Car sales person reading the contract

Zero Percent Auto Loans: The Catch

Is it really zero percent?

Dealerships and manufacturers love to offer zero-percent financing as a way to attract customers. This sounds like a tempting offer, but less than 10% of applicants actually qualify for this special financing. Not only do most people not qualify for this type of loan, but they are also packed with hidden fees and charges. If you are considering a loan option like this, read the fine print very carefully before proceeding with the loan. The last thing you want to do is get stuck with an expensive loan.

Hidden Fees

If a business were offering a truly zero percent financing loan, they would quickly go out of business. Many manufactures and dealerships who provide zero percent financing have hidden fees in the fine print that they might not tell you outright. Typical fees include annual membership fees that range from a few dollars to several hundred and can often make the cheap loan rate very expensive in the long run. Another common term is that the borrower will receive penalties for early repayment, which can include retroactive interest or additional charges.

Credit Trick

A common trick with zero-percent financing deals is to give you a credit limit that is barely above the loan amount. If you exceed that credit limit in the slightest, the creditor may be able to increase your interest rates. These rate increases many times can exceed 20% or more. If you do receive 0% APR and this is contingent on a specific credit limit, be sure you NEVER exceed that limit.

Time Limits

Many loans promising 0% financing require you to pay the loan back in full by a particular time. If this deadline isn't met, large interest amounts may be added based on the original loan amount, not just the remainder. If applied, these rates typically exceed 20% and can turn what seems like a great deal into a complete nightmare. When applying for a loan like this, make sure you're realistic about what you can afford and how fast you can repay the loan amount. If there is any question on whether you'll make the payments on time, find a different loan option.

Built-in Costs

If you're getting a zero percent financing car deal, you might have difficulty haggling to get the car price lowered or any other incentives. This allows the automaker to pocket a nice profit on the car's sale despite offering the 0% financing. These inflated prices can make the 0% financing deal a complete waste of money when. You need to compare the difference in cost to a zero percent financing deal and a low-interest rate with the ability to negotiate on the price.

 

More often than not, 0% financing is not what it's made out to be. There are many hidden fees, time limits, and credit restrictions. When making a large purchase such as a car, it's essential not to get tricked into thinking you're genuinely getting 0% financing. With BrightStar's FREE Auto Advisors, they will negotiate the lowest price possible, and you will receive a 0.25% rate reduction on your BrightStar auto loan.


A person calculating their budget

Navigating on a Reduced Income

How to Navigate on a Reduced Income

Many Americans are facing drastically reduced income due to the Covid-19 pandemic. Unfortunately, some people have lost their jobs or have reduced work available to them. With the CARES Act supplemental relief expiring at the end of July, extra federal unemployment benefits may be reduced. There are many ways to navigate a reduced income. It’s all about proper planning and cutting unnecessary expenses.

1. Analyze the Numbers

You need to revisit your budget and make any necessary changes. Figure out what income you currently have so that you can adequately budget what you’re able to spend.

2. Talk to your service providers and financial institutions

If you are unable to make your rent/mortgage, utility, credit card/loan, or other payments, you should reach out to your providers and financial institutions to see if they offer any accommodations. Many credit card providers were allowing their members to skip payments without any consequences. It’s worth asking even if it’s a long shot.

3. Cut out all non-essential items from your budget.

This means anything that is not essential to your life or work. For example, you may have to skip happy hour with your friends on Fridays because you don’t have the available funds with a reduced income. Of course, this won’t be fun, but it’s something that you will need to do. All these non-essentials will return once your income increases.

4. Apply for any and all assistance

Go to your county’s website for health and human services to find out what kind of public assistance they offer. This could include food assistance, childcare assistance, health insurance, work search programs, and transportation certificates. Using these services can help tremendously. Make sure you apply for assistance immediately because it can take some time to process.

5. Look for odd jobs

Exploit your talents and skills by finding different jobs that you can perform to make money. This could be as simple as working for GrubhubUberEatsGoPuff, and other delivery services. You can also sell your own products such as masks, art, handyman work, cooking, cleaning, or dog walking.

6. Learn how to DIY

We sometimes spend money on things that we can do ourselves just for the sake of saving a few minutes. Instead of paying to get your car washed, you can easily grab a bucket and soap to scrub with. If your furry friend needs a haircut but some clippers and do it yourself. It might not be as professional is you’re used to, but eventually, your skills will improve. Doing tasks yourself will save you more money than you may initially think.

