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Meal Planning on a Budget

The beginning of a new year is a great time to change up your diet in a way that fits your budget. Meal planning is popular among those who desire to eat healthy while maintaining a healthy budget. While there are many resources available for recipes, we have a few tips on how to make the most of your meal planning options.

Plan your shopping trips and meals in advance.

Take some time to look at the grocery store circulars or online deals to see what is on sale for the week. Once you know what meats and seasonal fruits and vegetables are being offered at a good price, you can research recipes to maximize your meal planning options for the season. These prices tell you how much they are by amounts so you can compare with your recipes to determine your budget before you’re in the store.

Check out meal planning resources via a Google search and on sites like Pinterest. There are meal preps and plans available from home cooks and more popular sources like Food Network. Be willing to try new recipes and look into meat-free recipes to conserve your funds. There are plenty of cost-effective options that can be a good source of protein.

Choose different recipes with the same meat.

Whether you’re making meals for a family or you’re making lunches for yourself, buying in bulk is always best. If you’ve found a few recipes for chicken that you think you’ll like, buy the chicken in bulk and freeze what you don’t use right away. This will keep your meat fresh and ready for when you’re ready to use it. For example, you could use chicken for the following meal planning recipes:

  • Chicken Burrito Bowls
  • Teriyaki Chicken Bowls
  • Chicken, Broccoli, and Rice

With the money you save on supplies, you will be able to allocate elsewhere for something you want and possibly didn’t have the funds for originally.

There are so many different choices that make meal planning flexible and customizable depending on your particular preferences and tastes. Make sure to mix it up so your tastebuds won’t get bored since this is easy to do with meal prepping.

Choose recipes that require a limited number of ingredients.

It’s easy to get carried away when you’re looking at what sounds and looks good for meals. Make sure to get recipes that have either a limited number of ingredients or items that you need to buy. If you find recipes that have common dried spices that you have in your kitchen, this could work as well and help you branch out and try different recipes and combinations.

Branch out and experiment with flavors that you’re confident will work well together.

Keep track of all your transactions and budget with a Scient FCU Checking Account. Use these tips and tricks and you will be well on your way to being a savvy meal planner that works for your tastebuds as well as your budget.

Which Credit Card Rewards Are Right for You?

Believe it or not, there isn’t a “one size fits all” credit card rewards program. For every card on the market, it seems like there are a million different ways to earn rewards.

With all the options, the research can be overwhelming and you might not know where to start. We’ve come up with a few ways you can choose the right credit card rewards program.

Is a rewards card right for you?

That’s the first question you need to ask yourself. A rewards card isn’t right for everyone. Here’s a handy checklist to run through to help you decide whether or not a rewards card is a good fit for you:

  • You have a good credit score. Most card issuers are looking for consumers who have a FICO score of at least 670. Of course, a higher credit score will help you get a lower interest rate, but a that mid-600 range will get your foot in the door. FYI, the higher your credit score, the more lucrative rewards programs you’ll have access to.
  • You can pay off your balance every month. Rewards card usually have a higher-than-average interest rate. When you carry your balance over each month, you could end up paying more in interest charges than you earn in rewards.
  • You can maximize the value of your rewards. A rewards card can cost you money if you don’t maximize your reward-earning potential. If you don’t earn enough points, you can actually lose money if your card has an annual fee.

Now that you’ve determined you could benefit from a rewards card, let’s talk about choosing the card with the program that best suits your lifestyle and spending habits.

Choosing the right card

There are three main things to consider when choosing a card: your spending habits, personal preferences and credit score. If you don’t look at your spending habits and personal preferences, you could end up spending a lot of money and racking up rewards that aren’t right for you.

Let’s say you have a large family and your primary expenses are groceries and gas. It would make sense for you to have a credit card that offers bonus rewards on those purchases. But, if you’re single, have a small grocery budget or don’t have a car, those rewards wouldn’t make sense.

