Credit Union Philosophy

October 19, 2023 • By Lisa

International Credit Union Day 2023

ICU Day celebrates the spirit of the global credit union movement. The day is recognized to reflect upon the credit union movement's history, promote its achievements, recognize hard work and share member experience. The 75th anniversary of International Credit Union (ICU) Day is Thursday October 19, 2023.

ICU Day is brought to you by the champions of the credit union movement, The World Council of Credit Unions and the Credit Union National Association (CUNA).

Together we all contribute to helping spread the belief of all people having access to affordable, reliable and sustainable financial services for all our members, meeting them at their financial terms.

Ever Wonder What The Differences Are Between Credit Unions And Banks? Here's How They Are Different.

Difference Between Banks and Credit Unions - 2023

Credit Union Fun Facts

There are 118 countries with credit unions.
Worldwide, there are a total of 87,914 credit unions.
Throughout the world there are 393,871,631 members.
The first true credit unions were established in Germany in 1852 and 1864.
President Roosevelt signed the Federal Credit Union Act in 1934 to promote thriftiness and prevent usury during the Great Depression.
Credit union membership eligibility is pretty flexible and open to most based on where you live.
Credit union members are entitled to vote for their board members or directors.
Credit unions are able to offer better rates and lower/fewer fees than banks.
Many credit unions participate in shared branches and ATMs, which means you can visit other participating credit unions for access to your accounts, making it a larger network than most big banks.
Once you're a member, you're always a member, regardless of where you live.
All credit unions require you to have a share (savings) account. Even if you only want a loan. It acts as your "share of ownership".

What is a Credit Union?

Celebrating 75 Years!

Click here to view more educational videos.

Thank you!

We'd like to take this opportunity to thank you, our valued members, who help make SafeAmerica Credit Union what it is today.

July 20, 2023 • By Lisa

A Guide to Understanding Financial Terms

When reading about credit cards, mortgages, or other financial products, you may encounter financial terminology and acronyms that you aren’t familiar with. Please note, these descriptions are a guide only and are not legal definitions.

A

Adjustable-Rate Mortgage

An adjustable-rate mortgage (ARM) is a mortgage that offers the borrower a fixed interest rate for a set amount of time. After that time expires, the interest rate on the remaining balance varies though out the life of the loan. Depending on the terms of the mortgage, the interest rate resets each month or year. This type of mortgage is also called a variable rate mortgage.

Annual Percentage Rate

The Annual Percentage Rate (APR) is the yearly cost of borrowing money. APR includes the interest and fees charged over a one-year period. Many types of debt include an APR such as credit cards, auto loans, mortgages and personal loans. The APR helps borrowers choose credit card offers, mortgages, loans, etc.

B

Balance

When referring to debt, a balance is the amount of money remaining to be repaid on a loan, credit card or mortgage. When the term "balance" refers to a checking or savings bank account, the balance is the amount of money present in the account.

Balance Transfer

A balance transfer refers to moving a balance from one account to another account, which is often an account at another financial institution. It most commonly describes transferring outstanding debt owed on a credit card to an account held at another credit card company.

Balloon Payment

A balloon payment is the money owed on a loan when the loan term expires (usually after 5-7 years). When the term is over, the borrower must pay a balloon payment for the total amount remaining on the loan, or the borrower can choose to refinance the loan for new terms and rates. Balloon loans sometimes allow the borrower to transfer the remaining amount automatically into a long-term mortgage.

Bankruptcy

When an individual or a company has debt that cannot be repaid, declaring bankruptcy gives the individual or company legal protection from the debts. Bankruptcy is a legal process that can offer relief from some or all debts, depending on the type of bankruptcy.

Budget

A budget is written plan that tracks monthly expenses and income. It is used to help manage finances, keep current with expenses and save money.

C

Card Holder

A card holder is the person who is issued a credit card, along with any authorized users. The primary card holder is responsible for credit card payments. Credit card holders are protected by the federal lending laws which protect consumer rights.

Cash Advance

A cash advance is a loan issued from a creditor. The most common cash advances are issued by a credit card or through a loan taken in advance of a paycheck. These types of cash advance loans charge special interest rates and fees on the amount of the advance.

Cash Advance Fee

A cash advance fee is a charge made by the bank or financial institution that the borrower owes after taking a cash advance loan. This fee could be either a one-time, flat fee that is owed at the time of the transaction or a fee charged as an annual percentage of the amount of the cash advance. Did you know SafeAmerica waves cash advance fees on our Visa Credit Cards? Click here to learn more.

