Archive forFebruary, 2016

First Marblehead to Release Second Quarter Fiscal 2016 Financial Results and Host Con…

First Marblehead to Release Second Quarter Fiscal 2016 Financial Results and Host Conference Call

February 01, 2016: 04:00 PM ET

The First Marblehead Corporation (NYSE: FMD) plans to release its second quarter fiscal year 2016 financial and operating results for the three and six month periods ended December 31, 2015 after the market closes on Tuesday, February 9, 2016. The Company will host a conference call at 5:00 p.m. Eastern time on Tuesday, February 9, 2016 to discuss its results and provide an update on the Company’s business. First Marblehead’s Chairman and Chief Executive Officer Daniel Meyers and Chief Financial Officer Alan Breitman will host the call.

Investors and other interested parties are invited to listen to the conference call via a simultaneous internet broadcast on the Company’s website at www.firstmarblehead.com, under “For Investors,” or by dialing (888) 317-6003 from the United States or (412) 317-6061 from abroad and entering the pass code 8495222.

A replay will be available approximately one hour after completion of the call on First Marblehead’s website or by dialing (877) 344-7529 from the United States or (412) 317-0088 from abroad and entering the pass code 10079934. The replay will be available for two weeks.

About The First Marblehead Corporation First Marblehead helps meet the need for education financing by offering national and regional financial institutions and educational institutions the Monogram®
platform, an integrated suite of design, implementation and credit risk management services for private label, customizable private education loan programs. For more information, please see www.firstmarblehead.com. First Marblehead supports responsible lending and is a strong proponent of the smart borrowing principle, which encourages students to access scholarships, grants and federally-guaranteed loans before considering private education loans; please see www.SmartBorrowing.org. First Marblehead also offers outsourced tuition planning, billing, payment technology services and refund management services through its subsidiary Tuition Management Systems LLC. For more information, please see www.afford.com. Through its subsidiary, Cology LLC, First Marblehead offers private education loan processing and disbursement services for lenders. For more information, please see www2.cology.com.

 

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Are Chip Cards Exposing You to a Deeper Form of Identity Theft?

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The Advantage of Leasing Vs Financing a Car

Car buying consumers no longer have to go through the annoying hassle of visiting a wide range of car dealerships to check out various competing.

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4 Types of Atlanta Auto Loans: Which Is Best for You?

This content is sponsored by PenFed, one of the country’s strongest and most stable financial institutions with more than 1.4 million members and $19 billion in assets. Established in 1935, PenFed is federally insured by NCUA and an equal housing lender.

As gas prices slowly return to normal levels, you might no longer fear that trip to the pump. As of Feb. 1, 2016, the average price per gallon for regular gas in Atlanta was $1.75, according to AAAs Daily Fuel Gauge Report. This rate is about $0.20 less per gallon than it was a year prior, and $2.30 less than the highest recorded average for the city in 2008.

If you compensated for higher gas prices by ditching your car and using public transportation in recent years, lower rates might motivate you to get back behind the wheel. However, the price of Atlanta auto sales could compel you to change your mind. If you need a new car and cant afford to pay cash upfront, an auto loan might be your best bet.

Related: 10 Huge Mistakes to Avoid When Financing a Car

What You Need to Know About Getting an Auto Loan

An auto loan — or secured loan used to buy a car — allows you to purchase much-needed transportation without depleting your savings. After being approved for financing, you can typically opt to pay off the vehicle in 36, 48, 60, 72 or even 84 months, based on what you can afford. While Atlanta auto loans dont always require upfront cash, giving the lender a down payment reduces the loan balance and helps you qualify for a lower interest rate.

The truth is that finding the right auto loan is just as important as finding the right car. Although Atlanta car dealers can help you secure financing, you shouldn’t necessarily accept the first offer you receive. Additionally, borrowers should look beyond monthly payments when making their decisions.

Don’t get hung up on the monthly payment; it [might] be attractive but not if you’re paying a high percentage APR over 60 or 72 months, said Sean Worthy, director of automotive, sales and business development at Pentagon Federal Credit Union. The lower the interest rate, the less money you will pay in interest over the life of the loan.