Use your cards for everything

The more you use your card, the more rewards points you’ll rack up. But, don’t let that be an invitation to start spending money on things you don’t need. Instead, use your credit card in the place of cash or your debit card whenever possible.

Start looking for everyday situations where you can use your credit card instead of another payment method – gas, groceries, food, etc. But, always make sure you only spend what you can pay off every month.

What if a rewards card isn’t for you?

Rewards cards aren’t for everyone, and there’s nothing wrong with that. Maybe your credit score isn’t in the right range for a rewards card, or maybe you’re not interested in using your card to gain rewards. Maybe you’re looking for a credit card for emergencies only. If that’s the case, we can help you. We have a number of credit card options, and some have super low APRs, great rates on balance transfers and low rates on cash advances.

We can help you find the card for you. Check out our website, stop by and talk to us or give us a call so we can answer your questions.

Getting Started: Establishing a Financial Safety Net

In times of crisis, you don’t want to be shaking pennies out of a piggy bank. Having a financial safety net in
place can ensure that you’re protected when a financial emergency arises. One way to accomplish this is by
setting up a cash reserve, a pool of readily available funds that can help you meet emergency or highly urgent
short-term needs.

How much is enough?
Most financial professionals suggest that you have three to six months’ worth of living expenses in your cash
reserve. The actual amount, however, should be based on your particular circumstances. Do you have a
mortgage? Do you have short-term and long-term disability protection? Are you paying for your child’s
orthodontics? Are you making car payments? Other factors you need to consider include your job security,
health, and income. The bottom line: Without an emergency fund, a period of crisis (e.g., unemployment,
disability) could be financially devastating.

Building your cash reserve
If you haven’t established a cash reserve, or if the one you have is inadequate, you can take several steps to
eliminate the shortfall:

  • Save aggressively: If available, use payroll deduction at work; budget your savings as part of regular household expenses
  • Reduce your discretionary spending (e.g., eating out, movies, lottery tickets)
  • Use current or liquid assets (those that are cash or are convertible to cash within a year, such as a short-term certificate of deposit)
  • Use earnings from other investments (e.g.,stocks, bonds, or mutual funds)
  • Check out other resources (e.g., do you have a cash value insurance policy that you can borrow from?)

A final note: Your credit line can be a secondary source of funds in a time of crisis. Borrowed money, however,
has to be paid back (often at high interest rates). As a result, you shouldn’t consider lenders as a primary
source for your cash reserve.

Where to keep your cash reserve
You’ll want to make sure that your cash reserve is readily available when you need it. However, an FDIC-insured, low-interest savings account isn’t your only option. There are several excellent alternatives, each withunique advantages. For example, money market accounts and short-term CDs typically offer higher interest rates
than savings accounts, with little (if any) increased risk.

Note: Don’t confuse a money market mutual fund with a money market deposit account. An investment in a
money market mutual fund is not insured or guaranteed by the FDIC. Although the mutual fund seeks to
preserve the value of your investment at $1 per share, it is possible to lose money by investing in the fund.

Note: When considering a money market mutual fund, be sure to obtain and read the fund’s prospectus, which is
available from the fund or your financial advisor, and outlines the fund’s investment objectives, risks, fees,
expenses. Carefully consider those factors before investing. It’s important to note that certain fixed-term investment vehicles (i.e., those that pledge to return your principal plus interest on a given date), such as CDs, impose a significant penalty for early withdrawals. So, if you’re going to use fixed-term investments as part of your cash reserve, you’ll want to be sure to ladder (stagger) their maturity dates over a short period of time (e.g., two to five months). This will ensure the availability of funds,
without penalty, to meet sudden financial needs.

Review your cash reserve periodically
Your personal and financial circumstances change often–a new child comes along, an aging parent becomes
more dependent, or a larger home brings increased expenses. Because your cash reserve is the first line of
protection against financial devastation, you should review it annually to make sure that it fits your current
needs.

