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You are here Consumer News Remar's Report Rethinking Debt

Rethinking Debt

Putting Money In Your Pocket

/money_down_drain.jpgNovember 2010

Special note from Remar: This Remar's Report is going to sound like a commercial for Educators, but it isn't. This report is about saving you money, and since many times "saving money" and Educators go hand-in-hand, the credit union's name comes up a good bit. I think you'll be glad I bring it up, if you read carefully.

Want some free money? You know, some you don't have to work for? How about free money every month?

If you haven't looked at your debt—whether it's a payment on a loan or a credit card, recurring payments on your cell phone, or insurance or what you spend on groceries and house supplies each year, you're throwing away money and you're probably throwing away thousands. Like this:

Do you have a vehicle loan?

If you financed a vehicle (or vehicles) at a dealership or through a bank, you're probably paying too much in interest. Every day Educators sees members that regularly throw away at least a thousand dollars in unnecessary interest payments on a vehicle loan at a bank or dealership source.

And here's a fact: if you financed a used vehicle at a bank or dealership, you probably threw away a lot more than a thousand dollars. This week Educators just refinanced a member's 29% used car loan at another lender—and handed the member back $3,500. The credit union loan was under 6%.

Have you had your car and house insurance with the same folks for a long time?

Haven't had any wrecks or tickets? Have kids that have been driving for a number of years with no accidents or tickets? Talk to your insurance folks, and tell them you want an insurance review, and want to get your insurance costs down. Insurance companies aren't required to call you up and tell you if there's a way to lower your insurance costs. But most agents will listen very carefully if they sense they may lose you as a customer if they don't look for meaningful savings for you.

Do you have more than one cell phone?

For instance, does each member of your family have a phone? Is there a special plan for that? A true story: I have four cell phones and cut my monthly bill $80 by changing plans. $960 saved in a year. How long do you work to take home $960?

Have a mortgage?

Ever had that mortgage looked at? This week an Educators member is refinancing their mortgage currently at another lender and is cutting his interest payment $32,709.72. Please look at that savings again: $32,709.72.

Have a few credit cards?

The new credit card regulations mean many credit card companies are raising their rates, raising their fees, and generally raising barriers when it comes to qualifying for free features. Carry a regular balance of $5000 on a credit card with an interest rate of 22%, and you could be throwing away $34 a month in interest payments, compared to the average cost of an Educators card.

And while we're talking credit cards, guess what Educators' credit cards don't have? Binding Mandatory Arbitration Agreements. BMA agreements take away your right to use the U.S. court system. You'll find them in many bank credit card agreements. You won't find them in Educators.

And speaking again of credit cards, do you ever make the minimum payment? Look at the math of paying just a little bit more than the minimum. Let's say you owe $5000 on a 12% APR card. Paying the minimum of $100 a month will take you 259 months and cost $4,545 in interest. Pay just $50 more monthly, a payment of $150 and you'll pay the balance of in 41 months for $1113 in interest.

Want to cut your heating bill?

Have a timer for your thermostat yet? Lower the temperature at night, and during the hours you're gone. Turning the thermostat back 10 to 15 degrees for 8 hours helps you save about 10% per year on average.

Know your credit score?

Looked at your credit report lately? Your credit score is based on it. And don't be surprised if there's a mistake on it, and don't be surprised if that mistake costs you money. Your financial life is ruled by your credit score. Trouble is, the credit reporting companies haven't made it easy for you to understand your credit report—for a simple reason: they want to sell you an easier-to-understand credit report. Just a mere ten or twenty bucks per month, or more. Too bad there's not a way to get your report for free, and then have it explained to you—in person for free. Oh, I forgot to tell you: Educators, for free, gives you your credit score and explains your credit report to you with What's Your Score?

Saving thousands by rethinking your debt isn't brain surgery.

Start your own rethinking plan this week: Stop in to any office and tell them you want a copy of "What's your Score?" If you want to be really efficient, call and make an appointment with a staff member, and then head to that appointment with all of your debt records. Take copies of your credit card bills, copies of your loan paper work. Educators will look at it all, and tell you how much money, if any, you can save by moving credit cards, refinancing loans, or improving your credit.

Make sense? It makes big dollars and sense

Prepared by Remar Sutton and Associates and licensed to Educators Credit Union. Copyright 2010. All rights reserved.