Collateral

Collateral is an asset that a lender accepts as a security for a loan. If a borrower defaults on their loan payments, the lender has the right to seize the collateral and sell it to recoup any losses.

Collections

Collections occur when a creditor, or a business, like a utility company, sells past-due debt to an agency to recover the amount owed. The delinquent debt could be past due credit card debts, utility charges, medical bills, cell phone bills or other payments that are over 6 months past due. Collection agencies attempt to recover past due debts by contacting the borrower via phone and mail.

Conventional Mortgage or Loan

A conventional mortgage or conventional loan is available through a private lender or two government-sponsored enterprises-Fannie Mae or Freddie Mac. Conventional loans are considered risky because they are not guaranteed by the government. These mortgages can have strict requirements and higher interest rates and fees.

Credit

Credit refers to the money that is borrowed that the borrower will need to repay.

Credit Card Charge-Offs

Occurs when a borrower does not pay the full minimum payment on a debt for several months. At that time, the creditor writes it off as bad debt. Note that a credit card charge-off does not absolve a borrower of responsibility for the debt. Interest is still owed on the balance. even after a credit card charge-off, the lender could turn over the account to a collections agency.

Credit History

A person's credit history develops as they borrow, repay and manage their loan payments, expenses and other transactions. Future loans depend on a solid credit history, because lenders check this information.

Credit Report

A credit report is a statement that has information about a person's credit history, including loan paying history and the status of credit accounts. Lenders use credit reports to help them decide if they will loan money and what interest rates they will charge.

Credit Score

A credit score is a number based on a formula using the information in a person's credit report. The result is an accurate forecast of how likely that person is to pay bills or repay loans. Lenders use credit scores to determine what interest rate they will offer on credit cards, mortgages, car loans and other loans.

Creditor

A creditor is a person or institution that extends credit by lending a borrower money. The borrower agrees to repay the funds under the agreed upon terms.

D

Debt

Debt is money owed to a lender, such as debt from credit cards, student loans, or a mortgage.

Debt Consolidation

Debt Consolidation means that a person's debts, whether credit card bills or loan payments, are rolled into a new loan with one monthly payment, A debt consolidation loan does not erase debt. Borrowers might pay more by consolidating debt into another type of loan.

Debt Management plan

A debt management plan is when an organization works with creditors to reduce a borrower's monthly payment and interest rates. People working through a debt management typically take 3-to-5 years to pay off debt.

Debt Counseling

Borrowers receive debt counseling (also called credit counseling) when a trained credit counselor reviews their personal finances, debt and credit history to help manage financial challenges.

Debt Settlement

Debt Settlement is a process of negotiating with creditors to accept a percentage of the full amount of debt that is charged off or severely delinquent. For-profit debt settlement companies operate to deliver profits to their organization. As part of the for-profit business model, debt settlement employees are often paid on a commission basis, based on the fees they collect from consumers.

Default

A default on a loan occurs when a loan payment is not made by the borrower according to the payment terms of an agreement.

Deferment

A loan deferment is when a lender agrees that a borrower can pause making monthly payments for a set amount of time. Loans that are deferred are not forgiven. The borrower still owes the money and must repay the debt. Deferments are often available with student loans to provide the borrower with a set amount of time before making any payments.

Delinquent

When a borrower is late or overdue on making a payment, such as on payments to credit cards, a mortgage, an automobile loan or other debt, it is called delinquent. People who are delinquent, or late, with making payments may be charged a late fee.

F

Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act is a set of laws that protect consumer rights during the debt collection process.

Fannie Mae

Fannie Mae, the informal name of the Federal National Mortgage Association, is a U.S. Government-sponsored enterprised that buys mortgages from lenders, bundles them intp investments and sells them on the secondary mortgage market. typically, Fannie Mae purchases home mortgages loans from commercial banks or big banks.

Finance Charge

A finance charge is the cost of borrowing money. The cost to a borrower includes interest and other fees. Lenders typically set finance charges as a percentage of the amount borrowed. Some lenders might set a flat fee finance charge.

Fixed Rate

A fixed rate is an interest rate that stays the same for the life of the loan, or for a portion of the loan term, depending on the loan agreement.

Forbearance

Forbearance is a process when a lender agrees to a lower payment or no payment for a temporary period of time. Forbearance is not loan forgiveness. After that time expires, the borrower may face higher payments, accrued interest or an extended loan term.

