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What is a Savings Account & How Do They Work?

Saving money is a matter of personal preference. You could put your money under your mattress, in a piggy bank, or in your dresser drawer. But if you’d like to earn money on your money, you’ll want to open a savings account.With a savings account, you can deposit your money in a bank, credit union or online account in exchange for the ability to earn interest on your savings. An account will keep your savings secure (most reputable banks and credit unions offer federal insurance on your funds) and you can save as much or as little as you like — so long as you meet the minimum balance requirements.Your bank may use your savings funds to invest in other financial matters, including lending your money to other members of your community to buy cars and homes, or to start a business. When your financial institution makes money on these investments, they pass along a portion of the earnings to you.If you don’t plan to spend your money immediately, a savings account is a great way to organize your financial life, earn extra money and work toward your financial goals. But not every savings account is exactly alike. There are a few important differences you should know to find the best type of savings account for you.<h3>Eight Types of Savings Accounts</h3>Some savings accounts offer immediate access to your money, while others pay extra interest as an incentive for long-term saving. But with so many savings options, how do you know which account is right for you? Get to know the eight most common types of savings accounts to find the right one for your financial situation.<h3>Traditional or Standard Savings Accounts</h3>A traditional saving account is the most common type of savings account. You can open a traditional savings account at most banks or credit unions, which means you can have it alongside your checking account if you use the same place for both.Pros: A traditional savings account is simple and straightforward. You’ll have easy access to your cash, earn a little interest for your funds and your money will most likely be federally insured (you should always check with your bank or credit union to make sure).Cons: A traditional savings account may limit the number of withdrawals you can make in a month and potentially charge monthly or yearly maintenance fees to keep your account active. Although you’ll earn interest for your savings, it may be at a lower <a href="https://merrickbank.com/Learn/Maintaining-Good-Credit/What-is-an-APY">APY</a> than with other accounts.<h3>High-Yield Savings Accounts</h3>A high-yield savings account, typically offered by online banks, is a lot like a traditional savings account, but with one key difference. As its name suggests, a high-yield account usually offers a higher APY than traditional savings.Pros: Many people choose a high-yield savings account to earn more for their money, while still getting the same benefits of a traditional savings account, including federal insurance. In addition to the higher APY, the online nature of these accounts makes them easy to manage, often resulting in lower fees.Cons: Because high-yield accounts are typically online accounts, you may not be able to visit a physical location to deposit or withdraw funds. Money transfers may also require additional time, making your money less liquid.<h3>Money Market Accounts</h3>A money market account is another type of savings account offered by banks and credit unions. Financial institutions often invest money market funds in low risk, short-term assets to help your money grow at a guaranteed rate.Pros: In addition to the benefits of a traditional savings account, including federally insured funds and easy access to your money, you may earn a higher APY in a money market account. You may also be able to write checks on your money market account funds, making it more of a hybrid savings/checking account.Cons: Money market accounts usually require a minimum balance and may come with monthly fees. Although money market accounts typically offer a higher APY than other accounts, interest rates are tiered, so you may have to maintain a higher balance to earn the APY you want.<h3>CD Account</h3>A <a href="https://merrickbank.com/products/cds" target="_self">certificate of deposit (CD) account</a> allows you to save for a set amount of time, while forfeiting immediate access to your money. When your deposit comes due, you earn guaranteed growth on your savings at an agreed-upon rate.Pros: A certificate of deposit offers competitive rates — often much higher than you can find with traditional savings accounts. Because the investment term and APY are clearly spelled out, you can know exactly how much your money will grow. If you don’t need your money right away, a certificate of deposit may help you earn more than by simply keeping your money sitting in another account.Cons: The biggest drawback of a CD is that you lose access to your money for the entirety of your deposit term. If you want to make a withdrawal before the deposit comes due, you may have to pay an early withdrawal fee. Also, if market rates change during your term, your funds might be trapped in an account with a less competitive rate.<h3>Cash Management Account</h3>A cash management account isn’t a typical bank or credit union savings account. Instead, it allows you to keep investment money in an online account, so you can make quick money transfers, while still earning interest and receiving federal insurance on funds.Pros: With a cash management account, you can earn interest on money that you plan to invest — often at a higher APY than a traditional savings account. A cash management account may also offer higher federal insurance coverage limits and give you fast access to your funds for investing purposes.Cons: You may be able to earn a higher APY with other savings options, such as a high-yield savings account. If investing isn’t one of your current financial goals, you may not be as interested in this kind of account.<h3>Health Savings Accounts</h3>A health savings account (HSA) is a dedicated account that lets you save pre-tax dollars to pay for healthcare related expenses only, including insurance deductibles, co-payments, medications, and other related costs.Pros: An HSA gives you immediate tax savings on a portion of your income. You can also earn interest and grow your HSA dollars tax-free. It’s a convenient, affordable way to save and pay for medical expenses.Cons: An HSA account limits how you can spend your money and may penalize you for using savings or withdrawing funds for any other purposes. While it can be a great option to earn interest for your health expenses, you won’t be able to use those funds for any other expenses.<h3>Child &amp; Student Savings Accounts</h3>With a child or student savings account, you can help your children to save for college and other future expenses. Often a parent or guardian will serve as a joint account holder and make decisions about deposits, withdrawals, and transfers.Pros: These accounts can be a great way to teach your kids about money. Your kids will earn interest on their savings, so they can watch their money grow. Many child and student accounts also come with low or no minimum balance requirements and minimal account fees. It also gives you the opportunity to invest in your child’s future.Cons: Managing multiple accounts for you and your child requires extra time and effort. These accounts may also limit the number of transactions you can make in a month. Some child and students savings accounts come with monthly maintenance fees, potentially adding an expense that could be prevented by consolidating accounts.<h3>Other Specialized Savings Accounts</h3>If you want to save for a very specific purpose, such as retirement, a specialized savings account can give you benefits, including potential tax savings, above and beyond other savings options. As with other accounts, you can earn interest while saving for your financial goals, but specialized saving accounts often restrict access to your money and come with penalties for early withdrawals.<h3>401(k) Account:</h3>A 401(k) deducts pre-tax dollars from your paycheck to be contributed to your savings plan. Depending on your plan, your tax savings might come at the time you contribute or when you withdraw. Your 401(k) funds are invested to help you earn tax-shielded, tax-deferred returns and save for retirement.<h3>Traditional IRA:</h3>A Traditional IRA, or individual retirement account, lets you make pre-tax contributions to your savings. These funds are invested to help your money grow. You won’t pay taxes on your earnings until you retire or withdraw retirement funds.<h3>Roth IRA:</h3>A Roth IRA is similar to a Traditional IRA, except you pay taxes on the money you contribute to the account upfront. Your money then grows tax free.<h3>How Much Money Should You Keep In Your Savings Account</h3>How much you save is up to you, but you should always be aware of any savings restrictions on your accounts (including minimum balances and limits on transactions and withdrawals). You should also be aware of current federal insurance limitations and APY thresholds to help you get the most from your savings money.When it comes to federal insurance, your money is only insured up to a certain amount. By diversifying your savings and opening multiple accounts, you may be able to fully insure every penny of your savings, giving you added peace of mind. You should also pay attention to any APY tiers that come with your accounts. If your money dips below a certain dollar amount, you may automatically earn a lower APY.The amount you save also depends on your personal financial goals. If you’re saving for a family emergency, it’s wise to save three-to-six months’ worth of expenses. If you’re saving for a down payment on a home or to buy a car, make sure to find an account that can accommodate your specific savings needs.<h3>Key Takeaways with Merrick Bank</h3>Now that you know the pros and cons of each of the eight common savings accounts, it’s up to you to decide what’s best for you and your money. In many instances, the right answer might be to open and maintain multiple accounts.A combination of savings, specialized, and retirement accounts can help you work toward several savings goals at the same time, while helping to keep your finances secure and organized, every step of the way.As with any financial decision, take the time to ask questions and learn the benefits and drawbacks of each individual account. Compare multiple options to find the right combination of account features to help you get the most for your money.With a little work, the right knowledge, and the right savings account, you can set up a personalized savings plan to help you achieve your unique financial goals.

<h2>Best Ways to Get the Most Out of Your Credit Card without Making Mistakes</h2>There’s more to your credit card than mere purchasing convenience. Yes, your credit card offers a great way to make purchases, but it can also be key in helping you build or rebuild credit and unlocking a more fulfilling financial future. But with great purchasing power comes great repayment responsibility. Below are some basics on how to use a credit card wisely and a few best practices to help you get the most out of your card.&nbsp;&nbsp;<h2>How Credit Cards Work</h2>Every time you make a purchase on credit,&nbsp;<div><a href="https://merrickbank.com/Learn/Maintaining-Good-Credit/How-Does-Credit-Work">you agree to pay back the purchase price</a></div>&nbsp;(plus interest, if applicable), and your credit card provider agrees to front the cost. At the end of every&nbsp;<div><a href="https://merrickbank.com/Learn/Maintaining-Good-Credit/What-is-a-Billing-Cycle">billing cycle</a></div>, your credit card issuer will send you a statement that includes a&nbsp;<div><a href="https://merrickbank.com/Learn/Maintaining-Good-Credit/What-is-a-Minimum-Payment">minimum payment due</a></div>&nbsp;and any interest charges that may have accrued.You can&nbsp;<div><a href="https://merrickbank.com/statement">study this statement</a></div>&nbsp;to learn lots of important information, including your credit limit — the maximum amount you can put on your credit card at any time — and your&nbsp;<div><a href="https://merrickbank.com/Learn/Maintaining-Good-Credit/What-is-Available-Credit">available credit</a></div>&nbsp;— the difference between your credit limit and your current credit card balance. You can also check your&nbsp;<div><a href="https://merrickbank.com/Learn/Maintaining-Good-Credit/What-is-an-APR-Video">APR</a></div>, which is the Annual Percentage Rate your credit card issuer uses to&nbsp;<div><a href="https://merrickbank.com/Learn/Maintaining-Good-Credit/What-is-a-Variable-Interest-Rate">calculate interest</a></div>.As long as you pay at least the minimum payment due on each statement, you can avoid late fees and having a late payment show up on your credit report. If you owe more than the minimum amount due, you have a choice to make. You can either pay your balance in full, or you can pay at least the minimum payment due and carry the rest of the balance. If you do decide to carry a balance on your card, your credit card issuer will charge interest— essentially the price you pay for borrowing money on credit.<h2>How to Use a Credit Card</h2>You know how to use a credit card — you can swipe, insert, tap, or input your credit card number to purchase just about anything. But do you know how to use a credit card to get the most bang for your buck? Here are our best tips:<ul><li>Check Your Balance Regularly: It’s easy to get carried away with a credit card. Because making purchases on credit is so easy, it’s also easy to lose track of your balance. To avoid putting too many purchases on your credit card all at once and making it more difficult to stay on top of your repayment plan, check your balance regularly.</li><li>Always Pay Your Bill On Time:&nbsp;Making your credit card payment on time each month is the single most important thing you can do with your credit card. Missing a payment not only results in late fees, but it can also negatively impact your credit score, which will make it more difficult to borrow money in the future.</li><li>Know How Your Interest Is Calculated:&nbsp;Most credit cards come with a variable interest rate. That means your rate is subject to change based on a benchmark, like the&nbsp;<a href="https://merrickbank.com/Learn/Maintaining-Good-Credit/What-is-the-Prime-Rate">Prime Rate.</a>&nbsp;Check your monthly statement to find your current credit card APR. You can use this percentage rate to calculate exactly how much you’ll owe.</li><li>Watch For Credit Card Fees:&nbsp;In addition to interest, your credit card issuer may charge annual fees or other fees associated with maintaining your card. Be aware of when and how much you have to pay so you can plan to add these expenses to your existing balance.</li><li>Stay Below Your Credit Limit:&nbsp;While you can technically spend up to your credit limit, it’s a good idea to keep your balance as low as you can. This can help you make sure you’re not spending more than you can afford to pay off. Plus, a lower&nbsp;<div><a href="https://merrickbank.com/Learn/Maintaining-Good-Credit/What-is-Credit-Utilization-Video">credit utilization</a></div>&nbsp;is generally better for your&nbsp;<div><a href="https://merrickbank.com/Learn/Maintaining-Good-Credit/Everything-You-Need-to-Know-About-Credit-Scores">credit score</a></div>.</li><li>Report a Stolen or Lost Card Immediately: If you’ve misplaced your card or you see a fraudulent purchase on your account, contact your credit card company immediately. They’ll work with you to freeze future purchases and issue you a new card.</li><li>Monitor Your Credit: As you make purchases and payments on credit,&nbsp;<div><a href="https://merrickbank.com/Learn/Maintaining-Good-Credit/5-Reasons-to-Check-Your-Credit-Report">check your credit report and credit score often</a></div>. Doing so can help you spot mistakes and any possible instances of fraud that may impact your score. Plus, keeping track of your score can help you make changes to stay on track with your credit goals.</li></ul><h2>How to Make Your Payments On-Time</h2>As we mentioned above, making on-time payments is the single most important thing you can do with your credit card. In fact, according to FICO®, payment history accounts for&nbsp;<div><a href="https://merrickbank.com/Learn/Maintaining-Good-Credit/Your-Credit-Score-by-the-Numbers">35% of your overall credit score</a></div>. Even one late payment has the potential to derail a history of on-time payments. Consider the following practices to keep up with your payment deadlines.<ul><li>Set A Reminder to Pay: Add a payment reminder to whatever device you use to stay on top of your to-dos — a smartphone, calendar, or planner. There are so many ways to set reminders these days. Find the best method for you so that you never forget when a payment is coming due.</li><li>Set Up Autopay:&nbsp;If you’re prone to procrastinating (who isn’t?) or you just have a million things going on in your life, autopay can make credit card payments practically painless. Set up an automatic payment from your financial institution to your credit card issuer every month.&nbsp;&nbsp;</li><li>Pay Early:&nbsp;Instead of waiting until the last minute to make a payment, it’s a good practice to always make your payments a little early. Set up an automatic payment to be processed a few days before your due date, or schedule a reminder to pay a week or so ahead of time.</li><li>Change Your Payment Date:&nbsp;You might consider changing your credit card payment due date to better align with your other bills and/or incoming paychecks. You can call your credit card issuer to ask if you can bump up the due date in your billing cycle. If it makes it easier for you to pay your credit card on time, it’s probably worth it.</li><li>Budget Your Money:&nbsp;Maybe the best financial advice you’ll ever get is to live within your means and learn how to use a credit card wisely. Make a budget to help you save and spend your money wisely, and stick to it. Include your credit card payment in your monthly budgeted amount and you’ll be on your way to wiser money management and more considered credit card spending.</li></ul><h2>Conclusion</h2>Your credit card is an amazing financial tool. You can use it to make convenient in-store and online purchases, and build and rebuild your credit. The best part: as long as you’re consistent with your on-time payments and you use it responsibly, your credit card will continue to provide financial benefits for a lifetime. Now that you know how to use a credit card to your advantage, you can&nbsp;<div><a href="https://merrickbank.com/Learn/Maintaining-Good-Credit/Avoid-These-Common-Credit-Card-Mistakes">avoid common mistakes and missteps</a></div>, and get the most out of your card to build a better, brighter financial future.&nbsp;