When shopping for an auto loan, buyers can choose from a plethora of lenders. On average, credit unions offer lower rates on auto loans than banks. Not only does a low rate save you money in the long term, but it also increases your buying power. While credit unions might be smaller and have fewer locations than big banks, they can offer auto loans that truly fit your needs.

Atlanta Auto Loan Options

In addition to finding a good rate and payment amount on your auto loan, you should consider all of the types of auto loans available to you before you buy a car in Atlanta. Carefully evaluate your budget and driving needs to determine which auto loan type is most appropriate for you and the car you want to buy. Here are four options to help you start your research.

1. New Auto Loan

A new auto loan is given specifically for the purchase of a brand-new car. While the vehicle could be last years model, you must be the first owner of the car in order to qualify for a new auto loan.

A new car is the perfect choice for buyers who prefer low mileage and the latest features and gadgets. Moreover, since the manufacturer usually offers a standard three-year warranty on a new car, owners can rest assured knowing theyre protected if something breaks down.

Additionally, new car loans tend to have lower interest rates than used car loans. Still, Worthy cautions buyers against accepting 0% APR offers without reading the fine print.

Sometimes these offers are only valid for 36 months, which will leave you with a high monthly payment, said Worthy. Also, manufacturers will run specials like 0% financing or a dollar amount in cash back, for example $2,500. In some cases, you would be better [off financing] with a credit union or bank at a slightly higher interest rate, and tak[ing] the cash back offer from the manufacturer.

2. Used Auto Loan

You might like the idea of being the first owner of a vehicle, but you also probably know that a new car loses about 19 percent of its value in the first year. Buying used makes good financial sense if you want to save on a car purchase and reduce the risk of negative equity, or indebtedness that occurs when the value of the vehicle falls below the amount still owed.

In some cases, buying used also lets you get more car for your money. While the new car price for a specific model might be too steep, in many cases its possible to find a used version offering all the top features within your budget.

While buying used can get you luxury car features without the luxury price tag, its important to keep the loan rate in mind when making a decision. Because most lenders want you to buy new, the rates for used car loans tend to be higher. Weigh the pros and cons and make the best choice for you and your family.

3. Auto Loan Refinance

When you hear the term “refinance,” you might think it only applies to home loans. However, the truth is that refinancing — which involves paying off an old loan with a new one — can apply to any type of loan, including auto loans. If you applied for an auto loan but didn’t receive the most favorable terms, refinancing once your credit improves can help you get a better interest rate and a lower monthly payment.

Unfortunately, some banks and credit unions will not refinance older cars. Auto refinancing requirements vary by lender, and borrowers should do their homework to ensure they can get the best possible deals down the line.

Related: 7 Mistakes to Avoid When Refinancing a Car Loan

You also could ask your lender if additional loan options or adjustments are available to you. For example, PenFed’s Rate Reset Program allows eligible members the ability to extend their current car loan terms up to 24 months. When a member chooses a new term, PenFed will reset the member’s rate to that which is currently being offered for the same term, said Worth. The reset lowers the member’s monthly payments for the duration of the loan.

4. Payment Saver Auto Loans

Shopping around for an Atlanta auto loan is also an excellent way to find credit unions that offer specialized financing programs. Some people think leasing is the only way to snag a cheaper car payment, but the truth is there are other options available. For example, PenFed Credit Union offers a Payment Saver Auto Loan program for new and used vehicles. Rates start at just 1.74% APR and 2.24% APR for up to 60 months on new and used cars, respectively.

While the Payment Saver Loan is designed to reduce your monthly burden, borrowers should know that these loans do come with a caveat. Since you’re responsible for a balloon payment at the end of the term, this loan option is only appropriate if you anticipate having a lump sum of cash available to pay off the remaining balance.

Purchasing a car is a big decision, and its important that aspiring buyers do their research. By contacting a credit union, you can increase your odds of finding the best rate on an Atlanta auto loan.

