SafeAmerica Credit Union

Credit Cards

• By Kevin Alvarez

Paying Down Debt Is Saving — America Saves Week 2023

Making the decision to pay down debt, particularly consumer debt, can be mixed with emotion. You feel good about choosing to take concrete steps to pay off balances on credit cards, auto loans, student loans or other installment loans. On the other hand, you feel less positive about the amount of money you are directing into a savings account. Well, we’re here to show you how reducing debt is a form of saving, to give you strategies for the best way to do so that align with your personal situation, and to boost your financial confidence to keep you working toward your goals.

As you pay off your debt you are freeing up money, allowing you to direct those funds toward saving for something else that’s important to you – perhaps an emergency/opportunity fund, a vacation, home purchase, or retirement. This money is freed up as you spend less on interest, and possibly late fees, and lowering the debt balances themselves.

If you have more than one debt you want to pay off, for example an auto loan and a credit card balance, there are two main strategies to help you decide which debt to pay off first.

  • The snowball method focuses on the balances of each loan. In this strategy, you make the minimum payment on all your loans except the one with the smallest balance. With this loan, you put as much money as you can toward it and when it is completely reduced you allocate that money to the next smallest balance. Your confidence gets a boost every time you see an account balance at zero.
  • The avalanche method focuses on the interest rates of each loan. In this strategy, you pay the minimum payment on all your loans except the one with the highest interest rate. You apply any remaining money you have for debt repayment to the highest interest rate loan. By paying off the debt with the highest interest rate first you reduce the overall amount of interest you must pay.

You choose which method is right for you and your situation.

Once you are on a path to reducing your debt, reflect on the type of relationship you have with credit. Credit is a tool. When used wisely and with purpose, credit can help you achieve your financial goals and build financial confidence. Having a clear view on when and for what purpose you use credit is the foundation for a positive relationship.

Sometimes we’re told that there are good types of debt (home mortgage) and bad debt (credit cards). This type of categorization is based only on the financial aspect and not the personal situation you are dealing with. It may feel better to ask yourself if the type of debt you are taking on is a good decision for you or not.

For example, when an emergency expense crops up and it is large enough that it will deplete all or nearly all of your emergency savings, you may feel like you’re on shaky ground if another expense crops up before you can replenish your savings. So, you may weigh this option against using a combination of savings and credit based on what feels best for you in the situation.

Making purposeful choices about credit, something that you plan for financially and mentally, can help you build more financial confidence.

You can use the America Saves Spending and Saving Tool to calculate how much you have available for debt repayment, take the America Saves Pledge to make a plan for this repayment, or listen to the ThinkLikeASaver Podcast for even more tips.

SafeAmerica Credit Union is here to help you on your saving journey. Check out all the Savings opportunities we have to offer.

Savings Accounts

• By Kevin Alvarez

The 5 Factors That Affect Your Credit Score (And Simple Ways to Boost Them!)

Information is brought to you by our partner, GreenPath Financial Wellness

Whether you’re looking to get your first credit card for everyday expenses or take out a mortgage to purchase your first home, credit is an essential tool for helping people to meet their financial goals.

When applying for a line of credit, the higher your credit score, the more likely you will be to qualify, and the more options you will have available to you.

Here, we’ll breakdown the 5 factors that affect your credit — in order of most heavily weighted to least—and the simple  yet effective steps you can take to give your score a boost.

Understand Your Current Credit SnapShot.

Federal law requires each of the three nationwide consumer credit reporting companies -Equifax, Experian, and TransUnion -provide you a free credit report every 12 months if you ask for it. While these reports don't contain your actual score, they can be very helpful in identifying what might be affecting it (as well as any inaccurate information that may need correcting). Request yours at annualcreditreport.com.

1. Payment History (35%)

Payment history is the biggest single factor used to calculate your credit score. Late payments (even a couple of days), past due accounts, and accounts in collections all have a negative impact on your credit. Regular, on-time payment of the minimum amount (or greater) will improve your credit score. A non-time payment history in the range of 18 months or longer will begin to show results in a growing credit score.

Set up automatic payments.

If your late payments are due to forgetfulness, this is the easiest way to ensure you never miss a future payment.

Change your billing due date.

Suppose you have multiple bills due on the same day of the month. In that case, it may be worth changing your payment due date to align better with your personal situation (e.g.,spacing out bills to make them more manageable, or ensuring your payment date is after an income deposit date.)

Explore hardship/deferment options.

If you’re having trouble making ends meet, call your creditors and request a forbearance or payment deferral. They may also be able to waive late fees or even allow a lower payment for a period of time.