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Best Tips on How to Use a Credit Card

<h2>Best Ways to Get the Most Out of Your Credit Card without Making Mistakes</h2>There’s more to your credit card than mere purchasing convenience. Yes, your credit card offers a great way to make purchases, but it can also be key in helping you build or rebuild credit and unlocking a more fulfilling financial future. But with great purchasing power comes great repayment responsibility. Below are some basics on how to use a credit card wisely and a few best practices to help you get the most out of your card.&nbsp;&nbsp;<h2>How Credit Cards Work</h2>Every time you make a purchase on credit,&nbsp;you agree to pay back the purchase price&nbsp;(plus interest, if applicable), and your credit card provider agrees to front the cost. At the end of every&nbsp;billing cycle, your credit card issuer will send you a statement that includes a&nbsp;minimum payment due&nbsp;and any interest charges that may have accrued.You can&nbsp;<a href="https://assets.contentstack.io/v3/assets/blt6c40640a229ed552/bltb56464f3c833a3d9/659497131c5d7cc1af0f2d27/How-to-Read-Your-Statement.pdf" target="_blank">study this statement</a>&nbsp;to learn lots of important information, including your credit limit — the maximum amount you can put on your credit card at any time — and your&nbsp;available credit&nbsp;— the difference between your credit limit and your current credit card balance. You can also check your&nbsp;APR, which is the Annual Percentage Rate your credit card issuer uses to&nbsp;calculate interest.As long as you pay at least the minimum payment due on each statement, you can avoid late fees and having a late payment show up on your credit report. If you owe more than the minimum amount due, you have a choice to make. You can either pay your balance in full, or you can pay at least the minimum payment due and carry the rest of the balance. If you do decide to carry a balance on your card, your credit card issuer will charge interest— essentially the price you pay for borrowing money on credit.<h2>How to Use a Credit Card</h2>You know how to use a credit card — you can swipe, insert, tap, or input your credit card number to purchase just about anything. But do you know how to use a credit card to get the most bang for your buck? Here are our best tips:<ul><li>Check Your Balance Regularly: It’s easy to get carried away with a credit card. Because making purchases on credit is so easy, it’s also easy to lose track of your balance. To avoid putting too many purchases on your credit card all at once and making it more difficult to stay on top of your repayment plan, check your balance regularly.</li><li>Always Pay Your Bill On Time:&nbsp;Making your credit card payment on time each month is the single most important thing you can do with your credit card. Missing a payment not only results in late fees, but it can also negatively impact your credit score, which will make it more difficult to borrow money in the future.</li><li>Know How Your Interest Is Calculated:&nbsp;Most credit cards come with a variable interest rate. That means your rate is subject to change based on a benchmark, like the&nbsp;Prime Rate.&nbsp;Check your monthly statement to find your current credit card APR. You can use this percentage rate to calculate exactly how much you’ll owe.</li><li>Watch For Credit Card Fees:&nbsp;In addition to interest, your credit card issuer may charge annual fees or other fees associated with maintaining your card. Be aware of when and how much you have to pay so you can plan to add these expenses to your existing balance.</li><li>Stay Below Your Credit Limit:&nbsp;While you can technically spend up to your credit limit, it’s a good idea to keep your balance as low as you can. This can help you make sure you’re not spending more than you can afford to pay off. Plus, a lower credit utilization is generally better for your credit score.<div></div></li><li>Report a Stolen or Lost Card Immediately: If you’ve misplaced your card or you see a fraudulent purchase on your account, contact your credit card company immediately. They’ll work with you to freeze future purchases and issue you a new card.</li><li>Monitor Your Credit: As you make purchases and payments on credit,&nbsp;check your credit report and credit score often. Doing so can help you spot mistakes and any possible instances of fraud that may impact your score. Plus, keeping track of your score can help you make changes to stay on track with your credit goals.</li></ul><h2>How to Make Your Payments On-Time</h2>As we mentioned above, making on-time payments is the single most important thing you can do with your credit card. In fact, according to FICO®, payment history accounts for&nbsp;35% of your overall credit score. Even one late payment has the potential to derail a history of on-time payments. Consider the following practices to keep up with your payment deadlines.<ul><li>Set A Reminder to Pay: Add a payment reminder to whatever device you use to stay on top of your to-dos — a smartphone, calendar, or planner. There are so many ways to set reminders these days. Find the best method for you so that you never forget when a payment is coming due.</li><li>Set Up Autopay:&nbsp;If you’re prone to procrastinating (who isn’t?) or you just have a million things going on in your life, autopay can make credit card payments practically painless. Set up an automatic payment from your financial institution to your credit card issuer every month.&nbsp;&nbsp;</li><li>Pay Early:&nbsp;Instead of waiting until the last minute to make a payment, it’s a good practice to always make your payments a little early. Set up an automatic payment to be processed a few days before your due date, or schedule a reminder to pay a week or so ahead of time.</li><li>Change Your Payment Date:&nbsp;You might consider changing your credit card payment due date to better align with your other bills and/or incoming paychecks. You can call your credit card issuer to ask if you can bump up the due date in your billing cycle. If it makes it easier for you to pay your credit card on time, it’s probably worth it.</li><li>Budget Your Money:&nbsp;Maybe the best financial advice you’ll ever get is to live within your means and learn how to use a credit card wisely. Make a budget to help you save and spend your money wisely, and stick to it. Include your credit card payment in your monthly budgeted amount and you’ll be on your way to wiser money management and more considered credit card spending.</li></ul><h2>Conclusion</h2>Your credit card is an amazing financial tool. You can use it to make convenient in-store and online purchases, and build and rebuild your credit. The best part: as long as you’re consistent with your on-time payments and you use it responsibly, your credit card will continue to provide financial benefits for a lifetime. Now that you know how to use a credit card to your advantage, you can&nbsp;avoid common mistakes and missteps, and get the most out of your card to build a better, brighter financial future.&nbsp;

The benefits of exercise are well-documented. But there’s one perk in particular that you might not be aware of—the many money lessons you can learn while you work out. Here are a few financial lessons you can learn from exercising.<h3>Put in the Work</h3>One of the best lessons exercise can teach is discipline. It’s not easy to get up early to go to the gym or out for a run. There are about a million things you’d probably rather be doing with your time, all of which are more immediately gratifying (and much easier) than working up a sweat. But you do it because you can see the end goal in mind. The physical benefits of exercise make the pain and inconvenience worth the effort.Just like exercise,&nbsp;<a href="https://money.usnews.com/money/blogs/my-money/articles/2018-01-12/5-clever-ways-to-stay-financially-disciplined-in-the-new-year">saving money takes discipline</a>.&nbsp;There are about a million other things you’d rather do with your dollars. But you save because you can see the end goal in mind. If you’re having trouble finding the motivation to save money, write down some financial goals and save with purpose. It can make all the difference in the world with your discipline.<h3>Make Goals</h3>If you decide to start exercising more frequently, it’s usually pretty difficult to stay focused if you don’t have an end goal in sight. This can be as simple as wanting to exercise 3 days every week, or as specific as losing 2 pounds every week until you reach a certain weight. When you start with specific goals that have an end result in mind, it’ll help you stay motivated on a more consistent basis.Your finances will also benefit from creating goals. If you just decide to start saving money, but you don’t really have any specific goals, it’s going to be difficult to stay focused. It may be easy to slip up and spend more than you budgeted for. Think about where you’d like to be financially in 1, 5 or 10 years. Make your goals realistic and time-oriented. Stay specific on what you want to achieve. So, instead of deciding that you want to save money, think about an amount of money you’d like to save. If you’d like to lower your debt or improve your credit score, consider making a goal that will keep your eyes on the prize of financial healthiness.<h3>Be Consistent</h3>Have you ever subscribed to the occasional, half-hearted, you’ll-get-around-to-it-eventually exercise plan? How well did it work? Probably not great, right? If you want to see results from your exercise, you have to be consistent. After all, it’s called an exercise routine for a reason. You have to put forth routine effort if you want to reap real rewards. Even small efforts consistently performed over time can produce big results.As it relates to your money, the occasional, half-hearted, you’ll-get-around-to-it-eventually savings plan is just as effective as its exercise counterpart. As you work on your workout schedule, remember that&nbsp;<a href="https://www.thebalance.com/ways-to-save-money-today-2386117">saving money requires regular effort</a>.&nbsp;To reap real savings rewards, you have to keep at it.<h3>Start Somewhere</h3>For many people, the barrier to regular exercise is unfamiliarity. They don’t know where to start or they find exercise intimidating because it’s been a while since they’ve tried. It’s human nature to shy away from the unsure. It’s natural to fear failure. But everyone has to start somewhere. There are countless examples of people who find improved health and a renewed love for exercise later in life or after they had given up on the concept of exercise altogether. The same lesson applies to finances.One of the biggest barriers to saving money or improving your financial situation is doubt and unfamiliarity. It can be hard to break bad spending habits, especially if it’s been a while since you tried to save. It’s natural to want to give up on putting money away for retirement or toward future financial goals. But if you’ve been procrastinating your savings goals or feel financially unfit, remember&nbsp;<a href="https://www.daveramsey.com/blog/3-reasons-its-not-too-late-retirement">it’s never too late to save</a>. Just like exercise, everyone has to start somewhere. It takes effort, dedication, and consistency, but you can achieve your savings goals, regardless of how far ahead or behind you feel you are.<h3>A Convenient Correlation</h3>It’s no secret that exercise can lead to better health. And with a little extra thought and a few money metaphors, it can benefit your bank account too. But did you know that exercise has a much more direct effect on your finances? According to the World Health Organization,&nbsp;<a href="http://thinkhealth.priorityhealth.com/the-benefits-of-exercise-physically-and-financially/">physically active people save about $500 on health care expenses every year</a>. So the next time you exercise, give yourself a pat on the back for saving money just by staying active.