Related: What Is the Difference Between Banks and Credit Unions?

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First Marblehead Announces Second Quarter Financial Results

First Marblehead Announces Second Quarter Financial Results

Results From Continuing Operations Improved 62% February 09, 2016: 04:05 PM ET

The First Marblehead Corporation (NYSE: FMD) today announced its financial and operating results for the second quarter of fiscal 2016 as well as the six month period ended December 31, 2015.

For the second quarter of fiscal 2016, the Company recorded a net loss from continuing operations of $4.9 million, or $(0.41) per share, compared to a net loss from continuing operations of $12.9 million, or $(1.12) per share, for the second quarter of fiscal 2015, a 62% improvement. Total expenses for the second quarter of fiscal 2016 were $17.8 million, a $6.3 million, or 26%, improvement compared to total expenses of $24.1 million for the second quarter of fiscal 2015, which included a one-time charge of $5.0 million related to the NC Residuals legal settlement. Total expenses for the three months ended December 31, 2015 also declined due to decreases in compensation and benefits expenses of $763 thousand, occupancy costs of $681 thousand and travel and entertainment costs of $256 thousand. Revenues for the second quarter of fiscal 2016 increased $1.7 million, or 15%, to $12.9 million as compared to the second quarter of fiscal 2015. The improvement in revenues for the three months ended December 31, 2015 included increases of $714 thousand in tuition management fees from the Company’s subsidiary Tuition Management Systems LLC, $478 thousand in Monogram®-based fee revenues, $384 thousand in fee income from the Company’s subsidiary Cology LLC and $83 thousand in portfolio management services fees as well as an increase of $52 thousand in fair value changes to service revenue receivables. The increase in revenues and decrease in expenses resulted in a $7.7 million, or 62%, improvement in net operating cash usage*, a non-GAAP financial measure, for the second quarter of fiscal 2016 as compared to the second quarter of fiscal 2015.

For the six month period ended December 31, 2015, the Company recorded a net loss from continuing operations of $11.0 million, or $(0.94) per share, compared to a net loss from continuing operations of $23.4 million, or $(2.04) per share, for the six month period ended December 31, 2014. The improvement in the net loss from continuing operations was primarily due to an $8.4 million decrease in total expenses, principally the result of a one-time charge of $5.0 million during the second quarter of fiscal 2015 related to the NC Residuals legal settlement. Total expenses for the six month period ended December 31, 2015 also declined due to decreases in compensation and benefits expenses of $2.5 million, lower occupancy costs of $1.0 million and lower third-party services expenses of $916 thousand, principally related to lower legal fees pertaining to certain tax matters. Revenues for the six month period ended December 31, 2015 increased $4.1 million, or 16%, to $29.4 million. The improvement in revenues for the six month period ended December 31, 2015 included increases of $1.8 million in tuition management fees from TMS, $1.2 million in Monogram-based fee revenues, $744 thousand in fee income from Cology LLC and $473 thousand in portfolio management services fees, partially offset by a decrease of $119 thousand in fair value changes to service revenue receivables.

For the second quarter of fiscal 2016, total facilitated private education loan volumes were $172.1 million, which consisted of $13.3 million of Monogram-based loans and $158.8 million of loans facilitated by Cology LLC, which was relatively unchanged for our Monogram-based programs and was a 52% increase for Cology LLC over the same quarter of the prior year. Loan disbursements for the second quarter of fiscal 2016 totaled $163.8 million, which consisted of $19.1 million of Monogram-based loans and $144.7 million of loans disbursed by Cology LLC, which was relatively unchanged for our Monogram-based programs and was a 40% increase for Cology LLC over the same quarter of the prior year. 

For the six month period ended December 31, 2015 total facilitated private education loan volumes were $682.0 million, which consisted of $110.5 million of Monogram-based loans and $571.5 million of loans facilitated by Cology LLC, which represented increases over the six month period ended December 31, 2014 of 13% and 23%, respectively. Loan disbursements for the six month period ended December 31, 2015 totaled $489.8 million, which consisted of $72.3 million of Monogram-based loans and $417.5 million of loans disbursed by Cology LLC, which represented increases over the six month period ended December 31, 2014 of 17% and 32%, respectively.

