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.

The Lost Art of Balancing A Checkbook

Seleni Lobo Member Service Representative

Seleni Lobo
Member Service Representative

Technology now a days is so advanced compared to how it was decades ago. With mobile apps on our phones we are so used to having easy access to our checking and savings account that we feel that there is no need to balance our checkbooks anymore. But, did you know that when you write out a check or making an electronic purchase that go through as “credit” it will not show immediately on your checking account through your mobile app? Before you know it, you are paying on overdraft fees because you forgot that you made out that check or that online purchase. By balancing your checkbook you not only know how much money you have left to spend but you can also see where your money is going, which comes in handy when budgeting. It’s quick and easy to do and will help you avoid overdraft charges along with insufficient funds fees.

The easiest way to do this is just write in every purchase and amount as you make them, keep all your receipts to go back and verify the amount you wrote in is correct. When convenient, at least once a week, you can sit down and balance your checkbook by subtracting any purchases made or adding any deposits made. Keep in mind that your checkbook can be used for any checks written but also for any purchases made with your debit card, cash withdrawals or deposits made in person and any debits or credits made electronically. There’s even an app for that if you prefer.

Is A Health Savings Account Right For You?

Jamieson Mackay CCUFC

Jamieson Mackay
CCUFC

Since my wife works in a local school district that offers TRS ActiveCare to employees, this is a question I actually had to ask. Her immediate reaction to the three choices of plans was to focus on options one and two. The first option, TRS ActiveCare 1-HD was attractive because the premium contribution was by far the lowest, $204 per month lower than option 2. Simply put, that means more money in the paycheck. The deductible, however, caught her attention. In order to qualify for an HSA, the deductible has to be high. In this case it is at $2400. The deductible on TRS ActiveCare 2 is $1000 which is $1400 less. That seems like a significant difference until you go back to the $204 a month premium difference. That means her deductible plus premium payments on TRS ActiveCare 1-HD total is $3120. The TRS ActiveCare 2 option total for premium and deductible is $4168. My wife is healthy so she doesn’t anticipate using enough medical care to meet the deductible either way. In that case, the ActiveCare 1-HD option costs only $720 in premium compared to $3168 for the ActiveCare 2 option. Again, given that my wife is healthy and historically hasn’t used very much medical care in the past, the decision to choose TRS ActiveCare 1-HD was fairly easy and straight forward.

Since she chose the TRS ActiveCare 1-HD option, she now qualifies for a Flexible Spending Account or a Health Savings Account. This is where you have to be honest with yourself and use a little introspection to decide what will work best for you.

Debt Consolidation & Net Worth

Jason Chambers, CCUFC

Jason Chambers
CCUFC

In my experience as a loan officer for the credit union, one of the most frequent requests was for a debt consolidation loan. Several times a week, I would have a member come to me and explain: “Jason, I can’t seem to catch up. I have too many scattered payments to credit card companies at high interest rates. I can hardly keep up, and I feel like I am getting nowhere. Is there anything the credit union can do to help me?” In most of these cases, the members wanted me to offer the simple solution: a new, unsecured loan to pay off the debt and have one payment with the credit union. Ideally, this is the best solution for everyone involved. The member has one payment, is saving interest, and the credit union has a new loan. It seems perfect, everyone is a winner…right? Surprisingly, in my experience…no. More often than not, members find themselves in a year’s time or less in the same predicament. Why? The answer is equally simple: I can give a member a loan to pay off their credit cards, but I can’t keep them from using them.

If you feel that a debt consolidation loan is your only hope, you first need to identify the source of the problem…your spending habits vs. savings habits. Credit cards and loans were never designed to replace responsible savings. That being said, credit card companies and financial institutions make a lot of money on customers who can’t properly manage their spending. Several of the products and “services” offered by these firms are designed to make the customer’s fail in order to keep the customer in debt longer and receive interest payments.

Debt consolidation is not a product…it is a mission. More accurately, debt elimination over consolidation should be your primary goal. This might sound easier said than done, but the first step is quite simple: stop spending. More specifically, stop purchasing with credit cards and instead rely on cash or debit purchases. If you leave your credit card at home before leaving the house, you will limit your spending power only to the balance you have in your account. This practice yields many positive results. First and foremost, you will not be able to give in to the temptation to make a purchase and “pay for it later.” Additionally, you will be forcing yourself to keep an eye on your spending and account balances. The credit union offers online banking and phone service to make this information easier to access at home or on the go. This small change in habit can have an overwhelming impact in just one month or two.

Now that you have made a move in the right direction, we can address the lingering problem: paying off existing debt. Juggling several credit cards instead of paying them off with a single loan doesn’t make much sense. If you have good credit, why not take advantage of credit union products like a personal loan to pay off the balances? Well…you should; however you must realize that if your habits have not changed, the problem will not go away. In fact, members often secure a personal loan to pay off their debt, only to charge the credit cards right back up. This creates an even bigger problem as the member is heavier in debt, and may have exhausted all of their resources with the credit union in securing the previous loan.

There are several options for consolidating, and ultimately eliminating, debt. For small consolidation loans (under $10,000) a 4 or 5 year personal loan can be the best choice. Qualifying members will find that in most cases, they will save hundreds in finance charges over the life of the loan and have more positive cash flow on a monthly basis. An example of a responsible habit would be to place the money saved on a monthly basis into your savings account. This can be set aside for emergencies or large purchases that you would normally make with a credit card. If you were unable to pay off all of your accounts with the loan, then the most logical use of the savings would be to pay down the remaining high interest accounts. The most common mistake that members make is replacing a portion or all of the monthly savings with new debt. Just because you can breathe a little easier, doesn’t mean you should go out and buy a motorcycle or patio furniture.

In addition to credit cards, some members may have large unsecured debt as a result of student loans or medical expenses. Much like credit cards, these scattered payments are often a large drain on a member’s monthly cash flow. Often times, the balances on these liabilities is greater than the credit union can assume with a personal loan in regards to amount and repayment term. A good strategy for paying off this kind of debt is through equity.

What is equity exactly? Equity is defined simply as the ownership interest in real property. If you have a mortgage or auto loan that you have been paying for several years, chances are you have equity that you can in turn borrow against. Equity is directly related to your net worth, which is simply your total assets minus total liabilities. If you have paid your mortgage for several years or own your home out right, a home equity loan is a perfect choice for restructuring your liabilities. A home equity loan can provide a lower interest rate, longer repayment terms, and possible tax deductions (consult your CPA for specific information.) The best part is that from a net worth position, nothing changes. The amount of debt still exists, but replacing the way you repay it can save thousands in interest with less money paid out on a monthly basis. Equally, if you have an auto that is paid off or almost paid, you may be able to secure a title loan or cash out refinance. If your car is in great shape and you have no immediate plans to sell, why not take advantage of low rates and extend the balance and term by a year? It’s a simple decision if it means paying off a credit card now or in 5 years and with more interest.

These suggestions are based solely on my years of experience helping members on a one on one basis. Keep in mind, no two member’s credit situations are the same. I encourage you to consider some of these options and invite you to contact the credit union for more information. If you have success with any of the topics discussed today, please share your story with us. Helping our members by providing the tools for financial success is among our founding principles.