Foreclosure

Foreclosure is a legal proceeding that happens when a borrower does not make payments on a secured debt. The lender may start legal foreclosure proceedings to seize the property associated with the debt. As an example, default on a mortgage could result in foreclosure and auction of the property.

Freddie Mac

Freddie Mac, the informal name of the Federal Home Loan Mortgage Corporation, is a U.S. government-sponsored enterprise that buys mortgages, combines them with other forms of loans, and sells the debt on the secondary mortgage market. Typically, Freddie Mac purchases home mortgage loans form smaller banks and lenders.

G

Grace Period

A grace period is a set period of time in which borrowers do not have to pay finance charges or interest if they pay balances in full. Revolving credit card lending provides a borrower with a grace period.

I

Interest

Interest refers to the cost of borrowing funds, paid to the lender by the borrower. Interest also means the profit that accrues to those who deposit funds in a savings account or investment.

Interest Rate

An interest rate is the fee lenders charge a borrower, calculated as a percentage of the loan amount. The percentage charged when borrowing money is known as the interest rate.

L

Loan

A loan is sum of money that is advanced to a borrower. The borrower agrees to specified terms such as finance charges, interest and repayment date. Some examples include auto and recreational vehicles loans, home loans, home equity loans, personal loans as well as student loans.

Loan Forgiveness

Loan forgiveness means a borrower is no longer obligated to make loan payments. With student debt loan forgiveness, the borrower must meet criteria such as actively serving in the military, performing volunteer work, teach or practice medicine in certain types of communities, or must meet other criteria specified by the forgiveness program.

Loss Mitigation

Loss mitigation is the process when mortgage servicers work with borrowers to avoid foreclosure.

Loan Modification

Loan modification is when a lender makes a permanent change to loan terms. The modifications could inlcude changing the interest rate, type of mortgage or extending the time to pay the mortgage balance.

M

Minimum Payment

The minimum payment is a payment made on a loan or credit card that is specified by the lenders as the smallest payment amount due. Borrowers can pay more than the minimum payment.

Mortgage

A mortgage is the loan a borrower takes in from a lender to purchase real estate.

P

Past Due

Past due is when a payment has not been made by its due date. Borrowers who are past due will usually face penalties and are subject to late fees.

Private Mortgage Insurance

Private mortgage insurance is a type of mortgage insurance that might be required for borrowers to pay for with a conventional loan. Private mortgage insurance protects the lender in the event a borrower stops making payments on the loan.

R

Reinstatement

Reinstatement refers to a lump sum payment that makes an account current when the borrower pays everything that is owed. This payment would include any missed payments and fees.

Refinance

Refinancing applies to all types of loans, this simply means you are replacing any existing debt and terms with a new set of debt and terms, most often with a lower interest rate than the original loan rate.

Repayment Plan

A repayment plan is a written agreement for borrowers who are past due on loan payments. This option allows the borrower to pay the late amount as a smaller addition to the regular monthly payment, spread out over several months.

Revolving Credit

Revolving credit is when a creditor increases the credit limit to an agreed level as a borrower pays off a debt, such as a credit card. Revolving credit may take the form of credit cards or lines of credit with other lenders.

S

Secured Debt

A secured debt is a loan that allows the lender to seize the asset or collateral used to acquire the debt to repay the funds advanced to the borrower in the event of default. Examples of secured debt are mortgages and auto loans.

Short Sale

A short sale is when a homeowner in financial distress sells property for less than the amount due on the mortgage.

U

Unsecured Debt/Unsecured Loan

Unsecured debt or an unsecured loan is a loan that is not backed by an asset or collateral. It is riskier than secured debt. The interest rate for unsecured debt is normally higher than secured debt.

V

Variable Rate Mortgages

A variable rate mortgage is a mortgage in which the initial interest rate is fixed for a period of time. After that period expires, the interest rate on the outstanding balances varies throughout the life of the loan. Depending on the terms of the mortgage, the interest rate resets each month or year. This type of mortgage is also referred to as an adjustable-rate mortgage (ARM).

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Sources:

https://www.greenpath.com/

https://www.debt.org/

https://www.investopedia.com/

https://www.consumerfinance.gov/practitioner-resources/youth-financial-education/

November 16, 2022 • By Lisa

Managing Debt as Interest Rates Rise

Debt can be a challenge to manage, even in the best of times. Now, with the economy in the news nearly every day, how do you effectively manage your debt as the cost of borrowing for things like homes, cars,
and credit cards rises? People are successful when they set a realistic budget for spending. Focusing on non-traditional gifts, the joy of experiences and the resulting memories, can be just as rewarding without damaging your finances, especially as prices on essentials are rising.