2. Amount Owed (30%)

Your credit utilization is determined by the amount you owe—not relative to your income but, compared to the total credit limit available to you, expressed as a percentage.(For example, if your card balance is $600 and you have a spending limit of $2,500, your credit utilization is $600/$2,500 or 24%.) As a rule of thumb, your credit utilization should be no more than 30.

Quick Tips for Improving Amount Owed:

Pay down your balance early.

If you can make small payments throughout the month, this can help keep your balance down and lower your credit utilization.

Decrease spending.

Find areas where you can cut back on spending to lower your utilization. Our Prioritizing Expenses Worksheet can help you to determine what to cut.

Ask for a credit line increase.

Increasing your credit limit is the simplest way to decrease your credit utilization with out having to cut back on spending.

3. Length of Credit History (15%)

Although not the most heavily weighted category, the length of a borrower’s credit history is important. It’s an indication to the financial institutions what kind of borrower you maybe in the future. In addition to the overall time an individual has had credit accounts open, credit history is also determined by how long specific types of accounts have been open, and how long it’s been since those accounts have been used.

Quick Tips for Improving Credit History:

Get a secured credit card.

Backed by a cash deposit, a secured credit card can be an excellent low-risk way for those who have not had a credit card previously to start building credit.

Keep credit cards open.

Closing a credit card can negatively affect your score. If you have cards you aren’t using, placing a small recurring charge on them (such as a phone bill or streaming subscription) can help to keep the card active while keeping your overall credit utilization low.

4. Credit Mix (10%)

Credit mix is determined by looking at the types of credit you are carrying (this includes credit cards, retail accounts, installment loans, mortgage loans,etc.) as well as your payment history in each area.

Quick Tips for Improving Mix:

Explore loan options that work best for you.

Your credit mix isn’t the most impactful category, and you shouldn’t pursue loans unless they make sense for you and your personal needs. In fact, you may already have a fair credit mix—things like credit cards, personal loans, auto loans, and mortgage loans are all considered different types of credit.

Make sure you pay loans on time.

A good credit mix is moot if you aren’t making timely payments–ensure you are making at least the minimum payments on your outstanding loans each month.

5. New Credit (10%)

Research shows that opening several credit accounts in a short amount of time represents a more significant risk—especially for people who don’t have an established credit history.

Quick Tips for New Credit:

Open new credit accounts only as needed.

Every time you apply for a new credit card,this creates a hard inquiry on your credit,which will automatically lower your score. Having more credit than needed can also encourage unnecessary spending and lead to increased debt.

Understand how hard inquiries show upon your report for different types of loans.

While multiple inquiries over a short time frame for credit cards may result insignificant score damage, other types of inquiries—such as home or auto loans—are reported a little differently. Since lenders know people often shop around, these types of inquiries won’t hit your report for 30 days, and when they do,they’ll be counted as a singular inquiry.

So, there you have it. If you implement these tips, you should start to see a gradual increase in your credit score. Remember: Your credit score is based on patterns over time, with an emphasis on more recent information. Improving credit won’t happen overnight, but with persistence and consistency, your score should gradually improve over time!

Free Credit Report Review

Need some extra help navigating your credit report? GreenPath’s NFCC-certified credit counselors can walk you through a free review of your credit report. They’ll explain how to read the report and help you to make a plan for managing your credit score to support your goals.

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• By Kevin Alvarez

Understanding and Preparing a Savings Account – Financial Literacy Month

Have you been keeping an eye out on the housing market? What about the auto industry? Well before you can purchase your first home or a brand new car, taking control and understanding your debt is needed. The journey of reaching your next financial goal may sound like a daunting task, but having the understanding of what it will take to reach those goals is the mindset to strive for. Through then, you can create short term goals which will assist with building up to the overall financial goal.

In order to be properly set for the financial path forward, there are a few initial organizational concepts that need to be accounted for first.

Understanding Your Monthly Income

Do you know the difference between net pay and gross pay? Net pay is the amount you take home AFTER pay roll deductions and tax with holdings have been made. Gross pay is the amount that is shown BEFORE tax deductions like state tax, federal tax and social security.

The number to be aware of is your net pay. As the amount of money you are actually taking home is known and acknowledged, you can create a budget from a true dollar amount and track accurate financial habits.

Understanding and Cutting Your Spending Habits

Are you aware of any habits that add a burden to your wallet? When it comes to finding where you can save money, coffee is a common expense people adjust first. You don’t have to cut coffee completely, but you can easily save by making coffee from home. Purchasing coffee from your favorite café is costly compared to a home brewed pot which could even save you time, eliminate transportation costs and reduce the cost of coffee itself.