The increase in Monogram-based loan volume for the six month period ended December 31, 2015 was a result of a stronger credit mix of applicants, which led to an improved application conversion rate while the increase in Cology LLC loan volume for the three and six months ended December 31, 2015 was primarily the result of organic growth at existing clients, including new loan programs. 

“We are pleased with our second quarter fiscal 2016 results, as we continued with the trend of higher revenue growth in conjunction with lowered operating expenses,” said Daniel Meyers, Chairman and Chief Executive Officer.

Company Liquidity

As of December 31, 2015, the Company had cash and cash equivalents and short-term investments of $49.1 million compared to $63.0 million at June 30, 2015. The decrease of $13.9 million was primarily the result of $6.6 million used to fund continuing operations coupled with fundings of $5.2 million for participation interest accounts, which represents what the Company believes to be approximately 68% of its fiscal 2016 obligation, and the remaining change of $2.1 million was a result of cash outflows primarily for accrued expenses and prepaid assets.

* See below under the heading “Use of Non-GAAP Financial Measures.”

Quarterly Conference Call

First Marblehead will host a conference call on Tuesday, February 9, 2016 at 5:00 p.m. Eastern Time to discuss its operating results. Investors and other interested parties are invited to listen to the conference call via a simultaneous internet broadcast on the Company’s website at www.firstmarblehead.com, under “For Investors,” or by dialing (888) 317-6003 from the United States or (412) 317-6061 from abroad and entering the pass code 8495222. 

A replay will be available approximately one hour after completion of the call on First Marblehead’s website or by dialing (877) 344-7529 from the United States or (412) 317-0088 from abroad and entering the pass code 10079934. The replay will be available for two weeks.

About The First Marblehead Corporation First Marblehead helps meet the need for education financing by offering national and regional financial institutions and educational institutions the Monogram® platform, an integrated suite of design, implementation and credit risk management services for private label, customizable private education loan programs. For more information, please see www.firstmarblehead.com. First Marblehead supports responsible lending and is a strong proponent of the smart borrowing principle, which encourages students to access scholarships, grants and federally-guaranteed loans before considering private education loans; please see www.SmartBorrowing.org. First Marblehead offers outsourced tuition planning, billing, payment technology services and refund management services through its subsidiary Tuition Management Systems LLC. For more information, please see www.afford.com. Through its subsidiary, Cology LLC, First Marblehead offers private education loan processing and disbursement services for lenders. For more information, please see www2.cology.com.

Statements in this press release, including the financial tables, regarding First Marblehead’s future revenue, expenses and other financial and operating results and liquidity, as well as any other statements that are not purely historical, constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon our historical performance, and on our plans, estimates and expectations as of February 9, 2016. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future results, plans, estimates, intentions or expectations expressed or implied by us will be achieved. You are cautioned that matters subject to forward-looking statements involve known and unknown risks and uncertainties, including economic, legislative, regulatory, competitive and other factors, which may cause our actual financial or operating results, or the timing of events, to be materially different from those expressed or implied by forward-looking statements. Important factors that could cause or contribute to such differences include: market acceptance of, and demand for, our Monogram platform and fee-based service offerings, including our success in negotiating loan program agreements with additional clients; the successful sales and marketing of Monogram-based loan offerings, including the volume of loan applications and the extent to which loan applications ultimately result in disbursed loans; the volume, timing and performance of disbursed loans; the size and structure of any credit enhancement provided by First Marblehead in connection with our Monogram platform; the successful sales and marketing of the products and services offered by Tuition Management Systems LLC and Cology LLC; other changes to our business model or business effects, including the effects of industry, economic or political conditions outside of our control; capital markets conditions and our ability to structure securitizations or alternative financings; the size, structure and timing of any such securitizations or alternative financings; our ability to further reduce our operating expenses without adversely affecting our business; resolution of litigation and regulatory proceedings pertaining to our Massachusetts state income tax returns; the estimates and assumptions we make in preparing our financial statements, including quantitative and qualitative factors used in determining the estimate of the fair value of service revenue receivables and deposits for participation interest accounts; and the other factors set forth under the caption “Part II – Item 1A. Risk Factors” in First Marblehead’s quarterly report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2015. Important factors that could cause or contribute to future adjustments to the estimates and assumptions we make in preparing our financial statements include: actual transactions or market observations relating to asset-backed securities, loan portfolios or corporate debt securities; variances between our performance assumptions and the actual performance of the loan portfolios held by the GATE trusts or First Marblehead’s clients (the “Portfolios”); economic, legislative, regulatory, competitive and other factors affecting discount, default, recovery and prepayment rates on the Portfolios, including general economic conditions, the consumer credit environment and unemployment rates; management’s determination of which qualitative and quantitative factors should be weighed in our estimates, and the weight to be given to such factors; the receptivity of capital markets to securities backed by private education loans; interest rate trends; and the resolution of litigation and regulatory proceedings pertaining to our Massachusetts state income tax returns. We specifically disclaim any obligation to update any forward-looking statements as a result of developments occurring after the date of this press release, even if our estimates change, and you should not rely on those statements as representing our views as of any date subsequent to the date of this press release.

