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Check Card: Money On The Go

Not all plastic money is equal. Credit cards let you buy things now and pay later. But unless you settle up on time every month, you may pay and pay. If you only make the minimum monthly payment, you will accumulate more and more debt.

A debit card looks like a credit card, but it works like a check; in fact, it's often called a check card. You don't pay any interest because the money is deducted directly from your checking account. Of course, that means you will need to have money in your account in order to use it!

You will need a personal identification number (PIN) to use the card to make purchases or to get cash from an automated teller machine (ATM). Keep the number private; memorize it, don't write it on the card. Keep all of your receipts so that you can record your purchases and ATM withdrawals in your check register. If your card is lost or stolen, contact the credit union immediately.

A credit union check card is like having the credit union in your pocket. Applying is easy - stop by and we'll show you how.


Three Things To Look For In A Credit Card

All credit cards come in the same size, but not all credit cards are the same. Here are three important things you need to look for in a credit card:

1. What is the grace period? A credit card lets you buy now and pay later. The grace period is the time you have before a credit card company starts charging you interest on your new purchases, usually a period of 20 to 25 days. But there's a catch. If you don't pay off what you owe (the balance), you may be charged interest on your new purchases immediately. So, unless you pay off your balance every month, you will want to look for a credit card with a full grace period listed as "average daily balance excluding new purchases."

2. What is the annual percentage rate (APR)? How much interest you pay is determined by the APR. Annual percentage rates can vary widely. The lower the APR, the better the deal, but watch out for teaser rates. With these, you pay little or even nothing for a time, but then the rate jumps. If you don't pay off the balance every month, before you know it, you may be paying 22%, 23%, or even 25% interest on it.

3. What is the annual fee? Some card issuers charge an annual fee, often $25 or more, just for opening your account. Others do not.

So while you may be excited when you receive your first credit card application, take some time to sort out your options. Chances are a credit card from your credit union will be your best deal. When you're ready for a credit card, call or stop by the credit union.


Fraud Or Identity Theft: It Can Happen To You

When someone steals money from your purse or your wallet, you likely discover the loss right away. But if a thief steals your identity, you may not even know it until you hear from a bill collector or notice charges on your credit card statement that you didn't make. The Federal Trade Commission estimates that as many as nine million Americans have their identities stolen each year.

To keep your identity safe, carefully guard your personal information including your name and Social Security number, driver's license, debit card number, or other financial account information by:

  • Shredding bills or other papers with your personal information on it before you put it in the trash.
  • Never responding to suspicious e-mails asking for personal information.
  • Being aware when bills are due in the mail; thieves file fake change-of-address forms in order to divert your billing statements to another location.
  • Checking your checking account statements carefully to look for any unauthorized charges from your debit card.
  • Checking your credit report annually through www.annualcreditreport.com, by calling 877-322-8228 or writing Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.


Start Now To Build Credit History

There's more to economic history lessons than the Industrial Revolution or the Great Depression. In fact, this history is all about you: It's your credit history, and it can make a big difference in your life.

As you might guess, your credit history is a record of your borrowing, including credit cards. There are three credit reporting companies that track consumer borrowing: Equifax, Experian, and Trans Union. They note credit applications, credit limits, payments, and account closures in a record called your credit report. And, just like any history class, you get a score! Scores are based on payment promptness, how much you owe, what kinds of credit you have, and your credit history. The higher your score, the better. A high score improves your chances of qualifying for a better loan rate. 

Credit history includes both the age of your oldest account and the average age of all your accounts. Your application history is also tracked. Each time you apply for credit, a lender accesses your credit report. Aggressive credit shopping makes it look like you're anxious to take on more debt. This can lower your score. 

The key to establishing a clean credit history is to start small and to pay promptly. If you haven't started building your credit history yet, stop by the credit union to get more information on applying for a loan or a credit card. 


New Law Curbs Credit Cards

Starting in February 2010, there may be more room in your wallet for pictures and less mail in your mailbox. That's because provisions of a new law called the Credit CARD Act of 2009 restrict credit for consumers younger than 21.

You can still get a credit card. You will just need to submit a written application that meets specific requirements. Basically, you must prove you can make payments either by having someone co-sign the application or with earnings from a job. A co-signer is someone who agrees to pay your bill, if you don't. The co-signer can be a parent, legal guardian, spouse, or anyone who is 21 who has the means to repay any debt you incur by using the credit card. If you can prove you have a job and can make credit card payments, you don't need a co-signer. The new law also prohibits credit card companies from sending pre-screened credit card offers to consumers younger than 21 and limits promotional items to students. Previously, pizza and T-shirts were popular items offered as inducements to sign up for a credit card - one that a student may or may not have been able to afford.


