As you built your list of New Year’s resolutions, you may have included “saving money” as one of the top goals – and you’re not alone. A majority of Americans listed a financial resolution in their goals, and when asked to pick between two choices, would rather save $5,000 in 2021 than lose five pounds!
We’ve asked some of NNB’s branch staff – AVP and Hummels Wharf Branch Manager Rod Zechman and Northumberland Assistant Branch Manager Tim Botts - for some of their best banking tips on how to save money in the new year, and here’s what they suggest:
Don’t avoid credit cards – if you can use them responsibly
“For some of us, the idea of opening a credit card can be intimidating,” Rod Zechman says. However, “there are financial benefits to some credit cards, particularly if your goal is to lower your existing debt.”
With a credit card that offers a balance transfer, for example, you can move debt from one account to another to avoid paying higher interest. Rod notes, “With debt that's moved to a credit card with a low introductory APR offer on balance transfers, you could potentially pay off the debt you were carrying on a much-higher interest card, interest-free, if you make all of your payments within the advertised period. But be sure to pay attention to the fine print.”
Who should consider doing a balance transfer?
“In general,” Rod says, “a balance transfer may be the best choice if you need months to pay off high-interest debt and you have good enough credit to qualify for a card with a low introductory APR on balance transfers. A balance transfer could then save you money on interest, making it easier and faster to pay off your balances.”
Rod also advises that balance transfers can come with certain costs and limitations. Generally, you'll have to pay a balance transfer fee, which is a percentage of the total amount transferred.
Here’s a quick overview of how balance transfers work
While the exact process for balance transfers can vary, the general process includes:
- Applying for a card with a great extended introductory offer. Check out Norry Bank’s Platinum Visa Card, and ask Norry Bank representatives for help applying at a branch near you!
- Starting the balance transfer. If you’re doing this online or by phone, you’ll need to provide information about the debt you’re looking to move, such as the card issuer name, the amount of debt, and the account information.
- Waiting for the transfer to go through. Once the balance transfer is approved, which may take two weeks or longer, the issuer will generally pay off your old account directly. That balance from your old card account — plus the balance transfer fee — will show up in your new account.
- Paying down the balance. When your previous debt is added to your new credit card, you’ll be responsible for making monthly payments on that account. If you pay it down during the introductory low APR period of a certain number of billing cycles, you could potentially save a good amount of money.
Use your debit card strategically to automate your savings
If your New Year’s resolution is less about paying down debt and more about saving money – for a rainy day fund or for a specific goal like a down payment or next year’s school supplies, Tim Botts recommends Norry Bank’s Savings Made Simple program.
“This service is a great way to automate your savings efforts,” Tim notes. “Every time you use your debit card, you can put money in your savings account as well because we’ll round up your debit card transactions to the next dollar and transfer the difference to the savings account of your choice – Savings, Christmas Club, or All-Purpose Club.”
How does Savings Made Simple work?
Any debit transaction with cents can be rounded up, so even automatic payments linked to your debit card will qualify, as well as purchases you make online or in stores. According to Tim, “You can get groceries or a tank of gas, set up your regular monthly bill payments – they’ll all help you save!”
Your savings will be added up in a single transfer each day. “So, if your one-day purchases had $1.49 in change that rounded up to the next dollar, we’ll automatically transfer that amount from your checking account to a savings account, the very next day. You don’t have to do a thing – just live your life, and let the savings accumulate,” Tim notes.
Your staff at Norry Bank is here to help
Thanks to Rod and Tim for two great tips on using credit and debit cards to jump-start your financial goals in 2021. Figuring out how money works isn’t always easy or clear, so don’t forget that your trained Norry Bank staff are always available to help with any questions you have as well!