The following tables present our private education loan facilitation metrics with respect to our Monogram-based loan programs for the three and six months ended December 31, 2015 and 2014, excluding our former bank subsidiary Union Federal Savings Bank for the three and six months ended December 31, 2014, as well as the private education loans processed by Cology LLC for these periods. We use the term “facilitated loan” to mean an education loan that has been approved following receipt of all applicant data, including the signed credit agreement, required certifications from the school and applicant and any required income or employment verification. We use the term “disbursed loan” to mean a loan for which loan funds have been disbursed on behalf of the lender. Historically, we have processed the greatest loan application volume during the summer and early fall months, as students and their families seek to borrow money in order to pay tuition costs for the fall semester or the entire academic year.

Use of Non-GAAP Financial Measures

In addition to providing financial measurements based on U.S. generally accepted accounting principles (“GAAP”), the Company has included in this press release an additional financial metric that it refers to as “net operating cash usage” that was not prepared in accordance with GAAP. The Company defines “net operating cash usage” to approximate cash requirements to fund its operations. “Net operating cash usage” is not directly comparable to the Company’s consolidated statements of cash flows prepared in accordance with GAAP. Legislative and regulatory guidance discourage the use of, and emphasis on, non-GAAP financial metrics and require companies to explain why a non-GAAP financial metric is relevant to management and investors.

The Company’s management and its board of directors use this non-GAAP financial metric, in addition to GAAP financial measures, as a basis for measuring and forecasting the Company’s core operating performance and comparing such performance to that of prior periods. This non-GAAP financial measure is also used by the Company in its financial and operational decision-making.

The Company believes that the inclusion of this non-GAAP financial metric helps investors to gain a better understanding of its results, including its expenses and liquidity position. In addition, the Company’s presentation of this non-GAAP financial measure is consistent with how it expects that analysts may calculate their estimates of its financial results in their research reports and with how clients, investors, analysts and financial news media may evaluate its financial results.

There are limitations associated with reliance on any non-GAAP financial measure because any such measure is specific to the Company’s operations and financial performance, which makes comparisons with other companies’ financial results more challenging. Nevertheless, by providing both GAAP and non-GAAP financial measures, the Company believes that investors are able to compare its GAAP results to those of other companies, while also gaining a better understanding of its operating performance, consistent with management’s evaluation.

“Net operating cash usage” should be considered in addition to, and not as a substitute for, or superior to, financial information prepared in accordance with GAAP. “Net operating cash usage” excludes the effects of income taxes, acquisitions or divestitures, participation interest account fundings and changes in other assets and other liabilities that are solely related to short-term timing of cash payments or receipts.

