2. We will review your debt to find ways to save you money in payment or total interest.
Debt. Even typing the word makes me shudder a bit. We know how burdensome debt can become, but we also know that debt is a necessary part of most of our financial lives. That’s why we make a point to examine our member’s debt situation during a WalletCare conversation. We aren’t interested in simple saddling our members with more debt. We want to help our members borrow better.
We know you have to borrow money occasionally. It happens. The key to our conversation is finding the best solution to make that debt manageable. In addition, if you’ve already borrowed somewhere else, but those debts are making life difficult for you, we want a chance to make that debt easier by moving it to 3Rivers.
How can debt be easier? There are a couple different ways to lessen the financial weight of your debt. First, you can refinance your debt to lower your monthly payments, freeing up more money each month so you can actually save for your future. But monthly payments aren’t the only way to save money. You can also restructure your debt to save a LOT of money over the life of your loan. By shortening the term of your loans, not only will you pay off your debt sooner, but you will also end up paying substantially less interest. These are the benefits of sitting down for a WalletCare conversation and taking the time to examine all of your opportunities.
If you’re interested in sitting down for a WalletCare conversation with us, visit your local 3Rivers branch today!
By now you’ve seen us talking about WalletCare on TV and in our branches. We want to help everyone understand what WalletCare means so we’ve laid out a four-point Promise to explain what it’s all about.
The WalletCare Promise by 3Rivers
- We will complete a comprehensive financial review to help you find better ways to spend, save, and borrow.
- We will review your debt to find ways to save you money in payment or total interest.
- We will compare deposit accounts elsewhere to help you save and even grow your money.
- We will listen to your financial goals (college planning, retirement, etc.) to help you build your desired financial future.
When you come into a 3Rivers branch for a WalletCare conversation with one of our team members, you can expect to have each of these points covered because this is the only way we can be sure we’re helping you solve ALL of your money matters.
This isn’t a one-time flashy promotion. We’re not going to toss WalletCare away in 6 months and start doing business differently. In fact, we’ve already been delivering WalletCare to our communities for over 78 years, and we don’t plan on changing that anytime soon.
Keep following the 3Rivers blog as we’ll be breaking down the WalletCare Promise and explaining how these four points can help you solve your money matters.
Smaller paychecks, higher prices and growing debts are leading many consumers to examine their money matters more closely. As WANE-TV and CNN Money reported recently, consumers are cutting back as they feel a new pinch on their money matters. As Sarah Quinlan, senior vice president for market insights at MasterCard Advisors, observes:
People still are acting as if we are in a recession.
Some ways people are taking action include:
- Holding off on major purchases
- Decreasing energy expenses by driving less or turning down thermostats
- Cutting out or reducing spending on splurges like coffee-shop lattes
- Hunting for sales and using coupons more often
One way we at 3Rivers are helping our community overcome money challenges is through something we call WalletCare. We’ve been doing it for 75+ years but only recently gave it a label. We take an honest look at your financial lifestyle and seek ways to help you better manage your debts. Then, we suggest options for using your newly freed-up cashflow to pay down debt faster, save for retirement or have a little extra breathing room to budget more confidently.
A real-life WalletCare example
A member we’ll call “Pat” recently visited us. Through a brief conversation, we learned about 11 different debt payments that Pat makes monthly.
They total just a hair under $1,000 and Pat was starting to struggle to come up with enough to cover all the payments each month. To make things worse, Pat’s credit rating was also starting to suffer because those payment obligations were a big chunk of Pat’s income.
Our team member suggested an alternative to consolidate all those debts into one monthly payment totaling $225 each month – a reduction of more than $760!
Our team member then offered Pat a few different options for using those funds more effectively. Pat chose to use half the savings (about $380 a month) as an extra payment on the principal of the new loan and put the other half into a newly opened IRA.
The WalletCare impact?
