EPEFCU

Boost Your Credit Score!

These days it’s nearly impossible to do anything without having your credit score checked. So many things rely on that little three digit number, including your insurance premium, whether or not you get a job, where you are going to live and what you will be driving.

A good credit score opens the door to an immeasurable amount of possibilities. A good credit score means being approved for larger finances such as a home or vehicle. Overall, a good credit score is an indicator of how dependable you are. If you do a good job of meeting your financial obligations each month, a prospective employer may view this as a measure of how well you deal with responsibility.

According to the Minority Business Development Agency, a FICO score is a generic term for a credit bureau score and specifically refers to the score derived from the FICO statistical model. A credit bureau score measures the relative degree of risk a borrower represents to the lender or investor.

 FICO is short for Fair Isaac and Co. During the 1980's, the Fair Isaac and Company developed custom software that helped to determine a credit risk based on a number derived from a person's credit history, according to credit.com. This number soon became the standard that was adopted by the three main credit bureaus: Experian, TransUnion, and Equifax. The FICO score ranges from 300 to 850.

Many people do not know what their credit score is or what might cause their credit score to drop. There are several factors that may trigger a drop in your score, learning what can cause your score to drop is the first step in sustaining a healthy credit score.

Maxing out your credit card. This one may come as a surprise to many and while you might make your monthly bill on time every month, being close or at your credit limit can significantly hurt your score. Why? A maxed out credit card may be seen as an indication of financial stress.

 Lenders may worry that you are on the brink of default and will hesitate in lending you more money. According to the Federal Trade Commission, more than a third of your FICO score depends on how much of your available credit you’re using. It is suggested that you keep a gap of at least 15% between your balance and your credit limit. It’s better to have small balances on several cards than a big balance on one card. On the same note, closing revolving accounts may also reflect badly on your credit score, according to an article posted on MSN money. Remember, the more available credit you have, the higher your credit score will be.    

Source: FICO

Making a late payment. Often times the most frequent mistake made by consumers is not paying their monthly bills on time. Generally, your monthly bills must be at least 30 days past due for the incident to be reported to the credit bureau.

Don’t let your credit cards sit in your wallet for too long. Not using your credit cards at all can actually hurt your credit score. Pull out your credit cards and let them see the fluorescent light of your favorite department store every once in a while but remember to pay the balance off in full the following month.

Now that you know what not to do to hurt your credit score, you can begin working on ways to improve it. First, check your credit reports as often as possible. The Fair Credit Reporting Act requires each of the nationwide consumer reporting companies to provide you with a free copy of your credit report at your request once a year. To request your free credit report visit http://www.annualcreditreport.com. Dispute any incorrect information immediately.

Secondly, while it’s important to pay off your debt, make sure that you don’t reduce your buying habits to a cash only way of life. You need to use some type of credit for credit reports to continue to generate scores for you. 

Also, make certain to make all of your monthly payments on time and if possible, try to make more than just the minimum payment. If you’re having trouble making all of your monthly payments it may be time to create a budget and re-prioritize your finances. If you’re prone to forgetting about your monthly bills, set up automatic payment, a free service usually offered through your financial institution. This way, the payments are automatically pulled from your account each month which means no more late payments for you.

Remember, bringing up your credit score is a continuous responsibility. Once you reach your target score, it is important to constantly watch your score to make certain that nothing negative is affecting it.  

What have you done to improve your credit score and how do you maintain it? Please share with us! We’d be honored to read your comments.  

Summer Writing Contest

With the summer season in full swing, it’s tough to think about going back to school. Before you know it though the long summer days will be over and the time for homework, school supplies and football games will be upon us once again.

As we all know, a college degree can be a pricey endeavor. According to the College Board, published prices for tuition and fees increased an average of 6.5% to $7020 last year. According to an article written in The Prospector, The University of Texas System’s Board of Regents approved an approximately 3.95 percent increase to tuition rates for the next two semesters at nine University of Texas institutions, including UTEP. The increase adds to the approximately 70 percent increase that UTEP has seen since 2004.

We here at El Paso Employees FCU want to give you a head start and help you prepare for the back to school season by offering two students $1000 each towards their college education.

Beginning August 1st, EPEFCU will kick off its summer writing contest, open to all college students and high school seniors. One student will be chosen from each category to win $1000 to use towards their education, all you have to do is share your experience with us! (You must be a high school senior or college student to qualify.)

Students, please choose one topic to write about:

1. Are you saving for something special? What is it and what are your strategies for accomplishing your goal?
2. Tell us about your summer job and how it has influenced your future plans. How has this affected the way that you spend and/or save money?
3. Have you recently experienced a semester living on your own? What was it like having to be responsible for all of your own finances? Describe your experience.

Once written:

1. Email your submission along with your Name, Address, Telephone Number, Contest Group (high school senior or college) to marketing@epefcu.org.
2. Become a fan or follower and leave a comment about your recent submission to any one of our social media sites.