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Money Lessons We Learned from Exercising

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How to Protect Yourself While Shopping Online

Working on your financial health takes practice, patience and perseverance. Just like with physical fitness, financial fitness is something that takes time and effort, but the rewards are well worth the hard work. Here are our top tips to help you work toward better financial fitness.<h3>1. Be realistic &amp; get specific</h3>First and foremost, be realistic about the current state of your finances. Take the time to find out:<ul><li>How much you make each month.</li><li>How much you’re spending each month.</li><li>How much debt you’re in.</li><li>How much you have in savings.</li></ul>Be honest. You can’t improve your financial health if you aren’t honest with yourself about where you’re at. And, who knows, you may be doing better than you think.Then, be specific about what you want to achieve with your finances. Are you looking to buy a home? Build your credit? Build a retirement plan? You can determine what you want to achieve by asking yourself the following questions:<ul><li>Where do I want to be in five years? 10 years? 20 years?</li><li>What do I wish I would have done five years ago? 10 years ago?</li><li>What are the financial areas that I can improve in? What areas do I excel in?</li></ul>Once you’ve gotten specific about your financial goals, take it a step further and map out what you need to do to reach that goal.For example, it’s not enough to just say that you want to buy a home. You need to get specific about the steps you’ll take to get there. Think about the current roadblocks preventing you from buying that house. If you don’t have any savings for a down payment, build up your savings by putting a specific amount of your income each month into a savings account.<h3>2. Educate yourself</h3>Let’s be honest – learning to be successful with your finances can be really tough. There isn’t a one-size-fits-all roadmap and we often have to learn lessons the hard way. But in today’s world, there are so many educational resources to help you master the financial topics you don’t quite understand.Here are ways to learn more about financial topics:<ul><li>There are some&nbsp;<a href="https://www.themuse.com/advice/13-free-classes-to-help-you-manage-your-personal-finances-like-an-adult">free online courses</a>&nbsp;that you can take to learn more about personal finance.</li><li>Go to your favorite place to buy books and browse through their “Money” section. Or, if you don’t have time to browse, you can check out&nbsp;<a href="https://www.amazon.com/Best-Sellers-Books-Personal-Finance/zgbs/books/2717">Amazon’s Personal Finance Best Sellers</a>&nbsp;or&nbsp;<a href="https://www.nytimes.com/books/best-sellers/business-books/">The New York Times Business Best Sellers</a>.</li><li>A lot of news and media outlets have a section for finance. You can take a look at the articles and resources available at whichever news outlet you prefer. If you’re not sure where to start, here’s a list of&nbsp;<a href="https://aelieve.com/rankings/websites/category/finance/best-financial-news-sites/">top financial news sites.</a></li><li>There are a lot of financial thought leaders that provide personal finance articles, tips and tools. Popular sites include&nbsp;<a href="https://www.creditkarma.com/search/i">Credit Karma</a>,&nbsp;<a href="https://www.nerdwallet.com/hub/category/finance">NerdWallet</a>,&nbsp;<a href="https://www.bankrate.com/">Bankrate</a>, among others. You can view a list of other sites&nbsp;<a href="https://www.lifehack.org/articles/money/top-10-highly-useful-websites-learn-about-personal-finance-for-free.html">here.</a></li><li>Check to see if your bank or credit card issuer offers free&nbsp;<a href="https://merrickbank.com/Learn">financial education</a>&nbsp;resources for you.</li></ul><h3>3. Take advantage of technology</h3>There are so many apps and websites available that can help you reach financial goals. Whether you’re looking for an app to help you budget or a website to help you save money while online shopping, the options are endless. There’s simply no reason why you need to tackle all your financial goals without a little help from technology.<ul><li>If you’re looking for a budgeting app, take a look a&nbsp;<a href="https://www.nerdwallet.com/article/finance/best-budget-apps">Nerdwallet’s recommendations</a>.</li><li>If you’re wanting to save money while online shopping, review these&nbsp;<a href="https://wallethacks.com/best-cashback-rebate-sites/">rebate sites.</a></li><li>If you want to save more money, check out&nbsp;<a href="https://www.creditkarma.com/savings/i/best-money-saving-apps">Credit Karma’s best money-saving apps.</a></li><li>If you don’t know where to begin, consider&nbsp;<a href="https://www.thebalance.com/best-personal-finance-apps-4170650">these personal finance apps.</a></li></ul><h3>4. Reduce, reuse and reimagine</h3>You can often turn your finances around simply by taking a look at the items you’re currently using and buying every day.Reduce: Take a look at where you’re spending your money. Then, try to think of ways that you might reduce your spending. For example, you might take a look at your latest purchases and realize that you’re paying for 5 different tv streaming subscriptions. Consider removing the streaming service you haven’t been using as often, or see if you can find a deal on the subscription for a cheaper price.Reuse:&nbsp;Items that have a one-time use can be pricey over time, like plastic water bottles, paper towels, sandwich bags, etc. Think about the items you’re only using once and then throwing away. Is there an alternative that you can use again and again? Chances are that you will end up saving money over time if you switch from paper towels to washable cloths.Reimagine:&nbsp;Financial health can sometimes take some creativity. You can take out your DIY skills and turn something you already own into something you need. This could be as simple as washing out&nbsp;<a href="https://www.onegoodthingbyjillee.com/13-ways-to-use-glass-jars/">your pickle jar</a>&nbsp;when you’ve eaten them all and using it to store loose change. Or, it could be as fun as turning&nbsp;<a href="https://www.huffpost.com/entry/20-uses-for-old-t-shirts_n_5a564000e4b03417e8743b68">your old t-shirt into a new toy for your dog</a>.<h3>5. Beef up your savings</h3>When you make saving money a priority, you’re really making your financial health a priority. This is because a healthy savings account can give you the peace of mind that if an emergency happens – like a flat tire or a broken appliance – you can take care of it.&nbsp;&nbsp;So if you’re serious about taking charge of your finances, start to increase your savings account in any way possible. Here are some ideas to get you started:<ul><li>Automatically deposit a portion of your paycheck into your savings account</li><li>Set a goal for your savings account and track yourself as you make progress</li><li>Set a budget and stick to it</li><li>Consider a savings account with a higher interest rate</li><li>Decrease your spending on non-essential items</li></ul><h3>6. Invest in yourself</h3>One great way to introduce new income or increase your existing income is to invest in yourself by learning new skills, increasing your education or taking advantage of the knowledge you already have. Be proud of the skills you have now (or the skills you could gain for the future) that can help you have a little more cash in your pocket.Here are some ways you may be able to invest in yourself:<ul><li>Continue Your Education – This can sometimes be a daunting (and pricey) goal, but when you invest in your education, you’re investing in your future career and income.</li><li>Create a Side Hustle – If there’s something you already love as a hobby, consider turning it into a business. Or, consider the options listed out&nbsp;<a href="https://www.entrepreneur.com/article/293954">here.</a></li><li>Increase Your Current Skillset – If you’re already in a career you love, think of skills you can gain to take it to the next level. Look for online courses or workshops that can help you gain leadership skills, increase your industry knowledge or stay on top of the latest advances in your line of work.</li></ul> Financial fitness can take some time and effort. But just like physical fitness, the effort can be well worth your time and pay off in the long term.

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Our Top Tips for Becoming Financially Fit

It’s always fun to get family and friends together for a game night at home. But have you ever considered the money lessons found in some of the games we play? From Scrabble and Chess to the Game of Life, many board games can teach us something about our finances.&nbsp;<h3>The More You Know, the More You’ll Succeed</h3>Scrabble is a game based on vocabulary. You receive a “bank” of letters and then you are challenged to use those letters to create a word on the board and score points. This game is much more rewarding if you already have a large vocabulary and know a lot of words to play. But if you don’t know as many words, you might just have the right letters to spell out a game-winning word, but you won’t know to use those letters and you won’t score the points.&nbsp;Similar to Scrabble, your success with money will also be based on what you know. It pays off big to have an understanding of how money works and what you can do with your money to become financially secure. If you don’t know how to create a budget, you might struggle to live within your means. But if you take the time to learn a budgeting method that works for you, you can start to save your money or get out of debt.&nbsp;<h3>Have a Strategy with an End Goal in Sight</h3>Chess is a game of strategy where you play against someone to see who can defeat your opponent’s king. If you go into the game with no plan, you may not be able to make it very far without having your pieces killed off and removed. Chess is not a game where you can just “wing it.” The best chess players always use a specific strategy from start to finish to win the game. They have an end goal in mind and they have specific steps they’ll take to make that goal happen.Just like chess, you can’t simply “wing it” with your finances and make your goals happen. Say you have a goal to buy a house. You will need to come up with a specific strategy in order to make that goal a reality. Your plan could include creating a budget, taking on a side job, or not buying the latest smartphone. Just like each chess player has their own unique strategy to win the game, your personal financial strategy might be very different from the other people around you. The important thing is to understand your financial goals and come up with a strategy to make those goals happen.&nbsp;<h3>Always Prepare for the Unexpected</h3>The Game of Life takes real-life events – like buying a home or having a career – and uses them to create a fun board game. There’s a lot of chance and good luck involved in the game if you want to end up in a mansion with 8 children and no debt. Not everyone will have the same outcome as you and may do better or worse than you during the game. Along the course of the game, you may land on spaces that say your car has been crashed or you have unexpected expenses. These are things you need to think about before they actually happen to you if you plan to win the game. You can do things, like buy insurance, so that if your car does crash, you’re covered and still have a chance at winning the game. Just like the Game of Life, real life will often present you with challenges that you’re not expecting. And there are things you can do, such as put money into an emergency fund or buy insurance so that you’re ready for those challenges. Unexpected expenses happen often and to everyone. If you have money saved for any emergency expense, you’ll be able to pay it off and not have it affect your financial wellbeing. Preparing for the unexpected allows you to stay out of debt and still be able to afford your regular expenses.&nbsp;Playing board games and learning from them can actually teach you a lot about money. Whether learning more about finances or preparing for unexpected expenses, the skills these games teach can help you in a game night at home and out in the real world as well.&nbsp;

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Money Lessons We Learned from Board Games

