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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.


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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