SafeAmerica Credit Union

San Francisco

• By Kevin Alvarez

What To Do If You’re Late Making Car Payments.

Life can be unpredictable and challenging at times, and having a late car payment might seem tempting as a temporary solution.

Making regular, on-time car payments not only helps borrowers maintain a good credit score, but it also ensures the reliability and availability of your vehicle, allowing you to fulfill your daily responsibilities without unnecessary stress.

If you find yourself facing financial difficulties, it can be helpful to reach out for assistance and explore viable options to avoid missing payments. While there isn’t one solution that works for everyone, there are options that can work best for you.

Making Late Car Payments Can Lower Your Credit Score.

Unfortunately, the consequence of making late payments on your car loan can reduce your overall financial health. You will also end up paying more for your car due to late payment fees. And if the payments continue to be late, it might even result in repossession, which will become a negative chapter of your credit history.

With a little planning, it might be possible to get back on the road to financial health to keep current with car loan payments. Assembled here, is a roundup of information to keep in mind if you’re consistently late with car payments.

Tips To Staying On Track With Your Car Payments.

Tip 1: Know When The Payment Will Be Considered Late

  • Check with your lender to confirm exactly when your payment will be considered late.
  • Typically, a payment will be reported as late to the credit bureau when it hits 30 days past due.
  • Ask your lender if there is a late car payment grace period. Some lenders provide a 10-day grace period for example.

Tip 2: Understand The Late Payment Fee Structure

  • Look over the loan documentation to understand the amount of fees you will be assessed when payments are late.
  • Creditors assess a late payment fee immediately following the missed payment, so be sure you have a clear picture of the fee total.

Tip 3: Track Your Credit Score

  • Creditors typically report a missed payment to the national credit bureaus after the 30-day mark.
  • When you’re finding it tough to keep up with payments, be sure to track the activity on your credit report and monitor your score.
  • Annualcreditreport.com provides updates from all three credit bureaus. Be sure your history is accurate and up to date. If something’s inaccurate, there are ways to reach out to credit bureaus for resolution.

Tip 4: Understand Repossession Policy

  • The number of missed payments allowed before a lender repossess the vehicle can vary by financial institution.
  • Some lenders can initiate repossession proceedings after a single default on the loan.
  • Take the time to connect with your lender to understand their policies and timing when it comes to repossession.

Tip 5: Connect With The Lender

  • Waste no time reaching out to creditors before payments are missed.
  • If payments are late, talk to the lender and ask for hardship options.
  • If you are facing a financial significant hardship, often the lender is willing to work with people to prevent delinquency or repossession.
  • Contacting lenders sets people up for more options, a new payment plan or hardship assistance, especially if you’ve maintained a good payment history.

Tip 6: Return To Budgeting Basics

  • Take an inventory of your financial picture. Has your income increased, decreased or remained steady? How have your expenses changed? Figure out your new baseline.
  • Prioritize expenses. Take a hard look at non-essential expenses and determine those that can possibly be reduced or eliminated.

Tip 7: Use Trusted Resources And Information

  • If you are considering a repayment option, or want to check on affordability, use GreenPath’s handy car payment financial calculator.
  • Take a free online course that shares information about budgeting for car payments.
  • Connect with a financial counselor who can assess your specific challenges and provide an action plan to move forward. Everyone who contacts GreenPath receives a free initial financial counseling session with certified counselors who lend an emphatic ear, look at the entire financial picture, help ease financial stress and uncertainty through access to clear information and develop a personalized plan.
Woman Calculating Monthly Bills

Your Next Step

It can be scary when loan payments are late, and there might be a chance your vehicle will be repossessed. It can be even more stressful when you work though the challenges all by yourself.

Our partner, GreenPath Financial Fitness is a trusted national nonprofit financial counseling agency which helps people navigate debt, budgeting and financial challenges for more than 60 years. Their certified trained counselors will look at your entire financial picture and help make a plan tailored for your situation.

