Page 52 - November 2017 Magazine

Eliminate your high interest credit and loan balances
If you feel crunched for cash and buried in debt, you are not alone. Two-thirds of Americans would have difficulty coming up with the money to cover a $1,000 emergency, according to an exclusive poll conducted by The Associat-
ed Press-NORC Center for Public Affairs Research.
Three-quarters of people in house- holds making less than $50,000 per year, and two-thirds of those making between
$50,000 and $100,000, would have difficulty coming up with $1,000 to cover an unexpected bill. Even for the coun- try’s wealthiest 20 percent – households making more than $100,000 per year – 38 percent say they would have at least some difficulty coming up with $1,000.
Even if you are carrying balances on credit cards that are not extremely high, the credit card and store credit interest rates across the board add up and help keep you behind.
Hopefully you know that your benefits plan offers an ex- clusive opportunity to lower existing student loan debt rates to as low as 2.23 percent, with an immediate $100-member discount for your entire family, and also provides lower in- terest rates on new student loans through Lendkey. This op- portunity can be accessed through your FOP Benefits Plan
website whose address is listed below.
As for credit cards and store credit cards, you can and
should get a handle on your existing debt and any other high interest loans you or your family members may be carry-
TOM TUOHY
FOP
Benefits Plan
ing. Here are some guidelines that are useful:
•Never take a cash advance on your credit card. It might be tempting, but consider that with the ad- vance fee and high interest rate, the cost of a cash advance on a credit card can be 500 percent or more. • Never rob your deferred comp for any purchase or pay down of debt, as 28 percent of Americans are re- ported to be doing. In addition to the 10-percent penalty, you will be taxed at the normal income tax rate on the funds, yielding you only an average of 65 percent of the money you withdrew. And, of course, you will set back
your long term investment goals for retirement.
Beware of using a home equity loan for anything other than an emergency or a major repair. It is tempting to take advantage of the historic low mortgage and home equity loan interest rates to pay down your credit cards; however, without financial discipline you have only lev- eraged your home with existing non-secured debt while the debt starts all over again on your credit cards.
Don’t open new credit card accounts. Resist the tempt- ing offers of initial low interest rates or miles. And don’t transfer balances from other cards unless you can pay them in full before the promotion period expires. Something else to remember when you are unable to resist that new credit card offer – your credit applica- tions adversely affect your credit score. Whether you are ready for your next house or investment property or are preparing for retirement and downsizing, there will be a time when your credit score will help determine your credit worthiness and available rate. Keeping track of your credit score is one of the great benefits of Legal Shield, an important partner in your benefits plan. In ad- dition to protecting you against identity theft, you have regular access to your all-important credit score.
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52 CHICAGO LODGE 7 ■ NOVEMBER 2016
All this sounds reasonable; however, what if you are one of those people who simply does not have the cash on hand, and one of your children needs a laptop, or you need to replace the refrigerator or washer and dryer? The reality is that some purchases are essential. The good news is there is an answer coming soon through your benefits plan, with a company that offers more than 46,000 products – on in- stallment, with no interest charges for up to a year for cur- rent FOP members who are still working. Details are being worked out for final approval. Stay tuned!
Registration for the FOP Benefits Plan for FOP members and their families is free. Visit www.fopbenefitsplan.com or call 1-866-729-5454 for assistance with registering. d
Tom Tuohy is the founder of Tuohy Law Offices and the FOP Benefits Plan. He has been a police lawyer for 34 years. His fa- ther was a CPD detective and his grandfather was CPD Chief of Major Crimes. Tom can be reached at 312-559-8400.