________________________________________________________________________________________
Non-deposit investment products and services are offered through CUSO Financial Services, LP (“CFS”) a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS:are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS for investment services. Atria Wealth Solutions, Inc. (“Atria”) is a modern wealth management solutions holding company. Atria is not a registered broker-dealer and/or Registered Investment Advisor and does not provide investment advice. Investment advice is only provided through Atria’s subsidiaries. CUSO Financial Services, LP is a subsidiary of Atria. This communication is strictly intended for individuals residing in the state(s) of CT. No offers may be made or accepted from any resident outside the specific states referenced. Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2019.

Holiday Shopping on a Budget

‘Tis the season…to avoid going broke buying presents for your loved ones. It’s easy to do, right? Sometimes we get carried away and spend more money than we intended to. You don’t want to look like a cheap gift-giver, but you also don’t want to buy the whole store.

So, how do you buy awesome gifts for everyone without breaking the bank? We have a few tips for you to keep your trees and your wallets full.

Make a List, Check It Twice

Hey, the process works for Santa so it can work for us! Start with a list of people you plan to buy for, jot down the gifts you think they’ll love and then check it twice. Santa has to buy gifts for the whole world, but you don’t have to. If your shopping list includes more than five people outside of your immediate family, trim your list. Look at alternatives like homemade gifts or baked goods so you can spread holiday cheer without looking like a Scrooge.

Create a Budget Based on Your Finances

Your best friend started a great job a few years ago and always gets you the most amazing gifts. However, if you’re in a different place in your financial life, don’t overextend yourself to match gifts. Look at your budget and see what you can do. Don’t shop based on what you think you should spend. The saying “it’s the thought that counts” really does ring true. It’s still possible to give thoughtful gifts to your loved ones without breaking the bank.

Homemade From The Heart

While there are many options to choose from at one store or another, the best gifts sometimes don’t come from the store. Another way you could save some money on presents this season is by making your loved one(s) a gift. The possibilities are endless on what you can make. Often times, a gift that is handmade from the heart is priceless and more special. If you need some inspiration on what to make, check out Pinterest for a few ideas.

Keep It Local

Shopping local is a great way to save a little cash while also supporting local businesses. Because there are fewer hands involved, buying local can often save you some money. You’ll likely save money by purchasing green beans from a produce stand because the farmer doesn’t have to divvy up his profits the way a chain supermarket does. It’s also a great way to improve your local economy. For example, every $100 you spend at a local business, $68 stays in the community. Follow your local news and check Facebook pages in your area to see what area businesses are offering locally made products.

We know that holiday shopping can be stressful. You’re paying your regular bills, taking care of your everyday expenses, and planning for holiday shopping on top of that. It can be tempting to open multiple credit cards or store cards, which come with incredibly high-interest rates. Don’t get stuck paying big balances on multiple cards. We have numerous options that can help you fund your holiday shopping without spending more.

Let us help. Stop by, check out our website or give us a call to see what options we have to help you.

4 Tips to Jumpstart Retirement Planning

Retirement. It seems like a lifetime away, right? Probably something you plan to worry about when you’re a little closer to your retirement date. However, financial experts suggest that the best time to start planning is in your 20s when you typically start earning a steady paycheck.

To put it into perspective, if you start saving at 25 and put away $3,000 a year for 10 years, by the time you reach 65, your $30,000 investment could grow to more than $338,000.* Regardless of your retirement date, it’s never too early to start planning for your retirement. You may be asking, “Where is the best place to start?” and “How should I invest my money to maximize the returns I see at retirement?” Both of these are great questions that we will delve into on this post.

Set your goals

This applies to 20-somethings, 30-somethings, and 40-somethings. How do you know what steps to take if you don’t know where you’re going?

Sit down and figure out your goals. Do you want to buy a house one day? How long do you need to rent and save money? What “bad debt” do you need to pay off now to help you in the long run? These answers may change as life circumstances change, but it’s helpful to know what your goals are and create a plan to achieve them before you set out on your savings adventure.