This information is brought to you by our partner, GreenPath Financial Wellness

GreenPath Financial Wellness

• By Kevin Alvarez

Coping with Inflation

Inflation continues to put pressure on household budgets. From groceries to gas, record-breaking inflation means the purchasing power of your money is decreasing each month. Below you will find guidance on how to best navigate a time with high inflation.

1. Take Inventory of your full financial picture. Has your household income changed? have you adjusted your budget for rising groceries, transportation, or other expenses? Check your existing budget to see where you stand and where your money is going. If you don't have a budget, it can help to create a simple spending plan or roadmap of monthly expenses. A good place to start is to use resources like a budgeting worksheet track your monthly income against current expenses.

2. Continue to build an emergency fund to tap into when unexpected circumstances arise like a medical expense or costly home repair. An emergency fund helps reduce the chance of taking on debt to cover an unplanned expense. It might be tempting to pause monthly savings as rising prices take a bigger bite out of your monthly budget, but resist the urge. Put savings on auto pilot with each paycheck. Even a small amount will add up over time.

3. Prioritize monthly spending in a time of rising prices. Rethink certain monthly expenses such as subscription or streaming services. According to researchers, the average household has 4.5 streaming services and spends an average of $55 on them per month. This may not seem like much, yet $55 a month adds up to more than $600 per year. If you’re trying to cut expenses in the face of higher prices, ditching underused subscriptions can be a good place to start. As essentials get more expensive, figure out your new baseline. Limit credit card use and curb discretionary spending (dining out, entertainment). GreenPath’s Aligning Priorities workbook can help you make these decisions.

4. Monitor debt, especially as interest rates rise. Paying off high-interest credit card debt saves you money in interest, improves your credit score, and frees up room in your budget. Choose a debt payoff strategy that works for your situation. Consider GreenPath’s Debt Management Plan which helps you pay off unsecured debt in 3 to 5years. GreenPath can work with many creditors to bring your ac-counts current, lower interest rates, and eliminate fees.

5. Shop smart. Research the best sales, coupons, and specials, especially on products that are low in inventory. Check dollar stores for deals on household items and stock up on those items where possible. Bulk retailers or wholesale clubs might be a good way to stock up on items in large quantities for a lower per-use cost. Strategically plan your higher-cost purchases. Swap out brand-name items for generic as much as possible.

6. Keep tabs on your credit history. In times of rising prices, it pays to keep tabs on credit history, which is used to calculate your credit scores. The three digit number of your credit score helps determine whether lenders approve you for new credit and what interest rates they offer. Annualcreditreport.com is a trusted “one-stop-shop” to check your reports from Experian, Equifax, and TransUnion – the three industry-standard credit bureaus. You can also work with GreenPath to review your credit history.

7. Get independent guidance from a nonprofit financial counseling agency like GreenPath. Counselors look at your entire financial picture to help you ease financial stress and uncertainty, through access to clear information and a personalized action plan.

Information brought to you by our partner, GreenPath Financial Wellness

GreenPath Financial Wellness

• By Kevin Alvarez

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.

Youth Month

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

• By Kevin Alvarez

America Saves Week – Save By Reducing Debt

One of the greatest contributors to financial stress is debt. If you're having a tough time financially, it can feel isolating, but the truth is 80 percent of Americans have consumer debt. The only way to relieve financial stress is to make a plan and work your way through it. But to make that plan, you'll need to understand the type of debt you have, your best-case scenario to pay down your debt, and how to leverage your knowledge so that you can maintain or increase your credit score. When you reduce your debt, you save in the long run — on late fees, interest, and a higher credit score, which will lower interest rates.

Get A Clear View Of Your Finances

You thought we'd say budget first, didn't you? While creating a spending and savings plan (our preferred term over "budget") is essential, the true value in having a plan is clarity. When you know your exact income and expenses, you can better steward the discretionary income left over after your bills are paid. It will become easier for you to decide how much to spend, if you can put more toward debt, what goes into savings, and whether to begin making investments. Your spending and savings plan will also highlight areas that need attention.