Every time you make a purchase, you’ll have to decide how you’ll pay. If you aren’t paying with cash or check, you’ll need to decide if you’re going to use a debit or credit card. But how do you know which to use and when? It usually depends on the kind of purchase you’re making. There are certainly some instances where using a credit card is the safer choice.<h3>The Difference Between Debit and Credit Cards</h3>When you use a debit card,&nbsp;<a href="https://www.consumer.gov/articles/1004-using-debit-cards">it’s essentially like paying with cash</a>. So if someone uses your debit card information to make fraudulent purchases, your own money is taken out of your account. And the money will not be back in your account until you dispute the transactions with your bank and they investigate. This means it may be a while before you get your money back, which can make paying for your other expenses difficult in the meantime.On the other hand, credit cards don’t automatically withdraw your own money from a checking account. Instead, your credit card issuer pays the money up front and then you pay the money back through your credit card payments. This means that if there is a fraudulent transaction on your card, you can dispute it with your credit card company and work with them to get it resolved. During that dispute, you still have all your money in your checking account available to you.<h3>Purchases to Make on Your Credit Card</h3><h4>1. Big Ticket Items</h4>When you purchase a big-ticket item, like a major appliance or TV with a credit card, you may be able to&nbsp;<a href="https://visa-platinum.com/mq/beneficios/extended-warranty_860">take advantage of an extended product warranty</a>.&nbsp;Always keep in mind that there will be items that aren't covered, so be aware of what protections are available to you.<h4>2.&nbsp;ATMs and Gas Stations</h4>Because ATMs and gas stations are outside and accessible, they’re an easy target for tampering. So before swiping your card at a gas station or outdoor ATM, look for the warning signs of a card skimmer that might steal your information, and always reach for your credit card for that extra protection and peace of mind.<h4>3. Restaurants</h4>It’s a good idea to be cautious of paying with a debit card when the card will be taken out of your sight for any amount of time. Restaurants are one good example of this. At many restaurants, your server will take your card away from the table to pay for your meal. When your card leaves your sight, it creates an opportunity for some untrustworthy person to steal your card information.<h4>4. Online Purchases</h4><a href="http://fortune.com/2018/07/18/shape-security-hackers-online-retailers/">Online hackers are a real concern</a>&nbsp;in today’s world. When you use your debit card to pay for online purchases, your bank account’s funds are susceptible to fraud at the merchant’s website, at your home computer through malware, and even somewhere in the middle as a result of eavesdropping on your wireless network. Even at trusted sites, your payment information can be intercepted. So it’s always best to opt for the additional protection of using a credit card online.<h4>5. Service Providers</h4>Using a credit card is a safe and effective option for paying service providers, such as home improvement contractors. By using a credit card you have more substantial proof that you paid the service provider for the job if it isn’t done to your liking or not done at all.<h4>6. Travel</h4>Travel is unpredictable. And spending time and money in unfamiliar places can be risky. But using a credit card can help protect your liability and your purchases. In fact, your credit card may provide you with&nbsp;<a href="https://www.visa-platinum.com/mq/beneficios/visa-travel-information-services_49">bonus travel perks</a>&nbsp;like travel accident insurance, auto rental insurance, and free information services so you can know more about your travel destination.Of course, using your credit card should always be done responsibly and with a plan to pay off your purchases. But there are plenty of reasons to use your credit card over other payment alternatives. So, the next time you open your wallet, think about the many protections and perks your credit card can offer. It might just save you some hassle and money down the road.

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Things You Should Buy Using Your Credit Card

You’ve been working hard to manage your money, stick to your budget and pay your credit card bills on time. As you prepare your budget for the upcoming month, you receive a notification from your credit card issuer that your credit line has been increased. So what is a credit line increase and what does it mean for you?<h3>What is a credit line increase?</h3>Nearly all credit cards come with a preset limit, also known as a credit line. The credit line is the maximum balance you can use on your credit card. Once you’ve reached that limit, you won’t be able to use your credit card until you pay down your balance.When a credit card issuer accepts your application for a credit card, they will provide you with an initial line of credit. Every credit card company uses their own policies to determine what your limit will be, but they generally look at a&nbsp;<a href="https://creditcards.usnews.com/articles/how-is-your-credit-limit-determined">variety of factors</a>&nbsp;related to your creditworthiness and your ability-to-pay the amount of the credit.When your bank or credit card company increases your credit limit, it simply means they’ve upped the amount of money you can borrow from your credit card.<h3>What are the benefits of a credit line increase?</h3>Getting a credit line increase can actually benefit your credit utilization ratio. The credit utilization ratio is how much you currently owe on all of your credit cards divided by your total credit limit.So if you have one credit card with a $1,000 limit and you carry a balance of $400, your credit utilization rate is 40%. If your credit limit increases to $2,000 and you carry that same $400 balance, your credit utilization ratio drops to 20%, which can positively affect your credit score.Another benefit of getting a credit line increase is that it allows you to have more credit available.<h3>A Word of Caution</h3>If you’ve recently received a credit line increase, you should feel good about yourself and your credit practices. But it also comes with a word of caution. That is, a credit line increase is not a pay raise. And you will still need to pay off whatever money you charge to your credit card. So, regardless of your credit limit, it’s always a good idea to stick to a budget and make sure you’re spending less than you earn.

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What is a Credit Line Increase?

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To Buy or To Rent? The Great Property Debate

We often dismiss movies as mindless media or simple entertainment for a Saturday night. But movies can teach you more than meets the eye. Believe it or not, there are some important finance lessons you can learn from the movies.&nbsp;<h3>Have a Financial Plan in Place</h3>The Money Pit with Tom Hanks and Shelley Long tells the story of a couple trying to make ends meet while renovating their dream home. The film is a comedy of errors with one stroke of bad luck following another. Eventually, the couple’s relationship and their lives begin to fall apart. And nearly every unlucky event in the movie relates to poor financial planning. The problems start when the couple fails to look for a new place to live despite knowing they have a limited time to live in their current apartment. The couple then makes the decision to buy a home and make renovations with money they didn’t have. The problem isn’t that the couple went into debt. The problem is they decided to spend money haphazardly and impulsively without a plan to pay it back.&nbsp; The moral of the story: always have a financial plan in place. Whether buying a home, a car, or making purchases on your credit card, keep track of your expenses and have a plan to pay it back.<h3>Have Clear Contracts and Define Expectations</h3>When working with others in matters that involve money, it’s important to have clear expectations. The Social Network tells the story of Mark Zuckerberg, Facebook, and how loosely defined contracts can cause long-running financial problems. The takeaway from The Social Network is that no matter what you’re working on—a home renovation with a friend or a major business venture with a bank—everyone must have a clear understanding of their roles. If you take out a business loan or hire a contractor, have explicit, written understandings of what you will do with the loan money. Doing so can help avoid headache and frustration in the future. When you apply for a new credit card or checking account, make sure you understand the terms the bank makes so you aren’t hit with any unexpected surprises later on.&nbsp;<h3>Put Financial Pursuits in Perspective</h3>While having a healthy bank account is important for financial security, accumulating money for the sake of money can have unfortunate consequences. Movies like The Wolf of Wall Street, It’s a Wonderful Life, and Jerry Maguire all deal with the concept and consequences of greed. But perhaps no movie has taught this lesson to an entire generation better than the 1971 classic, Willy Wonka &amp; the Chocolate Factory.Set in a reality where five kids are suddenly thrust into a world where their every dream is fulfilled, the movie teaches the lesson that getting everything you want sometimes isn’t enough. When the kids fail to appreciate the wonders around them and instead choose to focus on getting more, they’re unceremoniously dismissed from the chocolate factory. And in the process, they’re disqualified from the grand prize of inheriting Wonka’s entire enterprise.&nbsp;The takeaway: while it’s important to pursue financial goals and strive for self-reliance, never lose focus on what you do have and what you’ve already accomplished financially and otherwise.&nbsp; Movies are filled with subtle examples and moral lessons about any number of subjects. Our brains pick up on them even if we don’t notice it directly. Next time you sit down to enjoy your favorite film, think critically about how you can apply financial lessons in your own life.

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Money Lessons We Learned from the Movies

Credit cards have become an everyday part of life. Instead of carrying cash, they offer convenience. Rather than counting coins at every purchase counter, they save time. And most importantly, credit cards offer a level of freedom (in travel, in purchasing power, and in financial management) that other payment methods lack.But with their widespread appeal, it’s easy to take credit cards for granted. In fact, you might not be taking advantage of all the benefits your credit card can offer. Here are 5 ways to unlock the full potential of your plastic.<h3>1. Go Mobile with Your Banking</h3>One of the best benefits of using a credit card is that every purchase is tracked for you by your bank. And by pairing your purchases with an&nbsp;<a href="https://www.merrickbank.com/Account-Services/goMobile">easy-to-use mobile app</a>, you can keep track of all your finances on the go. To get the most out of your credit card, make sure you’re viewing your statements, managing your money, and paying off balances from the convenience of your phone.<h3>2. Sign Up for Account Alerts</h3>Some banks offer the convenience and courtesy of alerting you when a change to your account occurs. Some banks will even let you&nbsp;<a href="https://merrickbank.com/Products/Our-Cards">customize your account alerts</a>&nbsp;so you can get notified for things you care about and not for everyday activities.<h3>3. Make Payments on Time</h3>A credit card can offer freedom, but it can also tie you down in debt. To&nbsp;<a href="https://www.bankrate.com/finance/credit-cards/get-most-from-your-credit-cards-1.aspx#slide=3">avoid late penalties</a>, excess debt, and a potential ding to your credit score, make your payments on time. Even if you carry a balance, to get the most out of your credit card, make at least the minimum payment every month on time.<h3>4. Pay Off Your Card Every Month</h3>The average American household carries about&nbsp;<a href="https://www.thesimpledollar.com/how-to-use-credit-cards-to-your-advantage/">$7,200 in credit card debt</a>. And that number continues to rise every year. To avoid credit card debt and high interest payments, treat your credit card like a debit card and pay off the balance in full every month. By charging everything and being smart about your purchases, you can make one payment every month, avoid debt, and build your credit.<h3>5. Track Your Credit Score</h3>Most credit cards offer special benefits to cardholders, but among the most practical perks is the ability to&nbsp;<a href="http://goscore.merrickbank.com/">track your credit score for free</a>&nbsp;every month. Keeping tabs on your credit score consistently can help you respond to unexpected changes in your score and work toward a better financial future.Your credit card is an everyday part of your life. So, it makes sense that it should offer you everyday benefits that are both practical and meaningful. Follow these 5 tips and you’ll get the most out every benefit your credit card can offer.&nbsp;

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Five Ways to Get the Most Out of Your Credit Card

As with many other questions related to credit, the question above doesn't have a "yes" or "no" answer. Intuition might say that closing a credit card account is a good way to curtail spending and improve your credit score, and in some cases that might be true. But everyone's situation is different, and it's important to look at the five key elements of a consumer credit score and evaluate what the effects might be in your particular case.Payment history&nbsp;makes up the largest single portion of your credit score - 35 percent - and its effects will remain on your credit report for years after an account is closed. For this reason, it is important to consider your payment history on an account before closing it. In the long run, the way to mend a negative payment history is to make timely payments for a couple of years.Credit utilization&nbsp;is the ratio between your total available credit and the amount of credit used. For example, if you have two credit cards, each with a $1,000 credit limit, your total available credit is $2,000. If the balance on Card 1 is $400 and the balance on Card 2 is $100, the amount of credit used is $500, or 25 percent of $2000. Your plan might be to pay off the balance on Card 2 and then cancel the account. Take into consideration though, that this would raise your total utilization to 40 percent ($400 of a $1,000 credit limit), a dramatic increase that could actually lower your credit score. Credit utilization accounts for 30 percent of your credit score, making this an important aspect in the decision to close an account.&nbsp;Length of credit history&nbsp;represents 15 percent of your credit score. An account that you opened 10 years ago and have always paid on time will show a longer, stronger credit history than a newer account, and perhaps should be kept open and active.New credit&nbsp;determines 10 percent of your credit score, and refers to the number of new credit accounts you have opened in the past year. If this number is high, it may negatively affect your credit score because it could send a signal to a lender that you're in financial trouble. This aspect of your credit score isn't greatly affected by closing a credit account, unless it means that your only remaining credit accounts are new.Credit mix&nbsp;shows the number of different credit cards, retail accounts, installment loans, finance company accounts and mortgage loans that are open in your name.1 It’s not necessary to have one of each, and it’s not a good idea to open credit accounts you don’t intend to use. Credit cards are considered revolving accounts and auto and student loans are examples of installment loans2 If you close an account that leaves you lacking in one credit type, the account will still appear on your credit report, but it will be labeled as closed. Credit mix represents 10 percent of your credit score. In the end, only you can evaluate the wisdom of closing a credit account. Before you close an account it’s worth some careful consideration before you take the scissors to your plastic card.<h3>Sources</h3><ol><li>http://www.myfico.com/CreditEducation/Types-of-Credit.aspx</li><li>https://www.credit.com/credit-reports/tips-for-improving-your-credit-types-of-accounts/</li></ol>

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If I Close a Credit Account, Will It Hurt or Help My Credit Score?

