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Archive for Credit Card Debt

How to Avoid Credit Card Dependence

Posted by Frank McKinley on
 February 12, 2021

Ask yourself these questions to evaluate your dependence on credit cards:

Do you rely on credit cards to make it until your next paycheck?

Does it seem you always have to put unexpected expenses on your credit card?

Do you think you spend more than you would with cash because your card has rewards or discounts?

Do the holidays leave you with a mountain of credit card debt?

If you answered yes to these questions, you are probably relying too much on your credit cards. If you are concerned you are too dependent on credit cards, there are steps you can take to become credit card independent.

Put your credit cards somewhere for safekeeping to reduce the temptation to use them as your regular form of payment.

Become more disciplined with spending by enacting a cash only policy. While many people use debit cards as a convenient way to pay cash, be careful. Many financial institutions will allow you to overdraft your account when you use a debit card and may charge a large fee for this overdraft privilege.

Consolidate your balances to the cards that have the lowest interest rates and close the rest of your credit card accounts to reduce the amount of available credit and, thus, the potential amount of debt you could incur. While closing credit cards can have a negative impact on your credit score, it’s
still better to have a temporary credit score setback than to go deeper into debt if you can’t control your spending. To reduce the impact to your score, you should also consider keeping your oldest credit card in addition to a lower interest-rate card.

Shock yourself into reality by looking at a few important things on your credit card statement, including: how much you are paying in interest on an annual basis, how long it will take you to pay off the balance, and how much
you will pay in interest if you are only making the minimum monthly payment. This information can be a real eye-opener.

If you would like more information or to discuss your financial concerns

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Categories : Credit Card Debt, Financial Services

Financial Planning for Married Couples

Posted by Frank McKinley on
 May 12, 2020

Frankly Speaking

“When stocks drop, that is not the problem, that is the solution.” – Benjamin Graham

“Bull markets bail you out of your mistakes. Bear markets make you pay for them.” – Anonymous

“Imagine you see a child playing with a yo-yo, riding up an escalator. Focus on the escalator, not the yo-yo.” – Mark Zinder

I’m told people are most concerned with 3 things now: The Virus, the Market & the November elections. If you said the virus, you’re human; if you said the market, you’re an investor; if you said the elections, you’re a voter. And while you could easily be all 3, which is MOST important to you?

We all want to stay alive & healthy. We all hope to accumulate enough wealth to enjoy a long life without running out of money. Yet, where will our allegiances fall come November? Vote the party line as in the past, or break ranks and move to the ‘dark side’ whichever that might be? Will we vote for something, or just against? Will there be a dark horse independent who overwhelms the rest, and will he/she really be ‘any better’?

If you, anyone in your family or someone you know is feeling down & confused by the Market and how the Virus is affecting things, PLEASE call me to discuss facts, rather than headlines, that may help put your mind at ease.

Financial Planning for Married Couples

Marriage is a partnership. You and your spouse are a team both personally
and financially. Even if you’ve been married for decades, you may need a refresher course on financial planning basics. Here are six financial moves to make.

Start talking — Some couples avoid having conversations about finances because they’re boring, while others skip the talk because of money anxiety or conflicts. But your financial lives are deeply intertwined. You and your spouse need to be able to talk honestly about your finances. Consider having a monthly check in, where you sit down together and go over important issues.

Get on the same page — You’re not going to agree on everything money-wise. But when it comes to major financial moves, you should be on roughly the same page. If you’re both working together toward the same goals,
you’re much more likely to get where you want to be.

Be willing to compromise — Ideally, you and your spouse will be of one mind when it comes to money matters, but in reality, you might not always agree. That’s where compromise comes in. For example, you may want to keep working until age 70 for maximum financial security, while your
spouse may be dreaming of quitting his/her job at 60. You might want to meet in the middle by planning for a retirement that starts at 65 for both of you.               

Put it in writing — Don’t let inertia lead you and your spouse into skipping key financial- and estate-planning tasks. Even if you want all your money and personal effects to go to your spouse, a will is still helpful in clarifying your wishes should you die unexpectedly. You may also want to set up a financial power of attorney to ensure your spouse can make financial decisions on your behalf if you’re incapacitated. Meanwhile, a living will and medical directive can make it clear to your spouse, other family, and loved ones what medical interventions you want (or don’t want) if you are  seriously ill.

Share information — If the worst happens, will your spouse have the  information he/she needs to keep the household running? Make sure each of you knows how to access the bank and investment accounts — even the accounts for the household utilities. You each should also know how to locate important documents, like insurance policies, financial records,  birth certificates, and the deed to your house.