Here are five general questions to ask in order to minimize the hit to your wallet in the face of rising interest rates.

What's Your Current Credit Score And History?

Knowing this information helps you understand how rising interest rates will apply to you. Some research shows that only 33 percent of Americans checked their credit score in the past year. Regularly monitoring your credit can alert you to errors, protect you from fraud, and provide you valuable information to strengthen your credit score–which can potentially minimize the rising cost of borrowing.

What Is Your Debt Portfolio?

Another helpful course of action is to make a list of your current debt such as credit cards, car loans, student loans and other debt. Although it’s a simple step, this can make a big difference in visualizing the big picture of your financial situation. Part of seeing the impact of rising interest rates is understanding exactly where you stand.

What Are Your Current Interest Rates?

An effective next step is to regularly review your balances, terms, and interest rates on a monthly basis. By staying on top of this vital information, you can make adjustments and informed decisions about reducing any existing balances more aggressively. As a debt paydown strategy, it often makes sense to start with the highest interest credit cards or loans.

What Is A Realistic Payment Plan?

As you are able, consider paying credit card balances in full by the due date each month. You can avoid interest charges on what you purchase, which means rising interest rates may not have much of an effect on your household finances.

What Is Your Overall Financial Plan?

To stay financially healthy and minimize the impact of rising interest rates, it is key to earn more than you spend, so that you have enough money to build savings for the future. Keeping an eye on your spending is an important step in the effort to create a budget without the cost of high-interest debt. Once you develop a household budget and track income and spending, it becomes clear where the money is going and where you need to adjust your spending to achieve your financial goals. By setting financial goals, preparing a financial plan, sticking to a budget, and setting up an emergency fund for the unexpected, you ensure that your financial well-being does not suffer as interest rates rise.

This information brought to you by GreenPath Financial Wellness.

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October 20, 2022 • By Lisa

International Credit Union Day 2022

The 74th anniversary of International Credit Union (ICU) Day is Thursday October 20, 2022. This year, we celebrate together as a global movement that encourages you to Empower Your Financial Future with a Credit Union™

ICU Day is brought to you by the champions of the credit union movement, The World Council of Credit Unions and the Credit Union National Association (CUNA). Together we all contribute to helping spread the belief of all people having access to affordable, reliable and sustainable financial services for all our members, meeting them at their financial terms.

Fun Facts About Credit Unions and How They Differ From Banks

Bank
For profit
Owned by Stakeholders
Insured by FDIC
Anyone can join
Proprietary branches and ATMs
Objective: to maximize profits
Stakeholders benefit

Credit Union
Not for profit
Owned by members
Insured by NCUA (or privately insured)
Community-based membership
Shared branches and ATMs
Objective: to meet members needs
Members benefit

The first true credit unions were established in Germany in 1852 and 1864.
President Roosevelt signed the Federal Credit Union Act in 1934 to promote thriftiness and prevent usury during the Great Depression.
Credit union membership eligibility is pretty flexible and open to most based on where you live.
Credit union members are entitled to vote for their board members or directors.
Credit unions are able to offer better rates and lower/fewer fees than banks.
Many credit unions participate in shared branches and ATMs, which means you can visit other participating credit unions for access to your accounts, making it a larger network than most big banks.
Once you're a member, you're always a member, regardless of where you live.
All credit unions require you to have a share (savings) account. Even if you only want a loan. It acts as your "share of ownership".
There are currently over 86,000 credit unions that operate in 118 countries worldwide.
You are one of the 375 million credit union members today!

What is a Credit Union?

ICU Day Member Empowerment

Click here to view more educational videos.

Thank you!

We'd like to take this opportunity to thank you, our valued members, who help make SafeAmerica Credit Union what it is today.

International Credit Union Day

April 11, 2022 • By Lisa

Financial Terms To Teach Your Kids

It’s never too early to start teaching your kids about finances. After all, it is a topic they will use for the rest of their life. Breaking down some the key financial terms will help them have an understanding of a few fundamental concepts.

Here are some terms you can teach your child and why it’s important for them to know.

Budget

What is a budget?

A budget is a plan that helps you keep track of your money and where it goes. One way parents like to teach kids how to budget is to categorize money into three “buckets”: give, save, and spend.

Why is a budget Important?

A budget allows you to plan out your finances for the future and ensures you’ll have enough money to pay for all your “needs” and, if you have money left-over, to pay for all your “wants”. It provides structure towards reaching a financial goal, such as saving for a video game system, a vacation or even a college education.

