Your Tax Refund Can Safeguard You Against Future Debt

ROCKVILLE, Md., March 29, 2016 /PRNewswire/ -- The recent report published by Consumer Financial Protection Bureau notes that banks and financial institutions observe lower credit card late fees and reduced loan balances in the second quarter of each year, right at a time of tax season. This could suggest that many people use their tax refunds to pay down debt.

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"Paying down debt can undoubtedly be one of the best ways to put a tax refund to good use," says Nick Bryan, Executive Vice President of OpenSky, a financial division of Capital Bank, N.A. that provides tools and resources to help consumers build credit. "This not only saves on interest payments but also can improve credit, since the ratio of debt-to-credit impacts credit scores."

"However," Bryan adds, "if someone has a no- or low-interest rate, paying off credit card or long term debt may not be urgent. It makes sense to do the numbers – you aren't losing money to let zero interest debt stay where it is for a while."

There are ways to turn the refund money into a safeguard against possible future debt, Bryan notes. It may make more sense to put a tax refund toward a "life happens" savings account for emergencies, such as car repairs or medical bills. Otherwise, an unexpected cost could create future debt.

Home maintenance also goes under the category of preventing future debt – making necessary repairs and upgrades is a good use of tax refund dollars. Home ownership is a big investment, and protecting that investment pays off in the long run, when the house sells for top dollar.

Finally, for people just starting out in their careers or starting over after a life change, a tax refund can be used to help build or rebuild credit. Using some portion of tax refund money as a security deposit to get a secured credit card, such as the OpenSky Secured Visa® Credit Card, allows consumers to begin building a credit history as soon as they start using the card.

Taxpayers have until Monday, April 18, this year to file their 2015 tax returns and pay any tax due. But there is no need to wait until the last minute. The sooner consumers file their return, the sooner they'll get their refund if they're due one – and the sooner that money can be put to good use.

About OpenSky
OpenSky is a business line of Capital Bank, N.A. that focuses on delivering credit building tools and resources to help consumers establish or re-build their credit. OpenSky credit card products are designed to be easy to get, easy to use and offer variable credit lines, allowing consumers with any financial needs to build a solid credit history. The premiere product, the OpenSky® Secured Visa® Credit Card, has been recognized by Credit.Net as one of the best credit cards for 2014 that build credit fast. With more than 50,000 cardholders and counting, OpenSky is committed to helping consumers meet their financial goals through the power of strong credit and credit knowledge.

For more information visit https://www.openskycc.com.

About Capital Bank
Capital Bank, N.A., is a leading private bank in the Washington, D.C. metropolitan area that offers a range of services encompassing cash management, commercial lending, consumer credit and residential mortgage/Veterans Administration mortgage loans.  Capital Bank's core commercial banking and lending business includes two rankings by the U.S. Small Business Administration (SBA), ranked number two among community lenders and in the top ten among all lenders in the Washington Metropolitan District for loan volume for Fiscal Year 2015.  With double-digit asset growth over the past three years, Capital Bank has more than $730 million in assets and is well positioned to fulfill its culture of collaborative partnerships and solutions for area businesses and consumers nationwide. For more information, visit http://www.capitalbankmd.com. Member FDIC. An Equal Housing Lender.
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Media Contact:
Ksenia Valentin
301-468-8848

SOURCE Capital Bank, N.A.