Financial literacy in America is not the best. Many highly intelligent people were never taught the fundamental precepts of proper money handling habits, and it can cause them to make poor financial decisions. Still, there are ways to get the upper hand using very basic financial tools. Here are three examples that you can get from a local credit union.
- Cash Back Credit Cards
Roughly seven out of 10 Americans have one or more credit cards, but many of those people likely misuse them. A line of credit is a potential loan amount that you can use on a monthly basis. If you pay back the loan in full every month you won’t be required to pay interest on your balance. Paying in full and on time will also increase your credit score over time, making it easier to secure loans and rent apartments. Certain cards also give cash back rewards. Whether they give points or a percentage of each transaction, these perks can add up over time. You must remember to pay your bills on time, though, or else you risk paying more in interest than the cash back rewards are worth.
2. Checking Account
A checking account makes it easier to pay for things like utilities, rent, phone bills, and even your credit bill in one place. Most checking accounts these days have the option for auto pay, a convenient way to automate your monthly bills. You won’t need to worry about missed payments once you set this up.
3. Saving Account
Savings accounts can award you a great interest rate for storing your money in a credit union. And they can also give you options. If you need money in a hurry, you can’t really remove money from an IRA or from the stock market. Plus, your checking account is reserved for paying bills. A savings account can be treated as a separate money accumulation fund for emergencies.
There are many other financial tools at your disposal once you learn more about money management. These three are very common examples of banking tools people often underutilize. If you can leverage them correctly, you can become much more financially secure.