As the spread of the Coronavirus (COVID-19) continues, social distancing and stay-at-home orders in many parts of the country continue to impact life and the economy. We are experiencing an unprecedented time of anxiety and uncertainty. But now is not a time to panic. Like in other areas of life, uncertainty can be overcome with education and preparation. As you spend more time at home, hopefully staying safe, educate yourself and do what you can to take control of your finances.<h3>The realities of the COVID-19 impact on the economy</h3>In recent weeks, unemployment has skyrocketed at historic rates. Millions of people have been laid off (<a href="https://www.nytimes.com/aponline/2020/04/02/business/bc-us-virus-outbreak-unemployment-benefits.html">more than 10 million Americans filed for unemployment in March</a>). The stock market has been volatile as investors try to predict the fallout of the virus and its impact on the economy. Even those who remain employed could see a reduction of hours and income in the coming weeks and months. These are scary times, to be sure, but there are a few things you can do to prepare and make sure your finances are in order.<h3>1. Ask for help</h3>At Merrick Bank, we're here to help. You can learn more about what we're doing for those affected by COVID-19&nbsp;<a href="https://merrickbank.com/Resources/Coronavirus">here</a>.&nbsp;If you have been laid off or your income has been reduced in recent weeks, there are a few ways you can find relief. First, the federal government has just approved a&nbsp;<a href="https://www.forbes.com/sites/kellyphillipserb/2020/04/06/answers-to-your-most-commonly-asked-questions-about-those-tax-stimulus-checks/#2e7019d13939">stimulus package</a>&nbsp;that includes sending money to most Americans. If you haven't already received the money, it should arrive in the next couple of weeks. Look into&nbsp;<a href="https://www.dol.gov/general/topic/unemployment-insurance">unemployment benefits</a>&nbsp;or find reputable employers seeking extra help due to high demand as a result of the Coronavirus.<h3>2. Budget your money</h3>Now is also the perfect time to take a long look at your finances. With more time at home, you can find out exactly how you’ve been spending your money, then make adjustments that will allow you to put more of your income into savings. Use the extra time to finally create and live by a budget. Compare your income to your expenses, categorize your purchases, and make goals that will limit your spending for each category type. Your budget is something you can take pride in. Living within your means and according to your budget can empower you during difficult economic times.<h3>3. Start saving money</h3>If you're able to do so, now could also be a good time to set aside funds and build up your savings account. While social distancing, you may have limited entertainment choices. And you’re probably eating at home more too, which can save you a lot of money. Use this time to build good savings habits and put some extra money away for an emergency, in case your income is affected or you have an unexpected medical expense. Consider putting some money in a safe, high-yield savings account to help you earn more interest and keep your savings separate from your other funds.&nbsp;<h3>4. Pay down your debt</h3>Paying off debt brings peace of mind, and in times of economic downturn, it can free up extra cash in case of emergency. You should pay down debt, but only if you’re financially able. Of course, you need to account for your necessities of life first. Make sure you have enough money to pay for food, shelter, transportation, and utilities for the foreseeable future. Don’t forget to make minimum payments on your existing debts, and if you’re comfortably able, start chipping away at what’s left.<h3>5. Invest in yourself</h3>Whether or not your income has been affected, now is a great time to look for ways to bring in extra money. Right now, that might mean investing in yourself and your education. Take advantage of the extra time you have at home to learn new skills or look into educational opportunities that are within your means. It might also mean picking up extra jobs or extra projects at work that will bring in extra income, while still keeping you safe. If your income or job has not been impacted, look at the present situation as an opportunity to further your worth to your employer.<h3>6. Avoid scams</h3>Unfortunately, the current pandemic has given rise to more than a few scammers, who are using their extra time at home to prey on people’s fears. The&nbsp;<a href="https://www.fcc.gov/covid-scams">FCC is warning consumers</a>&nbsp;against falling victim to scams offering virus cures, scam health insurance, and free home testing kits for the Coronavirus, to name a few. These scams can come via email, text message, or phone call. Be wary of these types of messages, and always safeguard your personal and financial information.&nbsp;<h3>Our Final Thoughts</h3>Now is a time of preparation, not panic. Do what you can to control your finances, educate yourselves about the realities of the economy and its potential impact on you. And adjust your spending and savings behaviors accordingly. A little preparation now can bring peace of mind, even in uncertain economic times.<h3>Learn More:&nbsp;</h3><a href="https://merrickbank.com/Learn/Maintaining-Good-Credit/Our-Top-Ten-Tips-to-Pay-Down-Your-Debt">Our Top Ten Tips to Pay Down Debt</a><a href="https://merrickbank.com/Learn/Budgeting/6-Ways-to-Track-Your-Monthly-Expenses">6 Ways to Track Your Monthly Expenses</a><a href="https://merrickbank.com/Learn/Budgeting/5-Ways-to-Avoid-Unnecessary-Spending">5 Ways to Avoid Unnecessary Spending</a>

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What Should You Do with Your Finances During COVID-19?

Let’s go back 10 years to 2008. The iPhone is celebrating its first anniversary. Mobile apps are brand new. Facebook has just 100 million users worldwide and there is no such thing as Instagram or Snapchat. Need a ride? You can’t order an Uber or Lyft, because they don’t exist. And, everywhere, people are swiping their credit cards to make purchases.The world has changed a lot in the past decade, and credit cards are no exception. In the past two years, we’ve seen EMV chips added to credit cards. We’ve seen cards become safer, smarter and more rewarding than ever before. Mobile apps allow us to make account payments no matter where we are. And online shopping makes it so many retailers never actually see our physical cards.With all of these technological advancements, you may wonder: Does it even matter if I sign the back of my credit card?<h3>Why is there a signature line on my credit card?</h3>Have you ever really thought about why that signature line is there? The main reason that a signature has been required on credit cards is because it may help protect against fraud.Credit cards had a signature line on them originally as a way to help protect consumers from fraud. The basic idea was that if someone stole your credit card and used it at a store, a cashier would be able to compare your signature on the back of the card to their signature on the receipt and see the difference. In fact, the main credit card companies had a policy that merchants were not supposed to accept a credit card that wasn’t signed.&nbsp;<h3>How has technology changed the need for a signed credit card?</h3>While the reasons for a credit card signature may have been plausible in the past, the reality is that the way we shop and spend has changed in the past few decades.One of the largest changes to credit cards in the recent years was the conversion to&nbsp;<a href="https://www.creditcards.com/glossary/term-emv-card.php">EMV chips</a>. EMV chips are the computer chips on your credit cards that store your account information and create unique transaction codes. Credit card issuers have switched to the EMV chips because the technology is considered to keep your card information safer than magnetic stripes.To make a purchase in a store with an EMV chip, you must use a payment terminal where you insert the chip into a payment processing machine. In today’s world, most retailers have the payment terminals in front of the consumers at check out. Instead of cashiers having to swipe a card, shoppers can now insert their own card without ever having to hand their card to the cashier. This means that most cashiers never even touch your physical card. So how can they make sure there is a signature on the back?Similarly, many of us do a lot of our shopping online. Since online shopping requires you to enter your credit card information into a secure payment processing site, these online retailers never see your physical card to make sure you signed the back.&nbsp;<h3>What about credit card fraud?</h3>There are people who believe that signing the back of their credit card could cause a fraudster to have easier access to their signature. In an effort to protect against unauthorized access to their signature, some people choose to write the words “See ID” on the back of their card instead of signing the card.&nbsp;And at a store, they simply present their credit card and ID together to make a payment.While this may have worked in the past, it’s becoming less common for retailers to physically handle your credit card. This means that few, if any, cashiers are likely to actually ask to see your ID.The good news with credit cards today is that technology has allowed us to create safer ways for us to protect our credit card information from criminals. The EMV chip&nbsp;<a href="https://www.creditcards.com/credit-card-news/emv-chip-cards-one-year-later-consumer.php">technology has been shown to better protect</a>&nbsp;your credit card than the magnetic stripe. The simple act of using a credit card for your transactions can help protect you against someone stealing your money. In most cases, you aren’t responsible for fraudulent purchases on your credit card. In fact,&nbsp;<a href="https://www.consumer.ftc.gov/articles/0213-lost-or-stolen-credit-atm-and-debit-cards">federal law limits your liability</a>.There are also other ways to protect yourself from credit card fraud that have nothing to do with signing it. The best way is to review your statements regularly and report any unauthorized activity. You should also always ensure you’re using your credit card on a secure website when shopping online, and always keep your credit card information private.<h3>So what’s the bottom line?</h3>So do you really need to sign your credit card? The answer is really up to your personal preferences. In today’s world of online shopping, EMV chips and increasing ways to protect your card from fraud, there’s really no need for you to sign your card. There is no definitive rule that you have to. Your card will still work if you don’t. Your credit card company will likely never ask if you’ve signed it, and chances are that no retailer is going to check for the signature.That being said, if it gives you peace of mind to sign your credit card, you absolutely can. If you don’t want to take the time to sign your card, don’t worry about it.

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Do You Still Need to Sign Your Credit Card?

You make important financial decisions every day, and many of those decisions are linked to your credit score. At Merrick Bank, we’re committed to giving you the tools you need to monitor your credit score.Learn more about why your FICO®&nbsp;Score is so important and what it means to really understand your credit score.<h3>Why is your FICO®&nbsp;Score so important?</h3>FICO®&nbsp;is now the leading credit score on the market in the U.S., used by 90 percent of lenders,&nbsp;so it’s important to understand all of the decisions that may be affected. Whether you’re getting a loan for a car or a home or starting a new business, the better your credit score, the lower the interest rate you’ll pay. In short, a high FICO®&nbsp;Score usually means money saved, because applicants with higher FICO®&nbsp;Scores will generally receive more favorable rates that can translate into thousands of dollars in savings over the life of a loan.<h3>Understanding your credit score.</h3>Understanding what your credit score means and what affects it is the best way to get on track toward improving it. And that’s important, because establishing good credit can save you thousands of dollars a year, and even more with big purchases. It’s important to note, not all banks or lenders use the same version of FICO®&nbsp;Score. For example, some FICO versions are used for auto lending, while other versions are used for when lenders make decisions about whether to extend you a credit card offer.The good news is that the average score has been rising; yours might be one of them. In April 2017, the national average FICO®&nbsp;Score hit 700.&nbsp;To see your FICO®&nbsp;Score take advantage of Merrick Bank’s goScore by simply logging into the&nbsp;<a href="https://login.merrickbank.com/?iid=gblpost1017A">Cardholder Center</a>&nbsp;and accessing your up-to-date FICO®&nbsp;Score for free. If you aren’t enrolled in the Cardholder Center yet, you can&nbsp;<a href="https://logon.merrickbank.com/core/Enroll/Enroll?iid=%20gblpost1017B">enroll</a>&nbsp;today. It’s free for all Merrick Bank customers. Plus, you can enroll in email alerts that can help you manage your account.&nbsp;For even more information on credit scores, be sure to check out the new video series from FICO available at&nbsp;<a href="http://goscore.merrickbank.com/goScoreLearn.aspx?iid=%20gblpost1017C">MerrickBank.com/goScore</a>.The power to make the best credit choices starts with your FICO®&nbsp;Score. Find out what yours is today at&nbsp;<a href="https://login.merrickbank.com/?iid=%20gblpost1017D">Merrick Bank.com</a>.