7. Stay home and enjoy free things to stay entertained and healthy

Staying home will not only help you stay within social distancing guidelines, but you will also save money by not going out. Enjoy a good book, movie, or an at home workout. This is also an excellent opportunity to discover new hobbies or talents that you may not have considered before.

Navigating on a reduced income can be stressful, but with the proper planning is doable. For more financial tips, visit Balance Financial.


Credit Report showing an excellent score of 765

Understanding Credit in a Changing World

Your Credit Matters!

Understanding your credit is an incredibly vital thing to grasp. It’s what employers, lenders, and even insurance agencies can look at to determine if they will provide you with a service. Especially in today’s world, credit can be a huge lifesaver when needing a little extra help.

What is a credit score?

Your credit score can range from 300-850. Ratings 720 and above will usually give the borrower the best rates available unless it is a thin file (minimal trade lines and history) also known as a false Beacon. The following are the roles of credit scores:

  • One element of the credit decision-making process.
  • Often the key to better rates. Higher scores equal a better rate.
  • Not a money-management tool. This is purely an indicator of how risky you are to a lender.
  • Discovering fraud or credit reporting errors is essential. You want to check your credit score periodically to ensure your personal information hasn’t been compromised.

How Scores are determined

Many different factors determine your credit score. No one knows precisely how much each category is worth, but they are all significant in determining your final number. Below are the different categories with an estimated percentage of how important each is.

  • Types of Credit (10%)
  • New Credit (10%)
  • Length of Credit History (15%)
  • Amounts Owed (30%)
  • Payment History (35%)

There are many mistakes that you can make when it comes to your credit. Each error will adversely affect your credit score. Typically, if you max out your card, it will decrease your score by 10-45 points. Late payments will reduce your score by 60-110 points. A foreclosure will affect your score by 45-125 points, and bankruptcy will decrease it by 130-240 points. Make sure you are responsible with credit to avoid penalties.

How to improve your credit score

It can take time to repair your credit score, but it’s essential to do. The following are ways that you can improve your score:

  • Pay on time, every time. Even if it’s just the minimum, pay it.
  • Pay collection accounts.
  • Keep your old accounts. Don’t cancel old credit cards that aren’t costing you money. The length of your credit is important when determining your score.
  • Avoid maxing out accounts.
  • Limit balance transfers.
  • Avoid excess credit applications. Generally, you only need 3-5 credit cards.

Beware of credit repair companies. They cannot legally do anything that you cannot do yourself for free. Take steps yourself to dispute incorrect or outdated information. Members of BrightStar Credit Union can speak with a financial advisor for FREE to sort out their credit issues and develop a plan to improve their score. Our Balance Financial Advisors will also help build a household budget, understand your credit report, buy a home, protect your identity, rebuild your credit rating, and more.

COVID-19 and your credit score

While employment status isn’t included in your credit report, job loss can still affect your credit. The reason job loss can affect your credit is that you might not stay current on your payments resulting in penalties. Unemployment itself does not prevent you from applying for new credit. The likelihood of a loan denial is much higher with a loss of steady income. Hopefully, during these hard times, you have taken the right steps to ensure your credit score remains healthy.


Juneteenth Freedom Day

Juneteenth - Let's Celebrate Freedom

Let's Celebrate Freedom!

History of Juneteenth

Juneteenth is an annual celebration marking the end of slavery for over 3.5 million African American Slaves in the United States. Every June 19, millions celebrate the day that slaves in Texas learned that they were finally free. Texas was the last state to enact the Emancipation Proclamation, which took effect on January 1, 1863, signed by Abraham Lincoln. The Civil War ended in April of 1865, and two months later, on June 19, 1865, Major General Gordon Grander issued General Order No. 3 in Galveston, Texas. He proclaimed, “The people of Texas are informed that, in accordance with a Proclamation from the Executive of the United States, all slaves are free.”

Congress ratified the 13th Amendment to the U.S. Constitution 6 months later, on December 6, 1865. The following year, freed slaves across the United States celebrated their newfound freedom on June 19. The celebration of June 19 was coined Juneteenth.

BrightStar Credit Union’s Observance

Currently, 47 states (including Florida) recognize Juneteenth as a holiday or day of observance. BrightStar Credit Union is committed to supporting and helping our employees celebrate Juneteenth with family and friends. June 19, 2020 will serve as the inception of BrightStar Credit Union observing Juneteenth Day. In lieu of closing operations this year, all BrightStar employees will receive a paid floating holiday to use at their leisure. Thereafter, consistent with all BrightStar Credit Union observed holidays, our operations will be closed annually for Juneteenth Day commencing in June 2021.


