The Pros & Cons of Transferring Credit Card Balances

Like most people, you’re probably bombarded with credit card offers – some with a 0 percent annual percentage rate. If you’ve looked at a few 0 percent offers, you may be wondering if it’s a good idea to transfer your existing credit card balances to a lower rate card. Here are some of the pros and cons of any balance transfer:

What are the “pros” of transferring your balances?

There are many advantages to transferring your credit card balances:

  • If you have high interest rate credit cards, you can transfer to a lower rate card and save hundreds (if not thousands) of dollars over time.
  • You’ll only have one card to repay – eliminating the need to keep track of multiple payment due dates and avoiding late fees.
  • You may be able to pay off your debt faster because your payment will go toward your balance and not paying off interest. This can help you improve your credit score over time.
  • The new credit card may have better terms overall – from a lower rate to low or no fees (especially annual fees).

What are the “cons” of transferring your balances?

Transferring your credit card balances to a lower rate card has its advantages, but there are also some drawbacks:

  • Not everyone qualifies for promotional cards that feature a 0 percent interest rate. If your credit is average, it may not be worth your time.
  • If you open a new credit card, it may negatively impact your credit score — especially if your combined balances are over 30 percent of your new credit limit.
  • Be aware of the fees charged to transfer your balance to another card. Unlike GCEFCU, some places will charge you a fee of up to 5 percent of the balance you plan to transfer.
  • You may be tempted to use the available credit on your old cards, driving up even more debt. If you don’t have enough discipline to have that amount available, cut up your cards or close them out. If you close out a card completely, there’s a chance your credit history may take a hit if you’ve had the card for a while.

Use this calculator to look at how much money you’ll save in the long run if you transfer your balances. If you think you’ll be able to pay off your balances faster by transferring your balances, it may be worth your time.

To learn more about the credit cards available at Gulf Coast Educators FCU, click here, or give us a call at 281-487-9333. We’re ready to get you on the road to financial freedom.

Information is for informational purposes only and is not intended to provide legal or financial advice. The views expressed are those of the author.?

Sources:
https://www.thebalance.com/pros-and-cons-of-a-credit-card-balance-transfer-960203
http://www.bankrate.com/finance/credit-cards/credit-card-balance-transfer-1.aspx
https://www.bankrate.com/calculators/credit-cards/credit-card-balance-transfer-calculator.aspx 

Tax Refunds & Credit Union Accounts

Stacy Wilson, ACH Coordinator

It’s tax time and the credit union is receiving income tax refunds via direct deposit and still a few paper checks. Here are few things to remember about tax refunds and direct deposit:

We post direct deposit twice a day. Once in the morning and once in the afternoon.

The IRS states that the person on the return must have access to the funds, and if they are not on the account they do not have access to the funds.

If it is a joint return, the deposit will come in under the first name listed on the income tax return form. There is limited space for the IRS to put information.

If the person on the refund deposit is not on the account, we will try to locate an account for them and post it to the account we are able to locate.

If you want the funds to go into your savings:

You should mark the account type as savings, give the IRS our routing number 313087286, and your member number. (No extra numbers or dashes)

If you want the funds to go into your checking or money market account:

Mark the account type as checking, give the IRS our routing number, and the SDC number for the account (the extra digit on your checks).

For those that will be receiving a check instead of direct deposit we offer the following:

The credit union can only accept a tax refund check if a name appearing on the check is a member. In order to deposit or cash a joint check, both names must be on a joint account. A co-borrower on a loan is not considered a joint owner of an account. In addition, both people must endorse the check exactly like it is made out, including initials. Writing for deposit only on the back of a check is not an endorsement.

If the account is not jointly owned, both people must be present, and both parties need to endorse the check exactly as it is written on the check.

Remember these important tips to ensure that your tax refund check can be deposited or cashed without delays:

  • A co-borrower is not a member
  • Check must be signed exactly as it is made out
  • At least one name on the check must be a member

If you have any questions regarding your refund check or direct deposit, you can reach our contact center weekdays during business hours.

 

Prepare Your High School Senior For Their Financial Life

Jamieson Mackay CCUFC

Jamieson Mackay
CCUFC

Congratulations, you’ve helped your high school senior successfully navigate almost 12 years of school. Once they graduate, they will begin a new chapter in their lives as young adults and either continue with school or enter the workforce. Either way, you can help them make sure they are well prepared financially.