In accordance with the requirements of Regulation G promulgated by the Securities and Exchange Commission, the table below presents the most directly comparable GAAP financial measure, loss from continuing operations, before income taxes, for the three and six months ended December 31, 2015 and 2014 and reconciles the GAAP measure to the comparable non-GAAP financial metric:

 

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Meridian Offers One-Year Fixed Mortgage at 1.69%

TORONTO, Feb. 2, 2016 /CNW/ – Meridian, Ontarios largest credit union, today announced it is offering Ontarians the lowest posted fixed mortgage rate on the market today at 1.69 per cent for a one year term.#160;

Meridian is going against the trend set by banks and lenders of raising their fixed mortgage rates, says Bill Whyte, Chief Member Services Officer for Meridian.#160; As a Member-owned financial institution, we are able to take advantage of the current bond and lending environment and pass those savings onto our Members.

Meridian mortgage specialists work closely with Members to help ensure they are well informed about the financial facets of home ownership, including home affordability guidelines and smart borrowing practices.#160;

In addition to this attractive one-year fixed #160;mortgage offering, Meridian offers a full suite of mortgage options including fixed, variable, mortgages for business owners and construction mortgage solutions, added Whyte.#160; As we are quickly approaching the busy spring home buying season, this is the perfect time for people to evaluate their home buying options by getting a pre-approval now.

Meridian also provides one of the best repayment options on the market today.#160;#160; Meridians 20/20 repayment program allows Members to pay down up to 20 per cent of the original principal balance per year without penalty and can be done at any time of the year without notice.#160; Members can also increase their monthly payment up to 20 per cent of your original payment plan each year.

*Rate is subject to change without notice and offers may be withdrawn or extended without notice. Refer to our website for current residential mortgage posted rates. Mortgage must fund by April 30, 2016.

About Meridian
With over 70 years of banking history, Meridian is Ontarios largest credit union, helping to grow the lives of more than a quarter of a million Members, including over 19,000 business Members. Meridian has $11 billion in assets under management and delivers a full range of financial services online, by phone, by mobile and through a network of 74 branches and 7 business centres. Meridian Members also have access to THE EXCHANGE#174; Network, with more than 2,500 no-fee ABMs across Canada and 360,000 ABMs in the United States. For more information, please visit meridiancu.ca.

SOURCE Meridian Credit Union

For further information: Diane Medeiros, Manager, Media and Stakeholder Relations, Office: (416) 597-4444 ext. 2667, Email: diane.medeiros@meridiancu.ca

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4 Ways You’re Making Your Credit Card Debt Even Worse

Credit card debt isn’t an easy thing to overcome, there’s no doubt about it. But as if that wasn’t enough, there are quite a few common financial mistakes out there that can make your debt situation even worse! So, to help keep you from exacerbating your credit card woes, take heed of these four things that can worsen your debt scenario.

1. Only Making Minimum Payments

While making minimum payments on time will help you avoid getting hit with late fees, it won’t do much to help you out of debt. In fact, sticking exclusively to minimum payments might only make your debt situation worse. If your credit card has a high interest rate, minimum payments will only drag out your debt repayment process, resulting in more interest payments and, in the end, costing you more money. (You can calculate the lifetime cost of your debt here.)

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Try to contribute as much as you possibly can to help pay down your debt. If you can’t come up with the cash, consider reassessing your budget or picking up a side hustle to help free up cash flow. The sooner you pay off your credit card debt, the less interest you have to pay and the more you’ll save!

2. Using Your Cards While Paying Down Debt

After paying off a good chunk of your balance, you might feel tempted to utilize a little of the space you’ve freed up on your credit card. Unfortunately, this tends to be a slippery slope for folks working to pay off debt. Even if you intended to make only a small purchase with the card here and there, this type of spending behavior could wind up erasing all your hard work.

If you’re paying off debt on a credit card, you may want to consider opting for a cash-only budget instead. Limiting yourself to a set amount of cash each week can help you stay on budget and keep you from tapping into your credit. Leaving credit cards at home, or with a trusted family member or friend, can also help you fight off the urge to spend.