       
 
 Contest Rules:

• High School Senior entries must be at least 500 words. College student entries must be at least 1,000 words.
• Content must be original and cannot be published elsewhere.
• By submitting an article for this contest the writer is granting El Paso Employees Federal Credit Union first and full publishing rights to your piece.
• The applicants will be judged by a committee. A winner will be announced in each category and monies will be given once membership has been established. For the high school category, money will be deposited into an Escrow account and will be released to the university the student enrolls in after graduation. For the college category, the funds will be released to the university which you attend. Please keep in mind that the funds are to be used for educational purposes only.
• Winners will be notified September 10, 2010 via the e-mail address with which they registered.

CLICK HERE TO DOWNLOAD A PDF PRINTABLE VERSION

Uncovering the Difference Between Debit and Credit Cards

Although it may seem like light years ago, there was a time when cash was the common form of payment. These days it’s rare to find someone in a grocery line pulling currency out of their wallet.

According to an article on the New York Times website, credit cards have been around since the 1950s, and debit cards were introduced in the mid-1970s. By 2006, there were 984 million bank-issued Visa and MasterCard credit and debit cards in the United States alone.

Today, both debit and credit cards provide a safer and faster alternative to cash. Approximately 12 percent of all retail noncash payments are made through the use of debit cards. That’s five times greater than the number of payments made by using a debit card just five years ago, according to the Federal Financial Institutions Examination Council.

While used interchangeably, debit and credit cards should never be confused with one another.

Unlike credit cards, debit cards are linked to your checking account so that every time you make a purchase, the full amount is deducted from your account. This feature is convenient in that it reduces the probability that you will overspend.

When using a debit card that is linked to your bank account, you are usually asked if you would like to use your card as a “debit card” or a “credit card.” The difference here is that when you process your debit card as a “debit” transaction, you will be asked to input a four digit pin number and your purchase amount will be immediately withdrawn from your account.

On the other hand, opting to have your debit card processed as a “credit,” transaction will usually require your signature and delay the time it takes for the merchant to pull the money form your checking account.

Alternatively, credit cards allow the user to essentially borrow money to make a purchase, and then pay back the lender at a later time. However, delaying your repayment will cause interest to be added to the amount you owe, so that dress you bought on sale with your credit card may end up costing you more than you think. For instance, if you have a credit card balance of $1000, and it takes you three years to pay off your credit card, you will really have paid $1247.95, according to a loan calculator on bankrate.com.

One advantage of credit cards over debit cards is the protection against any disputed charges. According to the Fair Credit Billing Act, your credit card issuer can withhold payment from a retailer if you should decide to dispute a purchase. Make certain that you are aware of the billing cycle and due date, find out if there are any penalties for not using the card. If the credit card issuer is offering a special promotional interest rate, find out how long the special rate applies.

If you are looking to apply for a credit card, make certain that you understand the terms and conditions of your card, be aware of any fees you may incur and your interest rate, keep in mind that the credit card issuer may raise your interest rate after the card has been opened. Additionally, keep in mind that these regulations may vary once changes implemented by the Federal Reserve go into effect later this year.

Remember, just because you qualify for a $5000 Visa card does not mean that you should go out on a shopping spree the minute the card arrives in the mail. Use your debit and credit cards wisely so as not to get caught up in the debt cycle.

Do you prefer plastic or cash? Tell us! We want to hear about your experiences and find out which method works best for you and why.

Making Room in Your Budget for a Summer Vacation

As the temperatures steadily climb around the nation, we are constantly reminded that summer is here, and nothing says summer more than a summer vacation. But with today’s economy in turmoil, a vacation may be out of the question for many, or is it? Traveling doesn’t have to mean getting deeper into debt, try these money saving suggestions for a guilt free vacation.

1. Fill up your itinerary with free places to visit.  

Pack up your SUV and head out to the nearest park for a few days of camping bliss. There is nothing quite like spending some time away from the noise and bustle of city life, not to mention you’ll save money on lodging.

At most you may have to pay a low fee if you choose to park your tent in a camping ground facility. These fees are usually minimal, and allow you to take advantage of the camping ground facilities, such as real toilets that flush and showers, yes, showers. While camping may be fun, smelling like the bear living nearby is not. Take your family hiking, or simply sit around the campfire roasting marshmallows and enjoy the fresh air and tranquility that is nature.  

If parking your tent just miles away from a family of grizzlies isn’t your idea of a vacation, head on out to a lake or a beach. Splashing around in ocean water is fun at any age so long as you steer clear of jellyfish. If you can afford it, you might even consider renting a Jet Ski or boat for a few hours.