Take advantage of your employee benefits

Does your company offer a retirement savings account? Most full-time jobs will offer either a 401(k) or a SIMPLE IRA (Savings Incentive Match Plan for Employees Individual Retirement Account). It’s important to understand what these accounts are, how they work, and whether or not it’s a viable option for you. What’s the difference in a 401(k) and a SIMPLE IRA?

A 401(k) is an investment account you make contributions to out of each paycheck. If your employer matches your contribution up to a certain percentage, that’s free money going into your 401(k) in addition to the contributions you’re making.

A SIMPLE IRA is a tax-deferred employer-provided retirement plan. Like a 401(k), you make pre-tax contributions from your paycheck, and your employer can also elect to match your contributions up to a certain percentage. Unlike a ROTH IRA, when you reach retirement age and begin drawing from the SIMPLE IRA, you will pay taxes on the money you’ve saved.

Good debt vs. bad debt

Believe it or not, there is such a thing as good debt. Debt to buy a home or to start a business is considered good debt as it can be used as collateral. To our 20-somethings, listen up! Consumer debt – credit cards, car loans, and student loans – are always bad. Most consumer debt comes with high-interest rates, which only hurt you as you get older.

No matter what age you are, the best thing you can do is to avoid buying things you can’t afford. But, if you have debt or need to go into debt for a major purchase, have a plan to get out of that debt promptly. Look for places in your monthly budget where you can reduce spending and cut unnecessary costs.

Check out debt consolidation and refinancing options

Consolidating debt and refinancing loans are two great ways to save money on your monthly payments. Debt consolidation is typically used for unsecured debt and is especially effective for high-interest debt like credit cards, while refinancing a loan enables borrowers to “redo” an existing loan to get a lower monthly payment, different term length or a more convenient payment structure.

Both options are a great way of saving money each month. Ideally, you’d be able to measure the savings you’re seeing and put that toward your retirement planning. It might not sound like a lot of money, but even if you were able to save $50 a month, at the end of a year you’d have $600 to put toward your retirement.

Do you have debt that can be consolidated? Do you have loans that can be refinanced? You never know what your options are until you ask. Check with someone at our branch to see if we can save you some money each month to put toward your retirement.

Truth is, there are a dozen different ways you can prepare for retirement early and start saving money. At Scient FCU, we offer our members a complimentary financial review – no strings attached.  Schedule your 30-minute consultation with our financial advisor now.  Visit Scient Financial Services, call 860 441 9090 or email delster@cusonet.com and start preparing for your future.

Tips for Managing Your Holiday Spending

Like almost everything else these days, the holidays have become a barrage of options and choices, with nearly limitless opportunities to overspend. Here are some tips to help you make sure your family’s spending remains in check this holiday season.

Develop a spending strategy

First and foremost, develop a budget. Involving family members will help you establish and maintain realistic expectations at the outset. Remember to include not just gifts, but also holiday meals and parties, travel, greeting cards and stamps, gift wrap, decorations, and any other category you deem necessary. This is also a good time to commit to using cash or charging no more than you can pay off in one month.

Next, devise a method of tracking all your purchases, receipts, gift recipients, and the locations of hidden gifts that you might otherwise forget about. This will make life easier as the chaos ramps up.

Review your credit cards to see if you have any perks. Could you use earned points for travel, or cash-back and gift card rewards to help defray costs?

Track down old gift cards and put them to use now. If you think you’ll never use them, trade them in for cash on a discounted gift card website. There, you can sell your old cards and even buy new e-gift cards at a discounted rate, which you can then give as gifts or use for your own purchases.

Put technology to work for you. You can find apps that offer cash back if you shop online; alert you to online coupons available at nearby stores; round up your purchases to the nearest dollar and put the difference into a savings account; and track your online purchases, scan other stores for better prices, and then automatically email the original stores on your behalf to take advantage of the price-match guarantees. There are myriad options available, so be sure to check reviews and privacy/security measures before downloading.