For example, is your grocery allocation adequate? Are all of your subscriptions and recurring monthly expenses still necessary, or can any be canceled? Knowing where all of your money is coming from and going to helps you build financial confidence and shows you where you can afford to reduce your debt and begin building wealth.

If you need support with making a spending and savings plan, we've created a straightforward tool that will help!

Work With What You Have

When you're paying down your debt, one conscious decision to adopt is to stop adding to your debt. This step may seem intuitive, but there are circumstances where the urge to just "charge it" may arise.

Many "Buy Now, Pay Later" options are becoming increasingly popular. Though it may feel like it is not, options like Klarna, Afterpay, and Affirm are debt and should be treated as such.

As you work to pay off your credit cards, here's a word of advice: do not close your credit cards!

Closing your credit card accounts may reduce your credit score, as the "age" of your credit factors into your FICO score. By keeping your card open with a $0 balance, you'll have a longer credit history and a larger amount of available credit. The only time you may want to consider canceling a card is if it has pricey annual fees.

Increase Your Income

If you can, consider increasing your income temporarily, allowing you to put more money towards your debt. This will allow you to pay down your debt faster! There are so many options to get a quick cash injection or additional income in today's economy. Some ideas include selling items around your home you no longer use, purging your closet on sites like thredUp, leveraging a talent or skill you have, like tutoring or singing, to offer as a service, or taking advantage of the booming gig economy.

Paying It Off For Good Starts With A Decision

There are many strategies to use when working toward paying off your debt. The most popular strategies include the snowball method or the avalanche method. By deciding which method you want to use beforehand, you will reap the benefits of paying it off faster.

Snowball Method

"Snowballing" your debt is a type of accelerated debt repayment plan. First, list all of your debts from the smallest balance to the largest balance. Next, make the minimum payment on all your debt except the smallest one. With your smallest debt, you will put as much money as you can toward the balance. Once the smallest debt is paid, take the amount you were putting towards that debt and apply it to the next smallest. With this method, interest rates are not the focus.

Avalanche Method

With the "avalanche" method, you will still make the minimum payments on every source of debt, but you apply the remaining funds toward the debt with the highest interest rate. By paying off the debt with the highest interest rate first, you reduce the overall amount of interest you pay.

Making extra payments allows you to pay off your loan(s) more quickly when paying toward installment loans, like your car payment. Just be sure to specify that any additional funds outside of your monthly payment go toward the principal. Before you begin making extra payments to installment loans, check the terms of your loan to determine whether additional fees or prepayment penalties may apply.

Regardless of how you decide to reduce your debt, let America Saves be your savings accountability partner! Take the America Saves Pledge and choose “reduce debt” as your savings goal. We'll support you by sending email and text reminders, resources, and tips to keep you on track towards paying down your debt.

Make the Pledge

By accessing this link, you will be leaving SafeAmerica's website and entering a website hosted by another party.

Although SafeAmerica has approved this as a reliable partner site, please be advised that you will no longer be subject to, or under the protection of, the privacy and security policies of the bank's website. The other party is solely responsible for the content of its website.

We encourage you to read and evaluate the privacy and security policies on the site you are entering, which may be different than those of the bank.

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• By Kevin Alvarez

Here’s How An Auto Refinance Can Save You Money On Your Monthly Payment!

Did you know an Auto Refinance can provide instant savings on your monthly car payment? Maybe you already knew that? Either way, read through to see if there is something more you can add to your own financial strategy!

Here's an example of what an auto refinance is:

You pay off your auto loan balance from one lender and transfer the balance to another lender with a better rate and/or term.  For example, you have an auto loan with an APR of 7% and refinance with another lender to a new lower rate of 3%. The 4% drop in interest will provide you with a new lower monthly payment.

