Credit Union Guy Blog

Where is banking going in ten years?

2014-06-06T13:44:00.000-07:00

There have been a lot of changes in banking in the past few years. Some changes are subtle, but some create a new paradigm, such as the advent of Mobile Banking. Mobile Banking has the potential to be bigger than Online Banking was at its introduction. Why? There is a much larger installed base of mobile smart phones today, 1.5 billion worldwide, than there were PC’s in 1997 when Online Banking went live. Mobile Banking acceptance by younger adults is off the charts. They do not fear using their phones for banking purposes and welcome the convenience Mobile Banking promises them.

So, what are some of the big changes we will see coming in the near future? For starters, it is a foregone conclusion that paper checks are going away. With the proliferation of online bill pay systems, there is very little need for consumers to sit at the old desk and write out checks once or twice a month. You won’t have to lick any of those nasty bill envelopes anymore! Yuck.

Today, it takes me five minutes to pay 7 bills. No stamps, no envelopes, no calculators. Just me, my bills and my PC and my bills are paid in 24-48 hours mostly. It is very easy even for beginners.

Another change will be the new EMV or EuroPay MasterCard/Visa. This is the new “chipped” cards that many have been talking about. Simply put, EMV (sometimes referred to as chip-and-PIN, or chip-and-signature) is the most recent advancement in a global initiative to combat fraud and protect sensitive payment data on cards. A cardholder's confidential data is more secure on a chip-enabled payment card than on a magnetic stripe (magstripe) card, as the EMV card supports dynamic authentication, while the current mag-stripe card does not (the data is static). Consequently, data from a traditional magstripe card can be easily copied (skimmed) with a simple and inexpensive card reading device – enabling criminals to reproduce counterfeit cards. Chip (EMV) technology is effective in combating counterfeit fraud with its dynamic authentication capabilities (dynamic values exist within the chip itself that, when verified by the point-of-sale device, ensure the authenticity of the card). The one thing that cannot be copied is the chip in the card. (A lot of people are saying that if we had EMV cards, the Target data breach would not have happened. Incorrect. The EMV cards would not have protected anyone from Target’s failed attempts at data security on their systems.)

We still see a lot of paper loan applications around today. More and more, financial institutions are moving to paperless processes. Your application is online and all the loan underwriting will be done on line. You will sign with your electronic signature. Do you need to have paper copies of disclosures in your files at home? No, not if you can access them on your phone, tablet or PC whenever you wish. You can save a digital file of your documents on the security of your home computer if needed.

Teller roles are changing and that means that your bank will change as well over time. Some credit unions have installed video Tellers over the past few years. There is one CU that is currently experimenting with a holographic Teller. Tellers are now being trained to offer advice and show you how to use the latest technology, whether it’s online banking, a mobile application, or digital documents; the role of the teller is not what it used to be.

Consider that there is already a lot of automation in banking. Automatic Teller Machines, ATM’s, have become ubiquitous in our banks, convenience stores, airports, and even gas stations. Many of today’s ATM’s will give you a copy of the check you deposited for your records. Credit unions have really changed the paradigm of the ATM as they “share” their ATM’s; meaning that if I bank at Meriwest Credit Union, I can go to virtually any other CU’s ATM, nationwide, and make a deposit to my account at Meriwest. Credit unions have offered shared ATM’s for many years.

Other forms of automation are cash and coin counters. Certain new ATM’s are being equipped with cash counters in them. You deposit the cash in the slot and the machine counts and verifies your deposit. In most of our branches, we offer our members a coin counter. They can dump their accumulated coins in the machine; it counts them and gives them a receipt. Today we take that receipt to a teller who will deposit the amount in our checking account. In the near future, the coin counter will be connected to the financial institution and deposit the coin directly to your account. That is, if coins are still around.

It may be unbelievable, but actual physical money will make an exit from our lives. The dollars and coins with which we grew up will no longer be necessary to make transactions. All of our money will be digitally managed. Today, unless we physically use cash, most of our transactions are now digitally managed.

Your employer pays you by Direct Deposit. You go online and pay your bills with online bill pay. You get a check in the mail for a rebate. You use your Smart Phone to take a photograph of the check and use Remote Deposit Capture to deposit it in your checking account. Your financial institution never has a physical copy of the check, only digital. You walk to the deli and buy a sandwich and a soda with your debit card. We drive across a bridge and “beep,” our bridge tolls are paid automatically from our checking account. We can pay our taxes electronically and receive our refunds in the same manner.

I think it is easy to see the future is now and these changes are coming faster than we think.

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Our next Free Financial Workshop:

Car Buying 101

Saturday, June 14, 2014 at 10 AM

Learn how to plan, select, and make your deal for your next new or used car. We will cover research, financing, and explain how to save hundreds of dollars on vehicle warranties.

Location: Meriwest Credit Union Main Office

5615 Chesbro Ave.

San Jose CA 95123

Unmarried? Buying a Home Together? Read This!!!

2014-05-23T11:43:00.000-07:00

Buying a home means making a number of decisions with your money, investment planning (remember, your home is an investment), and we must consider how to accept title in our new home as part of our estate planning. Generally, California is a community property state. In California, a 50/50 division of community property between a married couple is strictly mandated by statute,meaning that the focus then shifts to whether particular items are to be classified as community or separate property. If one owned property prior to the marriage, that property can be vested as “Sole and Separate Property,” meaning that it belongs entirely to one party in the marriage.

Typically, in the absence of a Living Trust, married couples in California take title to property as joint tenants or as community property. But what if you are not married? What if you are cohabitating with someone and you decide to buy a house together?

Unmarried couples have many of the same decisions to make as married couples when it comes down to home purchasing. One of the most important is how to take title of the home. This can determine what can happen in the case of a dissolution of the relationship or a death of one of the parties to the home’s purchase. Let’s take a look at the different vestings available to unmarried couples and some of the details involved with each particular vesting.

To be sure, I am not an attorney. The information I provide here is rather basic so for additional details, please consider consulting with a Realtor, a lawyer or an investment adviser who can help you with some estate planning.

Individual vesting: In this case, only one individual of the unmarried couple owns the property and owns 100% of it. The other individual has no ownership involvement or rights. If the owner dies, the surviving member of the couple is out of a home unless the beneficiaries selected by the decedent (dead) owner allow him or her to continue living in the home with a rental agreement. The owner can bequeath the property to their unmarried partner in a will but that opens up a can of inheritance taxes and Legal issues.

Tenants-in-Common: This vesting is most common for investment properties with multiple owners. In the case of unmarried couples, some people like to retain what is theirs or at least have a dividing line to say this part is mine and that is yours. This is particularly acute when one party to the transaction provides a larger portion of the down payment of a new home. Tenants-in-common allows each borrower to delineate their ownership percentage of the home. If two people have equal down payments and will share 50/50 in the mortgage, the percentage could be set at each owning 50%. If the down payments are unequal or one party will be paying a significantly larger portion of the mortgage, the couple must work out who owns what percentage; 40/60? 30/70? Also, in Tenants-in-common each can leave their portion of the home to their own selected heirs. Their ownership does not automatically revert to the surviving tenant or tenants. You can leave your ownership interest to the dog if you want! This creates some sticky situations if the decedent tenant leaves their portion of the home to someone with whom the surviving tenant does not get along.

Joint Tenants: In Joint Tenancy, the owners own 100% of the property together. There is no delineation of who owns what percentage of the home. Joint Tenants must both sign documents when transferring the property or using it as a security for a loan. Joint Tenancy is often written on title documents as “Joint Tenants with right of survivorship,” meaning that when one tenant dies, the other tenant inherits the property and owns 100% of it. That tenant now owns the entire home and has the right to select his or her own beneficiaries for the home in the case of their own death.

Community Property (with right of survivorship): This vesting is intended for married persons or domestic partners. Similar to Joint Tenants, the tenants own 100% together. There is no delineation of ownership percentages. Since all such property is owned equally, both parties must sign all agreements and documents transferring the property or using it as security for a loan. Adding the “with right of survivorship” may add some tax advantages. On the death of an owner, the decedent’s interest ends and the survivor owns all interests in the property.

Trusts: Unmarried people may also take ownership in the form of a trust. The trust documents will determine each parties’ (trustees) ownership percentage and will determine what takes place upon the death of a trustee. In this case, funds could be left to the surviving trustee or decided in advance who will inherit the ownership. They can also designate who would manage the trust (successor Trustee) in the case both owners perish at the same time.

If you are unmarried and thinking of buying a house, this is a great time to do it. Despite the lack of inventory in some areas, interest rates remain historically low. There is a lot to take into consideration when purchasing a home such as the neighborhood, schools, transportation availability, shopping, down payments, loan terms, and how you will take ownership; your vesting.

When the time comes to purchase your new home, don’t forget to check your credit union’s mortgage rates. Judging from the volume of home purchase loans we are doing today, our interest rates and loan terms must be very competitive!

Link for additional information: http://www.clta.org/for-consumers/consumer-holdingtitle.html

This link is to the California Land Title Association's website for vesting information.

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Free Financial Education Class:
Credit Myths & Credit Repair
Wednesday, May 28, 2014 - 6:30-7:30 p.m.
Chesbro Financial Center

5615 Chesbro Ave, San Jose, CA

Your credit is one of the most important things you need to know the FACTS about. Protect your credit by learning about credit Myths vs. Facts.

Understanding Biz Credit Cards

2014-05-14T14:22:00.001-07:00

Here is a special bonus for our readers; the Credit Union Guy gets real about Business Credit Cards with Erica Sandberg of CreditCards.com.

You have your high school diploma. Now what’s next?

2014-05-09T04:30:00.000-07:00

You got your diploma, went to grad night, and stayed out until morning. What are your plans? You may have plans for college locally or away. You may have a job lined up for the summer. That’s what’s next for you, but what’s next for your money?

1. Have you opened a checking account? Was it at a bank or a credit union? If you opened your account at a commercial bank, you must enjoy paying fees to the bank. If you don’t enjoy paying fees to a bank, you can open your checking at a credit union and keep more of your money. It is not that credit unions don’t charge any fees, they just charge fewer of them than the banks do. Are you required to have a minimum balance in your bank account to avoid monthly service charges? Are you required to have direct deposit for a free checking account? If you don’t maintain these things, how much is the monthly charge? $10? $15?

Generally, at credit unions that is not the case. Most credit unions often offer checking accounts that are free of fees. There are no monthly service charges or minimum balance requirements. Direct Deposit is encouraged but not a requirement for a free account. Credit unions believe it is better for their members to keep their money than to take it from them in the form of banking fees.

2. Are you working? Then you should be saving money. Save what you can afford. If you have a car, you will thank yourself for saving some money. Cars don’t take care of themselves. Tires will go flat, batteries will go dead, hoses will spring leaks, and belts will break, all costing you money. Put some money away for that inevitable day when something goes wrong with the car. Just to tow your car five miles may cost you $100! Do you have $100 in your savings today? If not, you should have that as a minimum start amount and keep saving.

While we are working on savings, let’s talk about an emergency fund. As time goes by, an emergency fund will be important to you. A general rule of thumb for an emergency fund is six months worth of income. The emergency fund exists to fill gaps in your budget when unexpected expenses arise. Not just for fixing your car, but for emergencies such as getting transportation to visit sick family members, or your own emergency medical bills, or paying for your insurance deductible after a car accident are just some examples of good uses for your emergency fund. That emergency fund exists in case we find ourselves unemployed. That six months income in the fund may be what we need to bridge our income gap between jobs! So what’s the best way to save? Try allocating a portion of your check into a savings account as part of an automatic deposit or transfer. Think about it. If you get paid twice a month, that’s 26 checks in a year, if you only took $10 per check and had it automatically deposited into your savings, that’s $260. Now what if you doubled that to $20 per check? That’s $520 you’ve saved! And since it’s being automatically deposited, you probably won’t even notice it coming out of your check.

3. Do you have credit? Pay your bills on time so you don’t incur any bad credit and to help build strong credit. An unpaid bill can become a collection and hurt your chances to access credit. A cosigner can be very helpful in accessing credit such as a car loan or credit card. The cosigner is on the loan with you so they would suffer if you fail to pay on time. The cosigner is essentially putting their good credit at risk to help you. This should be treated with great respect. You must stay on top of any credit commitments made with a cosigner.