A hurricane as seen from space

Hurricane Survival Guide

Surviving Hurricane Season

Be Prepared!

First, it’s essential to know the definitions and standard terms that are associated with a hurricane. There are many different types of storms, and their intensity is what classifies them as a tropical depression, tropical storm or hurricane. Tropical depressions are cyclones with winds of 38 mph. Tropical storms can vary in wind speeds of 39-73 mph, while hurricanes have wind speeds of 74 mph or higher.

 

Terms you may hear

 

  • Tropical Storm Watch – Tropical storm conditions are possible.
  • Hurricane Watch – Hurricane conditions are possible. Watches are issued 48 hours in advance of the anticipated onset of tropical storm force winds.
  • Tropical Storm Warning – Tropical storm conditions are expected.
  • Hurricane Warning – Hurricane conditions are expected.
  • Eye – The center of the storm.
  • Eyewall – Surrounds the eye of the storm and contains severe weather conditions.
  • Rain bands – Bands coming off the storm that cause severe weather conditions.
  • Storm surge – Ocean water swelling as a result of a landfalling storm.

Everyone should be prepared for anything that can happen during a storm. Having adequate supplies is essential when a hurricane is approaching. Make sure you go to your local store to stock up on supplies well in advance to avoid the widespread panic.

 

Items to purchase

 

  • Non-perishable food (enough to last at least 3 days)
  • Water (enough to last 3 days)
  • First-aid kit
  • Flashlights
  • Battery operated radio
  • Cooler and ice packs
  • Evacuation plan
  • Plenty of recreational items to pass the time
  • Generator
  • Gas

 

Securing your home

 

  • Cover all windows with hurricane shutters or wood.
  • Make sure all trees and shrubs are trimmed to avoid damage from falling limbs.
  • Bring all outdoor furniture inside.
  • Consider parking your car in a car garage.

 

Preparing for power outages

 

  • Have plenty of gas in your car and stored in gas tanks.
  • Have enough cash on hand for emergencies.
  • Fill your bathtub and large containers with water for washing and flushing only.
  • The CDC has created a guide to staying safe in the event of a power outage.

Keeping your family and yourself safe during a storm should be your number one priority. For a downloadable checklist, please visit the American Red Cross.

This blog used “The essential guide to hurricane preparedness” by Christine Harrison as a reference. 


A lady budgeting

Make the Most of a Reduced Paycheck

Don't worry you will get through this!

Don't stress out!

Bubbles burst, the economy falters, companies downsize, and personal disasters happen which can result in a reduced paycheck. Perpetual salary growth or even maintenance is simply not guaranteed. However, by adopting the right tools and attitude, you can make the most of a reduced paycheck and not just survive, but thrive.

 

Determine whether your situation is temporary or permanent

If you fully expect to be back to your full salary soon, you may only have to adjust to lessened cash flow for a limited time. But before you tap into your reserves (and retirement savings, home equity, cash value life insurance, etc.) it would be wise to behave as if the salary reduction is long-term. Cut down on spending now. Securing your old income may take longer than you think.

If you do not expect to make as much money as you once did, you may be experiencing anxiety, which is normal. You may be panicking about the practical matters to contend with as well, such as how you will pay your bills. Adopting a systematic approach and devising a plan will help you manage the anxiety.

 

Recognize that your salary is not you

This is a deceptively obvious statement. Of course your salary is not you. But many people’s self esteem directly corresponds with how much money they make—the higher the income, the more important they feel. If your mood declines when your income drops, make every effort to dispel the attitude that financial wealth equals worth. It does not, nor does having an abundance of money guarantee happiness. Think back to when you were making more money then you do now. Were you genuinely happier, or did you just have the ability to buy more?

 

Seize the day

Hardship can hone skills and challenge entrenched ideas. Perhaps you worked in the high-tech field because the money was good, but that is not where your passion (or even perhaps talent) truly is. Consider this your opportunity to discover what you really want out of life. After all, if you are going to dedicate forty or more hours a week to your job, it should be something you love. Or at least like.

