The world of money has its own language. Here are a few key terms to know.
|Account||A fund established at your credit union in your name, with which you can withdrawal or deposit money. An account keeps a complete record of all your financial transactions.|
|Annual Percentage Rate (APR)||The total yearly cost of a loan, expressed as a percentage. APR calculates interest, fees and any other charges such as insurance.|
|Annual Percentage Yield (APY)||What you earn (total dividends, expressed as a percentage) on your deposits during one year.|
|Automated Teller Machine (ATM)||A machine at a credit union branch or other location that lets you do basic banking transactions, such as get cash, check your balance, or even make a deposit. Because the machine is automatic, it is often available even when the credit union is closed.|
|Balance||The amount of money in an account at a specific time. Also often called an “account balance.”|
|Budget||A detailed plan of how much money you should save and spend each month, based on your income, in order to meet your needs and goals.|
|Certificate Accounts||A special type of savings account (sometimes called Certificates of Deposit at other financial institutions) offering higher dividend rates, in exchange for depositing your money for a fixed amount of time.|
|Checking Account||An account that lets you write checks to make payments using the money deposited in the account.|
|Credit Card||A plastic card that lets you pay for items using a temporary loan. The card is swiped through a special machine at a store, and the amount of the purchase is added to the loan balance. At the end of each month, the user is expected to make a payment toward the balance of the loan.|
|Credit Score||A standardized measurement of your credit history, included in your credit report. Your credit score analyzes your history making loan payments on time, responsibly using credit cards, renting a home, and more, and decides if you can be trusted to pay back a loan.|
|Debit Card||A plastic card that lets you make purchases electronically using your checking account. Instead of writing a check, you swipe your debit card through a special machine, and the amount of the purchase comes out of your account right away.|
|Debt||The amount of money a person owes to other people or companies.|
|Deposit||Money you put into your credit union account.|
|Direct Deposit||A service that lets your employer deposit your paycheck directly into your credit union account--without giving you a paper check.|
|Disclosure||The “fine print” details of an account or loan, outlining complete details, risks and more.|
|Dividends||The rate (as a percentage of your balance) a credit union pays you for depositing your money. Sometimes called interest at other financial institutions.|
|Down Payment||A small part of the purchase price (usually of a car or home), paid in cash up front. A down payment lowers the amount of the loan or mortgage needed to make the purchase.|
|Individual Retirement Account (IRA)||An account used to save money for retirement. People with IRAs set aside money each year, and cannot withdraw the money until they are age 59 1/2 or older.|
|Interest||The fee (as a percentage of your balance) charged by a credit union to borrow money.|
|Loan||Money borrowed by a member from a credit union. The borrower agrees to repay the money, plus interest, over the course of a specific timeframe.|
|Mortgage||A loan used to purchase real estate (a home), with specific terms, payment periods and interest rates.|
|Online Banking||A web-based system that lets you perform certain transactions on your credit union accounts over the Internet.|
|Overdraft||A negative account balance, caused by having withdrawals greater than your deposits.|
|Savings Account||An account at a credit union that pays dividends, but cannot be accessed by writing checks.|
|Terms||The specific conditions and details required to establish a credit union account or loan.|
|Withdrawal||Money you remove from your credit union account.|
by Jean Chatzky
Part of being a smart consumer is managing your credit history and your credit score. Your efforts will be rewarded – a good credit score gets you lower interest rates, thus saving you money. It’s also particularly important now, because the recession tightened lending requirements. What used to be considered an excellent credit score may now be only good. Generally, if your score lands above 740 (on the FICO score range of 300 – 850) you’re in great shape.
So how do you keep on top of things? By getting your credit report regularly. Luckily, it’s free. Several years ago, the three major credit bureaus came together to create and host a website, annualcreditreport.com, that allows you to pull one copy of your credit report from each bureau every single year. That’s three free copies total within a one-year span, and I suggest spreading them out throughout the year. Pulling one every four months means you can stay on top of your file and spot any suspicious or inaccurate activity quickly.
Once you have your report in hand, you have to know how to read it. Start with your personal data. Are there any mistakes? You’re looking for red flags like names you’ve never gone by, addresses you’ve never occupied, or errors in your Social Security number’s digits. If all of that information is correct, move on to your accounts. Make sure that they are all ones that you’re aware of, and that the information is accurate right down to the credit limit, account status, balance, and payment history. If you have any negative information on your report, you need to check the accuracy of that too. Make sure that if you’ve declared bankruptcy, all debts included in your filing are noted on your report, and if you’ve settled debts, they should be listed as such.