Gym passes are also a typical expense that could be adjusted to aggressively save. There may be a numerous amount of reasons for a gym pass, yet there is an equal amount of alternatives that could be implemented in order to save. Switching to a home workout and using online videos and blogs can provide structure to your workout all while saving again, on transportation costs, time and of course, gym fees.

These are both conceptual ideas that could translate to other aspects of monthly expenses, in order to start cutting your spending habits.

Understanding Your Saving Habits

Now that you understand your spending, you can focus on your savings habits and take advantage of different accounts that pay dividends at better rates than traditional big banks. Your typical savings account at a big bank does not offer the same interest rates as a credit union, so it’s often advised to open either a Share Certificate Account or Money Market Account to maximize your monthly savings through dividends.

Understanding How to Move Forward

Everyone’s financial situation is different and some situations require to pay debt down aggressively, with a small consistent stream going into savings. It is recommended to do both collectively even if the monthly deposited savings amount is small. As a member of SafeAmerica Credit Union you have numerous resources readily available to help keep you, financially on track. Being financially healthy is a goal in and of itself and allows the path to financial milestones to present themselves. Keeping to strict saving and spending habits allows you to keep debt down and reach your financial goals.

Learn how you can use a Share Certificate to your advantage as well as the liquidity of a Money Market below.

Share Certificates
Money Market

• By Kevin Alvarez

Financial Tools for Success – Financial Literacy Month

Information is brought to you by our partner, GreenPath Financial Wellness

April is Financial Literacy Month –  a good time to consider the importance of financial literacy education, especially with the economic uncertainties caused by the ongoing pandemic. Continuing our series of blogs sharing information as part of Financial Literacy Month, the focus today is on finding the right financial tools for success – whether the resources help us with budgeting, setting financial goals, or managing credit card debt, loans, or other debt.

Check out these financial tools to begin understanding options to figure out your finances.

Financial Calculators

A healthy financial future begins with an understanding of a person’s current situation. Online financial calculators help people run the numbers and answer questions related to financing their home or comparing how a debt management plan can help manage credit card debt.

Financial Wellness Resources

Being able to make healthy financial choices is about having good information at your fingertips. Much of that education is available online, but it’s important to tap into trusted resources. As an example, as a national nonprofit, GreenPath makes available a library of resources including worksheets, guides, educational on-demand webinars about managing finances, online learning experiences to help set a simple spending plan or prioritize expenses, and other educational tools.

Financial Counseling and Debt Management

Teaming with a trusted financial counseling agency gets the right information to help people make the best decisions about their future.

As a national nonprofit, GreenPath Financial Wellness provides free one on one financial advising with certified counselors. You’ll improve your financial literacy education with credit card debt counseling, debt management plans, student loan counseling, housing counseling, foreclosure mitigation, and debt management counseling

Based on a person’s full financial picture, people will understand how to pay down debt, steps to rebuild credit history, tips to create a savings strategy or other specific information to move forward.

As your financial institution, we proudly provide our members with insight through financial education and resources that may be of benefit. Through this, we can equip our members with knowledge to assist with helping to prevent financial stress, especially during when its most unpredictable.

Below is a list of available resources SafeAmerica Credit Union has for members:

Calculators

Here you can learn and calculate:

  • What your loan payments would be
  • What your auto payments would be
  • Should you refinance your auto loan at a lower rate
  • How long it would take to to pay off your credit card(s)
  • Should you transfer your credit balances to a lower rate with us
  • How much could you borrow from your home equity (HELOC)
  • Should you refinance your mortgage
  • Understanding your possible mortgage payment
  • How much would you need for retirement
  • how much should you save to reach your financial goal
Rates and Fees

Here you can stay up to date with our current rates for:

  • Savings
  • Checking
  • Credit & Personal
  • IRAs
  • Auto
  • Home
  • Fees
Educational Videos

Through our How-To Videos you will understand the following:

  • What is a Credit Union
  • How to enroll in Online Banking
  • How to use Our Mobile App
  • How to use Mobile Deposit
  • How to use mobile wallet
  • How to make a payment

Learn about online security through our How-To videos:

  • Getting back your stolen identity
  • Simple Tips for Secure Mobile Banking
  • Protect your Account through Strong Passwords
  • Wi-Fi Network Access Scams
  • What is Multifactor Authentication?
  • Protect Yourself from Phishing Attacks
  • Protect Yourself from Vishing Attacks
  • Protect Yourself from Gift Card Scams
  • Warning! Fake Cashier's Checks
  • How did a Virus Get on My Computer
Blog

Read our blog for continuous financial learning and updates:

  • Financial Literacy for Kids
  • 5 Factors That Affect Your Credit Score
  • What is a balance transfer
  • What is a Debt Management Plan

Our blog is constantly being updated on a monthly basis, so make sure to check back often!