Think creatively

Gifts. Take time to carefully scan all promotional materials before you head out the door or open a browser, because great deals are often available for limited periods of time. For example, some stores have offered generous gift cards in exchange for buying certain products on Black Friday.

Consider giving experiences rather than gifts, which happiness experts say could lead to more sustained levels of well-being. In fact, you may find that you’ll spend less overall by giving one or two memorable experiences instead of the usual pile of items.

Create meaningful yet inexpensive gifts, such as photo books, calendars, and family recipe books, using online apps and services. This idea is especially appropriate for gifts from children to older family members.

For larger or extended families, make a game out of gift giving. Consider a “Yankee swap,” or implement a gift exchange, where everyone is randomly assigned a person for whom they buy one special gift. Or consider having the entire family chip in a certain amount per person and donating to a favorite charity or sponsoring another family in need.

Food. Nonperishable holiday-related goods typically go on sale in late fall, so plan ahead and stock up. Also keep an eye out for specials; for example, some grocery stores offer a free turkey around Thanksgiving when you spend a certain amount on groceries.

Party planning, decorations, gift wrap. Consider buying the bulk of these supplies at deep-discount stores and splurging on a few special highlight items, such as napkins with an elaborate design, centerpieces of fresh flowers, or fancy bows. If you live in an area where evergreens, autumn berries, and pine cones are plentiful, take advantage of this potentially sophisticated, yet completely free, decor. Or create even more memories by hosting an ornament-making party. Use old costume jewelry or other items to make ornaments and decorations with sentimental value.

Travel. During one of the busiest travel times of the year, deals can be hard to find. Here are some tips:

  • Be flexible. If you can postpone your celebration until after the holidays, you may be able to save substantially on travel costs. (You can also shop the post-holiday sales for gifts!)
  • Avoid airline baggage fees by using carry-on luggage.
  • Use fare-tracking apps to find the best deals.
  • Cost-compare alternative modes of travel, such as train and ridesharing.

It’s never too early to start saving

Finally, get a jump on next year’s festivities by stocking up on supplies during post-holiday sales, opening a savings account with a goal of saving at least as much as you spend this year, and shopping as early as possible to spread spending throughout the year.

Budgeting for Healthcare Costs

It’s open enrollment season, and most of us are thinking about the best healthcare option for us in 2020. Only one thing is certain when it comes to healthcare: the cost for us to stay healthy is constantly increasing.

When it comes time to choose a plan, there are multiple factors to consider so you can budget wisely.

Choose your plans based on more than the premium

People often select their healthcare plan based on the monthly fee they will pay for coverage each month. However, when you choose a plan based solely on this component, you could end up paying more in the long run. There are several other factors to consider when choosing a healthcare plan that will fit your health as well as financial needs. Factors include:

  • copayment (flat dollar amount you pay when you need care)
  • deductible (the amount you must pay before the insurance begins to pay)
  • coinsurance (the percentage of allowed charges for covered services that you’re required to pay)
  • maximum out-of-pocket costs (the maximum amount you will pay for services).

Take previous health history into account

You can’t predict the exact amount of insurance you or your family will need. But you can take your past medical history and family medical history into account when you’re selecting a plan.

By taking these factors into account, you should be able to get in the ballpark of the amount of coverage you’ll need, barring no serious medical emergencies.

Choose wisely

When you’ve signed on for healthcare coverage and the open enrollment period passes, you aren’t able to change your plan during the year unless you experience a big life event. Healthcare.gov describes a big life event such as marriage, having a baby, or losing your other healthcare coverage. If you experience one of those situations, you can amend your plan outside of open enrollment. Because of this, it’s important to choose a plan that works best for your health as well as your budget.