3. Ignoring Your Statements

When it comes to credit card debt, burying your head in the sand is one of the worst things you can do. While they may be a bummer to look at, ignoring credit card statements keeps you from seeing valuable information regarding your credit card account. Your payment due date, total balance, interest, and penalty fees are all included on your monthly statement. Not only that, but checking your statement is the best way to make sure your charges are correct and that you haven’t fallen victim to identity theft.

If you want to keep your credit card debt from evolving into an even bigger mess, you may want to attempt to get into the habit of checking your statements regularly. Most credit companies offer paperless statement options, so if you find it easier to pay attention to your email as opposed to snail mail, that may be the right option for you. Plus, seeing your balance decrease statement after statement can really be a big boost to your morale!

4. Not Changing Your Financial Habits

More often than not, debt is the result of poor fiscal practices. Whether it was your spending habits, failure to build a proper emergency fund, or a lack of financial knowledge, debt is too often the byproduct of bad behavior. And regardless of how much debt you’re able to overcome, if you aren’t able to adopt good financial habits, you’ll quickly find yourself falling back into debt or, alternatively, making your current debt situation even worse!

Old habits may die hard, but they aren’t entirely impossible to overcome. One helpful tool is to refer to your financial restraint in a positive light. When you can’t go on a shopping spree, it’s not because you “can’t afford it” it’s because you’re putting that money to better use. You’re not “losing money” to your savings account, you’re building yourself a helpful nest egg. Regardless of how you decide to go about it, adopting positive financial habits can really help when trying to keep your debt problem from worsening.

Remember, your debt level can directly affect your credit score. As you work to pay down your credit card debt, you can check your progress and see two of your credit scores for free every month on Credit.com.

When it comes to getting out of credit card debt, dedication is key. Once you’ve devised your get-out-of-debt battle plan, it’s important to stick to the rulebook no matter how tough times may get. While it’s going to be a struggle at times, you’ll find yourself feeling significantly more confident and positive about your financial future once you’ve pulled yourself out of debt.

More on Credit Cards:

  • Credit.com’s Expert Credit Card Shopping Tips
  • How to Get a Credit Card With Bad Credit
  • An Expert Guide to Credit Cards With Rewards

Image: iStock

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Residents Of The West And New England Have Nation’s Highest Credit Scores

CHARLOTTE, NC, Feb.4, 2016 /PRNewswire/ — San Francisco-area residents have the highest credit scores of any metro area in the US, increasing their eligibility for the best rates on mortgages and other types of loans.

Thats one of the findings of a new analysis of credit scores and loan offer information from LendingTree, the nations leading online loan marketplace. The company examined over four million loan requests made through LendingTree.com in 2015 to calculate average credit scores by metro areas, and to correlate credit scores with loan offer interest.

Western and Northeastern metros dominate the top spots on the credit score rankings, accounting for ten of the top twenty areas. Metros in Southern states account for virtually all of the twenty lowest-ranking cities.

Credit scores represent peoples creditworthiness for loans through a calculation of several different factors, including the amount an individual currently owes to lenders and his or her credit history. Most credit score models range from a low of 300 to a high of 850, with those above 720 usually considered excellent loan candidates and those below 500 generally classified as poor candidates. The average score in this study is 643.

Because credit scores are so closely tied to interest rates offered to borrowers, a credit score difference of even 50 points can mean substantial financial savings for large financial transactions like buying a home, financing a car or consolidating debt, said Doug Lebda, founder and CEO of LendingTree. Knowing and managing your credit score is especially important in this volatile interest rate environment.

People living around San Francisco and San Jose boast an average score of approximately 673, besting Bridgeport, CT and Boston, both about 664, Oxnard/Thousand Oaks, CA at roughly 663 and Denver and Washington, DC, each around 662.

With an average credit score of 620, Jackson, MS takes the lists bottom spot.

Credit and loans

In 2015, borrowers with a credit score of 720 and higher were offered APRs averaging 4.15% for a 30-year fixed rate purchase mortgage. For a $200,000 loan, the monthly payment would be roughly $963 per month.

