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"Three Reasons You Should Always Pay More Than The Minimum" next to a hand using a mock credit card on a card reader.

Three Reasons Why You Should Always Pay More Than the Minimum

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Credit cards are a valuable financial tool for both individuals and businesses–but they come at a price. 

 

You get purchasing power on the spot, and the creditor only requires you to pay off a small amount of the total every month, i.e., the minimum amount due. However, it’s important to remember that the minimum is calculated in the best interest of the creditor, which puts you at a disadvantage. 

 

Here are some important reasons why you should always pay more than the minimum due on your credit card. 

 

1) Save money 

When you only cover the minimum every month, you end up paying more in interest. The minimum payment exists to ensure that interest fees are covered, with only a small amount going toward the actual balance. 

 

For example, suppose you have a $3,000 balance with a 14 percent APR (Annual Percentage Rate). Your minimum payment would be around $65. By the time you pay it off, you will have paid an additional $1,332 in interest. 

On the other hand, if you were to pay $100 every month instead of $65, you would only pay $713 in interest. 

 

2) Get to debt-free faster 

The more you pay, the quicker you’ll be debt-free. Using the same example, it would take 67 months to pay off the original $3,000 balance, along with all that extra interest. That’s 5.5 years! 

 

Paying $100 per month instead would clear the debt out in approximately 38 months, which is just over three years. Of course, this is provided you’re not adding additional charges to the card and that your APR remains at 14 percent. 

 

3) Raise your credit score

The ratio of your balances to your credit limits is called “credit utilization.” This ratio actually accounts for 30 percent of your entire credit score. 

 

For example, a credit limit of $2,000 with a balance of $500 would mean that you have a credit utilization of 25 percent. A lower ratio is better because it shows that you’re using only a small amount of the total credit that has been extended to you. 

 

If you’re only paying the minimum, your balance remains high relative to your total credit limit. This will cost you some points on your score. Naturally, this also means that when you begin making higher payments that quickly bring down your balance, you’ll likely see an increase in your credit score to reflect this change. 

 

So what’s the solution to avoiding the minimum payment trap? Whenever possible, pay off your balances in full every month. 

 

APR = Annual Percentage Rate. This article is for informational purposes only and is not intended to provide tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors for advice. All loans subject to approval and rate may vary depending on individual's credit history and other factors. All Credit Union loan programs, rates, terms and conditions are subject to change at any time without notice. Membership required. SRP is federally insured by NCUA. 

Article Credit: BALANCE

"Three Mortgages Every Home Buyer Should Know" above the SRP logo and next to a key with a house-shaped keychain inside the door lock.

Image for an article describing the different types of mortgages available.

Three Mortgages Every Home Buyer Should Know

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Because of the high cost of most real estate, very few people can purchase a home with savings alone.

 

Therefore, if you are like the vast majority of people, you will be borrowing money from a financial institution to purchase the property you want. Called mortgages, these loan products can be quite complicated. Knowing the basics of how mortgages work can help guide you to the loan that is most appropriate for you. 

 

Mortgage Terms 

How long is it going to take you to repay the loan? That depends on the term of your mortgage. A term is the number of years that you agree to pay back the amount you borrow. 

 

The term also affects the cost of your mortgage payments. Shorter repayment periods mean higher monthly payments but less interest you pay over the life of the loan, while longer terms will give you lower payments but will cost more over the long run. The traditional mortgage term is 30 years, but they have ranged from ten to 40 years. 

 

Types of Mortgages 

There are several types of mortgages available, with the most common being fixed-rate, adjustable, and interest-only. 

 

Fixed-rate mortgages come with an interest rate that remains constant over the life of the loan. 30-year mortgages are the most common, but you may also choose a 20-year, 15-year, and even 10-year fixed-rate mortgage. In certain high-cost areas some mortgage lenders were even offering 40 year-loans. Though the mortgage interest rates tend to be higher than for other loan types, the rate is fixed and your payment won’t change. This stability makes them the most secure type of mortgage for buyers. 

 

Adjustable-rate mortgages (ARMs) have a period of fixed interest, but after that the payment changes with whatever index the loan is based on. The period of fixed interest may be three, five, or seven years. With a 5/1 (the first number stands for the number of years in the initial fixed period, while the second indicates how often the new rate will adjust) ARM, for example, the initial interest rate remains fixed for the first five years, and then adjusts annually for the remaining term. 