When it's best to refinance:

There are multiple opportunities in which it makes sense to refinance your auto loan. They are:

  • Pay less in interest - If you find a lower rate than what you’re currently paying, you could save in the amount of interest you pay over the life of the loan.
  • Lower payment - If you’re looking for a lower payment, a reduced rate and/or term extension could help.
  • Shortened term - If you’re looking to pay off your loan earlier and can afford the payments, a refinance can help direct that money toward principle while paying less in interest.

The cons to refinancing:

When making any financial decision, it’s always best to weigh the pros and cons of each situation.  When refinancing your auto loan, the option to extend your repayment period will allow for a lower monthly payment but it also extends the amount of interest owed. In general, you will pay more in interest over the life of the loan, even if your payments are smaller.  You can also risk owing more than the car is worth if you extend your term too long.  Use a financial calculator to compare your options.

Try Our Calculators

When deciding if a refinance is right for you, have a clear goal in mind.  Are you looking to reduce your payment, pay your loan off sooner, or maybe both!  You have options.  Do your research to find what other financial institutions have to offer; lower rates, no fees, and term options that work for you.  Run the numbers and take advantage of the tools that are available to you as a member of SafeAmerica Credit Union.

Refinance with us

As a member of SafeAmerica Credit Union, you can refinance your auto loan from another financial institution and take advantage of exclusive member-only savings.

  1. Great rates
  2. Flexible terms
  3. No fees

Auto Refinance

Learn more about our Auto Loans

• By Kevin Alvarez

Tax Return Delays Likely, Here’s What To Do This Tax Season

Tax season is fast approaching! The pandemic has affected production on a multitude of levels and has taught us to be prepared for any delays whether it be shopping in person or even online. The Internal Revenue Service has shared it is faced with backlogs of up to 6 million in unprocessed individual returns. This tax season could very well have delays we are not in favor with. To help alleviate the burdens of the IRS and improve our chances of receiving our returns in a decent time frame, the IRS strongly suggests you do the following:

Use Free Online Resources Provided By The IRS

Filing taxes always brings a myriad of questions; questions we never know who to direct to, but the IRS. For this year’s tax season the IRS has shared, instead of calling in with your questions, you can visit the IRS’ Volunteer Income Tax Assistance (VITA) and/or Tax Counseling for the Elderly (TCE). Both programs are managed by the IRS and staffed with IRS-certified volunteers, who must take and pass tax law training which meets or exceeds IRS standards. To learn more and find a location near you, click here.

File Your Taxes Electronically This Year

The IRS strongly suggests taxpayers file their tax return electronically along with their direct deposit information as soon as all their tax documents have been made available. Tax payers should also check on the accuracy of all their information. Filing a tax return with errors or one that is incomplete may add to the overall delay of receiving your tax return. For the latest IRS forms and instructions, you can visit the IRS website at IRS.gov/forms.

Expect To Receive IRS Letters This Tax Season

People receiving these letters should keep them. Do not throw them away. These letters can help taxpayers, or their tax professional prepare their 2021 federal tax return.

Letter 6419 - Advance Child Tax Credit Payments

Did you know the Child Tax Credits were actually advanced payments on your 2021 taxes? The tax credit was temporarily expanded from $2,000 to $3,600 and the government began to pay half of the available credit via monthly payments from July through December. Those who opted out of advance payments will be receiving full refund amounts.

Each individual, even those who file jointly, should have received letter 6419, 2021 Advance Child Tax Credit. The IRS began sending Letter 6419 via the United States Postal Service back in December 2021 and has continued into the month of January. This letter contains information such as the total Advance Child Tax Credit amount as well as the number of qualifying children used to calculate the overall amount. Anyone who did not receive any payments listed is instructed to call the IRS before filing a return.

Letter 6475 - Economic Impact Payment

Letter 6475, Third Economic Impact Payment (Stimulus Money) was also issued out to individuals who received a third payment in 2021, in late January. This letter is needed to provide verification to the IRS that the taxpayer received the money.