If you are currently unemployed or are working fewer hours, use this “extra” time wisely. Your options are as varied and abundant as your desires. Consider taking a class—one that will boost future earning potential or for pure pleasure. Write that book, paint the kitchen, start an exercise routine. Or just relax.

 

Analyze your expenses

When cash is copious, it is easy to spend arbitrarily. However, when the salary that sustained such a lifestyle is gone or drastically reduced, its time to take a good look at what you need to spend your money on, not what you can. Prioritize expenses now, and identify which bills take precedence. Mortgage versus car payment? Credit cards versus utilities? Analyze the ramifications of missing or not paying each. If you need help deciding, contact a financial counselor for help.

 

Develop a spending plan.

 

It will help you to discern between those expenses you can and cannot live without. If you find there is simply not enough money to support your necessities, much less your desires, at the very least you now know how much you will require from your next job. If expensive dinners are now a thing of the past, relish in the delights of a cheap pizza, or making cold cuts stretch with lots of lettuce. Enjoy and appreciate the things you may have begun to take for granted.

 

Remember: credit is not supplementary income

When money is tight, credit cards can take on an unusually seductive glow. However, a $40,000 line of credit is not a bonus in disguise, no matter how you much you wish it was. If you use credit to maintain the lifestyle you’ve grown accustomed to, it won’t be long before you “hit the wall”. Without an income to support repaying the balance in full every month, you’ll be paying in installments. Interest rates on unsecured credit is not cheap, and if you fall behind by 60 days, the rates will likely skyrocket. Late and over limit fees will add to an increasingly daunting balance. And soon you’ll be wishing you could return all the merchandise you bought and the meals you ate just so you don’t have to open another statement and look at those big, scary numbers. Credit cards are not designed to be emergency savings accounts.

 

Develop a plan

To thwart procrastination, write down what you want to achieve during this time. Be specific: include names of people you need to speak to and proposed accomplishment dates for each task. Update and refer to it regularly. Apathy’s enemy is a detailed and well-thought-out plan.

 

Go forward

Get professional assistance, talk to friends, and find others who are in like circumstances. It is too easy to think you are alone in this—support is key. Vent to those who can empathize; ask for help from those who can assist. Shock, shame, and anger are normal and feeling these emotions is expected. But by adopting a positive attitude and taking pragmatic steps, you can adapt to a reduced income, and achieve a financially stable future.

 

 

Blog Credit: https://www.balancepro.org/resources/articles/how-to-make-the-most-of-a-reduced-paycheck/


A couple purchasing a new car at a dealership

Tips to Save You Thousands on a New Car

Surviving the car dealership

Be Educated!

Whether you’re buying a new or used car, there are certain things to keep in mind when making a purchase. Unless you are a natural-born haggler, you might be a little uncomfortable or uneducated as to how to get the lowest price. A lower price means a lower monthly payment, and who doesn’t like saving money?

Research the Market Value

Just like any other purchase, you want to know what the vehicle is worth. There are many resources and websites available for consumers to check how much a car is realistically worth. Checking on this before going to the dealership will give you peace of mind knowing you’re getting a fair deal. You can assess the value of the car by going to sites like Kelley Blue Book or Edmunds. Both sites will help you find the average price per model in your area.

Don’t become too invested in the deal

You need to be ready to walk away from the deal if it’s not adding up. Make sure you keep a clear head and know when to say, “no thanks” and move on. Don’t get attached to a particular car, because in reality, there are thousands to choose from. Saying no and moving on may be a result of the dealer you are speaking to as well. Many are overly pushy and confusing, resulting in a bad customer experience. They may promise one thing, then turn around and take it back. Pay close attention to what they say and take notes if you have to. Auto Advisors are a great tool to use because they help people buy cars all the time. They know what to look out for and how to get the best deal.

Walk into the dealership knowing your out-of-door price

The out-of-door price is the price that you want to walk out with, which includes all fees, taxes, and other costs that you pay. Make sure this reflects the market value that you researched. Go into the dealership with a firm price and then talk the salesperson down. The salesperson wants to make a sale, so if you’re firm and don’t get too set on buying the car that same day, the salesperson will many times settle for your price.

Don’t get sucked into the extras

Here are some common add-ons that the dealership will try to get you to purchase to make it seem like you’re getting an added benefit.

  • Nitrogen in your tires – This is only useful for racing; otherwise, you likely will not notice a difference in your car’s performance or wear.
  • Theft Protection – These packages vary, but most new cars come with a built-in alarm system that will do the trick. There is no need for an advanced system.
  • Rear-seat Entertainment Systems – These are a complete waste of money. Ten years ago, it was a different story, but currently you can purchase a tablet for a fraction of what a rear-seat system would cost.