 

There are several types of caps that may apply to an ARM: an overall cap limits how much the interest rate can increase over the life of the loan; a periodic cap limits the amount the interest can increase from one period of adjustment to the next; and a payment cap limits the amount the monthly payment can increase at each adjustment. 

 

While ARMs are less secure than fixed-rate mortgages, they tend to have lower initial rates and therefore lower monthly payments. They can be a good option if money is tight in the early years, as long as you are confident you can meet future interest and payment increases. 

 

Interest-only mortgages are loans that allow you to pay just interest for between three and ten years. Once that period is over, the payment rises to include both principal and interest. While qualification can be easier and the monthly costs can be lower than other mortgage types, they can be a gamble. A downturn in housing prices could mean that you end up owing more than you own, and an interest rate hike could put the payments beyond your reach. 

 

Certainly there are benefits and drawbacks to each mortgage type. Long before you borrow, consider each option carefully to know which is most appropriate for your situation. With so much money at stake, making the best mortgage decision is important. 

 

This article is for informational purposes only. All loans subject to approval. Actual rate and terms may vary depending on individual’s credit history and other factors. Membership required. SRP is federally insured by NCUA. Equal Housing Lender. NMLS ID #612441.

Article Credit: BALANCE

Representatives of USCA and SRP Federal Credit Union prepare to cut the ribbon on the newly designed Pacer $mart hallway and classroom.

USCA and SRP Federal Credit Union Unveil New Pacer $mart Classroom

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Aiken, SC – Representatives from SRP Federal Credit Union and the University of South Carolina Aiken gathered on March 21 to celebrate the unveiling of a newly designed classroom and hallway dedicated to financial education at the university.

 

The new learning space will host Pacer $mart, a financial education program created in partnership between SRP and USCA’s School of Business Administration. Designed to equip college and high school students with financial knowledge, the program covers key personal finance topics, including budgeting, saving, credit, investing, insurance, taxes, and economics.

 

“The Pacer $mart program is a testament to the power of partnership in shaping students’ financial futures,” said Dr. Daniel J. Heimmermann, Chancellor at USCA. “This newly designed space will serve as a dynamic hub for financial learning, equipping students with the knowledge and confidence to make informed financial decisions throughout their lives.”

 

Located inside USCA’s Business & Education building, the newly branded Pacer $mart classroom will serve as a hub for guest speakers, financial success camps, and other educational initiatives. The classroom and adjoining hallway feature wall murals that incorporate university and SRP branding, along with an inspiring quote from Benjamin Franklin: “An investment in knowledge pays the best interest.”

 

SRP Federal Credit Union remains dedicated to the credit union philosophy of “People Helping People” by fostering financial education in the communities it serves. In addition to the Pacer $mart program, SRP provides personal financial education through seminars, financial counseling, school visits, and more.

 

“Uplifting our communities through financial education is a cornerstone of our mission at SRP,” said Liz Ponder, Interim CEO, SRP Federal Credit Union. “We are proud to partner with USC Aiken to empower students with the knowledge and skills they need for lifelong financial success.”

A figure of a person is being pulled in two different directions by a bomb that reads, "Debt," and a piggy bank that reads, "Save." The graphic reads, "To pay down debt, first you have to save."

To Pay Down Debt, First, You Have to Save

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When you want to pay off debt fast, that impulse often means depleting your savings. So how do you pay off debt AND save money?

 

Mathematically, based on the interest rates of your loans versus your savings account (or other savings products), your debt is likely costing you more money every month than your savings is earning you. Thus, looking simply at the highest net impact of your dollar, it would make sense to use extra income to pay off debt rather than save the money.

 

But this strategy usually results in more debt. Crazy, right? But think about it. If you're taking all your spare dollars and diverting them to your credit card or other loans, completely neglecting your savings account, what will you do when an emergency comes along, things like car repairs, vet bills, etc.?

 

Life happens, and since you don’t have a savings account, you'll probably have to slap these expenses onto your credit card. You know, the one you've been working so hard to pay off?

 

Here's how to get out of this cycle.