If college is the plan after graduation, make sure your student visits with the school counselor to learn about scholarship opportunities, such as the credit union’s scholarship. Also, even if you don’t think you will qualify, many experts recommend completing the FAFSA. The credit union doesn’t offer student loans, but try visiting SallieMae for student loan sources. Other sources of student loan information: Department of Education | Texas Guaranteed Student Loan Corp. | Texas Higher Education Coordinating Board

If you do decide to use student loans, we would encourage you to do so wisely and only use the loans to pay for tuition, fees, and books, not living expenses. It is a very expensive way to finance everyday living expenses. Many of our part time tellers are enrolled in college, and they tell us it is a really good job to have during college and helps avoid acquiring too much student loan debt.

Whether your graduate’s plans include college or not, one of the most important things you can give them is a good understanding of money and credit. A case in point. My wife and I both went to college together. Her dad sent her with a low limit credit card from their credit union that he had provided her once she turned 18, and taught her to use it responsibly. I went to college not knowing about credit cards. Shortly after I arrived on campus, I received a mailbox full of credit card offers. I took one and had maxed the card out in no time. At that point, I was working a part time job just to pay off the balance. My wife used hers responsibly and got to enjoy the money she earned from her part time job.

Managing money for young adults is crucial, especially if you as a parent want to make sure they move out of the house and remain in their own place. Teach your student about your household budget so they understand how each paycheck is divided into savings, paying bills, money for nice to haves, such as clothes & entertainment, and money for have to haves, such as food & shelter.

Some of these topics may be difficult to talk about, but the payoff is a leg up financially as your student enters adulthood. Let us know if you have any questions.

Preparation for International Travel

It’s summer, which means for a large majority of our member base that it is time for a well-deserved vacation. With our close proximity to one of the busiest ports in the US, it is convenient to hop on a cruise ship and visit Puerto Rico, Mexico, the Caribbean, as well as Central and South America. It is also just a few hours on a plane to visit exciting places such as Europe, Asia, or Africa.

Report your international travel to prevent your debit or credit card being suspended due to suspected fraud. 

A vacation should be exactly that; a getaway from the day to day troubles that you have giving you a chance to relax and have some fun. The following are some very important things for you to do before you leave to make sure everything goes as smoothly as possible on your trip internationally.

It is becoming increasingly popular in many countries to no longer accept debit and credit cards that do not have a chip (EMV cards). If you travel to a country where merchants typically no longer accept non-EMV cards, your transactions may be declined. Fortunately, your credit union has your plans in mind and has released chip-enabled debit and credit cards available for your use. If you have plans to leave the country, be sure to stop by or call us in advance to have a chip card created for you. Armed with a EMV card, you are one step closer to a care-free vacation.

Once you have a chip card, please also be sure to make your credit union aware of when you are planning to leave the country. For your protection, we block a majority of foreign transactions from clearing your account. Unless notified of your travel, we block foreign transactions for your protection. It is a common theme for transactions to be made internationally when card information is stolen because the fraud cases are more difficult to investigate. By calling us, we will be able to unblock the countries you will be travelling to for the time in which you are travelling to maintain your account security. Our goal is to give you peace of mind knowing that your funds are safe.

When traveling out of the country, please also carry an alternate form of payment. We do our best to be available to our members, which is why we increased our call center hours to 7am-7pm Monday through Friday. However, when traveling you may have problems contacting us via phone when you are out of the country. If your card is not working for any reason, it is better to have an alternative way to pay for things than to be without available funds for a short amount of time. If you find that you are unable to reach us via calling, be sure to visit our website to see the other options for communication that we offer to our members to be as available as possible.

Following these steps will help to make sure that your vacation is everything it should be: stress-free, care-free, and fun.

Happy Travels!

Sandy Savers: Start Young for a Lifetime of Good Habits

Caylee Smith

Caylee Smith

Every parent’s dream is for his or her child to grow up healthy and successful. Being successful doesn’t happen over night, it takes years and years of practice and instilling the correct behavior, whether that be saving habits, morals, work ethic, etc. Starting these habits at a young age can help your child in the future.

To help our members in this process, we have re-vamped our Sandy Saver’s Accounts. During the month of April you can bring your child in to open a Sandy Saver’s Account, and they will automatically receive a gift card incentive for starting good savings habits. Upon opening their account, they will also receive a stamp card. For every $10 deposited, they will get one stamp. Once they have collected 5 stamps, they get to choose a prize from the treasure chest.

