away some cash to start building on your savings account.

3.      Ask for help! If you’re struggling to make your payments on your loan, car, credit card, etc., or you need help figuring out a game plan for your budget, ask for help. Swing by your local credit union, explain your current financial situation, and we can help you come up with a plan.

The sooner you get your financial situation in check after graduation, the easier the real world will be.

Don’t forget to follow Honor on Twitter @honorcu!  Tweet us and let us know what you want to hear us talk about on Mason Jar Monday next week using #askhonorcu!

To listen to 97.5 Y-Country’s Wild Bill and Honor’s Scott McFarland talk about getting your budget in check after graduation, listen to the Mason Jar Monday episode below.

You Got Accepted To College...Now How Do You Pay For It?

As Youth Month continues and the school year approaches an end, many students (and parents) are already looking ahead to next fall and the tuition that comes with it.  If you or your student is headed to college, here are a couple tips on paying for it:

• Scholarships – This sounds like a no brainer, but make sure you look at all the scholarship options available that you may qualify for!  Your high school counselor is often a great first resource for a list of local scholarships, like Honor’s Community Commitment Scholarship for example.  Every spring Honor awards ten $1,000 scholarships to graduating seniors (we’ll be announcing winners soon!), and many other businesses or organizations may be listed at your high school with scholarship options, too!  Websites like scholarships.com or finaid.org/scholarships are also great resources.  You will be surprised what a little bit of effort and research can get you as far as scholarship options!
• Student Loans – There is approximately one TRILLION dollars of outstanding student loan debt in the United States.  $864 billion of that is federal student loans - that means it is backed by the government.  The other $150 billion is privately funded student loans - not backed by the government¹.  Federal student loans typically provide more benefits than private loans, such as fixed interest rates, no payments until the student is no longer attending class full time, and in many situations no required co-signer.  The Federal Student Aid website is a great resource when comparing federal loans to private and can save you time and confusion when determining the best option for you.
• Other Loan Options – Home Equity loans or personal loans through your local credit union may be another solution to assist with school expenses.  If you just need that little extra to help with your child’s textbooks, for example, a personal loan or home equity may be a good option.  Honor can help you with all of these options, and more information on which route will work for you is at our website.  You wouldn’t have the option to defer payments until your student graduates like the federal student loan, but you may qualify for a lower interest rate than another student loan option saving you money in the long run.

Hear Wild Bill and Honor's Scott McFarland discuss paying for college in this week's Mason Jar Monday here!

Comment on this post, or follow us on twitter @honorcu and use #askhonorcu to get involved! You can also comment with the topic you want to see discussed next week! It's your money, and we want to talk about things you care about!

¹ Source: http://www.asa.org/policy/resources/stats/