  1. Put away the credit cards and stop adding to your debt.

 

  1. Set a goal for your savings account that you’re comfortable would cover most emergencies, for instance, $500.

 

  1. Pay at least the minimum payments on your loans while you build your savings account until you reach $500.

 

  1. Then dedicate more money to paying down debt.

 

  1. If an emergency comes along that takes your savings below $500, switch back to paying the minimum on debt and put extra money into savings to build that back up.

 

  1. Once savings is steady at $500 and you feel you've gotten your debt under control, start increasing your savings. Most personal finance experts say your emergency savings should be able to cover three to six months of living expenses.

 

And don’t stop contributing to your retirement savings or dip into your retirement savings unless it’s truly an emergency—your future self will thank you.

 

With patience and some baby steps, you'll soon have your finances under control and find yourself resting on a comfortable nest egg.

 

This article is for informational purposes only. Membership required. SRP is federally insured by NCUA.

Article Credit: CUNA

A calculator, pen, and clock next to a sticky note that reads, "Tax Time!"

The Tax Man Cometh: Quick Tips From BALANCE

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Since we all know what the other certainty in life is (death), maybe we shouldn’t be all that upset about the onset of tax season, right? And while it may seem that the tax code gets more complicated every year, the good news is there are also a lot more tools now than ever before to streamline the process of tax preparation and make sure you complete your return correctly. Here are a few quick tax tips to dial down the pain.

 

Tax Software

You’ve probably heard of Turbo Tax. It’s the market leader in tax prep software, but it’s not the only option. If your adjusted gross income is $84,000 or less, you may qualify for free software to file your federal return. Go to the IRS website’s Free File page to learn more.

 

Different companies have different eligibility criteria to get the freebie. You’ll be asked to answer a few questions to match you with the right commercial tax software. And remember, not all of the IRS’ partner companies offer free state tax returns, so check those details before proceeding.

 

IRS Mobile App

Some filers may also qualify for free tax preparation assistance. You can use the IRS mobile app (IRS2GO) to find IRS Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) sites.

 

You can also use IRS2GO to:

  • Subscribe to tax tips from the IRS.
  • Follow the IRS on social media.
  • Connect to other online tools from the IRS.
  • Check your refund status.

Report Everything (yes, everything)

Finally, few things will trigger an audit faster than failing to report all of the income that’s been reported to the government under your Social Security number. You’re not likely to forget income noted on the W-2 you get from your employer, but be sure to also include other sources of income throughout the year, like freelance work, unemployment compensation, scholarships, and prize winnings such as gambling and lottery winnings.

 

This article is for informational purposes only and is not intended to provide tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors for advice. Membership required. SRP is federally insured by NCUA.

 

Article Credit: BALANCE

A heart-shaped cake on a plate next to text that reads, "Frugal Date Nights."

Frugal Date Nights: Keep Your Partner and Wallet Happy

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When you and your partner are focusing on paying down debt, it’s easy to put relationship fun on hold. After all, dining out is a sure-fire way to blow the budget. Expensive vacations? Entirely out of the question! But you can still keep the spark alive with regular frugal date nights.

 

First, schedule the time on your calendar. Often, busy couples find that if it doesn’t get scheduled, it doesn’t happen. If you have young children, consider coordinating with another family to swap babysitting duties. This way, each set of parents gets an evening out without paying for a babysitter.

 

Now that you’ve got the date set and the sitter lined up, here are some frugal date ideas so you and your partner can make great memories without spending much money.

 

Go on a hike

A hike (or a leisurely walk) in a beautiful location is a great way to spend some distraction-free time with your spouse. Enjoy the scenery, get some fresh air, and get your blood pumping. Apps like AllTrails and Hiking Project are good free resources for local hikes.

 

Play Tourist

If a friend or family member was coming to visit your city, where would you take them? Often, the most impressive or entertaining spots get overlooked by locals. Pretend you’re just visiting the area and hit up some of the top tourist destinations and local landmarks. The local Chamber of Commerce is an excellent resource for inspiration.

 

Star Gazing

You don’t need a telescope to take your honey stargazing! It’s best to choose a night when you’ll have clear skies and a new moon. Pack up a blanket and some snacks and head out of town to a place with dark skies and little light pollution. Spread out the blanket, look up at the stars, and bask in the awe of a starry sky.