Meet with an advisor together — It’s not unusual for one spouse to take on a bigger role in the dayto-day financial planning process either out of choice or necessity. Both of you should still be present at meetings with your  financial advisor. You’re a team, and your advisor will be better able to  provide appropriate advice if he/she can hear from both of you.

Please call 973-515-5184 or contact me
if you’d like to discuss your financial questions in more detail.

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Copyright © 2020. Some articles in this newsletter were prepared by Integrated Concepts, a separate, non-affiliated business entity. This newsletter intends to offer factual and up-to-date information on the subjects discussed but should not be regarded as a complete analysis of these subjects. Professional advisers should be consulted before implementing any options presented. No party assumes liability for any loss or damage resulting from errors or omissions or reliance on or use of this material.

Categories : Credit Card Debt, Newsletters

Spring Cleaning Your Way to Better Finances

Posted by Frank McKinley on
 March 26, 2020

Spring is a good time to clean out the cobwebs, and not just in your home or apartment. Your personal finances can benefit from a good spring cleaning, too. Here are some questions to ask yourself regarding your budget, debt, and taxes.

Is there room in my budget to save more?

A budget is the centerpiece of any good personal financial plan. After tallying your monthly income and expenses, you hopefully have money left over to save. But… is there room to save even more? Review your budget again with a fine-tooth comb to see if you might be able to save an additional $25, $50, $100, or $200 per month. Small amounts can add up over time. If you participate in a workplace retirement plan, you might not even notice your slightly smaller paycheck after you increase your contribution amount.

If your expenses are running neck and neck with your income, try to cut back on discretionary spending. If that’s not enough, look for ways to lower your fixed costs or explore ways to increase your current income. Budgeting software and/or smartphone apps can help you analyze your spending patterns and track your savings progress.

Do I have a strategy to reduce debt?

When it comes to your personal finances, reducing debt should always be a priority. Whether you have debt from student loans, credit cards, auto loans, or a mortgage, have a plan to pay down your debt as quickly as possible. Here are some tips.

  • Credit cards. Keep track of your credit card balances and be aware of interest rates and hidden fees; manage your payments so you avoid late fees; pay off high-interest debt first; and avoid charging more than you can pay off at the end of each billing cycle.
  • Student loans. Are you a candidate for income-based repayment? You can learn more at the Federal Student Aid website.
  • Additional payments. Making additional loan payments above and beyond your regular loan payments (or the minimum payment due on credit cards) can reduce the length of your loan and the total interest paid. Online calculators can help you see the impact of making additional payments. For example, if you’re halfway through a 30-year, $250,000 mortgage with a fixed 4.5% interest rate, an additional principal payment of $150 a month can shave two years off your mortgage. An extra $250 a month can shave off three years!
  • Refinancing. If you currently have consumer loans, such as a mortgage or auto loan, take a look at your interest rate. If you’re paying a higher-than-average interest rate, you may want to consider refinancing. Refinancing to a lower interest rate can result in lower monthly payments and potentially less interest paid over the loan’s term. Keep in mind that refinancing often involves its own costs (e.g., points and closing costs for mortgage loans), and you should factor these into your calculation of how much refinancing might save you.
  • Loan consolidation. Loan consolidation involves combining individual loans into one larger loan, allowing you to make only one monthly payment instead of many. Consolidating your loans has several advantages, including saving you time on bill paying and record keeping and making it easier for you to visualize paying down your debt. In addition, you may be able to get a lower interest rate.
  • Paying down debt vs. investing. To decide whether it’s smarter to pay down debt or invest, compare the anticipated rate of return on your investment with the interest rate you pay on your debt. If you would earn less on your investment than you would pay in interest on your debt, then using your extra cash to pay off debt may be the smarter choice. For example, let’s say you have $2,000 in an account that earns 1% per year. Meanwhile, you have a credit card balance of $2,000 that incurs annual interest at a rate of 17%. Over the course of a year, your savings account earns $20 interest while your credit card costs you $340 in interest. So paying off your credit card debt first may be the better choice.

Do my taxes need some fine-tuning?

Spring also means the end of the tax filing season. You might ask yourself the following questions:

  • Am I getting a large tax refund or will I owe taxes? In either case, you may want to adjust the amount of federal or state income tax withheld from your paycheck by filing a new Form W-4 with your employer.
  • What else can I learn from my tax return? Now is also a good time to assess tax planning opportunities for the coming year, when you still have many months left to implement any strategy. You can use last year’s tax return as a reference point, then make any anticipated adjustments to your income and deductions for the coming year.

