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Financial counselor gives advise on how to buy a car | Across the Fort



Whether it is on the side of the highway or on TV – advertisements for car dealers, sales and incentives are hard to miss.

But purchasing a new or previously owned can should not be decided rashly. Buying a car is a significant purchase that you will be paying for and living with for years to come.

“Car buying is a big undertaking and for some the first major purchase of their life,” said Fernando Fernandez, certified financial counselor and vice president at Fort Hood National Bank.

It is essential to determine a reasonable budget and check the market before heading to the dealership.

“Create a budget that includes not only your monthly car payment but all associated costs such as gas, maintenance and insurance,” he said. “Once you have this information, stay within this budget. It is recommended to not spend more than 10% of your net income on a car payment.”

The second step is to check what the current market has to offer. Websites such as, and can help to research availability and verify the value of specific vehicles.

“Gather the information you need to ensure you aren’t paying too much for a vehicle,” he said.

Knowing your financial resources and reasonable prices for the vehicles you are interested in puts you in the best position for negotiations with car dealers.

Fernandez recommended to stick to your plan when heading to the dealership and to keep in mind that sales are not always a good alternative.

Just because a car is on sale doesn’t necessarily make it a smart buy. Cars are often only on sale because the market has decided they’re not worth their full price.

“Make your decision carefully and deliberately based on the information you’ve gathered,” he said. “Do not let emotion or sales pressure lead you to a purchase that you can’t afford in the long run.”

Consumers should apply similar techniques to determine reasonable interest rates on car loans, which can vary widely.

“Many factors affect the interest rates on car loans,” Fernandez said. “The current market, the age and mileage of the car, the credit history of the borrower all play a role in determining the risk to the lender and therefore the rate charged on the loan.”

While individuals with limited or no credit can be offered rates above 20%, borrowers with a long credit history of consistent payments can see rates near 0%.

Fixing bad credit before applying for a loan can improve your chances of receiving a lower interest rate.

“You can always seek to refinance the vehicle later as your credit score improves, but be careful,” Fernandez said. “If you have accepted an extremely long term, you may find yourself ‘upside down’, meaning you owe more on your current loan than the vehicle is worth.”

This will decrease the chance of refinancing at a lower rate as your credit improves.

But before agreeing to any kind of loan, make sure to compare all options for financing your car.

“Just as you will choose the car and dealership based on which one gives you the car you want at the best price, you should choose the financing option with the terms that best meet your needs and keeps you within your budget,” he said. “Don’t be afraid to force lenders to compete for your business.”

Car buyers who need to purchase a vehicle immediately but don’t have established credit can use a co-signer to make a deal.

“This allows you to finance the vehicle based on the co-signers credit history,” Fernandez said. “However, if someone agrees to co-sign your loan, he or she is equally responsible to ensure you pay in full and on time.”

In the end, research is the key to smart car buying.

“Do your research to ensure you know your budget,” he said. “Do your research to ensure you are buying a good vehicle at a fair price. Do your research to ensure you are getting the best financing for which you qualify.”

Financial advisers can help you find a reasonable budget and find affordable options for car purchases.

“Do not hesitate to seek advice from a financial counselor to ensure you make the best-educated decision and save money,” Fernandez said.

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Martin Lewis issues guidance on using credit cards to build ratings – best deals | Personal Finance | Finance



Martin Lewis regularly urges savers to use caution when utilising debt themed products but at the same time, he acknowledges the need for a decent credit rating to get by financially. Today, the Money Saving Expert was questioned by viewer Miranda on how one can build their credit rating in difficult circumstances.

“What I’d then like you to do is go and do £50 a month of normal spending on it, things you’d buy anyway.

“[Then] Make sure you pay the card off in full every month, preferably by direct debit so you’re never missing it because the interest rate is hideous.

“That way you won’t pay any interest.

“You do that for a year, you’ll start to build that credit history, showing them you’re a good credit citizen.

“Then you’ll be able to move into the sort of more normal credit card range.

“So, bizarrely, to get credit you need credit. What credit will you get? Bad credit, go get the bad credit just make sure it doesn’t cost you.”

Consumers of all kinds may not have the best options at the moment as recent analysis from revealed.

In mid-November, they detailed that a number of high street banks have cut the perks and interest on a number of their current account deals.

On top of this, the Bank of Scotland and Lloyds Bank made credit interest cuts of up to 0.5 percent.

Rachel Springall, a Finance Expert at commented on the few options consumers and savers currently have available: “Clearly, it is vital consumers decide carefully if now is the time to switch, but if they wait too long, they may well miss out on a free cash switching perk.

“At present, providers will be assessing how they can sustain any lucrative offers in light of the pandemic.

“With this in mind, we could well see more changes in the months to come and if this does indeed occur, consumers would be wise to review whether their account is still worth keeping.”

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Should you use a balance transfer to pay off debt?