Plan ahead

While healthcare coverage can be good to have when it comes to covering medical expenses, it never hurts to have extra funds. Before an unexpected medical expense arises, plan ahead and set aside some money every month in a savings account. Anything you can stow away for a rainy day will be helpful when the time comes to use those extra funds. Scient Federal Credit Union is here to help. Talk to one of our Member Service Representatives today about setting up a savings account and be prepared.

Like most things in life, there’s no one-size-fits-all health insurance plan. You have to choose the best one for you and your budget.

*** This blog was written for financial purposes and not written by a healthcare professional. This article should not be taken as medical advice.

Make Your Money Work for You

Every day you hustle. Nose to the grindstone getting through the workday. You’re working hard for your money, but have you ever stopped to think how your money can work for you?

Making your money work for you goes beyond an emergency fund or simply being debt free – although, both concepts are a necessity in this instance. It’s about taking the money you’re already making and making it generate returns for you.

But, how? There’s no simple answer or even a single way to do it, but these tips can help you get started.

Get out of debt

First things first, if you have debt get rid of it. After all, you can’t invest in you and your future if you’re giving your money to other people. The first step to a debt-free life is figuring out exactly how much you owe. Most people don’t even know how much debt they’re in, according to a study from The Federal Reserve. Once you know how much debt you have, decide how you’re going to pay your debt.

Budget

The most important way to change the way you handle your money is to budget. By creating a budget, you are telling your money what you want it to do. When you assign each dollar into a category, you’re controlling where your money goes and what it does. It’s a great first step in reaching your financial goals. Think about it this way: your budget is like a fitness tracker in that it helps you monitor your money. When you monitor your money and know where it is and what it’s doing, it’s easier to make it do what you want it to do. Check out our monthly budget tool to help get you started

Utilize retirement accounts

Don’t sleep on opportunities to invest in a 401(k) or Roth IRA. A 401(k) is great because you’re contributing pre-tax money into your account, and you get free money from your employer in the process. Think about it like this: you earn $100,000 a year and your company offers a 3% match on your 401(k). If you invest $3,000 (3% percent of $100,000), your company will match that leading to $6,000 being added to your 401(k). A Roth IRA works just a little differently. Unlike the 401(k), a Roth IRA leverages after-tax income. However, when you begin to withdraw the money at retirement, you won’t pay taxes on your withdrawals.

Start a side hustle

Uber, GrubHub, Instagram – all of these companies began with an idea that blossomed into billion-dollar companies. What’s your passion and can you turn that into a billion-dollar idea? Consider starting a side hustle and find ways to make some extra money. It could be a traditional second job, a work-from-home job or turning your ideas into ways that add to your savings. If you can structure your budget and expenses around your primary source of income, any money you make from your side hustle can go straight into your savings.

Create passive income streams

Passive income is money you earn with little to no effort involved. Once it’s set up, passive income will earn you money while you sleep. Creative passive income does require some type of investment upfront, whether that’s time or money, but it’s an investment that can lead to huge payoffs later.

Building your future is important, and it takes a lot of hard work. At Scient Federal Credit Union, we’re just as interested in your future as you are. We want to help you take the necessary steps to make your dreams come true.

Maybe you need to consolidate your debt or look at options to pay off some debt. Maybe you’re looking to refinance your car in order to lower your payments and save a little money each month. Whatever it is, let us help you.

Stop by and see us or give us a call to get started.

Do Millennials Need Life Insurance?

The financial challenges millennials face can be overwhelming. Many young adults have to figure out how to pay off college loans, save to buy a home or start a family, and sock away money for retirement. Given these hurdles, it’s no wonder that life insurance as a financial asset gets little to no attention. But it should. There are many reasons to have life insurance at a relatively young age, but here are some common ones.

Leaving your debts for others to pay

As a young adult, you become more independent and self-sufficient. While you no longer depend on others for your financial well-being, your death might still create a financial hardship for those you leave behind.