Are you more independent? Don’t want a cosigner? Perhaps a secure Visa or Master Card is in your future. Meriwest Credit Union (as well as many other CU’s) offers a secure Visa card that can be started for as little as $300. Send a $300 check with your application and, if approved, your will receive a $300 Visa credit card. Want a higher credit limit? Increase your security deposit. Your incentive is that if you don’t manage the card well you are putting your savings at risk. If the card is not paid on time, it could be closed and paid off with your secured savings. You would receive whatever is left after pay off. Be aware that these cards usually have an annual fee as well.

Whether you initiate credit with a cosigner or through the secured route, it will take some time to get yourself established. Rome was not built in a day and we don’t build a credit history in three months! Check CreditKarma.com to see your credit score and watch it grow as you manage your credit.

4. Do you have a car? Do you have adequate car insurance? There are a lot of car insurance companies that advertise very low rates and for good reason! They mainly quote the cost of the California Minimum Insurance. What are those minimums?

$15,000 for injury/death to one person.

$30,000 for injury/death to more than one person.

$5,000 for damage to property.

Let’s say you bought this exact amount of insurance. It is very inexpensive. Why? You have very little insurance. Let’s suppose you hit a new Mercedes Benz E-Class sedan from behind and the owner gets a neck injury like whiplash. If the car is totaled, it will cost you over $50,000 to replace it. How much do you suppose the hospital bills would be for whiplash? $100,000? $250,000? Whoa! More than that? Yep.

In this case, your insurance company will give the victim $5,000 for the damage to their car and $30,000 for the hospital stay. You are on the hook for the rest of it and it could be in the hundreds of thousands of dollars. If you don’t have hundreds of thousands of dollars in your emergency fund, you might want to budget for adequate insurance. It may cost you more than the super cheap minimum insurance, but it will help you sleep at night knowing you are not at risk of filing bankruptcy for a car accident.

These four things, opening a checking account, starting your savings, establishing your credit and properly insuring your car can make your financial life so much easier and put you ahead of the game. Many college graduates are not ready for their lives financially when they leave college. If you start your post high school planning with these four simple ideas, you can build a financial foundation that will serve you and your future family for the rest of your days.

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All About Business Credit Cards
On Wednesday May 14th at 10 am PDT the Credit Union Guy, Meriwest CU's Community Relations Manager, Greg Meyer, will take part in a Google+ Hangout with the team at Credit Cards.com to talk about understanding Business Credit Cards. It's fifteen minutes that will bring you up to date on the differences and the proper uses of a business card. Here is the link to watch: http://bit.ly/1i20MX4 .

Free Credit and Identity Theft Workshops

Preventing Identity Theft
Wednesday, May 21, 2014 - 6:30-7:30 p.m.
Chesbro Financial Center, San Jose, CA

Identity theft is on the rise. After the Target Store breach, what more can we expect and how do we protect our hard earned money from these thieves? We share some answers with you.

Credit Myths & Credit Repair
Wednesday, May 28, 2014 - 6:30-7:30 p.m.
Chesbro Financial Center, San Jose, CA

Do you know all there is to know about credit? We review the top ten myths of credit and explain how paying bills, collections, credit inquiries, and divorce can effect your credit standing.

Ten Giant Wastes of your Money

2014-04-25T04:00:00.000-07:00

Do you waste money? Do you misuse it to the point that you might as well set it on fire? Do you have money to burn? I am sure you don’t think you do. No one wants to waste money but we often do unknowingly. There are more money wasters out there than I can list in the blog. After you have read my top ten ideas for how we waste money, I encourage you to pass along your own ideas. I will compile them and put your ideas into a future blog. You can respond to this blog or send them to GMeyer@meriwest.com.

Unused memberships for which you are still paying. Gym memberships, online gaming, dance clubs, fraternal organizations, etc. These memberships take money from us every month. If we are not using the advantages of these memberships, why are we still paying for them?
The social life is cool, but at what cost? One or two nights a week out drinking and carousing can cost you $30-$50 a night depending on the bar. It’s not all booze because when you are out drinking you invariably want to go out to eat. Who’s going to run home and fix pasta after four drinks? Besides, all those cool people at the bar are not at your home!
Regularly eating lunch in restaurants or take out. How much does it need to cost before you decide to start making your lunch at home and taking it with you? A cheap lunch of a deli sandwich and a soda can run $7 today, much more if you want something more elaborate. If I eat out four times a week all year long how much does that cost at my (low) average of $7 per day? Try nearly $1,500! It runs about a third as much to bring your lunch regularly.
Style. Addicted to style and fashions? Do you have fashion magazines coming to your door? Is the next thing from your fav designer the next must have fashion addition? Cool your jets. This is a problem for men and women. You can be helped; you just have to admit you have a problem! Now, repeat after me, “I am addicted to fashion!” Good, now get some counseling!
Gas hogs. Have you checked the gas mileage on your car lately? A ten mile per gallon difference, going from 20 mpg to 30 mpg, can be a $1,000 savings at $4 per gallon! (based on US resident avg. mileage of 15,000 miles annually)
Cable Premium Services. Do you still have HBO, Showtime, Starz, Cinemax, and the Movie Channel? It may be costing as much as $50 monthly/$600 annually to maintain these movie channels. Is it worth it? A subscription to a streaming video provider is much cheaper!
Tired of paying for cable? Did you know your local broadcast TV stations still broadcast on the air? Modern flat screen TV’s have digital tuners built into them. A $10 rabbit ear style TV antenna from your local electronics store connected to your Flat Screen can bring in a lot of programming; 54 stations in San Jose alone without a cable box or a satellite dish! Local television stations now broadcast in digital, meaning they have a lot more programming available. What was one channel prior to the advent of digital broadcasts is now 3 or 4 different channels. You want more? Consider internet TV. There are a variety of inexpensive internet TV devices ($100 or less) that work with your high speed wireless internet to bring you 1,000 channels of programming such as Youtube, the major TV networks, and most cable networks. Your Smart TV or BluRay DVD player may have this access built in to it. If you have a fast internet connection and an antenna on your TV, you might be fixed and be able to tell cable and their rising monthly fees good bye. Typical cable bills can be >$100 monthly. Would that look better in your savings account?
Still getting the newspaper at home? If you have the internet and a smart phone, is the newspaper necessary? Every news item in the paper was a news item 24 hours ago on the internet. Why do you want old news delivered to your door?
Do you buy extended warranties? When you check out of electronics stores with your gadgets, you are often asked if you want the extended warranty. These are unnecessary as the manufacturers generally have pretty good warranties to begin with. The extended warranties have a laundry list of exclusions that often prevent you from using the warranty as it was originally intended. Extended warranties are seldom used and make a lot of profit for the store where you purchased your item.
You don’t maintain a budget. You get paid and have no idea where your money goes because you don’t track it or pay attention to it. You hope that payday comes soon as you may be running out of money. That’s no way to live your life! Build a simple budget and use it to control your spending. You will save some money!

Get out last month’s checking account statement and see where your money went. How much was your cable bill? How much did you spend eating out? What was your gasoline bill for the month? You may find some fine incentives that can help justify one or two lifestyle changes that can help you save a few dollars here and there. The only question remaining is, are you ready to make that change? I am sure your savings account and your wallet would be happier.

Turbo Charge Your Retirement

2014-04-11T16:36:00.002-07:00

Q:Hey, Credit Union Guy, I'm in my 40s and haven't saved nearly enough to prepare for retirement. How can I 'turbo-charge' my retirement savings to catch up?

A: The good news is that you still have a lot of peak earning years ahead of you. Many people don't hit their professional stride until they reach their 40s, 50s and 60s, and they have their best earning years, by far, late in life. If you qualify for a traditional pension, so much the better, because many systems use your highest-paying three or five years to calculate your benefits. These traditional pensions, however, are getting quite rare.

The bad news is this: Interest rates are at or near record lows. That's great for borrowers, but it makes things a lot harder on savers. Chances are, you will need to save a lot more money to generate a given level of retirement income than your forebears did a generation or two ago.

Here are some ideas:

Rein in spending sharply. Learn to enjoy cooking, rather than eating out. Cut back on cable TV packages and take up exercise instead. The lower your monthly expenses, the more free cash flow you will have available to invest. All solutions to your problem start with this one step.

Pay down consumer debt and credit card debt. With credit card interest rates in the high 20s for some people, this is often the very best return on your investment you can get. Every dollar you pay down in credit card debt sooner or later nets you a return on investment equal to the interest rate on the card - with no risk, and no taxes due. Pay it off early and keep your future dollars.

Next, make sure you are making the most of your tax-advantaged retirement savings opportunities. Are you working for someone else? Increase your 401(k) contributions. Maximize your IRA or Roth IRA contributions if you are eligible.

Do you own your own business? Can you start one? If so, you have some additional options: You can form and contribute to a SEP IRA, or simplified employee pension plan. This plan allows you to contribute up to 25 percent of your income from the business into a SEP IRA, or up to $49,000 per year, tax deductible. No taxes are due until you take the money out. Some businesses may be better off forming a SIMPLE IRA or Solo 401(k), depending on the specifics. Consult a qualified financial advisor with experience in retirement planning to find out which alternative is most appropriate for you and which will enable you to maximize your contributions.

Want more ideas? If you are self-employed and have your own business, you have few or no employees and a steady stream of cash flow, you can make nearly unlimited tax deductible contributions to an insured pension fund, under Section 412(i) of the Internal Revenue Code. (Make sure you have an experienced advisor working with you on these. This might not be a job for your nephew who is just getting started in the life insurance business).

Have you spoken to your investment advisor about the growth in your account? How much risk can you honestly accept? The saying is the higher the risk the higher the yield. Is that risk and the stress worth the yield? A good advisor will set you up with some options that can mitigate or modify your risk.

Are you renting? It might be time to buy. That may sound expensive now, but interest rates are extremely low as of this writing. Even if rates rise to five percent or more, it would still be historically low. If you're in your 40s, you will have that 30-year mortgage paid off in your 70s. At that time, you may want to convert the equity in your home to a stream of income via a reverse mortgage. It's not for everyone, but if you rent rather than buy, you won't have that option. You can make that decision when you get there.

Above all, save money. Squirrel money away every way you can. Cash is still king, and there's no substitute for healthy cash reserves in your credit union account, whether in checking, certificates or other conservative savings options. You might not get a great return, but it's safe, secure and steady. Most of your success is going to come from controlling spending decisions, rather than from making brilliant investment decisions. Set things up so you don't have to be brilliant to succeed, just prudent.

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Meriwest’s Spring Pre-Owned Car Sale is this Weekend!
Sat-Sun: April 12th and 13th
Chesbro Financial Center, San Jose, CA

Sale Hours:

Saturday, April 12th:
9:00 a.m. - 6:00 p.m.
Sunday, April 13th:
10:00 a.m. - 5:00 p.m.

Event Location:

Chesbro Financial Center
5615 Chesbro Avenue
San Jose, CA 95123

Take advantage of this special event!

Low auto loan rates
Huge selection of over 200 quality vehicles
Up to 100% financing available for qualified buyers*
Fast and friendly service
Trade-ins welcome

Plus PRIZES and more!

Zombie Debt

2014-03-28T14:23:00.000-07:00

Even Zombies say, "Zombie debt bad!"

Zombies are more popular now than at any time I can remember. There are new zombie movies coming out, zombie games, zombie parties, and even self-defense products for the upcoming zombie apocalypse. There is one more Zombie Threat you must protect yourself from, ZOMBIE DEBT!

Zombie Debt is a collection that has been “termed” off your report. In other words, it has reached its seven year expiration and been removed automatically from your credit report. Then collectors try to call and collect on “Dead Debts” or “Zombie Debts.” It is as if the seven plus year old debt has risen from the grave and come back to haunt us. Imagine your old debts doing the slow zombie shuffle to your door yelling, “Pay me, pay me!”

Zombie Debt Collecting is becoming more common. This is particularly true with people who don’t track their finances well and don’t follow their credit report. Bill collectors are taking advantage of their naiveté and making threats about legal actions if payments don’t start right away. These tactics are working in the lower income communities. Typically they are going after old credit card debt.