Should you use a balance transfer to pay off debt?
Image source: Getty Images.

A balance transfer might be the solution if you have debts and want to gain control over your finances. But whether a balance transfer is right for you will depend on a number of factors.

Things to consider before using a balance transfer

The size of your debt

If you want to apply for a balance transfer credit card, be aware that most providers will allow you to transfer up to 90% of your credit limit.

Your credit limit will be dependent on your own personal circumstances, including your salary, your credit history and your residential status (homeowner or renter).

Be realistic about your debt. For example, if you earn £25,000 per year and you have a debt of more than £15,000, a balance transfer might not be cheapest way to pay the debt.

The time taken to pay the debt

The main advantage of a balance transfer credit card is that many offer an interest-free period on the balance. So, if you can pay off your balance in that period, you won’t accrue any further interest charges.

However, these periods typically range from 18 to 24 months, so if you think you will need more time to pay the debt, you may need to factor in additional interest charges when the interest-free period ends.

Whether or not a balance transfer is the right debt payment solution will depend on your personal circumstances. Check our balance transfer calculator if you want to work out how much a balance transfer could save you in interest payments.

Your credit score

The advantage of a good credit score cannot be underestimated in this situation.

When applying for a balance transfer credit card, the company will check your credit score. Based on this score, they could refuse your application.

Even if you are accepted, if you have a bad credit score they could reduce your credit limit. Ultimately, this will determine the benefit of a balance transfer as a suitable debt payment solution.

If you think your credit score might be a problem, it’s worth checking with the credit reference agencies before applying. That way you can avoid any nasty surprises.

There are three main consumer credit reference agencies in the UK. They are Equifax, Experian and TransUnion (Noodle).

Alternative solutions to balance transfers

You could still use a balance transfer even if the size of your debt is bigger than the credit limit.

Transferring part of the debt would enable you to benefit from any interest-free period, where applicable.

Alternatively, if you have multiple debts, you could consolidate all of your debts so that you can make a single regular payment. If necessary, you could do this using an unsecured personal loan over a period longer than 24 months.

Take home

Look at your own personal circumstances with a critical eye. Remember that you need to factor in living expenses when thinking about how long it will take you to pay off your debt.

Balance transfers are a useful method for debt repayment, but be aware that credit cards are an expensive way to borrow money. Take full advantage of any 0% deals wherever possible. Check out our list of the best 0% credit cards.

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Turn credit declines into a win-win | 2020-11-20



The pandemic has left millions of people needing credit at a time when lending standards are tightening. The result is a lose-lose situation—the consumer gets a bad credit decline experience and the credit union misses out on a lending opportunity. How can this be turned into a win-win?

The case for coaching

Let’s start by deconstructing the credit decline process: The consumer is first encouraged to apply. The application process can be invasive, requiring significant time commitment and thoughtful inputs from the applicant.

After all that, many consumers are declined with a form letter with little to no advice on actions the applicant can take to improve their credit strength. It is no wonder that credit declines receive a poor Net Promoter Score (NPS) of 50 or often much worse.

On the flip side, forward-looking credit unions provide post-decline credit advice. This is a compelling opportunity for several reasons:

  • Improved customer satisfaction. One financial institution learned that simply offering personalized coaching, regardless of whether or not consumers used it, increased their customer satisfaction by double digits.
  • Future lending opportunities. Post-decline financial coaching can position members for borrowing needs even beyond the product for which they were initially declined.
  • Increased trust. Quality financial advice helps build trust. A J.D. Power study noted that, of the 58% of customers who desire advice from financial institutions, only 12% receive it. When consumers do receive helpful advice, more than 90% report a high level of trust in their financial institution.

Provide cost-effective, high-quality advice

AI-powered virtual coaching tools can help credit unions turn declines into opportunities. Such coaches can deliver step-by-step guidance and personalized advice experiences. The added benefit is easy and consistent compliance, enabled by automation.

AI-based solutions are even more powerful when they follow coaching best practices:

  • Bite-sized simplicity. Advice is most effective when it is reinforced with small action steps to gradually nurture members without overwhelming them. This approach helps the member build momentum and confidence.
  • Plain language. Deliver advice in friendly, jargon-free language.
  • Behavioral nudges. Best-practice nudges help customers make progress on their action plan. These nudges emulate a human coach, providing motivational reminders and celebrating progress.
  • Gamification. A digital coach can infuse fun into the financial wellness journey with challenges and rewards like contests, badges, and gifts.

Virtual financial coaching, starting with reversing credit declines, represents a huge market opportunity for credit unions. To help credit unions tap into that opportunity, eGain, an award-winning AI and digital engagement pioneer, and GreenPath, a leading financial wellness nonprofit, have partnered to create the industry’s first virtual financial coach. To learn more, visit

EVAN SIEGEL is vice president of financial services AI at eGain.

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