We have also partnered with GreenPath Financial Wellness to provide exclusive and free financial education and counseling.

Learn more about GreenPath by clicking below.

Learn More

• By Kevin Alvarez

5 Reasons to Make a Budget – Financial Literacy Month

Information is brought to you by our partner, GreenPath Financial Wellness

Making a budget and following it are two powerful financial habits. It’s not always easy, or fun at first. But it is one of the best steps you can take to successfully manage your finances.  There are many reasons to budget and in the long run, it feels really good to see yourself accomplishing a goal.

 

Reasons to Budget (There's more Pros than Cons)

#1 – A budget helps you gain control of your finances

Think of a budget as a financial roadmap. It will guide you to your destination. It will also reduce arguments and improve relationships because you and your family will know where you are going financially, providing a smoother ride along the way.

#2 – Budgeting helps you achieve goals

Whether it is putting money aside for emergencies, a vacation or a college education, a budget helps you devote resources to those things that you determine are most important. Having a plan also promotes well-being and reduces stress.

#3 – A good budget keeps you honest

Documenting purchases allows you to figure out where your money is going.  It allows you to stay accountable to your goals. By keeping a budget, each dollar you spend is accounted for. That’s a powerful incentive to stay true to your good intentions.

#4 – Budgeting helps improve habits

If you spend more than you earn, you will drain your savings. And if it continues, you will take on debt.  By measuring how you spend your money, you will know for sure whether you’re headed for trouble, and you can take the steps necessary to improve your habits.

#5 – Budgeting helps you avoid debt and improve credit

By truly understanding how much it costs to be you, you can make adjustments to stop living from paycheck to paycheck. You may be able to identify ways to get out of debt and stay out of debt. By paying your bills on time and not taking on too much debt, you will take the most important step toward building good credit.

Use Greenpath's Budgeting worksheet to calculate your monthly expenses and income to get an idea of what you have to work with, what your commitments are, and what they have remaining to devote to their goals.

Click here for the Budgeting Worksheet

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• By Kevin Alvarez

5 Holiday Spending Tips to bring You Less Stress (and More Joy!) This Holiday Season

Information brought to you by our partner, GreenPath Financial Wellness

After a year full of twists and turns brought on by a global pandemic, many Americans are understandably looking forward to the holiday season.

This year, many Americans may find they are dealing with financial setbacks such as a loss of employment, reduced income, or other unanticipated expenses that may make it more difficult to avoid having holiday debt follow them into the new year.

Here are five tips designed to give you less stress and more joy this COVID holiday season:

Set a Holiday Spending Limit

During the holidays, it can be easy to let spending get out of control. Put a cap on your spending by creating a holiday budget / spending plan.

Be sure to factor in additional non-gift related expenses that can easily add up—things like holiday photos, decorations, food, and if your family gathering is cancelled, shipping of gifts to love ones.

Avoid Putting Holiday Debt on Credit Cards

The number one of financial wellness? Avoid spending money you don’t have. While it’s easy to do, putting holiday spending on credit cards can be risky—
especially if you don’t have the funds to pay it off when the bill comes due.

According to a recent survey, Americans racked up an average of $1,325 in holiday debt. Of those surveyed, 75% said they wouldn’t be able to pay it off in January, with 15% saying they only intended to pay the minimum monthly payment. In case you’re wondering, that translates to over $600 in interest and 5 years of making payments—ouch!

Trade Pricey for Priceless

A great gift doesn’t have to be expensive. Think outside the box and treat your loved ones to a thoughtful gift that generates excitement without the price tag.
Maybe that’s a handmade item, DIY project, a fun experience, a coupon book, or just the gift of your time.

Keep Your Personal Info Safe

The holiday season is a time when people are more vulnerable to identity theft scams. Not only are they making more purchases than at any other time of year, but they are often distracted when doing so.

According a recent Experian study, as much as 43% of holiday shopping identity theft occurs online. As the current COVID environment drives more people
than ever to online shopping, it’s important to be aware of the best ways to protect yourself from identity theft:

  • Stay up-to-date with online scams
  • Use strong account passwords
  • Monitor your credit report

Stay the Course with Free Financial Counseling from GreenPath

If you are caught up in the holiday frenzy, and you are stressed about overspending, the counselors at GreenPath can help. In fact, 90% of people surveyed report feeling better prepared to handle their finances after speaking with a financial counselor. Get a head of your holiday finances and connect with a counselor today—it’s free, no pressure, and 100% confidential.

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