Consumers need to know their rights in regards to credit reporting. I present a workshop in the community and at my credit union titled, “The Myths of Credit.” The presentation goes over the top ten myths of credit and an emphasis is put on managing and understanding collections. Too many people don’t understand that a collection can only be collectable for seven years and not beyond that. However, these collection agents continue to attempt to collect debts that are well beyond the seven year period. Also, once families go into an agreement with the collector on a Zombie debt, they need to stick to it and make their payments as the collection agent could now make this a new collection for nonpayment due to the payment agreement/promissory note the consumer might sign.

How should a person handle collection calls and avoid Zombie Collections? Regrettably, it is not as simple as shooting a zombie in the head and ending the threat.

Before a collector calls:

1. Access your credit report through AnnualCreditReport.com. You can access all three bureaus’ reports here. You will never be in the dark about your credit status. You will always know when a collection has gone on to your report and when it expires. This is a free service.

2. Sign up for CreditKarma.com. They will notify you of any changes in your score and provide the info for those changes; such as a collector “re-aging” a collection or putting an old expired collection back on your report with a new date to make it appear current. This is also a free service.

When a collector calls:

Don’t admit to anything. Don’t agree to payments. Your agreement to making payments or even acknowledging the debt could provide the company the legal right to collect the debt and may reinstate a dead debt and make it a real Zombie!
Make them identify themselves and the details of the debt they are collecting; dollar amounts and the date the collection became active on your credit report (AKA First date of delinquency: The legal term for the first day a debt goes on your credit report). This date can clue you into whether they are collecting on a Zombie debt.
Don’t fall for the traps. Agencies will sometimes “re-age” the debt, (reporting the debt to the credit bureau as if it’s new). They might promise to wipe off the “red checkmark” on a credit report, of sometimes do a “bait and switch” where they tack on the balance of a zombie debt to a new credit card offer.
Ask them to validate the date and amounts of the collection and send them to you in writing. This should also include asking them for the credit card agreement you signed. Double check the statute of limitations in your state. Generally, seven years is the accepted period of collection. If the debt was discharged thru a bankruptcy they cannot collect it.
If you have determined that you are not responsible for the debt due to age of the debt or other written agreements such as settled or paid in full, write a letter to the collection agency and inform them that you will not pay the debt and share the reason for it as well as any copies of evidence you have showing the debt is no longer collectible.
Collectors often like to threaten payees with court. “If you don’t pay this, we will take you to court!” With most modest credit card debts it is just not economically feasible to hire attorneys to go after the payees. This is a common threat with Zombie debt. If your debt is expired and the collector makes this threat, it is an empty threat with nothing to back it up. No one is going to spend big money ($500 per hour!) to hire an attorney and pay for court costs to collect small expired debts.
Check your credit report annually. Review it and compare it to the previous year’s report and determine that all items on the report are current and valid.

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Save The Date!
Meriwest Spring Pre-Owned Car Sale
Sat-Sun: April 12th and 13th
Chesbro Financial Center, San Jose, CA

Sale Hours:

Saturday, April 12th:
9:00 a.m. - 6:00 p.m.
Sunday, April 13th:
10:00 a.m. - 5:00 p.m.

Event Location:

Chesbro Financial Center
5615 Chesbro Avenue
San Jose, CA 95123

Take advantage of this special event!

Low auto loan rates
Huge selection of over 200 quality vehicles
Up to 100% financing available for qualified buyers*
Fast and friendly service
Trade-ins welcome
Plus PRIZES and more!

Learn More

Debit Cards vs. the Fraud at Target Stores

2014-03-14T09:29:00.001-07:00

With the recent electronic data theft from Target, Neiman Marcus, and others in the 4^th quarter of 2013, many people are looking for an alternative to their bank or credit union issued debit card. We are getting a lot of questions like:

How safe is my debit card?
What happens if I find unauthorized electronic debits in my bank statement?
How do I get reimbursed for unauthorized usage of my card? How long does it take?

Bank customers and credit union members all over the country have concerns about the safety of their data. Let’s be clear here, your financial institution very likely has the best anti hacking software made today. There has not been a significant breach of banking data since 2011. How often are retail merchants the victim of identity theft hackers? It seems like every month we hear about a new breach!

The problems really lie with the retailers like Target. Their security was so poor the thieves were able to use common malware that had been used before in other data breaches and the bad guys didn't even encrypt where the money was going! Essentially, Target was broken into by an amateurish gang who left all kinds of evidence of what was happening, but Target’s IT department failed to recognize the danger. (See the article in the Minneapolis Star Tribune for a story on the methods of the thieves.)

Target will not be paying for anyone’s monetary losses resulting from the fraud. They won’t be paying the millions of dollars it cost the financial institutions to replace all the compromised debit and credit cards. Retailers have no responsibility to their customers when there is a data breach. For many of you this is a very surprising revelation but that is how it works today. The financial institutions are forced to pay for their customer’s losses after a hacker has broken into the merchant’s computerized payment system. Target’s breach cost banks and credit unions $200 million so far! It cost credit unions in Wisconsin $750,000 alone. The numbers for California are still being calculated.

(Okay, I am done with my “I am so mad at Target’s weak data protection.” screed. Now, let’s talk about Debit Card security.)

The debit card is a viable alternative for paying in store charges as well as preauthorized transfers. When managed properly, it has very strong anti-fraud/anti-theft procedures. The Federal regulation known as Regulation E provides consumer protections for fraud against unauthorized use of a debit card. One has 60 days from the issuance of their account statement in which the problem or error occurred to contact their financial institution and file a Reg E complaint. This is true for banks and credit unions.

Once the complaint is filed it takes about 48 hours for most institutions to issue provisional credit to their clients for the disputed items. Each will have a different procedure so you should make yourself familiar with the procedure at your institution. The reimbursement is pending an investigation into the fraud. Most investigations are completed within 10 days resulting in final credit or revocation of credit. Reg E limits a consumer's liability for unauthorized electronic fund transfers, such as those arising from loss or theft of an access device, to $50; if the consumer fails to notify the depository institution in a timely fashion (>60 days after the statement was issued), the amount may be $500 or unlimited.

The key to this is that customers of banks and credit union members need to keep an eye on their accounts. It is so much easier today than 10 or 15 years ago as we now have online and mobile banking. Our customers and members can keep up on their accounts while on the run and be able to address any inconsistent transactions immediately with their institution. The faster someone reports an unauthorized transaction, the faster the institution can reimburse them.

One of the reasons credit cards are being pushed as a payment alternative is that the credit card companies are pushing this issue and have been for many years. My friends at Visa would want people to pay all their bills and groceries with a credit card and then write one check at the end of the month to pay all. According to the credit card companies this protects your checking account from being exposed to fraud. Of course, the credit card companies would be very pleased if you could only pay a portion of their bill. Then the consumer will be paying interest and that is the issuers’ primary desire!

For domestic payments, I would use my debit card and keep a close watch on my checking account thru my online banking program. I would definitely use a credit card when traveling internationally.

* * *

Our Next Free Teen Financial Education Class:
Real World Budgeting for Teens and College Students
Saturday, March 22, 2014 - 10:00 -11:00 a.m.
Chesbro Financial Center, San Jose, CA

Attend this FREE, fun and interactive class made just for teens! Various life scenarios involving everyday finances are covered:

Learn how to make wise money decisions when starting an "adult life".
Learn tips and find out the steps on how to rent that first apartment.
Learn the best tricks for making ends meet when you are on your own.
Find the hidden costs of being on your own.
Learn how saving money can improve your lifestyle.
Learn how your down payment on your first car can effect your payment and interest rate.

Teens, learn what it's like to be on your own in the real world!

Parents are also welcome to attend.

RSVP today to Greg Meyer, Community Relations Manager - gmeyer@meriwest.com or call (408) 365-6328

Minors with Credit Cards-Good idea?

2014-02-28T13:11:00.000-08:00

As minors cannot sign a contract until they are 18 they cannot be involved as a co-signer on a card. A parent cannot cosign for their kids as the kids cannot sign on to the card with them. Cosigning for your kids is a relatively straightforward process, both of you will be on the application and both will sign. The parent’s credit will be evaluated for approval. If it is approved, the proper management of the card and the parent’s credit background will elevate their adult child’s credit score. Of course, if the card is not managed well or the parents have a lapse in managing their credit, that can be detrimental to the young person’s credit score.

However, being younger than 18 does not lock a young person out of having a credit card. They can be placed on an established credit card as an authorized signer. This gives them all the rights of usage without the responsibility. But it will start to build their score for them provided the parent has a good score to start with. Yes, the minor can start building that FICO score while they are a minor. The best option: Parents can remove the minor from the account anytime they wish!

This is especially helpful when the card has been misused.

The major disadvantage of minors with credit cards is their occasional lack of responsibility. They might use the card for parentally unauthorized usages like a Miley Cyrus concert or go hog wild buying MP3’s on iTunes or Amazon. There are a variety of opportunities for minors to misuse a card. It is up to the parent to ensure the child understands the limitations and responsibilities related to managing the card and teach them how their current authorized usage will benefit them in their adult life.

One option that families have in training their kids to manage money is the Meriwest Credit Union Flow Card. The Flow Card is an electronic checking account (no checks allowed) that is managed by a parent and their child. Flow Cards come with free online banking, online bill pay, and mobile banking options. Your child cannot overdraft a Flow Card! The account is ideal for those students who are aged 13-24 years old. It gives parents an opportunity to teach their kids about managing money with a debit card as the parent and the kid will both have access to the account information. This is good training for eventually managing a credit card.

Meriwest Credit Union is an Equal Housing Lender. All accounts are insured by the NCUA to $250,000.

Love, Money, and Joint Tenants

2014-02-14T04:30:00.000-08:00

I can understand why married couples are often opting for separate accounts when it comes to consumer credit such as car loans and credit cards. It is mainly because the errors of one spouse normally don’t have an effect on the other spouse’s credit. If a husband has a late payment, it won’t affect his spouse’s credit. That is until they buy a house. The house is a major purchase in which both parties are deeply involved. This usually takes both incomes to make the purchase, thus both spouses are applying for credit jointly. It is usually at that point that a lot of couples start combining their credit.

But in this modern age, there are couples who are maintaining completely separate finances. There may be a variety of reasons for this. As mentioned above, a spouse may have very bad credit or perhaps even a bankruptcy on their record. The spouse may have problems managing a checking account and has repeated overdrafts or had written checks on non-sufficient funds. Many couples find that the best solution is to have a joint account in addition to each keeping an individual account.

A creditor can be justified in attaching those jointly held funds to pay a debt that only one spouse may have incurred. If a marriage is foundering or if a couple has severe disagreements about how to manage money, they may want to maintain separate accounts. With joint accounts, either party can "clean out" the other simply by withdrawing all the funds in the account.

As for savings, checking, and investment accounts it is wise to hold vesting as Joint Tenants or as a Totten Trust. In the case of a joint account, both parties, or tenants, are each other’s beneficiary. Each one is an owner of the account with equal rights of ownership and transaction.

One might explain Joint Tenancy as: Each tenant owns 100% of the account. Should one owner die, the other has the “right of survivorship” and will take over the funds without probate upon the death of the other joint owner. This is the most common form of account vesting for married couples here in California.

A Totten Trust places a beneficiary or multiple beneficiaries on an account. In the case of the accountholder’s demise, the funds go directly to the beneficiary without having to go through probate. It is a very simple process. In the case of multiple beneficiaries the funds are divided equally between them. A Totten Trust can be very helpful when a couple is hesitant to have joint accounts for any reason but do wish to leave their assets to each other.

Of course, the difference is that in the Totten Trust the beneficiary has no rights to transact on the account while the accountholder is alive. In a joint account, each joint owner has equal rights to transact on the account.

If you have a complex estate or have multiple beneficiaries, it may be helpful for you to have a Family Trust or what is also known as a Revocable Living Trust. These types of trusts allow you to have very detailed instructions on how your estate is distributed. For more information on Living Trusts, please contact an attorney who specializes in family and trust law.

