My account is in collections. What should I do?

When your account goes past due and is now in collections, be proactive! These tips can help you cope with and resolve accounts in collections.

OWN IT/ DON’T IGNORE IT. Contact your creditor and tell them what happened. You do not need to divulge personal information; just be truthful and give the basic facts. Most accounts receivable specialists, or “collectors,” will welcome this approach, have worked with many people in similar situations, and probably have options available.

HAVE A PLAN. The collectors don’t know what your resources are, so be prepared to offer some alternatives. Can you pay interest only for a few months or make a partial payment on the past due balance? Ask your representative for advice and what they recommend during times of temporary financial distress.

FOLLOW THROUGH. Do what you have agreed. Do not hesitate to contact the company again if your plans or resources change. Stay in continuous contact until you are able to bring your account up to date.

Written by Mark Austin, Collection Manager, University Student Financial Services & Cashier Operations

Making the Most of Job Benefits (Recorded Webinar)

In today’s economy, we are happy to have jobs, but many college graduates are underemployed. This webinar on job benefits is to inform students across the state how to get the most from their employment perks. Topics that will be discussed include salary negotiation, pension plans, and many more employee benefits. This is a great opportunity for students to prepare for the working world so they can be better informed when making decisions on those post-graduation job offers.

University of Illinois Extension, along with the University of Illinois’ Student Money Management Center, hosted the webinar “Making the Most of Job Benefits” on February 24, 2015. The FREE webinar focused  the types of job benefits employers could offer you and how to make sense of them. Watch it below!

Earning badgeThis is an Earning Badge eligible program, so make sure to take the quiz after watching to get credit!

“Making the Most of Job Benefits” is part of the Get $avvy: Grow Your Green Stuff webinar series.

 

Written by Andrea Pellegrini, University of Illinois USFSCO Student Money Management Center

Why get a savings account?

The most noticeable benefit of a savings account is interest earned on money deposited. The interest rate on a savings account is currently very low, but it still provides extra money. A savings account has many characteristics of a checking account, but it offers other benefits. A benefit of having a savings account is that it can create a saving mindset. Finally, a savings account will provide additional security.

A savings account annual interest rate is, as of April 2015, ranging anywhere from .05% to 1%. This may not seem like a high number, but it is still creating money. For example, 1% of a thousand dollars is ten dollars. Current rates can be checked regularly through your institution’s website or other online sources such as http://www.bankrate.com/.

A savings account is a great offer because it has very high liquidity. Liquidity measures how quick an asset or any financial instrument can be converted into cash (usually into a checking account). The process is as simple as doing a quick online transfer from savings to checking. In addition to having liquidity, a savings account is backed by the FDIC in conjunction with a bank’s checking account, or the NCUSIF if your saving account is with a credit union. Your account is insured up to $250,000. (Personal limits also apply if you have multiple accounts.) Basically, a savings account provides interest with zero risk on savings up to $250,000. Specific variations on a savings account, like a money market account, may provide higher interest rates but may limit the amount of transactions that can occur. It is important to talk with a bank or credit union representative to figure out which account fits your needs.

Besides earning interest, savings accounts are great for creating a saving mindset. First, while savings accounts are liquid, the money is set aside from regular checking. This makes it more difficult to spend unexpected amounts of money on any good or service. The process of transferring money from savings to checking creates time to mull over the decision and can prevent unnecessary expensive purchases. However, the money is still available and accessible in times of emergency. Next, taking extra income and depositing into a savings account can develop a mindset more geared towards saving. Saving money is important for achieving future financial goals, and a savings account is the first step in saving and earning interest income.

Finally, a savings account can create additional security for money stored in an account. For example, a savings account has a different account number than the checking account, so if account information were to get stolen, the savings account funds would remain difficult to be stolen. It is a good idea to not link your debit card to your savings account. This will create an extra barrier if your debit card were to get stolen.

In conclusion, a savings account is a great complement to a regular checking account. It provides many of the same features of a checking account but earns interest on the money deposited. It also allows you to create a saving mindset which is important in the long run. Savings accounts can also come in many different styles, so it’s important to contact your financial institution to figure out which is right for you!

Written by Jonathan Alton, Financial Wellness for College Students Peer Educator, and Kathy Sweedler, Consumer Economics Educator, University of Illinois Extension

How can I build credit as an international student?

As an international student, it may be useful to think about building credit while attending college in the U.S. Building a credit history of on-time payments is a necessity for living in the U.S., including securing housing and utility services. Most of the transactions that happen in daily life are paid by credit or debit cards instead of cash. A good credit history can benefit you through lower interest rates on personal or mortgage loans and even lower security deposits when you rent an apartment. Here are some steps you can go through to start building your credit history.

Step 1: Find an on-campus job to get a SSN

SSN stands for Social Security Number. It’s a national identification number for taxation and other purposes issued by the Social Security Administration. As an international student, you probably would not allowed to work off-campus due to the F1 visa status. However, you can find an on-campus job and work 20 hours or less on a weekly basis.

Step 2: Apply for credit cards

It may not be easy at the beginning to get a card that fit your needs. Credit cards have different perks or advantages. For example, some feature balance transfers, low interest rates, rewards/cash back, or airline points.

You can always apply for secured credit cards even if you don’t have a SSN. These cards are backed with a deposit account as collateral. The deposit is likely to be 100% to 200% of the amount of the credit you want to get. However, keep in mind, different banks have different policies on credit card issuance and not all banks offer secured credit card. Therefore, do your research before applying for any credit cards or ask a banker in your local banks for any available offers.

Step 3: Manage your credit history

Use your credit wisely and make sure to pay off the balance on time. The University of Illinois Extension has great resources on how to manage your credit history on its website. These materials will give you a better understanding of credit history and how to manage it wisely. Peer educators with the Financial Wellness for College Students program also have office hours, and you are more than welcome to make an appointment with a peer educator to discuss credit cards.

Written by: Zige He, Financial Wellness Peer Educator, and Kathy Sweedler, Consumer Economics Educator, University of Illinois Extension

Navigating Life’s Financial Transitions (Recorded Webinar)

Whether it is going to college, moving, dating or getting a new job, all of these major life changes can cause periods of financial transition. How you deal with these transitions can seriously impact your finances in the long run. Do you have the necessary tools to manage life’s financial transitions?

University of Illinois Extension, along with the University of Illinois’ Student Money Management Center, hosted the webinar “Life Transitions” on January 27, 2015. The FREE webinar focused on resources for making major financial decisions at various points throughout your life and the tools necessary to stay on track towards your goals. Watch it below!

Spending badgeThis is a Spending Badge eligible program, so make sure to take the quiz after watching to get credit!

“Life Transitions” is part of the Get $avvy: Grow Your Green Stuff webinar series.

 

Written by Andrea Pellegrini, University of Illinois USFSCO Student Money Management Center