Banks Credit Unions Whats the difference Dos of
Banks & Credit Unions What’s the difference?
Do’s of Checking • Track your expenses • Track your balance • Set up e-alerts or text alerts
Do’s of Checking Get a “Hold” of Your Debit Card • What is a Hold? • Authorization for a purchase • Isn’t always the same as your purchase amount • Be careful at restaurants, gas stations and hotels
Don’ts of Checking • Don’t only use online banking to know your balance • Don’t assume the balance on your ATM receipt is correct
Do’s of Budgeting BUDGET and stick to it! • • Write down your income and expenses Save! Pay yourself first Use resources like mint. com Set limits on food, entertainment, etc… IN OUT
Do’s of Budgeting Have a money plan: 1. Emergency Fund - $1000 2. Save 3 -6 months living expenses 3. Pay off debt – first credit then student loans
Should You Have a Credit Card? If Yes: • Request a low credit limit • Get one card
Do’s of Credit Cards • Try not to carry a balance • If you do, always pay more than the minimum • Avoid making any cash advances Example: $1000 balance, $25 each month at 18% APR = 62 months to payoff and $538. 82 in interest Make the payment $35 = 38 months to payoff and $315. 59 in interest
Do’s of Credit • Know your credit score and which type of score you’re given. • Get free copies of your credit report annualcreditreport. com • Pay bills on time • Try to pay your credit card bill in full each month to avoid any interest fees. • Be a deadbeat
Why care about your credit? What’s in a credit report? • Identifying information (name, SSN, date of birth, address) • Employment history • Creditors and payment history • Bankruptcies, judgments, liens, lawsuits • Inquiries you initiated (loan and credit applications, but not credit card solicitations)
What’s a credit score? • Number that represents creditworthiness • “How likely are you to repay the loan? ” • Range: • 300 to 850 • Good Score is anything above 720
Credit Score Matters $25, 000 Honda Accord for 60 Months • • • Score >720 680 -720 640 -679 600 -639 <600 Rate 6. 49% 7. 99% 9. 49% 12. 49% 14. 49% Payment $489. 06 $506. 82 $524. 96 $562. 36 $588. 13 Interest $4, 343. 36 $5, 408. 79 $6, 497. 10 $8, 741. 47 $10, 286. 91
Components of a credit score • Payment history (35% of score) • Amounts owed to creditors (30%) • Length of credit history (15%) • New credit (10%) • Types of credit currently in use (10%)
Who can look at your credit report? • • Lenders Landlords Potential employers Insurance companies
Student Loans Federal Direct Grad PLUS Loans: 2014 -2015 Academic Year • Interest Rate: 7. 21% • Origination fee is 4. 292% • Applicant cannot have adverse credit history • Borrow up to the cost of attendance
Do’s of Student Loans • Be involved in your student loan consolidation process Grad School Loan forgiveness High interest/variable rate loans Prepayment penalties Perks • Pay more than the minimum payments
Bonus Tips! • • Bring your lunch to school or eat at home Save the latte for a treat, not everyday Rate shop Utilize discount clothing stores and consignment shops • Meal plan and make a grocery list ahead of time to avoid overbuying
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