 

Eat Cake

If you miss going out to restaurants while you’re tightening the budget, you can get that restaurant enjoyment without having a full sit-down meal. Coffee and dessert at your favorite restaurant still feel like a splurge. Who said you can’t have your cake and eat it, too?

 

Have a Picnic

A picnic doesn’t have to be a fancy (read: expensive) affair. A lunch sack will do just fine if you don’t have a dedicated picnic basket. Cheese, crackers, fruit, and your favorite drinks require almost no prep and taste even better at a local park or wilderness area.

 

Visit a Farmers Market

You might be amazed at how much is happening at your local farmer’s market! Of course, you’ll find farmers selling their freshly grown produce, but there’s likely also baked goods, meat and eggs, crafts (like handmade candles and soap), and ready-to-eat food. Wandering around the farmer’s market is a great way to spend a few frugal hours. You might even come home with local produce and inspiration to try a new recipe.

 

Hit up the Yard Sales

If you like the thrill of the hunt, it’s worth getting up early on a Saturday morning and hitting the yard sale circuit. Decide how much money you’re willing to spend ahead of time and bring it in small bills. This helps to ensure you stay within your budget. You never know what you might find at a yard sale—and sometimes you’ll come home empty-handed! Not knowing is all part of the fun.

 

Gather Fruit

Nearby orchards or berry farms can make for great frugal dates. The “u-pick” fruit farms are typically less expensive and tastier than the comparable fruit at the grocery store, and you get to spend some quality time outside with your partner. Make sure to research the right time to go for ripe fruit and bring some containers from home.

 

Wrapping it Up

Date nights are so important in relationships. Taking the time to talk without the day-to-day stressors and sharing new experiences help keep the romance alive. These things don’t have to be expensive. Keep your budget on track with frugal date nights and watch your relationship and savings account grow.

 

This article is for informational purposes only. Membership required. SRP is federally insured by NCUA. Article Credit: BALANCE

Ribbon-cutting of the SRP Federal Credit Union Boardroom at the J.A. Discovery Center

SRP Federal Credit Union Unveils Branded Boardroom at JA Discovery Center

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Evans, GA – SRP Federal Credit Union and Junior Achievement (JA) Discovery Center of the CSRA celebrated the unveiling of the newly branded SRP Federal Credit Union Boardroom with a ribbon-cutting ceremony on January 31, 2025.

 

Located inside the JA Discovery Center on River Watch Parkway in Evans, GA, the boardroom will serve as a dedicated meeting space for JA and its corporate sponsors, further enhancing the center’s mission of financial literacy and career readiness for students.

 

The newly branded space features a striking wall dedicated to SRP’s High School Affinity Debit Card program, alongside a detailed timeline showcasing the credit union’s rich history.

 

SRP Federal Credit Union has been a proud founding partner of the JA Discovery Center of the CSRA since its opening in 2023.

 

The center provides hands-on financial education to students from the Columbia County School District and the Richmond County School System through interactive programs like JA Finance Park and JA BizTown. These simulations immerse students in a real-world economy, helping them develop essential skills in personal finance, entrepreneurship, and career planning.

 

Community Impact

Grace Helms, Assistant Vice President of Marketing, Communications, and Community Development at SRP Federal Credit Union, emphasized SRP’s ongoing commitment to financial education and community support.

 

“Junior Achievement's mission to provide financial education to young people aligns perfectly with our dedication to equipping individuals of all ages with essential financial skills,” said Helms. “By working together, we are helping to empower the next generation with the knowledge they need to build strong, financially sustainable futures.”

 

SRP Federal Credit Union remains committed to supporting Junior Achievement, with numerous SRP team members actively participating as past and present instructors in JA programs.

 

Laney Mize, Director of Development for Greater Augusta at Junior Achievement of Georgia said, “SRP has been a huge supporter of Junior Achievement through providing employee volunteers and funding.” 

 

“SRP influences and educates students, but also adult visitors as well,” said Mize. “The SRP Boardroom is a place where JA Partners can hold meetings and also learn the impressive history and culture of what SRP Federal Credit Union has to offer to the CSRA.”