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Knowing Your FICO® Credit Score Lets You Reach Higher

There are a lot of benefits to attending college. With a college degree, you can unlock more financial and career opportunities. But along with valuable skills and training, most leave college with at least some student loan debt. In fact, Americans owe a combined&nbsp;<a href="https://studentloanhero.com/student-loan-debt-statistics/">$1.48 trillion in student loan debt</a>, far exceeding credit card debt. If you’re among the many that still owe money for college, here are 4 tips for paying off your student loans.<h3>1. Understand Your Loans</h3>Understanding the details of your debt can actually save you a lot of money. Make sure you know when your payments are due (and when they’re considered late). Find out exactly how much a late payment will cost you and when that amount will increase. It’s also important to understand the type of interest rate you have. Is it a fixed or variable rate? And how much money will you have to pay over the life of your loan if you make only the minimum payments?&nbsp;<a href="https://www.businessinsider.com/how-to-pay-student-loans-faster-2014-5">Understanding every aspect of your loan</a>&nbsp;can give you extra motivation to pay off your debt more quickly and help you avoid paying extra interest and fees in the long run.<h3>2. Make Sacrifices</h3>Paying off student debt as quickly and inexpensively as possible usually involves a few sacrifices. Instead of buying that nice new TV, phone, watch, etc., dedicate your discretionary spending to your student loan instead. Go without the niceties of life for a while with the understanding that your sacrifices will pay off later. So, wear your inexpensive clothes like a badge of honor. Drive your used car with pride. And display your several-generations-old phone for the whole world to see. Because every dollar you save can help you get out of debt more quickly so that you can better enjoy the fruits of your success (and sacrifices) down the road.<h3>3. Make Extra Payments</h3>If you have the means, and you’re able to sacrifice elsewhere in your budget, try making&nbsp;<a href="https://studentloanhero.com/ultimate-guide-paying-off-student-loans-faster/">more than one payment per month</a>&nbsp;on your student loan debt. This doesn’t necessarily mean that you have to double your existing minimum monthly payment. It just means that the total amount you pay every month is more than it was before. And spacing out the extra amount into two separate payments per month is usually an easier way to handle the extra cost. One common strategy involves splitting your monthly payment in half and paying that amount every two weeks. Doing so will allow you to make a full extra payment every year.<h3>4. Use Raises and Windfalls</h3>If you work at a job that offers bonuses apart from your expected income,&nbsp;<a href="https://www.forbes.com/sites/zackfriedman/2017/12/20/pay-off-student-loans-faster/#d0f875574d12">take advantage of the extra cash</a>&nbsp;and put it toward your student loan. Bonuses usually get spent on superfluous stuff anyway, so why not spend it on something that will put more money in your pocket in the long run? The same goes for unexpected cash windfalls, like inheritances, settlements, and even tax refunds. Even if you don’t want to devote 100% of your extra money to your student loan, set aside at least a portion of it and watch as your principal and interest payments fall.As you work toward paying off your student debt, remember that the financial sacrifices you make today can pay big dividends in the future and help you unlock the full reward of your educational investment.

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Four Tips for Paying Off Your Student Loans

Your credit score says a lot about you. It paints a picture of your financial practices that can affect your ability to borrow money, buy a home&nbsp;and even land a job. Yet, despite its importance, many people are surprised to learn that credit can&nbsp;<a href="https://www.nerdwallet.com/blog/finance/credit-scores-change/">go from good to bad</a>&nbsp;in no time at all. And, most often a few bad borrowing practices are to blame. Here are four of the best ways to ruin your credit.&nbsp;<h3>1. Making Late Payments</h3>Everyone forgets to make a payment at least once in a loan life cycle, but multiple mistakes can add up fast on your credit score. If you have a habit of paying your loans late, your practices are reported to the credit agencies, which can have a detrimental effect on your overall score. In fact, past payment history is one of the&nbsp;<a href="https://www.creditcards.com/credit-card-news/help/5-parts-components-fico-credit-score-6000.php">main factors affecting your credit score</a>.&nbsp;<h3>2. Maxing Out All Your Cards</h3>Credit agencies calculate something called&nbsp;<a href="https://www.nerdwallet.com/blog/finance/how-is-credit-utilization-ratio-calculated/">credit utilization ratio</a>, which takes into account your available credit and how much of that credit has already been used. So, for example, if you have three credit cards all with a max limit of $5,000, and you carry a balance close to that limit on every card, you look like a borrower that has overextended. This is bad for your credit score. Instead of maxing out your cards, try to keep your debts between&nbsp;<a href="https://www.nerdwallet.com/blog/finance/30-percent-credit-utilization-ratio-rule/">10% and 30% of your limit</a>.&nbsp;<h3>3. Failing to Check Your Credit Report&nbsp;</h3>Credit reports are there for a reason, but many people fail to take advantage of the opportunity to ensure that they’re accurate. Think about it. This is your time to check the work of those giving you the scores. If you see an error, don’t let it go. Report inaccuracies before they become part of your permanent record. Because, left alone, certain errors can wreak havoc on your overall score.&nbsp;<h3>4. Having an Account Charged Off</h3>When you don’t pay your bills for several months at a time, you run the risk of having your account&nbsp;<a href="https://www.debt.org/credit/cards/charge-offs/">charged off</a>. This means you will no longer be able to make purchases using the account. While you still owe the remaining balance, the charge off is reported to the credit bureaus at an extreme cost. A charge off will remain on your credit report for up to seven years and your score will drop significantly. So, avoid charge offs at all costs. Even if you can only make minimum payments on your accounts, that’s much better than running the risk of your score taking a big time hit.&nbsp;<h3>Conclusion</h3>The decisions that affect your credit can follow you throughout your life. So, put your best credit foot forward and avoid the bad borrowing practices that can cause your score to take a dive. Your present and future finances will thank you for it.&nbsp;

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Four Ways to Ruin Your Credit

For a simple 3-digit number, your credit score says a lot about you. Your credit score gives those who look at it a glimpse into your financial past and possible financial future. It can affect your ability to get a loan, land a job, secure housing, and more. Since it is so important to your financial future, it’s a good idea to become familiar with your score and what it means.<h3>What is a credit score?</h3>A credit score is a number that lenders use to evaluate your worthiness to borrow money and your ability to pay it back. Your credit score is based on your credit history, which includes information on your payment history, credit utilization rate, length of credit history, types of credit and recent credit inquiries.<h3>How do you find your credit score?</h3>One of the best things you can do is know your credit score. If you regularly check your credit reports, you can be aware of and report any errors or inconsistencies that are affecting your credit score.Credit reports are generated by the three major credit bureaus – Transunion, Experian and Equifax. You can request a free copy of your credit report from each of the 3 bureaus each year. Many credit issuers also offer services that allow you to view your credit scores for free. You can check with your bank or credit card issuer to see if they offer these services to you.<h3>How does your score affect your life?</h3><h4>1. Interest Rates</h4>Anytime you apply for a loan, a lender is likely going to review your credit history and credit score. Lenders use your credit score to determine the likelihood that you will repay your loan as outlined in your loan terms. Lenders may also use your credit score to determine your interest rate and down payment requirement. This applies to home loans, car loans, personal loans, credit cards and more.<h4>2. Insurance Rates</h4>Insurance companies may also review your credit history before determining your rates. They use the information in your credit report to determine your&nbsp;<a href="https://www.thebalance.com/what-is-insurance-credit-scoring-4156729">insurance score</a>. This insurance score is then used to determine your overall insurability, which can affect your monthly premiums and your ability to qualify for discounts off of normal insurance rates.<h4>3. Employment</h4>Some employers check the credit reports of prospective employees before extending job offers. They do this to&nbsp;<a href="https://www.thebalance.com/the-importance-of-your-credit-score-1289630">predict your level of responsibility at work</a>&nbsp;by looking at how financially responsible you’ve been in the past.<h4>4. Housing</h4>Some landlords insist on seeing your credit report as part of your lease application. You have to give your&nbsp;<a href="https://blog.credit.com/2018/07/what-happens-when-a-landlord-checks-your-credit-93811/">permission in writing</a>, but with a quick credit check, your landlord or property manager can make assumptions about your ability to pay rent on time.<h4>5. Utilities</h4>Many&nbsp;<a href="https://blog.equifax.com/credit/the-top-four-reasons-your-credit-score-is-important/">internet, TV, and cell providers will also check your credit</a>&nbsp;before giving you service. By viewing your credit report, these companies make predictions about your ability to pay your utilities.<h3>How can you improve your score?</h3>There are things you can do to<a href="https://www.bankrate.com/finance/debt/7-simple-ways-improve-credit-score-1.aspx">&nbsp;improve your score</a>, including paying your credit card statements on time, making more than your minimum monthly payment, using less of your total amount of credit, and keeping your oldest lines of credit open.If you don’t have any credit, you can always start building credit with a&nbsp;<a href="https://securedcard.merrickbank.com/">secured credit card</a>. A secured credit card requires a deposit upfront, but it can be a great way to build or rebuild credit.For a 3-digit number, your credit score can affect you in a surprising number of ways. Become familiar with your score and how it impacts your life, and it can help you on your way to a better financial future.

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Credit Score Basics: What You Should Know About Your Score

As adults, we put a lot of focus on finding the best ways to teach our kids about money. And rightfully so. Helping kids form good money management habits now can pave the way to a brighter financial future. But every now and then, it can be helpful to reverse roles and allow the teacher to become the student. Here are 5 money lessons we have learned from kids.<h3>1. Keep your savings separate</h3>The concept of a piggybank—saving money somewhere it can’t be retrieved without consequence—isn’t just for kids. Children are wise to put their money in a safe place that requires somewhat drastic measures (breaking the piggybank) to get it out. Whether we’re saving for retirement or some other future financial goal, it’s important to find a place to put money where we’re not tempted to take it out. Even the simple act of&nbsp;<a href="https://www.nerdwallet.com/blog/how-to-save-money/">separating savings from everyday spending money can make a big difference</a>&nbsp;in achieving financial goals.<h3>2. Start saving early</h3>Maybe the biggest financial advantage kids have over adults is time. When kids start saving at an early age, they can take advantage of compounding interest to build wealth over a longer period of time. Even small savings efforts can be hugely beneficial thanks to the&nbsp;<a href="https://money.cnn.com/retirement/guide/basics_basics.moneymag/index.htm">time value of money</a>. As adults, we can take a page out of our kids’ savings books and start saving now. We may not have the time advantage of our kids, but the sooner we start the faster our future savings will grow.<h3>3. Money is finite</h3>Just as we learn from our kids’ good examples, we can also learn from their financial inexperience. It probably goes without saying, but most kids have yet to unlock their full earning potential. And when they spend their savings, oftentimes they do so in one fell swoop with nothing left to show for their labors. This simple lesson in economics is a great reminder that money is a finite resource. Even as adults it can be tempting to make impulse purchases and spend unwisely. But like our kids, once our money runs out, it’s gone.<h3>4. Be enthusiastic about earning</h3>Anyone who has ever stopped by a lemonade stand or purchased a cookie from a youth bake sale can see the enthusiasm for earning money in the eyes of young entrepreneurs. As adults, there’s a valuable lesson to learn from this infectious excitement. That is, work doesn’t have to be a drag. It’s a good reminder to put a little extra heart into our labors, understand the present and future benefits of earning an honest dollar, and find the fun in earning (and saving) our money.<h3>5. Save for something special</h3>Kids have an uncanny ability to set their sights on something and see it through. And when it comes to money, they can be great examples of never giving up on financial goals. Even if we have our sights set on something more significant than new clothes or the latest video game, we can&nbsp;<a href="https://www.forbes.com/sites/financialfinesse/2017/01/15/are-you-financially-resilient-5-signs-to-look-for/#4390369f5e5f">be financially resilient</a>&nbsp;and refuse to let life’s challenges deter us from our goals. Like our kids, we can remain fixated on retirement, paying off debt, or even putting away a little money to help send those little ones to college one day.As we help pave the way to a better financial future for our kids, it’s important to find times to take a step back and learn a few lessons of our own. And if we pay close enough attention, our kids can teach us valuable lessons about life and money.