Love is good but it does not pay the bills or pay them on time, nor is love a good retirement planner. Sometimes love has to take a back seat to the realities of financial acumen and management. Today more than ever, your choice of a spouse can make a difference in the way you approach your finances. A spouse with poor credit and poor money skills who lack savings or a 401k could create an uphill battle for spouses who are good at money management. Let’s keep in mind that 70% of all marital arguments are about money! Ouch! Money is often cited as the cause of divorce.

One thing I have heard that is encouraging: If nearly 50% of marriages end in divorce, then over 50% last forever! That’s a stat I can live with.

Financial questions to ask before getting married

Questions you might ask yourself prior to making this financial decision:

Do I want a joint account with this person?
Do I trust this person to communicate with me about our spending plan?
How did his/her parents manage money?
How well does this person manage money?
Does this person take risks with their investment money or are they conservative? Has this person had a big loss due to a poor investment decision?
Will you pay the bills together or is one person to be responsible for them? Which way are you most comfortable?

* * *

FREE Financial Education Class JUST for Teens

Teens: Learn what it's like to be on your own in the Real World.

Whether you're starting high school or about to graduate from college, learn the necessary skills to start making smart money decisions.

Teenagers learn about the real world of
living on their own!

Real World Budgeting
Wednesday, February 19, 2014
6:30-7:30 p.m.

Meriwest Credit Union
Chesbro Financial Center
5615 Chesbro Avenue
San Jose, CA 95123

Attend this FREE, fun and interactive class made just for teens! Various life scenarios involving everyday finances are covered:

Learn how to make wise money decisions when starting an "adult life".
Learn tips and find out the steps on how to rent that first apartment.
Learn the best tricks for making ends meet when you are on your own.
Find the hidden costs of being on your own.
Learn how saving money can improve your lifestyle.
Learn how your down payment on your first car can effect your payment and interest rate.

Teens, learn what it's like to be on your own in the real world!

Parents are also welcome to attend.

RSVP today to Greg Meyer, Community Relations Manager - gmeyer@meriwest.com or call (408) 365-6328

Student Loans: Think Before You Borrow

2014-01-31T11:52:00.000-08:00

The total amount of outstanding student loan debt in the United States now tops $1 trillion. To make matters worse, recent graduates have been emerging from colleges and universities, with diplomas in hand, into one of the worst job markets in living memory.

Yes, we have had higher unemployment rates in years past: It reached 12 percent during the height of the 1981-82 recession. But that recession was over relatively quickly. And we have never had the combination of stubborn unemployment, underemployment and high student loan debt that we have today.

College costs have been outpacing incomes for a generation, fueled in no small part by the easy access to credit for college costs. The federal government has sought for years to make college more accessible for middle and working-class families. It routinely provides generous guarantees against default for student loans. However, the more money that’s available for any commodity, the higher consumers will bid up the prices for it, and education is no different.

Many of today’s students are having difficulty in making the payments on their student loans once they’ve graduated or left college. This is particularly true of humanities and arts graduates, who could wind up working low-skill service jobs that pay wages that are not designed to support a hefty student loan payment and the raising of a family.

As a result, the rates of default on student loans are soaring. An October 2012 report from the U.S. Department of Education notes that 13.1 percent of student loan borrowers have defaulted within three years of graduating. The Bureau of Labor Statistics is reporting that over 14 percent of Americans aged 20 to 24 are unemployed. That figure drops to 7.9 percent for 25-34 year-olds – but a large number of them are underemployed.

Bankruptcy is Not an Option
Most people who get into debt over their heads can seek refuge in America’s generous bankruptcy laws. Low-income individuals who can’t pay credit card debt or consumer loans, for example, can file a Chapter 7 personal bankruptcy and discharge some or all of the debt. They are allowed to keep a limited amount of assets with which to start over.

But federally-guaranteed student loan debt is not normally dischargeable through bankruptcy. The courts only discharge federally-guaranteed student loan debt in the event of extreme hardship.

How You Can Protect Yourself
Consider your employability after graduating. Some fields, such as psychology for example, tend not to pay well until you have a master’s degree. Here are a few additional tips to consider:

Lean towards STEM majors. That is, science, technology, engineering and math. These fields provide students with hard skills that are more marketable to employers.
Don’t co-sign student loans for your children if you cannot afford the risk of default – especially if they won’t be obtaining a marketable degree, or one that is not from a recognized, accredited institution.

Scholarships

A scholarship can make a big difference in the costs of your schooling. A $10,000 Cal Grant can pay $2,500 in tuition annually. That is $10,000 that does not have to come out of your pocket or borrow in a student loan and pay interest on! Also, many credit unions offer scholarships and student cash awards. Meriwest Credit Union has an annual Essay Competition that offers up to a $1,000 cash award for winning entries. We are preparing to announce the winners of our 2013 Essay Contest in February.

If you know a high school student or are one currently and wish to participate in our contest next year, put a mark on your calendar in September and watch our Meriwest Messenger Newsletter and emailed announcements for details.

Make maximum use of scholarships and the Post 9/11 GI Bill. Tip: Some veterans with the Post 9/11 GI Bill are able to transfer unused GI Bill benefits to family members. If you have a veteran in your family, explore this option.
Here is a great site for scholarships: http://www.collegescholarships.org/

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Have you made your IRA contribution yet? Yes, it is that time of year. Our Financial Service Representatives are ready to assist you in making your annual contribution.

This is also a good time to do an annual review your investment portfolio. Meriwest Credit Union can connect you with licensed Financial Consultants* who are available to help you and share a second opinion on your personal and retirement investments.

Comprehensive financial planning, long-term and short-term investment strategies and retirement planning are available to all of our members on a confidential basis. They can also help with your education planning. How much will it cost to send your child to college in ten years? Our Financial Consultants can help with those answers.

You can discover your options by meeting with one of the registered representatives in the convenience of any of our Meriwest financial centers or by calling (408) 866-1002.

* Security and advisory services offered through Cetera Advisors LLC (doing insurance business in CA as CFGA Insurance Agency), member FINRA/SIPC. Cetera is under separate ownership from any other named entity. The products offered are not insured by the NCUA, NCUSIF or any other regulatory agency, are not deposits or obligations of, nor guaranteed by the credit union or any affiliated entity, and may lose value.

What do you know about Identity Theft?

2014-01-17T04:00:00.000-08:00

With the recent news about Target and Neiman Marcus getting their customer records hacked, we thought it was the right time to focus our blog on identity theft.

Today we present some important statistics about identity theft. As you read some of these frightening numbers, I hope you will take some extra time to consider what you and your family are doing to prevent yourselves from being victims.

Recent Identity Theft Statistics

Compiled from the FBI and U.S. Bureau of Justice Statistics

· As many as 12 million Americans are victims of identity theft annually. That’s over 32,000 victims per day.

· About 15% of ID theft victims don’t find out for four years.

· 85% of incidents involved the fraudulent use of existing account information, such as credit card or bank information.

· Nearly $250 billion a year is lost by businesses who are victims of identity theft.

· 14% of victims experienced an out of pocket expense of >$1. About half of those experienced losses of more than $100.

· On average, a victim of identity theft will lose between $2,000 and $14,000; victims will subsequently spend an average of $851 to $1,400 in expenses related to their case.

· If 14% took losses of some sort, then 86% were victimized and had to have, at minimum, a new checking account and/or a debit or credit card re-issued for them. The costs of these replacements are generally born by the financial institution.

· Over 50% of victims have most of their issues solved after 24 hours. About 29% spend about a month resolving problems.

· The total average of time spent repairing the damages realized through identity theft is approximately 330 hours.

· 50% of identity theft victims experience trouble getting loans or credit cards as a result of identity theft.

· 20% of victims will experience higher credit card rates, while 16% of identity theft victims have higher insurances rates because of the theft.

· 72% of identity theft victims will have trouble resolving or terminating the negative information left on their credit reports or other information left on their personal records.

WHAT TO DO IF YOU'RE A VICTIM OF IDENTITY THEFT

Step One: Contact the fraud department of the three major credit bureaus

· Experian (TRW) 888-397-3742

· TransUnion 800-680-7289

· Equifax 800-525-6285

Step Two: Contact the account issuer in question

· Ask for the fraud/security department of the compromised or fraudulent account issuer.

· Notify them by phone and in writing.

· Close all tampered or fraudulent accounts.

· Ask about replacement cards.

Step Three: Contact your local police department

· Notify the police department in the community where the identity theft occurred.

· Obtain copies of all police reports made.

Keep a detailed log of all contacts:

· Location called.

· Name of person(s) you spoke to.

· Title and call back number with extension.

Ask and write down what the procedures are for that entity.

* * *

The Credit Myths Workshop provides you with information on the top ten myths of managing credit. Join us to bust some myths and catch up on the latest methods of managing and protecting your personal credit.

Our next FREE Credit Myths financial education workshop will take place:

January 22^nd 6:30 pm

Meriwest Credit Union Main Office Training Room

5615 Chesbro Ave

San Jose CA 95123

To RSVP, please contact Greg Meyer at gmeyer@meriwest.com or 408-365-6328

Should I pay off my Home's Mortgage?

2014-01-03T04:30:00.000-08:00

Is paying off your home necessary? There are some who say that paying off your home mortgage is the best thing you can do and others who say your regular monthly home payment pays you some important financial dividends. Who’s right? They both are. You just need to decide which course is right for you.

What are your benefits if you continue making your regular monthly payment on your home loan?

· You will continue to have a tax write off of the interest and property taxes you paid on your home. This can save you on your taxes provided the deduction is more than the U.S. IRS standard tax deduction.

· Money you might add to your payment to pay off your loan early can be dedicated to retirement investments. Enlarging your account and improving your overall retirement plan.

Recent surveys show that 50% of seniors aged 65-74 still have a mortgage or other loan on their homes. This debt can be difficult to pay off if one no longer has earned income. There is a lesson we learned during the last recession; adjustable mortgages and fixed incomes do not mix.

Important Tip: If you are approaching retirement and still have an adjustable mortgage, it is time to refinance and get a fixed rate loan as soon as you can. A one percent increase in a $300,000 mortgage can make the monthly payment go up well over $200! Can your retirement income survive an increase such as that?

Many of us think about paying our home off early. Homeowners often dream of the day they can have a mortgage pay off party where neighbors and family come for the ceremonial burning of the deed papers. What are your benefits in making larger payments during your peak earning years on your mortgage?

· You will pay less interest for your home over time.

· After the home loan is paid off, you will have more liquid money available to you on a monthly basis. These are funds that can be dedicated to IRA’s and other retirement programs.

· If you remain in the home when you retire, you will not have a monthly mortgage payment so your retirement money will go farther and your home will still have equity. This gives you greater financial security.

· You will still get to write off your property taxes provided the standard deduction is less than your total tax deductions for your income level.

· Should you need it in your future for personal care as a senior, your home equity is available for a reverse mortgage.

For seniors who have owned their homes for many years, the income deduction on their home may be minimal and, even with property taxes, inadequate as a tax deduction. It may be time to start thinking about your time horizon. When will you retire? Would you benefit most from a mortgage payoff or would maintaining your mortgage be a better plan?

If you have a specific time horizon in mind for paying off your loan, go to an amortization calculator on the web, (we have them at www.meriwest.com/calulators) enter your principle and interest rate and the term in which you wish to pay it off and the program will return a monthly payment for you. That payment will make it possible to pay off your loan within your time horizon if it is maintained throughout the remaining term of the loan.

Remember that any additional money you include with your payment will always be applied to your principle balance. You can do this on a regular monthly basis or apply a lump sum annually to reduce your principle amount. Either method will pay your loan off faster.

Please be aware of any prepayment penalties that may be included in your loan paperwork. These can make it difficult to pay a loan off early as it charges you a penalty amount for paying off your loan prior to maturity or a certain time period, such as the first five years of the loan.

For many, the only acceptable home loans are those that do not have prepayment penalties for early payment of principle. These penalties can prevent you from paying off your mortgage and prolong the pain of paying interest to the funder.

Interest expense is the largest single expense we have in our home purchase. It will be more than our downpayment. Often, if you pay your loan for the total of the thirty year term, you will pay out an interest amount more than the original amount of the first mortgage. This is dependent on the interest rate.