Finally, you want to look at your inquiries. Every time you apply for credit, whether it’s a new credit card, an increase in your credit limit, or a loan, the lender takes a peak into your credit file. Make sure that the inquiries listed on your report are ones that you are aware of—in other words, you applied for that loan or credit card, and no one was trying to apply in your name without your knowing.
If you find an error, it’s up to you to dispute it. If it’s just a simple mistake—like an address that needs updating—you can contact the creditor and ask them to fix it. They will send an update to each credit bureau, so follow up to make sure they do. If your creditor is unable to make the correction, you need to dispute it with the credit bureaus by sending a notice to each one. All three bureaus allow you to dispute information online, but where you can, you should also send a written letter. List all mistakes with a description of why the information is inaccurate and how it should be updated. Include any back up information, such as your account records, for proof, as well as your phone number and social security number. Give the bureau 30 days to investigate. If you don’t hear back (you should receive a letter detailing what was updated on your credit report, or an email if you submitted your dispute online), follow up and keep a paper trail.
Unfortunately, you can’t access your FICO score for free. You can buy one of your scores for $19.95 from myFICO.com (you have two FICO scores, one based on information in your Equifax report and one based on information in your TransUnion report. Experian split from FICO a couple years ago – you can buy their score from experian.com for $14.95). Your scores between bureaus will vary slightly, but they should be relatively similar.
I can see you scratching your heads. You listen to the radio. You see those commercials on television— they say you can get your score for free. Those deals generally require you to sign up for a credit monitoring service, which will cost you in the neighborhood of $15 a month. You do that, and they’ll give you a free score. Is it worth it? Sure, if you cancel the monitoring service before you incur any charges.
You can also get a free approximation of your score from our website. But if you’re going to be applying for a major loan (car, mortgage), I’d shell over the cash for a FICO score six months or a year before you apply
by Katherine Lewis
I am a poor college student who wants to stay fashionable, and have more than a limited wardrobe to choose from. Many of my peers have the same problem, yet they are unwilling to utilize the same solution I do because of the stigma attached. I believe that everyone should be shopping at thrift stores to save money, to potentially give money to a charitable organization, and to save the planet by reusing garments that would otherwise go to landfills. Fashionable young women have an advantage on other thrift shoppers, though, in being able to recognize what pieces are likely to be designer or otherwise high-quality.
Some people shop at thrift stores solely to find the designer gems and re-sell the ones that don’t fit on internet auction sites, such as eBay. This may be a way to make some extra money, but a college student typically doesn’t have the time (and extra space) this endeavor requires. I do recommend looking for designer pieces. In my time thrifting, I have found a gorgeous Oscar de la Renta trench coat, a Max Mara dress, and Fluevog boots. However, it is important to remember that many items are going to be fakes, even good fakes, and that quality is often independent of brand.
Because of this, when thrift store shopping, the most important skill to have is an ability to recognize raw quality. I have a simple test for this that applies to purses, shoes, and outerwear and can be applied to clothing as well. Ask yourself, “How much does it weigh?”
A well-constructed item will always have some heft to it. Even a top that flows should feel substantial in your hands, even if you can hardly feel it when you’re wearing it. You will also want to look at the seams. If you can’t find any, that’s a particular sign of quality, but as long as they seem neat and small and are not torn, the garment is likely well-constructed. You should, of course, also check for any damage. Do not waste your time with stained or torn garments. The time and money spent repairing the clothing will almost certainly negate the money you saved.
That is not to say, though, that you should never take risks when thrift store shopping. On the contrary, it is an excellent time to take fashion risks to both try on and purchase garments you never would at full-price. Don’t go home with anything that looks truly hideous on you, but try on things you might be dubious about. When trying on one of my favorite thrifted items, I was certain it wasn’t going to work. It was a 50′s-style polka dot dress, and I was sure that the waistline was all wrong for my curves. Also, I thought the orange dots would clash with my hair. I tried it on, though, and nearly gasped at myself in the mirror. Now it’s my favorite dress!
What if you make yourself take that risk, but you end up not wearing those shoes? The beauty of thrift store shopping is that you get to take those fashion risks and try those new ideas at a minimal financial risk to you. Yes, most thrift stores will not allow returns, but you didn’t spend that much money in the first place, and you don’t have to worry about what you did with the tags! Try giving away items that don’t work for you to friends or just donate them back to a charity!
