Borrowing costs money. That isn’t necessarily bad. It just means that when you pay it back, you have to pay more than you borrowed. The components of a good debt strategy are quite simple:
A good credit record does more than just make future credit approval easier to get. Most lenders use your credit record to determine credit limits and what rates to charge. A good credit record will save you money. You are entitled to a free credit report each year so you can know your own credit record. Go to www.annualcreditreport.com to get started. You can also monitor your credit score in online banking when you work with Peoples Bank.
Take action immediately if your borrowing is getting out of control. If credit cards are the problem, stop using them or even cut them up. Use our Debt Consolidation Calculator to see how much your monthly payment might be when you consolidate your debt into one loan or contact lenders to develop a workable repayment plan. A qualified credit counselor can also help.
Comparing credit cards can be confusing. You have to consider interest rates, fees, and associated benefits. The right credit card for you should reflect how you use it. If you pay the full balance monthly, the interest rate is of little concern. Focus on annual fees and benefits such as airline miles. If you carry over balances, the interest rate should be a top concern.
The “right mortgage” for you should balance interest rate, length, and down payment requirements that fit your situation. Adjustable rate mortgages usually have lower rates, but your payments may increase. Fixed rate mortgage usually lock a higher rate. If you expect to stay in one location only a few years, an adjustable rate mortgage may be best. If an increase in monthly payments would be too painful, look at a fixed rate mortgage or an adjustable one with rate adjustment limits.
Being conservative in your use of borrowing can help you take control of your financial future. Borrowing for the right reasons and living up to your repayment responsibilities can make borrowing a useful financial tool. If you need help finding the right loan and financing options, contact us at Peoples Bank in NC today.