What Is ... A Credit Score?

True or False:  Once you're out of school, no one is keeping track of your scores. False! While you may no longer need to worry about the grade on your math test or history quiz, you do need to be concerned about real life math and your personal history. That's because based on how you handle your finances, you earn a credit score. Lenders use credit scores to assess risk, or in other words, whether or not you will pay back a loan or make timely payments.

Generally, the higher your score, the more likely you are to get a loan and to pay a lower interest rate on it. Ever notice the fine print in the ads for deals on car financing? If so, you've seen phrases such as "not all buyers will qualify" or "for well-qualified buyers." That means that the special offers are reserved for those with the highest credit scores. Some insurance companies also use credit scores to determine whether they should sell you insurance and at what price.

Lenders and others use several different scoring systems, but many use the FICO system, a credit risk model created by the Fair Isaac Corporation. FICO scores can range from 300 to 850. The model calculates the score from information compiled in the credit reports of the three major credit reporting agencies: Equifax, Transunion and Experian. These agencies keep a record of your credit history - your credit cards and loans and the promptness of your payments. Late payments hurt your score. Because credit cards held the longest contribute the most to a credit score, your score will be lower than someone older who has had a card longer. Another factor is credit available; that's the difference between the credit limit on a card and the amount owed. People who max out their cards have a lower credit score than those who don't.

The way to get a high credit score is to respect the credit you've been granted. For more information, contact the credit union.


Use A Share Secured Loan To Build Your Credit

Getting a loan is a lot like getting a job. The best jobs want you to have experience, but how do you get experience if you can't get a job? The best interest rates on loans are available to those with a solid track record of borrowing, but how do you establish a good credit history without paying higher rates on loans? Here's help: One way to gain experience is to do volunteer work. And one way to build your credit is to get a share secured loan at the credit union.

A share secured loan usually has a lower rate than other personal loans because you are using your share savings as collateral for the loan. That means that if you don't pay the loan back, your savings would be used to pay off your obligation. But when you make timely payments, you will be building a good credit history. Plus, you won't have depleted your savings account. For more information or a loan application, contact the credit union.


Ready To Finance Your First Car?

Are you ready to buy your own set of wheels? Wouldn't it be nice if you had the cash to do so? Having the cash would be great, but as a teen, you will probably need to finance your first car, which means you'll need a co-signer. Next, get a pre-approved loan from your credit union. Remember, dealers make money off financing so don't share your pre-approval information with them until you have cut a deal.

Listed are some tips to help you understand the financing of your car:

  1. Be sure you understand all the terms of the loan.
  2. Put as much money as possible down as a down payment. The more down - the less to pay off!
  3. Set your loan up for the shortest period of time that you can manage. Make sure you are comfortable with your monthly payment.
  4. If you are receiving a rebate, use it as part of your down payment.
  5. During the term of your loan, if you have extra money then put it toward your car loan. This will help pay it off early.


Start Now To Build Credit History

There's more to economic history lessons than the Industrial Revolution or the Great Depression. In fact, this history is all about you: It's your credit history, and it can make a big difference in your life.

As you might guess, your credit history is a record of your borrowing, including credit cards. There are three credit reporting companies that track consumer borrowing: Equifax, Experian, and Trans Union. They note credit applications, credit limits, payments, and account closures in a record called your credit report. And, just like any history class, you get a score! Scores are based on payment promptness, how much you owe, what kinds of credit you have, and your credit history. The higher your score, the better. A high score improves your chances of qualifying for a better loan rate.

Credit history includes both the age of your oldest account and the average age of all your accounts. Your application history is also tracked. Each time you apply for credit, a lender accesses your credit report. Aggressive credit shopping makes it look like you're anxious to take on more debt. This can lower your score.

The key to establishing a clean credit history is to start small and to pay promptly. If you haven't started building your credit history yet, stop by the credit union to get more information on applying for a loan or a credit card.


The 411 On Credit History

As a student, you're all too familiar with report cards. And you may think that once you graduate, you won't have to worry about them anymore. But you'd be wrong. Sure, no one will be handing out grades in English, biology or sociology. On the other hand, you'll need to be concerned about another kind of report card: Your credit score. It's based on your credit history and is used to determine how much you'll have to pay for a loan, a credit card, insurance, and even whether you are a good candidate for a job.

Credit history is based on the use of credit. Three consumer reporting agencies compile your credit reports listing what credit you have with whom and how long, how much you owe and whether you have made payments on time. (Consumers are entitled to access their credit reports for free annually to verify they are correct.) Creditors use the information in your credit report to calculate your credit score. The higher your score, the lower the interest rate you'll pay.