You may have debts such as a mortgage or student loans that are jointly held with another person. Or you may be paying your parents for loans they took out (e.g., PLUS loans) to help pay for your education. Your untimely death would leave others responsible for some or all of these debts. You might consider purchasing enough life insurance to cover your financial obligations so others don’t have to.

Funeral expenses can also be a burden for those you leave behind. Life insurance could ease the financial burden of paying for your uninsured medical bills (if any) and for costs associated with your funeral and burial.

It’s less expensive

Premiums for life insurance are based on many factors, including age and health. Certainly, the younger and presumably healthier you are, the less your coverage will cost. This is especially true if you are at a high risk for developing a medical condition later in life.

Replacing lost income

Someone may be relying on your income for financial support. For instance, you may be providing for a family member such as a parent, grandparent, or sibling. In each of these instances, how would your income be replaced if you died? The death benefit from life insurance can help replace your income after you’re gone.

Providing for your family

As your family grows, so do your financial responsibilities. There is likely a hefty mortgage to pay. And there are costs associated with young children. If you died without life insurance, how would the mortgage get paid? Could your surviving spouse or partner cover the costs of day care and housekeeping?

And there are events you should plan for now that won’t happen until several years in the future. Maybe you’ll begin saving for your kids’ college education while trying to save as much as you can for your retirement. Over the next several decades, think about how much you could set aside for these expenses. If you are no longer around to make these contributions, life insurance can help fund these future accumulations.

Work coverage may not be enough

You may have a job with an employer that sponsors group life insurance. Hopefully, you take advantage of that program, but is it enough coverage to meet your needs now and in the future? Your insurance needs may change with time, although your employer’s coverage may not. Also, most employer-sponsored life insurance programs are effective only while you remain an employee. If you change jobs or are unable to work due to illness or disability, you may lose your employer’s coverage. That’s why it’s a good idea to consider buying your own life insurance.

The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications.

Don’t Let High APR’s Hold You Hostage

Actor Hill Harper said it perfectly: “Credit card interest payments are the dumbest money of all.”

This year wasn’t kind to credit cardholders’ wallets. In 2019, cardholders paid an average of 17% APR – the highest level recorded by the Federal Reserve since 1994. To put it into perspective: in 2009, the average APR registered just under 13% and in 2016 it hovered around 12.5%.

(See chart below)

credit karma apr chart

Even the maximum APR has climbed significantly. Financial institutions typically offer a wide range of APRs. As a result of the increase, maximum APRs are around 25% with the media standing at 21%.

So, what does this mean for you?

Well, it means you’re likely paying more in interest than you’ve ever paid. But, don’t worry. There are several ways around paying high interest rates that will actually help you in the long run.

Avoid balance carryover

Ultimately, the best and most responsible way to use a credit card is to pay off the balance monthly. By paying your balance in full each month, you avoid paying interest while reaping the benefits a credit card has to offer. Plus, it helps improve your credit score.

Avoid spending more than you have

We’ve all done it. We have a credit card for emergencies only, but something comes up we really want, and it finds its way to the credit card. Next thing you know, there are multiple unnecessary purchases on there that you’re trying to pay off. The best habit to get into is not spending more than you can pay off monthly. The more you put on a card, the more interest you’re going to be charged.

Do your research

If you’re thinking about signing up for a credit card, do your research. First of all, know your credit score. That’s going to be a huge factor in determining your APR. Also, consider why you want a credit card. Are you looking for cash back options? Do you want to earn points or build your credit? Don’t wander and apply aimlessly. Look at the specific types of cards that are designed for the purpose you want and see which card best suits your needs.

Obtaining and maintaining credit by using credit cards doesn’t have to be a scary experience. Have you talked to someone at Scient Federal Credit Union? We have several types of credit cards that could fit your needs.

Before you go with a big box bank, see how we can help. Stop by a branch, call us today at (860) 445-1060 or visit our Visa® card page.