In conclusion, you need to be prepared and informed when purchasing a vehicle. Going to a dealership underprepared will most likely result in a poor deal that you walk away from unsatisfied. If haggling isn’t your thing, consider using an Auto Advisor. It’s their job to make sure you get the best price. They work with dealerships thousands of times a year, so dealers want to give them the best price possible in order to keep getting their business. You can learn more about our free auto advisors by clicking here.


Woman with money on desk

Your Stimulus Check and How to Use It

Suggestions on How to Manage the Money

Everything will be fine!

The government will be sending financial relief checks to millions of Americans. If you’re expecting to receive this relief, we want to help you with some ideas on how to manage that money.

Establish a plan and take care of your immediate needs

Before you spend any of the money, you need to make a plan and budget. Make sure you have food, rent, bills and any other necessities. These should be your biggest priority and are what many will be using the money for. Once your basic necessities are taken care of, you can allocate money to other things.

Pay off debt

This is a perfect time to pay off high interest credit cards or loans that are racking up your extra funds each month. The average American has $8,000 of credit card debt with an APR around 22%. Once you pay this off, or pay a portion of it, you will have more money for necessities when you’re not paying that high interest fee. If your debt is paid off and you have the ability to save this or put it into an interest-earning checking, savings, or money market account, you could get ahead on your savings goals. Whatever you decide to do, make sure you make a smart financial decision.

Add to or start an emergency fund

A good rule to follow is to have 6 months of expenses saved for. This fund should be easy to access and pull from when needed. For many people, this fund could be in use right now with times being as challenging as they are. For others, this would be a great time to add to it and to create an extra buffer for when things aren’t going as planned. The Coronavirus is a perfect example as to why this emergency fund is so important to have.

Help the community

If you’re fortunate enough and willing to, the community could use your help. There are many people that are struggling to buy supplies and stay afloat. Consider donating to trusted sources such as the World Health Organization, the American Red Cross, and various other nonprofits. You can also check with your local government to see if there are any nonprofits that are directly assisting your community.

We're in this together!

Everyone will have a different plan as to how they are going to use the relief deposits. Figure out what works best for your situation but make sure you stick to a budget. Along with being financially responsible, we need to remain positive and support our community. We are all in this together and will get come out of this stronger than ever!


Frustrated man with head on table and paper all around him

How to Survive a Layoff

Surviving a Layoff

Everything will be fine!

Surviving a layoff can be tough and demoralizing, but there are plenty of strategies to get you through it. Many times, layoffs can be caused by things that are out of your control such as recessions, mergers, budget cuts, etc. These are unfortunate circumstance but are many times completely unavoidable. The only thing you can do is pick yourself up and divert your focus to finding new opportunities. Listed below are 9 items that you should keep in mind when you’re laid off.

  1. Make sure you’re receiving everything that was promised to you. For example, if you’re promised a certain amount of paid vacation days and sick days, check your final paycheck to make sure it’s all there.
  2. Don’t panic! You may even want to take a few days off to relax and clear your mind before you make any decisions. Becoming overly panicked and worried will only stress you out more resulting in poor choices.
  3. Review your company’s policies. Figure out how to file for unemployment if that’s what you decide to do, and make sure to check how long your company-paid health insurance will be in effect. These are immensely important to understand incase there is an emergency.
  4. Make sure to look over your budget and make adjustments. There are many ways to cut costs when you really need to, so revisit and make changes to your monthly expenses. This might be as simple as cutting on grocery expenses. Click here for some tips on how to lower your monthly grocery expenses.
  5. Update your resume! You should continuously be updating your resume even when you’re employed, but make sure you have a current resume to give to prospective employers.
  6. Assess your goals. Are they the same as they were before you were laid off? If they aren’t, make sure your future plan is clear and attainable.
  7. Start applying for jobs! There are many online portals that you can use! For example, Indeed and LinkedIn are great tools that you can use to find jobs.
  8. Your family will always want the best for you. If your family sees you struggling and offers to help, swallow your pride and accept it! There is no shame in needing a little extra help when things go bad.
  9. Don’t get discouraged! It could take some time to find a new job, but you’ll eventually get that offer! Who knows, the layoff could lead to much bigger and better things.