Pat went from having a high monthly payment commitment, no retirement savings and a slowly deteriorating credit rating to the prospect of being completely debt free in 55 months (instead of 180) and having an IRA with an estimated $45,000 when retirement comes. And, Pat didn’t have to take on any new debt or make any drastic life alterations.
That’s life changing. That’s WalletCare.
In a perfect world, we’d all be able to pay our entire credit card balance every month. We don’t live in a perfect world.
Maybe the car broke down, basement flooded, or one of the kids thought the TV was a Piñata. Whatever the reason, you have a credit card balance, and it’s not the end of the world. Sometimes you have to make a minimum payment.
With a 3Rivers Visa Platinum, you’ll only ever be asked to pay 1.5% of your balance every month, and that’s ok when life throws you a curveball, and you’re unable to pay more. However, we want all of our members to adopt healthy financial habits and encourage you to pay more than the minimum.
Paying more than the minimum means paying less interest, and it means saving money over time. Paying the entire balance every month means you don’t have to pay any interest and won’t pay a penny more than what your purchases cost.
Here’s an example of how paying more each month will save you in the long run.
VISA Platinum Balance = $5,000
Annual Percentage Rate = 8.95%
|Payment Per Month||How Long To Payoff?||Total Interest Paid|
|$75||7 yrs, 8 months||$1,941|
|$150||3 yrs, 3 months||$770|
So you may wonder why we don’t force you to pay the whole balance if it’s the best way to pay. We know that it’s not always possible to pay the entire balance, so we want to give you a flexible way to pay your bill each month. For that reason, we’ll let you pay as little as 1.5% of your balance as your minimum payment. But remember that your best bet will always be to pay more than the minimum each month. That’s how you can eliminate debt quicker and pay less interest over the life of your credit card.
According to research published in the University of Scranton. Journal of Clinical Psychology, 34% of American’s who make New Year’s resolutions, resolve to improve their money situation. This could be a result of all the credit card spending during the holidays. In fact, myFICO conducted an unscientific poll of 2,400 Americans, and found that nearly half of them planned to charge their holiday spending.
Using a credit card to purchase gifts isn’t necessarily a bad idea. Many cards, including our own 3Rivers VISA Platinum, offer rewards for making purchases. If the balance on the card is paid off at the end of every month your dollar is stretching further. You’ll be able to redeem your rewards points for goods, gift cards, and other incentives.
However, many of us are not able to pay off our cards monthly, and knowing how to manage the debt can reduce stress and help maintain a healthy credit score. An easy way to lower your monthly minimum payment, and pay off your debt quicker is to consolidate credit card debt on to one card. This allows you to eliminate balances on high interest rate cards while still maintaining some spending flexibility in case of emergency.
There are a few things to consider when choosing the right card to use for this:
Find a credit card with a low APR.
Your Annual Percentage Rate (APR) determines how much interest you will pay on your balance. The higher the APR, the more money you’re paying to the issuer of the card, and the less you’re paying on your balance. (APR Explained). Moving your high APR cards, to a lower APR card means that you could make the same payment, and see more of your principal balance paid off each month. You might also have a lower minimum monthly payment, which could give you extra cushion if you need to pay less.
Find a credit card with no balance transfer fee.
Sometimes credit cards, especially those with a low introductory rate, charge a fee to move a balance onto the card. Finding a card that doesn’t charge this fee is an easy way to keep more money in your pocket, and avoid needless spending.
Find a credit card with no extra fees.
Watch out for annual fees, higher interest rates for cash advances, and other charges. Be sure to read the terms and agreement of any card carefully to avoid nasty surprises later. The goal is to pay as little as possible on interest and anything else that isn’t your balance.
The 3Rivers VISA Platinum meets all of these criteria and has been recognized by creditcardconnection.org as an ethical card. If you already have a 3Rivers card, these are great guidelines to keep in mind when evaluating any credit card offer.
If you’re looking for more information about how to build a good credit score, check out this video that year one Young & Free Indiana spokester Matt put together.