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Money Lessons We Learned from Kids

People who don’t learn from history are doomed to repeat it. This message, passed down from generation to generation, can help us avoid costly mistakes by learning from people who have already made them. It’s a lesson you can use in life, love, politics, peace and yes, even money.<h3>King John of England – Don’t Live Outside of Your Means</h3><a href="https://www.ancient.eu/King_John_of_England/">King John of England</a>&nbsp;was a medieval monarch you may be familiar with if you’ve ever heard of Robin Hood. In the Robin Hood story, King John imposed super high taxes on all his subjects that made a lot of people very poor. Historically, King John really did tax his people heavily so he could pay for his wars and personal gains. He spent more money than he was collecting through taxes, so he would just increase the taxes to afford everything he wanted. This eventually led to his nobility rallying against him and forcing him to sign a treaty that took away a lot of his power.So, what’s the money lesson here? When you spend more money than you earn, you can create serious financial burdens for yourself. Living within your means can help you stay out of debt, save more money and be ready for emergency expenses that may come your way.<h3>Marie Antoinette – Focus Your Spending On Needs Instead of Wants</h3><a href="https://www.historyextra.com/period/georgian/marie-antoinette-facts-life-death-cake-buried/">Marie Antoinette</a>&nbsp;was the queen of France right before the French Revolution. During this time, the people of France were very, very poor. Antoinette, on the other hand, spent large amounts of money on parties, fashion and every kind of luxury item she could get her hands on. Eventually, she became known as Madame Deficit (Ms. Debt), and was blamed for the country’s growing financial crisis. This led to the eventual overthrow of the monarchy in France and Marie Antoinette’s execution.Today, it’s easy to spend money on things we don’t really need to survive and be happy. When you focus your spending on the things you want, it makes it more difficult to afford the things you really do need.<h3>The Great Depression – Always Have an Emergency Fund</h3>Known as&nbsp;<a href="https://www.history.com/topics/great-depression/great-depression-history">the worst economic downturn in the history of the industrialized world</a>,&nbsp;The Great Depression was the result of a stock market crash that lasted from about 1929 to 1939 in the United States. It caused nearly 15 million Americans to become unemployed. More than 5,000 banks failed. And hundreds of thousands of people became homeless.The lesson we should all take away from this is that nobody can predict the future and you never know what emergencies lie ahead. You should always have an emergency savings fund so that when a crisis hits your own life, you can afford it.<h3>King Arthur – Financial Rebuilding is Possible</h3>Whether actual history or just historical fiction, the story of King Arthur and the Knights of the Round Table is history nonetheless. Around&nbsp;<a href="https://www.biography.com/military-figure/king-arthur">5th&nbsp;or 6th&nbsp;Century England</a>, legend says there was no king on the throne of England. Without rule, there was little order and the kingdom was subject to invasion and defeat. That is, until King Arthur claimed the throne, rallied his people, overthrew enemies, and rebuilt a vast kingdom in Britain.The money lesson here is that taking financial ruins and turning them into financial success is possible. When you start making smart money choices like staying within a budget and saving for a rainy day, you can rebuild your finances and create a brighter future.Lessons about money management can be learned from paying attention to the past. So the next time you turn on the History Channel or open up a book, look for the little ways you can learn more about how you should use your money wisely.

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Money Lessons We Learned from History

With everything Americans have to be stressed about<a href="https://www.apa.org/news/press/releases/stress/2014/stress-report.pdf">,&nbsp;money is the number one source of stress for the average American</a>. It beats out stress related to employment, family responsibilities, and health concerns. In fact, about&nbsp;<a href="https://www.debt.org/advice/emotional-effects/">3/4 of adults report feeling stressed about money</a>.&nbsp;And to make matters worse,&nbsp;<a href="https://www.debt.org/advice/emotional-effects/">studies</a>&nbsp;have shown that financial struggles may lead to impaired financial judgment, increased spending, and decreased self-control. It’s the cycle of financial stress. And it can be difficult to break free.<h3>What Is Financial Stress?</h3>Financial stress is the emotional, physical or social pain you may feel because of your financial situation. Financial stress can come from many places, but the&nbsp;<a href="https://www.glassdoor.com/blog/personal-finance-problems-impact-career/">most common sources of financial stress</a>&nbsp;include: <ul><li>Lack of money to cover personal expenses</li><li>Mounting medical expenses</li><li>Saving for retirement</li><li>Credit card debt</li><li>Home mortgage payments</li></ul><h3>How Financial Stress Can Affect Your Health</h3><a href="https://www.debt.org/advice/emotional-effects/">Stress is your body’s response to a demand for change</a>. As it relates to finances, that means excessive worry about money and a lingering demand to change your financial situation can make your body respond in unexpected and often unpleasant ways. It can lead to physical and mental health problems.In fact,&nbsp;<a href="https://www.debt.org/advice/emotional-effects/">worrying about money may reduce your resilience to mental health issues</a>, including anxiety and depression. And it can lead to serious physical health problems like heart attack and stroke. Any one (or a combination) of these conditions can have serious consequences on your home life, career, and your ability to properly manage your money.<h3>How Financial Stress Can Affect Your Career</h3>In a&nbsp;<a href="https://www.glassdoor.com/blog/personal-finance-problems-impact-career/">survey of human resource managers</a>, 83% said financial problems have a large impact on employees’ performance at work. Financial troubles affect a person’s ability to focus at work and the overall quality of their work. Worrying about money reduces productivity and morale. And it increases tardiness rates and missed work days. The cycle of financial stress becomes evident when poor performance leads to fear of being fired, which can lead to even more financial stress and performance problems at work.<h3>How Financial Stress Can Affect Your Relationships</h3>Financial stress strains relationships. Couples with financial stress tend to become more hostile, irritable, and uncommunicative toward each other. In fact,&nbsp;<a href="https://www.daveramsey.com/pr/money-ruining-marriages-in-america">disagreements over money are the second leading cause of divorce</a>.&nbsp;And when a person feels his/her spouse spends money foolishly, that couple’s&nbsp;<a href="https://www.forbes.com/sites/financialfinesse/2011/11/10/5-financial-mistakes-that-ruin-your-marriage-2/#4ef460a5afa5">likelihood of divorce increases by 45%</a>.<h3>Healthy Financial Practices Can Benefit You</h3>The strain of financial stress can have negative effects on your well-being. But your personal and professional self can benefit greatly by incorporating a few healthy financial practices. Try these 3 to reduce your financial stress.<ol><li>Create a Budget&nbsp;- Financial stress isn’t about what you earn. It’s about what you spend. And learning to live on less is the key to reducing your financial stress. Have a plan in place to pay for all your expenses, including unexpected emergency expenses. With a&nbsp;<a href="https://www.thebalance.com/budget-fixes-common-problems-2385598?_ga=2.57163369.29425448.1542321739-2086299260.1542321739">well-thought-out budget</a>,&nbsp;you can reduce your debt, save for retirement, and avoid many of the negative effects of financial stress.</li><li>Communicate your goals. Whether you sit down with your significant other to work on a budget together or you seek a little positive peer pressure to get you moving in the right direction,&nbsp;<a href="https://www.apa.org/news/press/releases/stress/2014/stress-report.pdf">communicating your goals can reduce your financial stress</a>.</li><li>Recognize the financial stress cycle. If you see yourself slipping into bad money management habits as a result of financial stress, recognize the problem right away and work to fix it. Understand your areas of weakness and discipline yourself to live more simply and break free from repeating money mistakes.</li></ol>Since finances are the biggest cause of stress, finding ways to improve your financial health is extremely important. Be aware of the warning signs of financial stress and take control of your personal well-being for a healthier, happier financial future.

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Are You Suffering from Financial Stress?

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Managing Your FICO® Scores

Do you know how to manage your FICO® Scores? Watch this video to learn about some credit score dynamics that can help you manage your FICO® Scores.FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries.

<img asset_uid="blt7d19918fb398d8ff" src="https://images.contentstack.io/v3/assets/blt6c40640a229ed552/blt7d19918fb398d8ff/6584b208c11c0f3a07cf6923/5_Ways_Sports_-_300x300.jpg" alt="5_Ways_Sports_-_300x300.jpg" height="auto"/><h3>A Wait-and-See Approach</h3>There’s a new trend in Major League Baseball. After more than a decade of big-time spending on big-time players, the past few off seasons have been dramatically different. Now&nbsp;<a href="https://www.forbes.com/sites/anthonywitrado/2019/01/21/baseball-has-a-new-free-agent-system-and-players-hate-it/#44242e0874c7">teams are taking a wait-and-see approach with stars</a>, opting instead to sign lesser-known players to shorter-term contracts. Today’s teams are more reluctant to spend big to avoid the risk of a bad investment down the line.This wait-and-see approach can be helpful in your own personal finances too. By&nbsp;<a href="https://www.getrichslowly.org/control-impulse-spending-with-the-30-day-rule/">delaying big purchases even just 30 days</a>, you can save a lot of money. When you see something you want to buy, hold off on that impulse. Instead, wait 30 days to think about whether you really want it. If at the end of the month the urge is still there (and you have the money), reconsider purchasing it. In the meantime, you may have found that you don’t really need it after all. Or maybe you found something similar, but for less money.This is what big-league front offices are doing with their teams. They are delaying spending and investing in similar projected production at a lesser price. It’s driving down the prices of some star free agents and teams are saving money in the short and long term as a result.<h3>Play Moneyball with Your Money</h3>Moneyball has officially taken over sports. Popularized by author Michael Lewis and the talent-scouting methods of the Oakland A’s, Moneyball means analyzing statistics to find ways to play smarter, not harder. By using undervalued players and finding more efficient ways to score and defend, smaller-market teams are competing with lower budgets. This concept has moved beyond baseball to influence the world of business and other sports as well.As it relates to personal finances, there may be better, more efficient ways to manage your money. But the first and most important lesson from Moneyball is that&nbsp;<a href="https://www.thebalance.com/ways-to-live-within-your-means-960044">you can succeed by living within your means</a>. The A’s didn’t go out and spend money recklessly just to compete. They found smarter ways to compete by working within a set budget.The official subtitle of Moneyball, “The Art of Winning an Unfair Game,” is also applicable to your personal finances. When some teams’ budgets exceed others by millions of dollars, baseball can feel unfair. The same is true in life when advantages are given to some and not others. No matter your advantages or disadvantages, you can level the playing field by being more efficient with the money you have and simplifying the complex. If there’s something about budgeting that’s difficult for you, find the flaws in the old way of doing things and re-design your personal approach to money management.<h3>Life’s Little Curveballs</h3>Like sports, life has a way of throwing curveballs your way - sometimes when you least expect it. You step up to the plate to meet your obligations. But after seeing a steady diet of fastballs, even a single curveball can throw a wrench in your financial plans. Luckily, sports comes through with another life lesson.In baseball, the curveball is hard to hit partly because the batter isn’t expecting it. Of course, not all curveballs are created equal. And some are hard to hit even when they’re expected. But if you know a curveball is coming, it can be exploited. Being ready to adjust your swing, just in case you see the curveball, can give you a much better chance of success.When you’re prepared for life’s curveballs with a financial&nbsp;<a href="https://www.thebalance.com/planning-for-financial-emergencies-2385813">plan for emergency expenses</a>&nbsp;and periods of unemployment, you have a much better chance of coming out ahead. By budgeting and saving away a little emergency money every month, that unexpected car repair doesn’t have to set you back. And having a plan to pay down your debts and use your credit wisely will help you knock it out of the park the next time life tries to slip a curveball past you.<h3>Sports in Perspective</h3>The business of&nbsp;<a href="https://www.forbes.com/sites/darrenheitner/2015/10/19/sports-industry-to-reach-73-5-billion-by-2019/#7b0c419b1b4b">sports is a billion-dollar industry</a>. So it makes sense that lessons about money management (both good and bad) can be learned from watching players, teams, and front-offices on the big stage. The next time you turn on the game or read about your favorite sports personalities in the news, look for the subtle ways you can learn more about your own money management.

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Money Lessons We Learned from Sports

Remember when personal safety meant locking your doors at night and buckling your seatbelt? Today, you also need to consider keeping your personal information safe online. Hackers, identity thieves, and other cyber criminals can use the information you have online to do serious damage to your personal and financial well-being. So it’s more important than ever before to make sure you’re staying safe online.<h3>Avoid Oversharing</h3>Always consider the consequences before you post anything online. Posting too much information about yourself on social media makes the job of an identity thief that much easier. Information as innocent as your favorite music group, sports team, or even the name of your pet can be used to access your accounts through “challenge questions” that you set up.&nbsp;And, it probably goes without saying, but&nbsp;<a href="https://www.consumer.ftc.gov/articles/0272-how-keep-your-personal-information-secure">never post</a>&nbsp;your full name, Social Security number, address, phone number, or account numbers where they’re accessible to the public.<h3>Protect Your Network</h3>You might think your personal Wi-Fi is safe, but hackers have no shame in inviting themselves into your home to snoop around your network. The first thing you should do when setting up your Wi-Fi is change the generic username and password your router came with. And, just as you lock your doors and windows when you leave home, disconnecting your Wi-Fi when you’re not using it serves as similar protection for your network. Encrypting your wireless router is also a good way to prevent access to unwanted intruders.<h3>Safeguard Your Credit Cards</h3>Online shopping is great and it’s here to stay. But every time you enter your credit card online, you run the risk of it being stolen. When making a purchase online,&nbsp;<a href="https://www.lifehack.org/407556/7-ways-to-keep-your-information-safe-on-the-internet">make sure the website is secure</a>. Every time you visit a new site, take a quick look at the address bar at the top of the page. The difference between “HTTP” and “HTTPS” is all about security. Avoid entering your credit card information on unsecured HTTP sites. And be careful about linking your phone or personal computer to a public network if you’re going to be sending personal information.<h3>Double Up on Authentication</h3>Most of your online accounts have an option to set up&nbsp;<a href="http://techland.time.com/2013/07/24/11-simple-ways-to-protect-your-privacy/">two-factor authentication</a>, which means that you enter your normal login information and an additional one-time use code. Sure, it takes a little extra time, but double the authentication also means double the account security. It’s the same process you go through when you make a purchase with your debit or credit card. You first swipe your card, but you also input a second level of authentication when you type in your pin number.<h3>Conclusion</h3>In today’s online world, keeping your information safe is more important than ever. But with these simple tips, and a little common sense along the way, you can keep your personal information from becoming someone else’s information too.