Great clothing and accessories can be found at a thrift store near you. You just have to go out and find them. Try bringing along a friend who has been complaining about lack of money and encourage each other to take fashion risks. Thrift store shopping is a fun and frugal habit that benefits everyone.
by Jean Chatzky
Debit cards have been in the news lately, and not in a flattering way. By all accounts, you may soon be paying for the use of your card. Bank of America and SunTrust have announced they’ll charge customers who use debit cards (certain customers who carry high balances or have a mortgage with the bank are excluded) but other banks (Wells Fargo and Chase are both testing similar fees) are likely to follow. When everything shakes out, it could end up costing consumers $5 a month.
The irony is that while debit cards are getting pricier for consumers, credit cards are becoming more attractive. They’re offering sign-up bonuses are hard to resist – 50,000 extra miles, $300 if you spend a certain amount of money in the first three months – as well as ongoing rewards programs are getting more robust as well.
The message is clear: Banks are trying to shift customers from debit to credit.
Why? Because recent legislation limited the amount that big banks – those with more than $10 billion in assets — can charge retailers for swiping your debit card, but not your credit card. But while credit cards are better for your bank’s bottom line, the real question is what’s better for yours? Both forms of plastic have pros and cons.
Pros: You’re spending your own money, which means you’re forced to live within your means. You don’t have to worry about paying interest. People tend to spend less when using a debit card than when using a credit card (the same, by the way, goes for cash: If you use cash, you’ll spend less than you would with a debit card. And if you keep large bills in your wallet, you’ll spend even less). And you’ll have no bills to pay, which means no late fees.
Cons: There are limited reward programs. Overdraft fees can add up and add up fast. You can eliminate this issue by not opting into the overdraft protection. If someone steals your card, you likely won’t be liable for the purchases they make, but you’ll have to jump through a few administrative hoops to get your money back, which may leave you in a bind for a few days or even a week. Account blocking (the practice in hotels, for example, of putting a certain amount of money on hold just in case you spend it) can cause you to overdraw. And of course you may face new fees associated with their use.
Pros: They help you build up a credit history so you can take out additional loans when the time comes. Rewards are compelling, but may cause you to spend more. If you’re legitimately dissatisfied with a purchase or service, and you paid by credit card, your issuer will often stand behind you and you can withhold payment. And you have more protection in the event of theft and fraud, because your money isn’t being spent. You don’t have to worry about not having access to your funds while the bank sorts things out.
Cons: Interest. This is a biggie and there’s no getting around it. If you don’t pay your balance off every month, you’ll pay for it. Late fees are also an issue. If you don’t make your payment on time you’ll pay a hefty fee and damage your credit score. And consumers spend more on credit cards than they do using debit cards or cash. It doesn’t feel like “real” money.
That depends on your end goal. If you’re looking to build a credit history, you have to have a credit card, and you have to use it. If you’re trying to keep a lid on your spending or have had trouble with credit cards in the past, debit is the better option. And note: Just because fees are coming doesn’t mean you have to pay them. Smaller banks and credit unions tend to be fee freer (if not fee free) zones.
Thieves can obtain your information by means of stealing your wallet, your mail, phishing, computer scams or viruses or confiscating documents found in your trash.
Fraudsters may pose as a trusted financial institution, ATM/debit network, online retailer or other service provider to trick you into disclosing private information. Some tactics include an unsolicited email or phone call asking for personal and financial information.
Pharming uses computer software such as crimeware, malware or spyware to collect personal information from your computer and deliver it to fraudsters. When you log-on to a legitimate site, the software redirects you to an authentic-looking, bogus site and captures your personal log-on information. Because it happens 'behind the scenes', pharming is extremely difficult to detect.
Here's what you can do if you suspect you've been a victim of identity theft or fraud
We can help you close your compromised account(s), open a new account or obtain a new card.
Fraud alerts can help prevent an identity thief from opening any more accounts in your name.
Contact the toll-free fraud number of any of the three consumer reporting companies below. You only need to contact one of the three companies to place an alert. The company you call is required to contact the other two, which will place an alert on their versions of your report too.
1 (800) 525-6285
1 (888) EXPERIAN (1 (888) 397-3742)
1 (800) 680-7289
Contact the security department of the appropriate creditor or financial institution and close the accounts.
Use passwords (not your mother's maiden name or Social Security number) on any new accounts you open.
Get the report number or a copy of the report in case the bank, credit card company or others need proof of the crime later.
California Coast Credit Union will never ask for personal information via email and does not communicate with you through text messaging unless you've enrolled for text alerts via our secure Cal Coast Online.
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