As homeowners, we need to decide if paying interest after retirement makes sense for us in regard to our personal tax and income situation.

* * *

Would you like to learn more about retirement planning? Cetera Advisors LLC* have formed a partnership with Meriwest Credit Union to offer a complete array of financial investment options and personalized financial planning designed for your specific personal needs. Comprehensive financial planning, long-term and short-term investment strategies and retirement planning are available to all of our members on a confidential basis.

You can discover your options by meeting with one of the registered representatives in the convenience of any of our Meriwest financial centers or by calling (408) 866-1002.

* Security and advisory services offered through Cetera Advisors LLC (doing insurance business in CA as CFGA Insurance Agency), member FINRA/SIPC. Cetera is under separate ownership from any other named entity. The products offered are not insured by the NCUA, NCUSIF or any other regulatory agency, are not deposits or obligations of, nor guaranteed by the credit union or any affiliated entity, and may lose value.

Electronic Money – The World has Changed

2013-12-16T11:10:00.000-08:00

There once was a time that “Cash was King.” It was acceptable in any transaction up to any amount. When buying a car back in the day, someone might take more than ten thousand dollars with them to pay for the transaction. Paying debts with large amounts of cash was not uncommon. In the 1940’s and 1950’s, there were only three ways to pay for something; cash, check, or a wire transfer. The popularity of charge cards had not begun.

In the 1960’s charge cards or credit cards became a normal part of our financial world. Now we had a fourth way of paying for our wants and needs; a credit card. “Buy now and pay later” was the motto of many back then. It was a popular option for those with limited cash, as credit cards allowed them to purchase expensive items and pay for them at a modest interest rate over time. Credit cards changed the way we looked at cash. Cash dollars were no longer a necessity in a transaction.

The 1970’s and the introduction of the ATM was what really set us on the path to electronic money. An ATM made it possible for someone from out of town to get cash from their account without having to write a check and show several forms of ID to get it cashed. They could go to the ATM of the nearest bank and, for a small fee, access their account and get up to several hundred dollars from their account. They did not have to go to the ATM of their bank. Banks would exchange the money electronically between them to settle the transaction.

After the ATM card, came the ubiquitous debit card. The debit card was originally created by a Frenchman, Roland Moreno, in 1974. EFT/POS (Electronic Funds Transfer/Point of Sales System) or the debit card system as it is popularly referred to, changed how we all exchange money for goods and services. Suddenly, if we had the cash in our account, we could pay for any item if the merchant accepted EFT. Cash money was no longer a required part of monetary transactions. In 2011, only 27% of transactions were of the cash type and it is expected to drop to 23% by 2017. Another number that is expected to drop is the use of paper checks for payments; only 7% of transactions in 2011 involved a paper check.

There are convenience stores and other markets that are refusing cash and moving to 100% EFT transactions. Considering that merchants must pay a small fee for each transaction, why are we going to 100% EFT?

For years, checks were the way we paid for things when we did not have the cash readily available. That system worked just fine but it had pitfalls. What were the dangers of accepting a check?

· It took several days for a check to clear. Prior to electronic check clearing in the late 80’s, it took even local checks seven days to properly clear. An out of state check would take two weeks !

· We never knew if the money to pay the check would be available on the date the check cleared.

· Once the check “Bounced” back to us, it would take a couple of days to get the check back to us. Taking time away from recovering on the bad check.

Checks could be stolen, duplicated, or altered. If a merchant took a bad check, the merchant paid for it and took a loss. With electronic transactions, particularly with PIN style transactions where the accountholder must enter their PIN code in order to complete a sale, it gives the merchant much more confidence that the person processing their transaction is not a fraud. Electronic transactions reduce the amount of fraud losses for merchants.

In a few years, paper checks will be a thing of the past!

Happy Holidays to everyone! Stay safe this season.

When is 0% for a car loan not really zero??

2013-11-27T04:00:00.000-08:00

Good Morning! Today’s blog is guest written by our Personal Auto Shopping Service Manager, Bill Fultz. Bill had over 20 years in the auto sales business before he came to work at our credit union. Here, Bill gives us an education on how a zero percent auto financing deal may not actually equal zero percent for the consumer and could cost them more than conventional financing.

* * *

This time of year, we make our members a lot of auto loans. One of the phrases we often hear is, “I can get Zero Percent financing at the dealership.” But, is Zero Percent financing really 0%? Do you save more money taking the car with the dealer’s 0% financing or would you be better off negotiating the price of the car including the rebate and taking out a loan from your local credit union?

Here is the dealer’s basic program: 0% financing for up to 60 months or you have the option of taking a rebate from $1,000 to $2,000 and find your own financing. Which one is the better deal for you? Let’s look at this 0% deal and compare it to a low interest Meriwest Credit Union 60 month loan with the manufacturer’s rebate applied.

Dealer loan:

$20,000 @ 60 months 0% interest = 60 payments of $333.33

Meriwest Credit Union loan after $2000 rebate is applied:

$20,000 minus $2,000 rebate = $18,000

$18,000 @ 1.99% * = 60 payments of $315.20 total interest paid: $925.20

$18,000 + $925.20 = $18,925.20

You save $1,074.80 ($20,000 - $18,925.20) with a Meriwest Credit Union loan

(This is an example. Your actual savings will depend on the size of the rebate on the Vehicle you purchase and the actual rate you qualify for at the Credit Union).

Besides the outright savings using your Credit Union loan, you also get that savings up front! That means that even if you decide to sell or trade in your vehicle before the 60-month loan is paid, you already have saved the money when you purchased.

If you decide the 60-month 0% is the better way to buy, also consider that in order to actually save the full amount you must keep the car the entire 60 months. If you sell or trade before that time period, you have lost the value of the rate. Statistically most 60 month loans are paid off by members in a period of 36 months, as members choose to sell or trade in their vehicles on a newer model and in some cases as a result due to an accident.

Members who take the up front cash rebates are free to do as they please with regards to trade-in etc, since they are not forced to keep the vehicle for the full term of the loan in order to realize the advantage of low or 0 % financing. So, if you are in the market for a new vehicle from a manufacturer offering large rebates or artificially low interest rates, contact a Meriwest Credit Union financial service representative to give you a comparison between a Meriwest loan and the Dealer’s. You might find out that 0% isn’t really as good as it sounds!

About P.A.S.S.: Whether you're looking for a new or used auto, using P.A.S.S. means you don't have to deal with dealership salespeople. Instead, you work directly with Bill Fultz, Meriwest's Personal Auto Shopper and your very own insider in the automotive world. He has access to thousands of new and used cars in dealer inventories all over the state. Need a new or used car? Check our link at WWW.Meriwest.com/PASS for more info.

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Our next Financial Education Workshop:

Credit Myths and Credit Repair

December 11, 2013 - 6:30pm

Meriwest Credit Union Main Office

Training Room

5615 Chesbro Ave

San Jose CA 95123

Please RSVP to Gmeyer@meriwest.com

College Students Using a Credit Card

2013-11-15T05:00:00.000-08:00

The best way to use a credit card is only for emergencies. A blown transmission is a good example. Not everyone has $2,000 to fix it when it goes. But that transmission is an integral part of your car and your car is an integral part of your economic development; i.e. it gets you to class and to work on time. So fixing that transmission quickly and being able to pay it off over time may be very important for many students.

This brings me to my second point beyond emergencies, use your card to only purchase assets; not liabilities. The transmission is an asset to your car. Liabilities? Vacations are a liability. When you pay for a vacation on a card, you are only deferring the costs. After the vacation, you only have memories. Pizzas, movies, concerts, fancy dinners, fashionable splashy clothes and such are drags on our monthly budgets if we decide to place them on our card. These things have virtually no value after we pay for them and have the experience of the movie etc. You want to go to a concert or a movie? Save your money for it. Make it a special part of your budget. Paying for it with saved money is much more satisfying.

Use the card to purchase assets. Your school books are an asset to your education. If you use your card to buy household items, use it for furniture like a couch. Then you are buying an asset for your house. Then, when you sit on that couch and write out your checks for your bills, you are sitting on your asset. J (A little banker humor.) But, think about it, if you suddenly fall on hard times, you can sell that couch and pay down your card. You can’t sell the memory of a concert or the taste of a meal from three months ago.

Also, whenever one uses their credit card, consider how you will pay it off before you charge it!

Here are some other ideas fresh from my blog:

When establishing your first credit, consider using a secured credit card; a card where you have to make a deposit in a savings account in order to establish and maintain the card. The money on deposit is your collateral for the credit. You now have an additional incentive besides maintaining our credit to be on time with your payments; your own money is at stake. Meriwest Credit Union offers this type of Secured Visa Card. Info on our Secured Visa Card is here.

Another secured type of credit option is the credit union share account loan. Most credit unions have this. You make a deposit to an account and then take a loan out against the funds in the account. As you pay it back on time, your CU lets the credit bureau know and it helps get you get established in managing credit. Secured Share Account Loan info is available here.

When you get your first credit card, do not celebrate. There are those who like to go out and get a quick pizza or a movie when their new credit card arrives. A new credit card is not a good excuse to go out to spend and celebrate.

Avoid gas cards issued by Shell, Chevron, and other oil companies. Those who are new to credit are often unaware that gas purchases on oil company cards have to be repaid monthly. Only repairs and major purchases, (tires, transmissions, etc.) can be paid over time.

Check your credit report annually at AnnualCreditReport.com to verify your current outstanding credit and prevent identity theft. Do you see a card on your report you didn’t order or apply for? If you are reviewing your report annually, you can take action fast and stop identity theft.

It seems simplistic, have a budget and plan your spending. A good budget can keep you from using your credit cards to supplement your monthly budget and help you pay off the debt you already have.

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Our next Free Financial Education Workshop will take place Dec. 11th at our Main Office.

Credit Myths and Repair
6:30pm to 7:30pm
5615 Chesbro Ave
San Jose CA 95123

Please RSVP with Greg Meyer at gmeyer@meriwest.com or 408-365-6328

Financial Tips, Ideas and Rules of Thumb

2013-11-01T05:00:00.000-07:00

All my life, people have been giving me tips. Some were much better than others! Here are some of the more useful tips I have picked up over my years in finance.

#1- Don’t bank at a bank. Bank at a credit union.

Save time, money, and hassle! Be an empowered member of a credit union rather than a powerless customer of a bank. Since credit unions are not for profit corporations, they give their earnings back to their members, not stockholders. Keep more money in your pocket with better interest rates on savings accounts and lower rates when you borrow. Enjoy more available ATM’s than any of the big banks can offer and significantly lower fees than banks charge.

Credit Unions also offer shared branches and ATM’s. When you need to make a deposit and you are not close to your regular credit union, you can go to a shared branch or ATM and make that deposit to your account from virtually anywhere in the nation. If you bank with Meriwest Credit Union you can make a deposit at a shared branch of any other CU! Would Bank of America let you make a deposit to your Wells Fargo Bank account at their BofA ATM? Or inside the Bank of America branch? No way! Only Credit Unions do that.

Don’t pay monthly for something that should be free! I am talking about your checking account. Your credit union can provide you with a checking account that is free of monthly charges. We specialize in free checking accounts.

General Rules

Save 10% of your take home income. If you are over forty and just starting to save, you might want to up that to 30%. The 10% rule has been around for years. The 30% for over 40 rule is new.

Your emergency fund should equal six months’ worth of income. After college, this is the first thing you save for after landing your first job.

If you are not willing to pay cash for it, then it makes no sense to buy it on credit. If you don’t want to pony up the cash, why would you want to pay interest on it?

When buying a car, add at least 10% on to the purchase price of a new or used car to allow for sales tax, registration, and license. In states with lower sales tax than California, consider your sales tax plus at least 1% of the vehicle’s value for registration.

20/4/10 rule of thumb for buying a car. You should pay at least 20% down, finance for no more than four years, and the payment should be less than 10% of your income. The first part of this rule prevents you from owing more than the car is worth, and the last two parts prevent you from buying more car than you can afford.

No Brainer Retirement Rules

Do not invest more than 10% of your retirement savings in your employers stock. It is a good idea to diversify, no matter how much you love your employer!