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Keep Your Online Information Safe

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Anatomy of a Credit Card

Building or rebuilding credit can seem like a daunting task, but it’s very important and even necessary for your financial future. Having good credit will help you qualify for loans, as well as determine what the interest rate will be.Whether you are just starting your credit journey or trying to rebuild, we at Merrick Bank are here to help keep you on the road to healthy credit. Here are a few things to keep in mind.<h3>Your Credit History</h3>In order to build credit for the first time or rebuild credit from past financial problems, you have to establish a positive credit history. This can be done in many ways. One option is to get a secured credit card (which is simply a credit card that requires a cash deposit that then becomes the credit line for the account).With a secured card you can often set your limit with the amount you’re able to put as a deposit and then show your ability to use and repay this amount.&nbsp;1Another way to help establish or rebuild your credit is by getting a co-signed credit card or loan. A cosigner is someone who shares equal responsibility for the debt. Having a cosigner can help you qualify for the loan. It can also be helpful to have “authorized user” status on another person’s credit card. This means that you have someone else’s card in your name, which allows you to make purchases, but prevents you from being the primary card owner. Please keep in mind, however, not all lenders report authorized users to the consumer reporting agencies.One great option is to get a credit-builder loan. This is a small loan designed to help consumers establish or boost credit. There are two main types of credit-building loans, including:Standard secured loan – somewhat like a secured credit card, the borrowers use money they already have in a savings account or CD to secure the loan.<ol><li>Standard secured loan – somewhat like a secured credit card, the borrowers use money they already have in a savings account or CD to secure the loan.</li><li>Unsecured loan – works well for someone who needs cash upfront; however, these loans can have a higher interest rate.</li></ol>Your lender can help you determine which option is best for you. Once the loan account is created and you begin making payments, you will start establishing/reestablishing your credit history. If you’re trying to rebuild credit, a credit-builder loan should increase your score as long as no other credit problems persist.&nbsp;2<h3>Practice Good Money Habits</h3>Practice good habits to demonstrate you’re creditworthy. This includes making all of your payments on time and keeping your credit utilization low. Credit utilization compares how much your credit card balance is compared to your credit limit. So, if you have a credit limit of $500 and use $250 in purchases, your credit utilization is 50 percent.&nbsp; A good rule of thumb is to not exceed a 30 percent credit utilization ratio at any point in a billing cycle on any one of your cards.&nbsp;3By keeping this ratio low, you show that you’re likely not spending much of your monthly income on debt payments. Credit lenders like to see this, because it means you’re more likely able to pay back the money you borrow from them. Avoid opening too many credit accounts, as doing so in a short period of time can have a negative impact on your credit score.&nbsp;4&nbsp;Instead, stick with as few accounts as you can. Your credit score improves with a longer credit history. So, be sure to keep the accounts you do have open for as long as possible.Another way to practice good money habits is to set up reminders to ensure you never miss a payment. Paying your bills on time will not only demonstrate that you’re creditworthy, but it will also help boost your credit score.Sometimes people struggle with knowing where to start when it comes to building or rebuilding their credit. The key is to start now and be patient, since this process takes time. Before long, you’ll be on your way to a great credit score. [1] Tate, Ashley. (2017, March 8).&nbsp;How Long Does It Take to Build a Good Credit Score?&nbsp;Retrieved from&nbsp;<a href="https://www.creditsesame.com/blog/credit/how-long-does-it-take-to-build-a-good-credit-score/">https://www.creditsesame.com/blog/credit/how-long-does-it-take-to-build-a-good-credit-score/</a>2 Johnson, Allie. (2015, April 23).&nbsp;Create, restore credit with a credit-builder loan. Retrieved from&nbsp;<a href="http://www.creditcards.com/credit-card-news/create-restore-credit-builder-loan-1270.php">http://www.creditcards.com/credit-card-news/create-restore-credit-builder-loan-1270.php</a>3&nbsp;Konsko, Lindsay. (2017, August 31). 5 Tips for Winning the Credit Utilization Game. Retrieved from&nbsp;<a href="https://www.nerdwallet.com/blog/finance/credit-utilization-improving-winning/">https://www.nerdwallet.com/blog/finance/credit-utilization-improving-winning/</a>4 How to Quickly Improve Your Credit Score. (2017, February 17). Retrieved from&nbsp;<a href="https://www.preventloanscams.org/credit-repair/improve-score-quickly/">https://www.preventloanscams.org/credit-repair/improve-score-quickly/</a>

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How to Start Building or Rebuilding Credit

Owning your own home is part of the American Dream. It means setting roots, taking on new responsibilities, and finally having neighbors you don’t share walls with. But like the American Dream, owning your own home takes effort. And the work starts by taking time to understand the basics of a mortgage loan.Getting Back to BasicsIf you’re going to borrow money to buy a home, it’s important to understand what you’re signing up for. A mortgage loan is an agreement between you and your lender. The lender agrees to give you money to buy and take possession of a new home. And you agree to pay back the money over a set period of time with interest. If you default (fail to pay your mortgage payments), your loan is secured by the property, giving the lender&nbsp;<a href="https://www.mortgagecalculator.org/helpful-advice/what-is-a-mortgage.php">legal claim to the home</a>. Essentially, the basics of a mortgage loan involve you, a lender, a property, and a payment plan with interest.Choosing a LenderBecause your choice in lender is the start of a 10- to 30-year relationship, it’s important to go with someone you can trust to provide helpful advice and quality service. Compare lenders to find the best balance of rates, fees, conditions, and communication styles that fit your lifestyle. According to&nbsp;<a href="http://www.freddiemac.com/research/pdf/201804-Insight.pdf">research from Freddie Mac</a>, making just one comparison call could save you $1,500 over the life of your loan. And more comparison calls usually means more savings.Securing an Interest RateSeveral factors can influence the interest rate on your mortgage loan, including your credit score, down payment amount, loan term, and interest rate type (<a href="https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-a-fixed-rate-and-adjustable-rate-mortgage-arm-loan-en-100/">adjustable or fixed</a>). Even external market factors can impact rates. Let’s consider each item one at a time.<ul><li>Credit Score – Your credit score is used to assess your ability to make future loan payments. If you have poor credit, lenders are more likely to shy away from loaning you money.&nbsp;<a href="https://thelendersnetwork.com/what-credit-score-is-needed-to-buy-house/">You may still be able to get a mortgage loan</a>, but your interest rate will likely be higher based on perceived risk.</li><li>Down Payment – As a general rule, the higher your down payment, the lower your interest rate will be. If you can manage to put down at least 20% of your home’s price or appraised value,&nbsp;<a href="http://blog.credit.com/2014/12/6-reasons-you-might-want-to-make-a-larger-down-payment-102928/">your&nbsp;interest rate may be lower</a>&nbsp;and you may not have to pay insurance premiums.</li><li>Loan Term – Your interest rate may change depending on the amount of time you borrow money (usually 10, 15, or 30 years). Again, it comes back to perceived risk. Shorter loans usually have a lower risk of default. So, if you can pay off your loan in less time, your lender can offer you a lower interest rate in return.</li><li>Rate Type – Mortgage loans typically come with either a fixed or adjustable interest rate. A fixed interest rate stays the same for the life of your loan and&nbsp;<a href="https://www.bankrate.com/finance/mortgages/questions-rate-lock-answered.aspx">locks in prior to your loan funding</a>. Adjustable interest rates, on the other hand, are usually lower at first, but can change after an initial period, depending on market rates.</li><li>Market Factors – Finally, interest rates can rise and fall in response to&nbsp;<a href="https://www.investopedia.com/insights/forces-behind-interest-rates/">other market factors</a>. Things like inflation, overall employment rate, stock market conditions, government borrowings, and even gas prices can cause interest rates to go up or down. And they usually do so in connection with the interest rates set by the Federal Reserve. So, even though fixed interest rates will remain fixed for the life of your loan, prior to locking in your rate they are susceptible to fluctuation depending on the market.</li></ul>

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An Intro to Mortgage Loans

When you first hear the term “debt avalanche,” you may envision something that is huge, crushing and out of control. If that’s how you feel about your current debt, this kind of avalanche may actually be the way for you to break out of debt. Experts in consumer finance don’t always agree on the best method for debt repayment, however their opinions generally fall into one of two schools of thought—pay off the smallest debt first (debt snowball method) or pay off the debt with the highest interest rate first (debt avalanche method). The one that works best for you will depend on whether you want to see progress sooner or whether you are patient about waiting longer for results. Debt calculators like the one available at MagnifyMoney.com generally show that using the debt avalanche method will save you money in finance charges and get your debt paid off sooner.1<h3>How the Debt Avalanche Works</h3>Begin by listing all your debts, including credit cards, medical bills, auto, student and personal loans (exclude your mortgage from this list), with the highest interest rate at the top. This will be the first debt that you’ll pay off. If it is also the debt that has the highest payoff amount, you may be in for a longer wait before you are rewarded with a paid-off account.<table><tbody><tr><td>&nbsp;</td><td>APR</td><td>Balance</td><td>Mo.Min Payment</td></tr><tr><td>Credit card 1&nbsp;</td><td>21.0%</td><td>&nbsp;$5,400</td><td>&nbsp;$148</td></tr><tr><td>Credit card 2</td><td>19.0%&nbsp;</td><td>&nbsp;$7,500</td><td>&nbsp;$193</td></tr><tr><td>Auto loan&nbsp;</td><td>9.8%&nbsp;</td><td>&nbsp;$19,500</td><td>&nbsp;$412</td></tr><tr><td>Student loan&nbsp;</td><td>4.0%&nbsp;</td><td>&nbsp;$4,300</td><td>&nbsp;$49</td></tr><tr><td>Total&nbsp;</td><td>&nbsp;</td><td>&nbsp;</td><td>&nbsp;$802</td></tr></tbody></table>For the purpose of this demonstration, let’s assume you have a total of $1,000 per month to allocate to debt repayment. Using the example above, this leaves $198 after all the minimum payments are made. Add that $198 to the $148 minimum payment on Credit card 1 for a total of $346 each month toward that bill. Within a year, your highest-interest bill will be more than cut in half, as long as you don’t make any additional purchases on that card. The patience we mentioned earlier will come into play now because you’ll need to stay the course, making payments on time every month without adding more debt. When Credit card 1 is paid off, add $346 to the $193 you’ve been paying each month on Credit card 2. At $539 per month, that debt will be gone in a little over a year, and you will begin to see the avalanche effect as your other bills are swept away over time.<h3>One exception—pay the IRS first</h3>The one entity that takes priority over your debt avalanche is the Internal Revenue Service (IRS), which is not in the lending business. If you owe them money, you need to make that your first payment priority, or they may begin taking money out of your paycheck. The average American household carries $16,061 of credit card debt and pays a total of $1,292 in credit card interest per year.2 The debt avalanche method has helped many consumers find their way back to the surface and out of the red. <ol><li>http://www.forbes.com/sites/nickclements/2016/06/15/debt-snowball-or-debt-avalanche-how-to-eliminate-credit-card-debt/#235836d487d3</li><li>https://www.nerdwallet.com/blog/average-credit-card-debt-household/</li></ol>

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