To build a positive credit history that leads to a high score, start by applying for small loans or credit cards with low credit limits. Then pay your bills on time. Not doing so is the same as flunking a major exam! After you establish you're a good risk, you can apply for larger loans and higher credit limits. Use credit productively and you'll earn a high score.


ATTN Teens: Build Credit With A Secured Loan!

It's a Catch-22 ... you need credit to get credit. For teens without a rich credit history and a decent credit score, establishing credit can be a challenge. So what is the solution? A secured loan from us, your member-friendly credit union. Credit unions are set up to help members in these very situations, and especially love to help young people get a financial head start.

With a secured loan you'll be using the funds in your share savings account as security, or what is known as collateral (in financial lingo), for your loan. You are basically borrowing against the money in your savings account to show your credit worthiness by making timely payments. As you do so you'll build your credit history, raise your credit score, and increase your likelihood of being offered more substantial and better offers for credit. In other words, you'll be able to get larger loans and better rates for things like a car and even, someday, a house. You'll also begin to receive offers for more affordable credit cards.

Just remember to stay smart as you use credit. Keep in mind it is responsible credit management that will get you where you need to be. By abusing credit and falling into debt you'll do away with your good record.

For more information on a share secured loan, check out the credit union's website, call, or stop by a branch today.


What Does My Credit Score Mean To Me?

You know what a low score on a test can mean. Same for scoring fewer points than the opponent on the football field or basketball court. But there's an even more important score that can affect your life in many ways. It's called your credit score and it's a number that can save you money on a loan if it's high or makes you pay more for both a loan and insurance if it's low.

Your credit score is calculated based on how you use credit. This information is collected by credit reporting agencies and compiled into your credit report. The numbers are crunched to come up with your credit score. The most commonly used score is a FICO score, developed by a company named Fair Isaac. Things considered are your payment history, how much you owe, how long you've held each account, how many accounts you've recently opened compared with how many you have, and the types of credit you have (a vehicle loan vs. a credit card, for example).

For the best rates on a loan or credit card, you want a score that's at least 700. As an example, according to myFico.com, someone with a score above 700 might pay an annual percentage rate of 3.471% on a 36-month $5,000 car loan versus someone with a score of 500, who would pay 17.036% APR on the same loan. That's a difference of making a $146 monthly payment instead of a $178 payment. That may not seem huge, but it's a difference in paying total interest of $272 instead of $1,420 over the life of the loan. Insurance companies also often give discounts for higher credit scores.

That's why you will want to start now to use credit wisely. Good credit scores come from:

  1. Paying your bills on time, even library fines.
  2. Keeping your balances low on credit cards, and if you can, always make more than the minimum payment.
  3. Not opening a lot of new accounts, resist the urge to fill your wallet with plastic.
  4. Using your first credit card the most.


Safeguard Your Debit Card

Simply swiping your debit card to make a purchase is a lot simpler than carrying around a wad of cash or a checkbook. But simple doesn't mean you can be careless. Safeguard your debit card:
* Never write your Personal Identification Number (PIN) on the card. Memorize it. Write it down disguised in a phone number or address, in case you forget it. For example, if your PIN is 2367, you could write down "Carly's number: 877-2367" or "Debbie's address: 2367 Elm Street."
* Photo copy the front and back of the card and keep the copy in a safe place. If your card is lost or stolen, you have the account number and information about whom to call to report the loss in one place. Report the loss immediately.
* Keep the card in the same spot in your wallet. That way you will know at a glance if it's gone missing.


Dealing With Debit Card Theft

A debit card is a good tool for managing your money. When used responsibly and safely, your debit card allows you to:
* Make withdrawals, deposits, or transfer money at an ATM.
* Make purchases at stores or other retail establishments.

A debit card can also help you in terms of budgeting. Since a debit card is funded by the money in your checking account, you're forced to spend within your means. However, there are safety issues if your card is compromised. It's important to know how to react in the event that your debit card is lost or stolen. By being vigilant and taking some simple steps, you can protect your money:

  1. Act quickly! As soon as you realize your card is missing, call the issuer - in your case that would be your credit union. According to federal law, you won't be liable for any unauthorized transactions once you report the loss. If you report within 2 business days, your liability is $50; that amount climbs to $500 if you report after 2 days but before 60.
  2. Follow up. Send a second letter or email with your info (account number, missing date, and date of first report) just to be sure.
  3. Check your statement. Continue to keep an eye out for unauthorized purchases or errors and report any ASAP.


CU Teens Club is Brought to You By
Barton Plant Employees Federal Credit Union
P.O. Box 433
Boutte LA, 70039
985-785-3350
http://www.bartonfcu.com/


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