However, borrowers with a credit score between 620 and 639 were offered APRs averaging 4.93%. For the same loan, the borrower with the lower credit score would pay about $1,052 per month, a difference of roughly $89 per month, $1,068 per year or over $32,000 over the life of the loan.

If you are planning a major purchase in the next year or two, there are several steps you can take now that will help to improve your credit score in the future, said Lebda. Reducing balances on credit cards is a good place to start. Second, always be diligent about paying your bills on time and find ways to remind yourself of when a payment is due. Third, be sure to review details in your credit report and alert the major credit agencies to any errors. With MyLendingTree, we provide a free monthly credit score and score analysis to help consumers easily monitor and manage their credit score. We also analyze interest rates offered on our network and, based on your credit profile and existing loan details, will let you know if you could be overpaying, by how much, and what you can do to save money on your loan payments.

You’re Not a Grown-Up Until You Have a Credit Card. Here’s Why

A lot of people hate credit cards, and for good reasons. They make it easy to overspend and end up in very expensive debt. If youve had the experience of paying off credit card debt or watched someone struggle through it, perhaps youve come away from it thinking, Im sticking to cash.

That seems to be the mindset of younger consumers. Facebook analyzed financial conversations, conducted surveys and reviewed audience data of users ages 21 to 34 and collected the findings in a white paper titled Millennials + money: The unfiltered journey. According to the paper, the majority of millennials (57%) prefer to use cash or debit cards instead of credit cards, and the generation seems greatly attached to the goal of living debt-free. They were asked to define financial success, and 47% said it was to be debt-free. Their most common financial priority (43%) is to pay down debt.

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Point taken. Millennials dont like debt. Thats likely a huge reason theyre relying on cash and debit cards for their everyday purchases.

But dismissing credit cards could be a big mistake for young consumers, and they might not realize why. Nearly a third (30%) of millennials say they are not sure how credit cards could be helpful, the Facebook paper said. Well, heres how.

You Can Build Credit

You dont need credit to participate in the economy and live happily, but it can make things a heck of a lot easier. Your credit rating comes into play with big financial decisions, like buying a house or car (unless youre only using cash), but it affects a lot more than that. Bad credit or no credit could make it harder or more expensive for you to rent housing, set up utilities, get a cellphone or get insurance. It could even affect your job prospects. There are a lot of situations in which a good credit score comes in handy.

But how do you get a good credit score? One way is to use a credit card responsibly. You can start with a secured credit card (weve reviewed the best secured credit cards here) or ask a close friend or relative to co-sign your card application. Try to use very little of your available credit and make the payments on time. Those two things are the foundation of a good credit score.

You Dont Need to Go Into Debt

The interest rates on credit cards tend to be much higher than they are on other credit products, like personal loans, auto loans or mortgages. That being said, you can use a credit card without ever having to pay interest. In other words, you can improve your credit score without debt.

If you pay your credit card bill in full every time its due, you can take advantage of whats called a grace period — the time between when you make a purchase and actually take the money from your bank account to pay for it. During that time, youre technically borrowing money from your credit card issuer, but the grace period allows you to borrow that money without accruing interest on it.

On one hand, its a great tool: Youre building credit without going into debt. But be careful: If you miss a payment, you can lose your grace period, and your credit card issuer can start charging you interest for the outstanding balance. To make debt-free credit card use work for you, you need to pay very close attention to how much youre spending (so you can cover the bill) and make sure youre paying bills on time.

Credit cards can be both helpful and hurtful, which is why some people take the cautious route and avoid them. Unfortunately, that can make things more challenging for you at some point. This isnt to say everyone should have credit cards, but if you want to minimize the challenges of major adult milestones like buying a home or new car, you might want to give them a (careful) try to build your credit. You can check your progress and see two of your credit scores for free every month on Credit.com.

More on Credit Cards:

  • Credit.com’s Expert Credit Card Shopping Tips
  • How to Get a Credit Card With Bad Credit
  • An Expert Guide to Credit Cards With Rewards

Image: gpointstudio

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