Current Sandy Saver members can also participate. Just ask any Teller or Member Service Representative and they can get you a stamp card.

Most kids want to spend their money as soon as they get it, so this gives them a little bit of an incentive to save instead. Along with the prizes, Sandy Saver members will also receive a birthday card and newsletter in the mail. It is our hope that by instilling good savings habits in our younger generation, they will grow up and have a successful future. Click here for more details on Sandy Savers 2.0.

Next Year’s Christmas

Jamieson Mackay CCUFC

Jamieson Mackay
CCUFC

I know what you’re thinking. We haven’t even finished this year’s Christmas and this guy wants me to start thinking about next year’s Christmas. If you are feeling anxious about this year’s Christmas and the financial impact it will have on your family and budget then yes, I want you start thinking about next year’s Christmas so that you can reduce next year’s stress level.

An obvious solution is our Christmas Club account. This account is set up so that you add to it throughout the year and then in early November, the funds are put into your savings account so you can use them for your Christmas shopping. An obvious solution but saving money each month can be difficult for many of us. Families are already saving for other things such as recommended emergency savings and they don’t want to tie up the money in a Christmas Club account in case they need them sooner.

So let’s think outside the box a little bit. Many will use loans or credit cards to finance Christmas spending. If done wisely and prudently, there is no issue with doing that. For some, however, loans or credit cards can be out of reach due to poor credit history or no credit history. In those cases, we do have an option available to almost everyone. It is our credit saver loan which is secured by a term share account funded by the credit union and tied to a loan paid off over time. Once the loan is paid and the term share account reaches the term, the funds belong to the member to use as they need.

Another way that you can spread out the cost of Christmas is to buy presents throughout the year and put them away. This is how my wife handles it and I’m thankful she does. It means that our family doesn’t take the financial hit in one month and I usually don’t have to do much Christmas shopping. No matter how your family pays for Christmas, the most important thing is to plan ahead and make decisions as a family. Good luck and Merry Christmas this year and next year.

There Ought to be a Law

Jamieson Mackay CCUFC

Jamieson Mackay
CCUFC

One of my team members brought me a super convenient new way to get into trouble with payday type lending. In the mail, she received a check for $800 with a letter attached with pictures of Santa Claus and other Christmas designs. Let’s face it, the Christmas season can be hard on the wallet and many of us could use some extra money to provide a merry Christmas for our families.

If she had deposited that check for $800, she would have been agreeing to a loan with an annual percentage rate of 91.02% and a $370 finance charge with total repayment of $1,170 in 10 payments. The most a credit a credit union can charge per the law is an annual percentage rate of 18%. We offer several alternatives to this type scenario that would save you money:

  1. Christmas Club Accounts. Save a small amount each month and we release the funds in November. Amount of interest paid = $0
  2. Get our Holiday 12-12-12 loan. You can get up to $1200 for 12% annual percentage rate with repayment up to 12 months. Let’s use the $800 example from above with 10 payments. Your total amount of interest paid on the same $800 is $44.66.
  3. Open a credit saver loan this year in November or early December and next year at the same time when the loan is paid off, you’ve got Christmas money. On this type of loan we front the money to open a term share account with an annual percentage rate 3% above the current rate on the matching term share rate.

The best thing my team mate did was shred the check. I hope our members will always contact their credit union first to see if we can help you instead of falling into the trap of predatory lending. After all, you are not just a customer, you are a member-owner and we have your best interest at heart.

What Should You Do When You Experience A Financial Hardship?

What should you do when you experience a financial hardship?

Shannon Harms, Collections Manager

Shannon Harms Collections Manager

The most important thing to do is communicate. Have you ever ignored a call about a past due bill? Don’t wait for creditors to call. Be proactive and take the time to contact your creditors and explain your situation. If your creditor is knowledgeable of what is going on they are prepared better to help you. Take the time to contact all of your payees in the beginning so there are more options available to assist you.

You also need to communicate with the stakeholders in your household. Let those in the household who make purchasing decisions know about the situation. Pretending that everything is fine means those in your family won’t know that they need to change their spending to not make the hardship worse.

GCEFCU is here to help out when an unexpected situation occurs that leaves you unable to pay your loans. Pick up the phone and call us and we will get through your financial hardship together. We will assist you in finding the option that is right for you and your situation.