Rule of 72: To determine how long it will take an investment to double, divide 72 by the annual return/interest rate. If you’re earning a 7% return, your money will double in approximately 10 years. But if you’re getting 12%, it takes only six years to double up your original investment.

Always accept the employers match on your 401k. It pays to put in at least the minimum to get all the match dollars you can.

Unless you are retired, never touch your retirement savings. Period, end of story. Retirement savings is not for buying a home, a car, an engagement ring, or anything else but retirement!

( Want to learn more about what you can do to improve your chances for a comfortable retirement? Our partners at CU Financial Partners can provide you with the advice you need to retire worry free! An appointment can be set with them at any of our Financial Centers. )

Credit Rules

Always pay off your highest interest rate cards first. There is no benefit in you paying interest to a financial institution. Work to pay off your highest interest rate cards first. After paying them off, take the dollars you were paying on the highest rate debt and add them to the money you are paying on the next highest interest rate debt, and so on down the line until all debt is paid. This process amplifies the speed with which you pay off your debt.

Don’t cosign loans for anyone. Maybe you want to help your kids and that’s fine. You know your kids and whether or not they will be good payers on the debt. It is a judgment call. But, don’t cosign for relatives, in-laws, friends, boyfriends, girlfriends, Baby Mamas, and Baby Daddies!

Refinance your home when interest rates have dropped by 1% from your current mortgage. I have trouble with this rule as every time you refinance, there are costs involved like loan fees, points, title and documentation fees. If I had a 7% mortgage rate, would I refinance when rates dropped to 6%? And again at 5%? Consider the costs of your refi, if the cost is more than 1% of the loan amount, you might wait until rates drop farther to make it a better deal for you.

Don’t take out more in student loans than you can expect to make the first year of your new job. If you are going into social work, your annual pay may be in the vicinity of $35,000. It does not make sense to have a $50,000 student loan bill. $50K in student loans would be more inline with an engineering or computer science degree. The idea here is to give the new graduate a fighting chance at paying off their student loan debt in a reasonable amount of time.

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Meriwest Credit Union
CAR SALE!!!
November 9th and 10th at the Meriwest Credit Union Main Office
5615 Chesbro Ave, San Jose CA 95123
Come to see our wide selection of late model, gently used cars offered at bargain prices by our MCU approved dealers.

Should I close a Credit Card? Will that hurt my credit score?

2013-10-18T04:00:00.000-07:00

A question I hear often is, “Should I close out old credit cards that I don’t use anymore?” Is that a good idea? First we will talk about why closing a credit card may not ever be a good idea and then we can look at some reasons to close out a credit card.

Closing credit cards should never be taken lightly. Closing a card removes that available balance from our overall available credit. Removing these available balances by closing the cards can reduce our FICO/Credit score. 30% of your score is based upon the ratio of used vs. available credit. Reduce the ratio and reduce your FICO score.

Example: A person has $20,000 in available lines of credit and has $5,000 charged up. They are using 25% of their available credit; a 1:4 ratio of used credit to available credit. Then they close a credit card with a $5,000 available balance. This decrease in their available credit, from $20k to $15k, increases the percentage of credit they are using to 33% and takes them to a lower and less desirable 1:3 ratio in credit usage. This will lower their FICO Score.

Closing cards can be a big deal if consumer credit cards are your only form of credit. If you have other types of credit, a mortgage or car loan for example and have other credit cards, closing one card may not be a big deal. But if one has a thin or minimal credit file, it could be detrimental.Also, the history of your card usage will drop from the report after 18 months and it will no longer be a factor in your FICO score. Ouch!

Why close a card? Fees. Some cards have instituted annual fees; one must pay an annual fee just to possess the card. These annual fees can range from $25 to $100 depending on the card and its features (rewards, vacation insurance, travel services, etc.). If the fee is too much for you to afford or you just won’t pay it on principle, then it might be time to look for a new card to replace this one or close it altogether.

Interest rates can be an issue for people who carry balances. An increase in the APR of 3%, say from 15% to 18%, can cost a cardholder an extra $150 over a year on a $5,000 credit card balance. If the APR is a concern, I would recommend finding a lower rate replacement. Credit card issuers will often offer reduced rates for balance transfers. This may be an opportunity to transfer the balance to a new card with a lower rate and close the old card.

The card has been stolen or compromised by an identity thief. Good reason to close it. Often your card issuer will offer to replace the card with an entirely new account, transferring your balance to the new account.

Sometimes people get tired of making payments and are simply through with debt. They will cancel their cards to prevent further accumulation of debt. If you are ending your relationship with debt, that may be a good reason to close a card or two. That being said, keep one general purpose card such as a Visa or Master Card open for emergencies. Go to McDonalds once every six months and buy yourself a Happy Meal for lunch. Pay that bill at the end of the month and your card will remain active. Do this every six months to keep that card active. You never know when you will need it!

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Our next Financial Education workshop will be taking place at our Sunnyvale Financial Center at 563 E. El Camino Real in Sunnyvale, next to Togo's Sandwiches. To attend, please RSVP with Greg Meyer at gmeyer@meriwest.com or 408-365-6328.

Credit Myths and Repair - Learn how to access your credit report from all three credit bureaus and your credit score for free. How do inquiries effect your score? What happens to your credit after you pay a collection? Have a late payment? Get a divorce?

6:30PM - 7:30PM on Oct. 23rd

Sunnyvale Financial Center

Meriwest Credit Union

CAR SALE!!!

November 9th and 10th at the Meriwest Credit Union Main Office

5615 Chesbro Ave, San Jose CA 95123

Come to see our wide selection of late model, gently used cars offered at bargain prices by our MCU approved dealers.

Let's Compare FHA vs. Conventional Mortgages Today

2013-10-04T05:00:00.000-07:00

Today’s blog is a guest blog from Dan Hapner, the Director of Mortgage Sales at Meriwest Mortgage.

With home sales continuing to grow and the expectation that interest rates may be on the rise, let’s pause to consider the best loan products we might use for our next home purchase. FHA is a popular option for some families and I think it is important we understand the distinct differences between this form of government sponsored loan and a regular conforming conventional loan that is underwritten according to guidelines provided by Fannie Mae (Federal National Mortgage Association) or Freddie Mac (Federal Home Loan Mortgage Corp).

FHA Loans

The FHA, Federal Housing Administration, has been helping Americans own homes for 70 years. The FHA guarantees or insures home loans made by their qualified member lending institutions. This allows homebuyers to access a home without having to come up with a large downpayment. Typically, conventional mortgages require a 20% downpayment. FHA guaranteed mortgages can be made with as little as 3.5% downpayment! That downpayment can be 100% gifted to the borrower. There is no “seasoning” requirement of having the funds on hand 90 days prior to the purchase.

FHA guaranteed loans can be adjustable or fixed. They also have two graduated payment programs that can help families get into their first home at a reduced monthly payment that will grow as their income grows. Most of the FHA guaranteed loans are made at a fixed interest rate and is typically lower than a conventional loan.

How does it rate as a first time homebuyer loan? Not bad, but the news is not all good either.

The Good: FHA requires a FICO score of 580 for the 3.5% low downpayment program.

Many participating FHA lenders require a FICO score of at least 620 in order to qualify for an FHA home loan. Just because the FHA minimum is 580 does not mean a particular bank is willing to issue credit to those with that score--the FHA loan program is a voluntary one, lenders are not required to participate, and the FHA cannot force the bank to lower its FICO requirements. These FICO scores are significant as most conventional loans require a FICO score of 680 or better. Another advantage for FHA is the maximum loan limit is $625k vs. $417k for a conventional loan. FHA maximum’s are increased in areas with high priced housing such as the San Francisco Bay Area to $729,750. FHA loans often allow for a higher debt to income ratio, making more borrowers eligible.

The Bad: For most FHA loans, the sellers will pay the closing costs. This can be an impediment to selling to a particular buyer if they intend to use an FHA loan. Closing costs can be very expensive for the seller and make an FHA loan difficult to use for the buyer. This is particularly true in the case of a short sale home if the sellers don’t have a lot of cash on hand or equity. The sellers need to be flush with cash or equity in the case of a buyer with an FHA loan.

First time homebuyers need to be aware of the costs involved in using an FHA loan to finance your home purchase. As the loan is not a conventional loan, it is going to require mortgage insurance. FHA mortgage insurance will cost the buyer 1.5% of the total loan amount upon closing and then 0.5% of the loan each year to pay for the mortgage insurance. On a $400,000 loan that would mean a mortgage insurance cost of $8,000 in the first year; the upfront insurance payment of $6,000 at closing and then $2,000 the first year in annual premiums. The mortgage insurance stays in effect for the life of the loan. The only way to eliminate the insurance is through paying off the loan or through refinancing.

Another issue involved in FHA lending is the approval of the property. The property must meet FHA standards. If the collateral is not up to FHA standards, the seller must pay for repairs. This can be an impediment for sellers with homes that need a little work. If a house is being sold “as is,” it may not be a good target for an FHA type loan.

Time is also a factor. FHA loans typically take longer to process than a similar conventional loan.

Conventional Loans

Most of the mortgages made in the United States are conventional mortgages. These are used for purchase and for refinancing an existing loan. They can be an adjustable loan or a fixed rate type of loan. As most lending institutions offer conventional home financing and set their own interest rates, borrowers can have a wide range of lenders and interest rates from which to choose. FHA loans are limited to approved lenders.

Generally, conventional mortgages require a 20% downpayment for home purchase transactions. A purchase with less than 20% down would require private mortgage insurance (PMI) be paid for by the applicant. PMI generally costs 1% of the total loan amount annually. The insurance payment is usually included with the loan payment. A $400,000 mortgage that requires PMI would have a charge of $4,000. That would add $333 to each monthly payment.

Conventional loans also require an applicant have a 680 or better FICO score. This is higher than an FHA loan, but less than is required for most consumer loans which is 740.

There are fees involved with conventional loans, such as processing fees, application fees, and appraisal fees. But if one is willing to pay a slightly higher interest rate on their loan, they can avoid fees altogether. By paying an additional point or one percent of their loan amount upon closing, they can pay down their loan interest rate and possibly save themselves thousands of dollars over the life of the 30 year loan. Conventional loans have a lot of options when it comes to interest rates and fees.

There are local government and non-profit programs that can provide some downpayment assistance and thus decrease the downpayment needs. As an example, Meriwest Mortgage works with the Housing Endowment and Regional Trust in San Mateo County, HEART of San Mateo. They offer homebuyers up to $78,225 in downpayment assistance and that can offset up 15% of the purchase price with just 5% down. These downpayment assistance programs can be used to eliminate the need to pay for mortgage insurance and can be very helpful in making a home purchase more affordable for first time homebuyers.

As conventional loans are offered all across the country in every municipality, there is a great many lenders from which to choose. Competition is your friend and keeps fees down and processing times speedy. Most of the HEART Program loans are processed in less than thirty days and are often completed and closed in only 20 days!

As we saw with the need to provide PMI in cases of small downpayments, there are some warts on conventional loans. As these loans are sold on the secondary market to Fannie Mae and Freddie Mac once processed and booked as a mortgage backed security, borrowers have fewer options in regard to default. What this means to a borrower is the issuing lender does not own the loan and thus has no control over the default process and cannot make arrangements with the borrower to reduce interest rates, payment forbearance, etc. Currently, these borrowers are being encouraged to take part in the HARP and HAMP Government Programs to help families in foreclosure.

In conclusion

Let’s keep in mind that the United States Government does not make home loans. They guarantee or insure home loans. What this means is the lender is insured against loss by default of the borrower. It does not insure the borrower or guarantee the borrower against default in any way.

Do you have more questions about a future home purchase or a refinance of your existing loan? Please contact Dan at dhapner@meriwest.com.

Meriwest Mortgage and Meriwest Credit Union are Equal Housing Lenders.

Meriwest Credit Union deposits are insured up $250,000 by the NCUA

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Our next set of workshops will be taking place at our Sunnyvale Financial Center at 563 E. El Camino Real in Sunnyvale, next to Togo's Sandwiches. To attend, please RSVP with Greg Meyer at gmeyer@meriwest.com or 408-365-6328.