If you have questions or would like more information
please contact Frank

Representatives are registered through, and securities are sold through Nationwide Planning Associates, Inc., Member FINRA/SIPC, located at 115 West Century Road, Suite 360, Paramus, NJ 07652. Investment advisory services are offered through NPA Asset Management, LLC. Insurance sold through licensed NPA Insurance Agency, Inc. agents. Nationwide Planning Associates, Inc. and Frankly Financial are non-affiliated entities.

This communication is strictly intended for individuals residing in the state(s) of CO, CT, FL, NJ, NY, NC, OH, PA and RI. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Advisor Solutions Copyright 2020.

 

Categories : College Savings, Credit Card Debt, Investing
Tags : , ,

How can I lower my credit card debt and improve my credit score?

Posted by Frank McKinley on
 February 20, 2020

If you find that you are struggling to pay down a credit card balance, here are some strategies that can help eliminate your credit card debt.

Pay off cards with the highest interest rate first. If you have more than one card that carries an outstanding balance, one option is to prioritize your payments according to their interest rates. Send as large a payment as you can to the card with the highest interest rate and continue making payments on the other cards until the card with the highest interest rate is paid off. You can then focus your repayment efforts on the card with the next-highest interest rate, and so on, until they’re all paid off.

Apply for a balance transfer with another card. Many credit card companies offer highly competitive balance transfer offers (e.g., 0% interest for 12 months). Transferring your credit card balance to a card with a lower interest rate may enable you to reduce interest fees and pay more against your existing balance.

Most balance transfer offers charge a fee (usually a percentage of the balance transferred), so be sure to do the calculations to make sure it’s cost-effective before you apply.

Pay more than the minimum. If you pay only the minimum payment due on a credit card, you’ll continue to carry the bulk of your balance forward without reducing your overall balance. Instead, try to make payments that exceed the minimum amount due. For more detailed information on the impact that making just the minimum payment will have on your overall balance, you can refer to your monthly statement.

Look for available funds to make a lump-sum payment. Are you expecting an employment bonus or other financial windfall in the near future? If so, consider using those funds to eliminate or pay down your credit card balance.

How can I improve my credit report?

Most lenders use credit report information to evaluate the creditworthiness of potential borrowers. Borrowers with good credit are presumed to be more creditworthy and may find it easier to obtain a loan, often at a lower interest rate.

You can do a number of things to help improve what’s on your credit report, including the following.

Pay bills on time. Your credit report provides information to lenders regarding your payment history. For the most part, a lender may assume that you can be trusted to make timely monthly debt payments in the future if you have done so in the past. Consequently, if you have a history of late payments and/or unpaid debts, a lender may consider you to be a high credit risk and turn you down for a loan.

Limit credit inquiries. Each time you apply for credit, the lender will request a copy of your credit report. The lender’s request then appears as a “hard inquiry” on your credit report. Too many of these inquiries in a short amount of time could be viewed negatively by a potential lender, since it may indicate that the borrower has a history of being turned down for loans or has access to too much credit.

Build a credit history. You may have good credit, but not enough of it. As a result, you may need to build up more of your credit history before a lender deems you worthy to take on new debt.

Correct errors on your report. Uncorrected errors on a credit report could make it difficult for a lender to accurately evaluate creditworthiness and could result in a loan denial. If you have errors on your credit report, it’s important to correct your report by disputing inaccurate or incomplete information,

Finally, if you are ever turned down for a loan, you can find out why. Under federal law, you are entitled to a free copy of your credit report as long as you request it within 60 days of receiving notice of a company’s adverse action against you. Federal law also entitles you to a free annual credit report from all three credit reporting agencies (Experian, Equifax™, and Trans Union™). You can obtain this report by visiting AnnualCreditReport.com.

If you have questions or would like more information
please contact Frank

Representatives are registered through, and securities are sold through Nationwide Planning Associates, Inc., Member FINRA/SIPC, located at 115 West Century Road, Suite 360, Paramus, NJ 07652. Investment advisory services are offered through NPA Asset Management, LLC. Insurance sold through licensed NPA Insurance Agency, Inc. agents. Nationwide Planning Associates, Inc. and Frankly Financial are non-affiliated entities.

This communication is strictly intended for individuals residing in the state(s) of CO, CT, FL, NJ, NY, NC, OH, PA and RI. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Advisor Solutions Copyright 2020.

 

Categories : Credit Card Debt, Financial Services

January 2017

Posted by Frank McKinley on
 January 17, 2017
2017-January
Categories : Credit Card Debt, Financial Services, Medicaid, Medicare, Newsletters, Retirement, Tax

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