Checking Account

What is a Checking Account?

A checking account is a contractual relationship between you and your financial institution where you can make day to day transactions. The financial institution holds your money in a safe place and helps to facilitate your purchases. You are responsible for handling your account wisely by not overspending the money you have in your account.

Why is a Checking Account Important?

A checking account makes your money accessible and serves as a way to keep track of your spending. It also keeps your money safe, meaning it can’t be lost, stolen or damaged. Institutions must be insured in order to operate, so there’s no risk and much safer than carrying cash.

Credit and Credit History

What is Credit?

Credit is a way to borrow money (such as a credit card or loan) with the agreement of paying it back in full, plus interest. Paying back the borrowed amount on time is reflected on your credit report/history. One important concept to remember is that credit isn’t free and should only be used if you’re able to pay it back right away.

Why is Credit History Important?

Developing good credit history allows lenders see how responsible you are when it comes to paying that money back. The more on-time payments you make, the better your credit becomes, making it easier to borrow money in the future, rent an apartment, or even get a job.

Credit Score

What Is a Credit Score (also known as FICO Score)?

A credit score is a number that lenders use to measure your credit worthiness. Your credit score is influenced by a number of things such as the amount of open credit accounts, overall amount of debt you have and your repayment history (making payments on-time). Credit scores range from 300 to 850 and lenders use these scores to determine how much risk they will take on when lending to you. The higher your credit score, the lower your interest rate will be (less risk) and vice-versa; the lower your credit score, the higher your interest rate will be (more risk).

Why is a Credit Score Important?

The better the credit score, the easier it will be to reach life’s milestones. A good credit score can help you get a lower interest rate on a loan (like a car loan or mortgage), thus you pay less over the lifetime of the loan. A good credit score can even help you get an apartment or job. Overall, it pays to have a good credit score! Literally.

Loan

What is a Loan?

A loan is a sum of money that you borrow with an agreement to be paid back with interest. One way to help your child understand loans, is to explain why people take out loans in the first place. A great example is a car or mortgage loan. These items usually cost a lot of money, so it becomes necessary to borrow the money. Having that good credit score (as explained above) will help you get a lower interest rate on that loan, making it more affordable. Agreeing to the terms of a loan means you’re obligated to pay it back with the agreed upon interest. Failure to do so can be detrimental to your good credit.

Why Is Having a Loan Important?

Having a loan allows you to enjoy the item you borrowed money for right away. Rather than saving up $20,000 for a car, you can take out an auto loan to immediately have access to the vehicle and repay on a monthly basis until the loan has been paid off. Paying off loans strengthens your credit score and allows you to become prepared for any future or bigger purchases.

Debt

What is Debt?

Debt is money borrowed (a loan) which has not been paid off. Types of debt range from credit cards and student loans to major purchases such as vehicles and mortgages.

Why is Debt Good?

Borrowing money and having debt is typically the only manner in which some people will be able to purchase important high cost items such as a home or higher education. Debt is okay if it’s going to help you make money in the future, whereas taking on debt on items such as cars or clothes is not recommended based on the depreciating factor associated with these items.

Interest

What is Interest?

Interest has two sides; it is either something you pay (an interest rate on a loan) or something you earn (an interest rate on a savings account). Show your children the interest you pay on a loan, like a vehicle loan, each month. And then also show them that when you deposit money into a savings account (your “save bucket” from earlier) that the bank pays you for the deposits you place there.

Why is Interest important?

Whether you’re paying interest or earning interest, the amount of interest is important to understand. When obtaining a loan, you want to look for an institution that offers the best rate (lowest rate or APR). That combined with your good credit score will help you get the best deal. The same goes for deposits. When saving your money, you want to look for the highest yield (or APY). This will get you most amount of interest earned.

Taxes

What are Taxes?

Taxes serve as payment to the government and are used to pay for things like improving public schools and fixing the roads. Taxes are taken from your paycheck and the amount you pay depends on how much money you make. A great way to explain it is to relate it to their allowance. Take a small amount from their allowance and put it away to be used toward a household expense, like an improvement!

Why are Taxes Important?

Taxes are the main source of revenue for the government. Without taxes, funding for many of the public benefits we take advantage of every day would be impacted severely.

Save small. Dream big.

We're celebrating Youth Month all April long! Be sure to check out our blog each week or follow is on social media for a new youth financial literacy topic.

You can also check out our Youth Program to help get your child started on the path to smart money management.

youth program