Auto Finance 101 - Learn the in's and out's of purchasing a car. Research your car and your financing. Learn how to make the deal and avoid dealer tricks. Negotiate your purchase price, interest rate, and terms.

6:30PM - 7:30PM on Oct. 16th

Sunnyvale Financial Center

6:30PM - 7:30PM on Oct. 23rd

Sunnyvale Financial Center

Meriwest Credit Union

CAR SALE!!!

November 9th and 10th at the Meriwest Credit Union Main Office

5615 Chesbro Ave, San Jose CA 95123

Come to see our wide selection of late model, gently used cars offered at bargain prices by our MCU approved dealers.

Going from Bad to Worse – Collections are a Curse!

2013-09-20T04:30:00.000-07:00

What do you know about collections? I get a lot of questions like: How long can they stay on my credit report? What effect do they have on my credit score? What’s the best way for me to pay them off and get them out of my life?

Do you wonder about these things? A lot of folks do. Every day I get questions from our members about collections and how they affect their credit. Let’s see if I can give you some answers!

A collection takes place after we have been delinquent on a payment. That payment can be on a utility, a loan or a payment for other services where you may be billed later like a carpet cleaning. Technically, you can be late up to 89 days on your utilities like your water bill, heating bill, or even your phone or cellphone bill, even that invoice from the carpet cleaner. So long as you pay it by the 89^th day, no one at the credit bureau needs to know about it. Sure, the water company might charge a late fee or the cellphone provider might temporarily cancel your internet service, but it will not appear on your credit report and cost you a reduction in your credit or “FICO” score.

But, if you allow that bill to go unpaid that additional day so that is it 90 days late, your credit score will suffer. As a general rule, most businesses turn unpaid debt that is 90 days old to their internal collection departments or they may sell unpaid debt to a collection agency for further collection. What that means to you is a severe beating of your credit score. If you had an excellent score, it is now just okay. If you had a good score, your score has dropped significantly. An unpaid collection on your credit has the same power on your score the first day as it does seven years later when it expires and drops off your report! Unpaid collections drag your score down and prevent you from accessing future credit on good terms and rates.

My debt went 90 days delinquent and now a guy named Ralph is calling me from the collection agency. What can I do to stop this? You have a right to privacy and can write them a letter requesting they stop calling you. That’s the law and it works! Write the letter telling them to stop calling you and send it certified mail to the collection agency. Then, they can only call you to tell you they will stop calling or if they decide to take further legal action. Otherwise, all phone contact stops. Remember to keep a copy of your letter!

However, the best recommendation is to pay it and get it out of your life. This sort of debt is not your friend. Once you pay a collection, it changes from an upaid, also known as an open collection, to a paid or closed collection. Immediately upon paying it, your credit score will bump up a bit. As time goes by and the debt is 24 months, 36 months, and further into your past, you will see your score improve. With the collection’s status changing from an open/unpaid collection to a closed/paid collection on your credit report; it will still be a negative item, but much, much less than a collection that is unpaid. It will remain on your report for the balance of the seven years after you have paid it; i.e. if you pay it after two years, it will show as a paid collection for the five remaining years.

With older collections some agencies may be inclined to provide you a fairly steep discount to pay them. Collection agencies buy your debt at a discount. You just have to ask for a lower pay off amount and start negotiating with the representative. If you decide on an amount, get it in writing and attach your check to it when you pay it. Then you have a contract with the agency. Do not send any money until you get your agreement in writing.

Also, good debt offsets bad debt. This means that if you have other credit obligations besides that one debt that went bad, each time you make a payment on them you will improve your credit position. On time payments and keeping your debt balances low and under control are the keys to improving your credit score.

Questions? Ask the Your Credit Union Guy, Greg Meyer at gmeyer@meriwest.com

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Our next Credit Myths Financial Workshop will take place this Wednesday Sept. 25th at our Main Office at 6:30pm. If you wish to join us, please contact me at gmeyer@meriwest.com or 408-365-6328 to reserve a spot. Don't be shy. We have space!

Our October Workshops will be held at our Sunnyvale Financial Center on El Camino @ Fair Oaks in Sunnyvale.

Auto Financing 101

October 16th - 6:30pm to 7:30pm

Learn how to plan for, research, and negotiate your deal and financing for your next car. Be a step ahead of the car dealer. Take this class!

Credit Myths

October 23rd - 6:30pm to 7:30pm

What are the top ten myths of credit? We will tell you and reveal the truth behind these myths.

Both will be held at our office at 563 E. El Camino Real, Sunnyvale CA

Please RSVP with me at gmeyer@meriwest.com or 408-365-6328 to reserve your spot.

Money Scams – Everyone wants your Money!

2013-09-06T09:17:00.000-07:00

There are a lot of scams out there. People use them to separate you from your goods and money. One of the latest in the San Francisco Bay Area is the “Snake Scam.” This is where a nice looking lady in an Animal Control uniform appears at your door and tells you that there is a snake infestation in the neighborhood. She needs to show all the members of the household where she will set the traps. Once the lady has you in your backyard, her associate is pillaging your home for cash and jewels. They can also present themselves as a gas & electric worker or a cable TV installer. Ask for ID from anyone attempting to enter your home to perform services. If you are suspicious, call the company and check on them before allowing them in. If they are scamming you, they will run away.

Another popular scam used on older people is the “Lottery Ticket Scam.” Two people approach the “Mark” and one will say he has the winning lottery ticket. He will have a ticket with the winning numbers purchased on the date of the lotto drawing. However, the time is after the drawing, but the victim does not usually see that. The scam is that the person with the ticket is an undocumented alien and cannot cash the ticket and needs a citizen to cash it for him. The victim is asked to put up thousands in “good faith” money in cash. Yes, eventually the bad guys disappear with the good faith money and the Mark, our victim, is left holding a worthless lottery ticket.

Let’s not be victims. Let’s do some things that will protect us. Sometimes, little things make a big impact.

1. On all debit and credit cards, take a permanent marking pen and write, “Ask for ID” in the signature portion on the back of all your cards. Don’t sign it. You are only giving the bad guys an example of your signature to copy and forge. The idea is when a thief is buying a big ticket item he gets stopped when asked to present ID. Per Visa, a merchant may ask you to sign the card, but cannot refuse your transaction if you produce valid government identification such as a Driver’s License or State ID Card.

2. Utilize a good firewall and antivirus program to protect your computer and any data from hackers and spammers. A good firewall makes your computer anonymous to the internet, meaning your computer and your transactions cannot be seen by hackers. Good internet security software might cost as much as $60. Never download or click on links from someone you do not know. What is your peace of mind worth today?

3. Consider electronic banking and bill pay to avoid ID Theft. -Paying your bills with a check provides a thief with your name, address, bank routing number and your account number, as well as an example of your signature. Online Bill Payments are electronic and leave nothing like that to be used against you. Plus they save on the cost of checks and postage.

Utilize e-statements instead of a paper statement mailed to your mailbox. It’s easy for thieves to access your mailbox during the middle of the day. E-statements provide access to your account transactions and details quicker and are more secure. Not to mention they save on paper and postage, so you’re helping the environment. And if you need a copy, you can download and save your statements or print them from your home computer.

Consider “Alerts” with online banking. Setting up alerts can provide you with information on what’s happening to your accounts at any time, including transfers, withdrawals and deposits.

4. If you don’t want to use online banking, don't mail your bills by sticking them in your mailbox to be picked up by the postman. Thieves patrol streets on the 3rd thru the 5th of the month and after the 15th to fish for money in bill payment envelopes. Mail your bills in a U.S. Postal mail box or at the post office only!

5. Shred old banking documents you no longer need. It keeps your personal data away from thieves. If you don’t have a shredder, I would bet your local credit union branch will help you by taking a small stack of documents and adding them to their secure shredding. Also, many office supply stores offer secure shredding at low prices.

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Free Financial and Business Workshops presented at Meriwest Credit Union

Writing an Effective Business Plan and Access to Business Capital

Write a business plan that gets noticed!
Gain an understanding how lenders view business loan applications

Sept. 12^th – 6 PM

Meriwest Credit Union Main Office

5615 Chesbro Ave

San Jose CA 951123

Please RSVP with Dan Golding at dgoldin@meriwest.com or 408-632-4180

Real World Budgets for Young Adults

For Teens and College Students: Learn about money while building your post college budget!
Start managing your money today!

Sept. 18^th – 6:30 PM

Meriwest Credit Union Main Office

5615 Chesbro Ave

San Jose CA 951123

Please RSVP with Greg Meyer at gmeyer@meriwest.com or 408-365-6328

Credit Myth and Repair

Learn the Top Ten Myths of credit that are not necessarily true!
Learn how to correct errors on your credit report.

Sept. 25^th – 6:30 PM

Meriwest Credit Union Main Office

5615 Chesbro Ave

San Jose CA 951123

Please RSVP with Greg Meyer at gmeyer@meriwest.com or 408-365-6328

5 Behaviors of Highly Effective Savers

2013-08-23T04:00:00.000-07:00

Today's blog is a guest blog from the team at Debt.Org. Special thanks to the writer, Alanna Ritchie.

Managing personal finances successfully requires more than understanding numbers and having good accounting skills. In order for debt management solutions to be effective in helping you get out of debt and stay that way, they must be supported by changes in behavior.

Adopting five behaviors of highly effective savers can help to ensure that once you gain control over your debt and finances, you'll be able to keep that control in the long-term. Try incorporating these behaviors into the way you operate your personal finances, as well as your life in general, and you'll be sure to see positive results:

Set Incremental Goals

Setting a huge, generalized goal may end up overwhelming you, rather than moving you forward. Take that big goal – to get out of debt, perhaps – and break it into smaller, very specific steps with a workable, realistic time schedule. For example, when preparing for an upcoming big expense, set a weekly goal for saving for it.

Be a Good Record Keeper

Keeping track of what comes in and what goes out assists you in understanding the effects of your financial choices. When you are working to regain control of your finances, being a good record keeper will show you the positive results of your efforts, supplying even more motivation to keep up the good work.

3. Own Your Situation and Your Choices

If creditors are pressing you or your credit card interest rates have skyrocketed, the bottom line is that such things are a natural consequence of your past behavior. Accept it, own it and deal with it, rather than being angry at the people calling or your credit card company. It will reduce the stress in your life and help you to be more focused on what has to be done. Maybe think of joining a credit union. They normally have fewer fees, lower interest rates on loans, more services and higher dividends on deposits than banks.

4. Prioritize Properly

Place long-term well-being over instant gratification. Expand your vision beyond what you want in the moment to what you hope for and really need in the future by putting money in savings before you spend any for pleasure. Apply this concept to credit card use. Make financial choices—like putting money in savings or making a credit card purchase only if you know you will be able to handle payments—with the future in

mind.

5. Evaluate and Adjust as Needed

Effective savers are good at evaluating their own behaviors and situations and making the necessary improvements. They strive to be honest about their weaknesses and work hard to improve them. That is because they keep their goals and the big picture clearly in mind.

When you make these behaviors a part of how you manage your life and your finances, you'll be able to make the most out of the opportunity that debt settlement or other debt-related solutions offer you. All the work you do to eliminate debt will be wasted if you don't supplement the effort by developing behaviors that will keep you from returning to that position again.

Alanna Ritchie is a content writer for Debt.org, where she writes about personal finance and little smart ways to spend (and save) money. Alanna has an English degree from Rollins College.

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Our next Free Financial Education Workshop is this Wednesday. Credit Myths and Repair will explain the top ten myths of managing credit. We will address balances, payments, collections, and judgments. The workshop is fun and informative. You will learn more about credit than you had ever imagined!

Credit Myths and Repair

6:30 PM - Wednesday, August 28th.

5615 Chesbro Ave, San Jose CA 95123

To RSVP, please contact gmeyer@meriwest.com or call 408-365-6328

Incoming Freshman: Easy Stuff for Managing your Money

2013-08-09T04:00:00.000-07:00

Cool, you have graduated high school and have moved on to an institution of higher learning aka a university or community college. Maybe you’re self funded, parent-funded, or using a variety of grants and/or student loans to make your ends meet. Over the next four years, you will likely be handling more money than at any other time in your life so far.