What if I never received Letter 6419 or Letter 6475?

As mentioned above, to ensure you receive your refund, you will need the information on both letters. If you are missing either letter you can use the child tax credits portal to verify the information you need.

You always have the option to call the IRS at 1-800-829-1040, but remember, delays are imminent and strongly suggested you complete all your tax needs, electronically.

For more important IRS information, you can click here.

Tips To Make Filing Easier

  • Gather all your 2021 tax records, Individual Tax Payer Identification Numbers, Adoption Taxpayer Identification Numbers, and this year’s Identity.
  • Set up or log in securely at IRS.gov/account to access personal account tax information including balance, payments, and tax records including adjusted gross income.
  • Individuals can use a bank account, prepaid debit card or mobile app to use direct deposit and will need to provide routing and account numbers.

Key Filing Dates

Below are important dates taxpayers should be aware of this season:

April 18 — Due date to file 2021 tax return or to request an extension and pay tax owed due to Emancipation Day holiday in Washington, D.C., even for those who live outside the area.

April 19 — Due date to file 2021 tax returns or request extension and pay tax owed for those who live in MA or ME due to Patriot’s Day holiday.

When it's time to file your return, remember that filing your taxes electronically and including your direct deposit information would result in the quickest possible return.

SafeAmerica Credit Union Members Save

Filing your taxes doesn't have to be taxing. As a Safeamerica Credit Union member, you now have more choices and more savings this tax season. We've partnered with TurboTax and H&R Block to help you file your way and get special member savings.

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The information in this article is for general educational purposes only and not intended to provide specific advice or recommendations. Please discuss your particular circumstances with an appropriate professional before taking action.

• By Kevin Alvarez

Credit Reports – How to Get Your Annual Credit Report

How to Get Your Free Credit Report

The Fair and Accurate Credit Transactions Act of 2003 (FACT Act) entitles you to receive a free copy of your credit report once a year from each of the reporting companies – Equifax, Experian, and TransUnion. The three companies have set up one central website, toll-free telephone number, and mailing address. You can request your free report either online, by phone or even mail by visiting www.AnnualCreditReport.com or calling 1-877-322-8228.

Should Consumers Order All Their Credit Reports at Once or Space Them Out Over 12 Months?

It is entirely your choice whether you order all three credit reports at the same time or order one now and others later. If you request all three at the same time, you can compare them, however you won’t be eligible for another free report for 12 months.  On the other hand, if you space them out, (for example, requesting one report every four months), you can keep track of any changes or new information that may appear on your report. If you order from only one company today you can still order from the other two companies in the future.

Consumer Alert! Beware of Ads Claiming "Free" Credit Reports

Many other websites claim to offer “free credit reports, free credit scores, or free credit monitoring.” But, be careful.  Their claims of “free” are not always no cost. These sites are not part of the official, government-mandated annual free credit report program. In most cases, these sites will provide you with a free credit report and score, and they will attempt to enroll you in some type of credit monitoring or protection service. Before signing up for such a service, do your research and determine if it’s something that you really need. The Federal Trade Commission has received complaints from consumers who thought they were ordering a free annual credit report, but instead paid hidden fees or agreed to unwanted services. Don’t be fooled by misleading TV ads, e-mail offers, or online search results.

Other Situations That Warrant Getting a Free Credit Report

Under federal law, you may be entitled to a free credit report if a company takes “adverse action” against you such as denying an application for credit, insurance, or employment, based on information in the report. In addition, other circumstances include unemployment, receiving welfare benefits, and any report of fraud (including identity theft).

Is it Important to Review Your Credit Report Frequently?

Yes, absolutely! The information in a person’s credit report is used to evaluate applications for credit, loans, insurance, and employment. Therefore, making sure that your information on your credit report is accurate and up-to-date is very important.

It may be helpful to go over your credit report with one of our financial wellness counselors.  Call us to get started today.

GreenPath Financial Wellness
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