As you start your classes, you will find there are a lot of demands on your wallet. Books and tuition are a large part of this demand. But it is managing your living expenses and personal entertainment that calls for the most attention. Take some advice and don’t throw money out a window!

Open a checking account at a credit union.

Why a CU? No monthly service charges. Reduced fees. More Free ATM’s.
Use your online banking to track your checking usage. Don’t be afraid to check your balance daily on your phone, laptop, or tablet, it’s free!
Open up a savings, too. Set up a small amount to automatically transfer to the savings monthly. You may not miss the money but it will be there when you need it. $20 a month can be a lifesaver down the line.

Organize: Create some files for your important documents and statements. The basics will include:

College File: This file has your documentation for your financial aid; loans or grants. It should hold the receipts for your tuition payments.
Banking File: This file has all your bank statements (if you are not using your online banking). If you have a credit card you are managing, the statements would go here as well.
Bills: This file is where your monthly/quarterly records of bills shall be filed away; i.e. rent, cable bills, cell phone, heat/electricity.
Find a locking cabinet at a yard sale or second hand store to save your documentation. A simple lock is often all it takes to keep honest people honest and discourage would be identity thieves.

Budget: You have a limited amount of money each semester from your student aid grant or loan receipts.

· Use any money left over after paying your tuition and book expenses to help pay for your living expenses. That money left over after paying your school expenses is not a bonus to be spent at parties and spring break. It is what you have to feed and cloth yourself.

· Take the amount and break it out in even amounts for the next few months until your next aid payment is expected.

· Plan for your expected expenses by creating a budget for each month. You don’t have to wait until October to create the budget for October.

· Saving money should be the second item in your budget after paying your rent. See #1.

Avoid owning a car. This may sound crazy in “Car Culture” California, but in the big picture, owning a car is a major expense.

Paying for gas, insurance, maintenance, and repairs can put a major crimp in your happy fun time at college.
Colleges like San Jose State are close to all manner of stores and restaurants. There are lots of great shopping and eating options within easy walking or bike riding distances.
Besides, municipal transportation passes/bus passes are so much cheaper than gas, tires, and car insurance!

Don’t get talked into applying for a credit card. You don’t need it.

Of course, if Mom or Dad set you up with a card that you will manage together, that is a different matter. That card is in your possession for emergencies more than likely. Emergencies involve medical issues, police issues, fire, or floods. Running out of beer or pizza does not constitute an emergency. There is no such thing as an emergency night at the movies or an emergency concert.
Manage the card well and, if your name is on the account, you will build a strong credit record while you are enrolled in college.
Mismanaged cards don’t just get you into expensive credit card debt at high interest rates, it can affect you emotionally through depression and that can affect your studies.

Some of these suggestions may make your life easier. Some of them may save you money. The final word is that only you can make decisions and manage your finances. No one will do it for you. Do it right and you will thrive. I don’t like to think about the alternative!

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Our next free financial literacy workshops are coming August 21st and 28th.

The 21st we will have our Real World Budgeting Class for Teenagers. The class is held here at our main office in our Training Center at 6:30pm. Click her to RSVP!

The 28th we will be offering The Myths of Credit and Credit Repair. This class will also be held here at our main office in our Training Center at 6:30pm. Click here to RSVP!

5 Things New College Grads Should Know About Money and Credit

2013-07-26T04:00:00.000-07:00

Let’s start with five things every new college graduate should know about money and credit. We will end with a few words of advice for new grads facing an uncertain economic future.

Everyday, more and more employers are now looking at credit reports as a condition of employment. If you are responsible with your personal credit, you will likely be a responsible employee. Manage your credit well and enjoy the low rates and easy availability of money good credit management brings. You will want this when you buy a car or a new home.

Review your credit report annually! Reviewing your report annually for free at AnnualCreditReport.com can keep you abreast of your personal credit situation and help you spot Identity Theft.

Paying Bills: Very simple, your utilities need to be paid on time just like your credit card bills. Sure, you can let your light or water bill float for a couple of months and paying them 30 or 60 days late won’t count against you. As a matter of fact, you have 89 days to make your payment and have your account reinstated. However, if you wait to that 90^th day, you are now delinquent. Your water, light, or phone bill amount will now be placed in collection and exist as a negative item on your credit report for seven years whether you pay it or not. (Paid collections remain on our credit reports for the balance of the seven years after payment as a reminder to others that you were irresponsible once or twice or repeatedly depending on how many collections one has.)

Social Security: Social Security will exist in a very different format for these Gen Y students. They need to be self dependent and plan for their retirement early. No one will do it for them. In my workshops, I often ask who wants to retire with a million dollars in their retirement account. Of course, multiple hands go up. The point: When your employer offers you a 401k, pension, or any other type of “qualified” retirement plan, simply say “YES!” Start contributing to the retirement account. Put in at least 6%. You won’t miss it, you will save a few dollars on your taxes, and you will be pleasantly surprised when you get your retirement account statements and see it growing. This is especially gratifying if your employer matches your contribution or provides pension plan contributions from profit sharing.

Social Media: Restrict your personal information that is shared over the internet. Too many young adults share too much as it is and do not take proper advantage of privacy controls in websites like Facebook. If you don’t want your next potential employer to see your spring break photos of drunken debauchery in Palm Springs or Palm Beach, tighten up your privacy controls, Dude!

I think following these five ideas can save you from living in your Mom’s basement forever.

In my work with recent college students and grads, one of their greatest fears is that they will never own a house. Recent grads are facing a difficult time in some areas with the homes they may want to buy being priced out of site for them due to the current demand. Don’t worry. The average age of a first time homebuyer is 30 years old. Most people I know did not buy a home until they were well into their 30’s. There is no rush to buy a home despite the increases in overall prices. You have time to save your money. You have time to evaluate where you want to live and whether a house or condo would be best for you. You have time to gauge the economy and pick your best time to buy.

I have noticed it and it has been expressed to me by some students, the financial markets are too volatile. Why would they want to put their money into the stock market? They fear the return of the great recession. When I was 21 in 1981 there was a recession on and it was pretty serious. Interest prime rates had risen over 20%. No one could get a decent interest rate to buy a home. Unemployment was 8% and rose to 10% over the next two years. In the early 80’s, we had many of the same fears today’s grads suffer.

What happened? Eventually, markets went into recovery. Unemployment was under 6% by 1988. The stock market doubled, tripled, and eventually grew to 14 times its size by the present day. This didn’t happen in a nice even fashion. It took a market crash in 1988 (22% drop in the Dow in just one day!) and three recessions in 1992, 2000, and 2008 to get here. Financial markets are cyclic and, historically, have always recovered and surpassed previous high water marks.

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Don't forget to "Like" us on Facebook: http://www.facebook.com/MeriwestCreditUnion

10 Financial Infographics and a Blogger

2013-07-12T04:00:00.000-07:00

Today, we are full of links!

Info graphics have become a big rage on the internet. They can be very useful in explaining fairly complex issues in a series of “Powerpoint” like graphics and text that can be found on one page. Wikipedia says they can improve our cognition by utilizing graphics to enhance the human visual system’s ability to see patterns and trends; a data visualization so to speak. I like them because the read fast and always leave an impression.

Here are ten infographics I found that have some very important information in them that everyone could use. I will comment a little on each…

http://visual.ly/love-and-finance-0

Love and Finances. How much does love cost? It might be more than you think.

http://financeinfographics.wordpress.com/2012/03/19/how-much-americans-save-infographic/

How much do Americans Save? There are a lot of demands on our wallet! As savers, how are we ranked against other countries’ savers?

http://www.nextadvisor.com/blog/2013/03/14/are-you-protecting-your-identity-online/

Protect your Identity Online. These are simple tips anyone can use to protect them from scammers. You are only safe if you take action. No one will do it for you!

http://financeinfographics.files.wordpress.com/2012/02/capitalgains.png

What are capital gains? If you are unsure or don’t know at all, this graphic is a terrific explanation. It is better to know now than learn too late. That could be a costly tax mistake!

http://media-cache-ak0.pinimg.com/originals/c9/b0/c0/c9b0c044a9a13f3ce4af2b93a5e45277.jpg

How finances impact emotional well being. Do you get depressed at the end of the month when your account runs low? Do you ever get the “Day before Pay Day Blues?”

http://www.rothira.com/tower-of-beer

How much can you save with a Roth IRA? This is surprising! Had I started in my 20’s I would have a huge tower of beer or a huge retirement account if I invested in dollars rather than beer. This is a fun and informative graphic.

http://www.moneycrashers.com/how-much-save-retirement-ready/

It is important for us to plan for a long retirement. If you and your spouse were 62 today, there is a 47% chance that one of you will live to age 90. Have you planned your retirement accordingly?

http://visual.ly/do-financial-challenges-cause-divorce

Do financial challenges cause divorce? Earlier, we saw the costs of love in our Love and Finance graphic. But can money also cause a divorce?

http://www.igrad.com/articles/what-is-a-credit-union-infographic

What is a credit union? This info graphic lays it out nicely for us.

http://dailyinfographic.com/wp-content/uploads/2012/04/Banks-vs-Credit-Unions-Infographic-1000px.png

Credit Unions vs. Big Banks. The battle between the heavyweight champ (big banks) and the flyweight contender (credit unions) goes on. Where would you rather keep your banking?

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Len Penzo is an electrical engineer with a good head for personal family finance. He is a recommended blogger by Kiplinger Reports who named him one of “Kiplinger’s Personal Finance Best Money Blogs.” I like to read Len’s blog weekly.

What I like best about Len’s blog: “Well, my blog is all about being personally responsible – not only for our personal finances, but also for everything else we do in life. As you will learn from my blog, the great thing about financial freedom is that anyone can attain it — regardless of income level!”

http://lenpenzo.com/ Len Penzo - Finance Blogger

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Don’t forget that this weekend is the Summer’s Hottest Car Sale!!!

The parking lot at our main office will be filled with recent model pre-owned cars this weekend. We have some outstanding financing deals for those who qualify.

Summer’s Hottest Car Sale!

July 13 - Saturday from 9am – 6pm

July 14 - Sunday from 10am to 5pm

Meriwest Credit Union Main Office

5615 Chesbro Ave

San Jose CA 95123

Don't forget to "LIKE" us on Facebook: http://www.facebook.com/MeriwestCreditUnion

Credit Union Guy Blog

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Unmarried? Buying a Home Together? Read This!!!

Understanding Biz Credit Cards

You have your high school diploma. Now what’s next?

Credit Myths & Credit RepairWednesday, May 28, 2014 - 6:30-7:30 p.m.Chesbro Financial Center, San Jose, CA

Ten Giant Wastes of your Money

Turbo Charge Your Retirement

Zombie Debt

Debit Cards vs. the Fraud at Target Stores

Our Next Free Teen Financial Education Class:Real World Budgeting for Teens and College StudentsSaturday, March 22, 2014 - 10:00 -11:00 a.m.Chesbro Financial Center, San Jose, CA

Minors with Credit Cards-Good idea?

Love, Money, and Joint Tenants

Student Loans: Think Before You Borrow

What do you know about Identity Theft?

Should I pay off my Home's Mortgage?

Electronic Money – The World has Changed

When is 0% for a car loan not really zero??

College Students Using a Credit Card

Financial Tips, Ideas and Rules of Thumb

Should I close a Credit Card? Will that hurt my credit score?

Let's Compare FHA vs. Conventional Mortgages Today

Going from Bad to Worse – Collections are a Curse!

Money Scams – Everyone wants your Money!

5 Behaviors of Highly Effective Savers

Incoming Freshman: Easy Stuff for Managing your Money

5 Things New College Grads Should Know About Money and Credit

10 Financial Infographics and a Blogger

Credit Myths & Credit Repair
Wednesday, May 28, 2014 - 6:30-7:30 p.m.
Chesbro Financial Center, San Jose, CA

Our Next Free Teen Financial Education Class:
Real World Budgeting for Teens and College Students
Saturday, March 22, 2014 - 10:00 -11:00 a.m.
Chesbro Financial Center, San Jose, CA