Plan a day at a museum. A variety of museums around the world offer free admission. According to the travel channel, the top ten free museums in the U.S. include:

• Smithsonian Museums in Washington, DC
• Getty Center in L.A.
• Walters Art Museum in Baltimore, Maryland
• National Museum of Mexican Art in Chicago, Illinois
• Alamo in San Antonio, Texas
• Frye Art Museum in Seattle Washington,
• Cleveland Museum of Art in Cleveland Ohio
• Museum of Fashion Institute of Technology in New York, New York
• Baltimore Museum of Art in Baltimore Maryland

2. Avoid Airfare Costs.

This year, forego that pricey airline ticket and consider driving to your destination. If you should decide to drive, remember to pick a location that is nearby so as not to expend too much vacation money on your gas guzzling vehicle.

3. Shop smart when looking for lodging.

Select a hotel just outside a major city. Rates tend to be cheaper, and you're still close enough to get into the city. Consider taking the metro or bus routes to travel to and from your destinations during your stay. If you’re headed to New York City for instance, save some extra money by avoiding the pricey hotels located inside the city. Instead, opt for a hotel located just outside the city limits such as the Stamford Marriott Hotel and Spa, only a 45 minute train ride on Metro North from the city.

Additionally, consider booking your reservation on the “off peak” season. Hotels typically offer lower rates if you reserve a room during the week rather than on the weekend. When searching for your ideal lodging, use the Internet to find the best bargains and avoid tourism hot spots, which will cost you more because of their popularity.

To learn more about how you can save money for next years family vacation, read about the Vacation Club Accountoffered at EPEFCU. The last day to open an account and begin saving for next year is July 31st.

Did you find ways to save on your vacation this year? Tell us! We would love to hear your stories.

The Truth About Debt Consolidation

While debt consolidation loans may seem like a quick fix for one giant problem, keep in mind that debt consolidation firms aren’t fairy godmothers with the ability to wave a magic wand and make your debt disappear. If you’re considering debt consolidation, make sure to look beyond the shiny offers of lower interest rates and monthly payments. Knowing all of the facts will help you make an educated decision. 

Debt consolidation firms offer loans to consumers to repay their creditors. Instead of making multiple payments each month, your monthly payments are combined into one payment made directly to the debt relief company. The lender will then take your payment and distribute it to your creditors on your behalf. Many times however, lenders will build in a fee as part of the monthly payment you make to them.

Debt consolidation loans give off the illusion that your debt has somehow reduced in size, when in reality, these type of loans are often much more expensive than the original balance they’re intended to pay off.

According to the Dave Ramsey website, statistics estimate that 78% of the time, after someone consolidates his credit, the debt grows back. This is because debt consolidation treats only the symptom of overspending, not the habit.

The type of advertisements that offer a swift cure for your debt woes, such as those put out by debt consolidation firms; appear to have a boomerang effect. By suggesting the risks of misbehavior are manageable, they actually make it less likely that those that need help will try to get it, according to a study conducted by the Pew Research Center.
 
Consolidation loans may appear inviting because they advertise a low interest rate along with a low monthly payment. These lower payments are only possible by stretching your payments out over a longer period of time, drastically increasing the amount of money you will end up paying back. After all, the longer you’re in debt, the more money the lender makes.  

Also keep in mind that the enticing low interest rate advertised by the lender will not be offered to everyone who applies for the consolidation loans. If you have had problems with your credit in the past, you might be seen as a credit risk. In this case, you may end up with an even higher interest rate than what you’re paying now.

If you’re looking for a fast and successful way to pay down your debt, consider making larger payments on your highest rate line of credit while continuing to pay the minimum balance on all your other debts. Once you’ve finished paying off this high-rate loan, continue to apply the same payment amount to your next highest-rate loan, and so-on and so-fourth.  

Another alternative to consolidation loans you might want to consider is negotiating a lower interest rate or extending your repayment schedule. If you have been a responsible customer and have avoided making late payments each month, your lender may consider your request.
 
Nevertheless, debt consolidation may be the only option for some. If you simply cannot afford to make your monthly payments each month, debt consolidation is certainly a much smarter route than becoming delinquent on any one of your accounts.

Just remember, before you ask for any type of loan, do your homework. Be certain that you fully understand the terms and conditions of your loan. And, once you’re in a better place financially, try to give more than your minimum monthly payments. Doing so will drastically reduce the amount of interest you end up paying the lender.

Debt consolidation doesn’t have to be a trap, it can be an essential tool in helping you take control of your finances; just remember what got you into debt in the first place. Learn to budget and spend your money wisely so as to avoid repeating the same mistakes in the future.

Do you have a story about consolidating your debt? Or maybe you’re considering a debt consolidation loan, what are some of your concerns or expectations? Share with us! We’d be honored to read about your experiences.

Are You Prepared for the Unexpected?

In today’s consumer driven world, finding the will power to set aside money for an emergency fund can be all but impossible, especially when faced with a sky-high stack of bills every month.   

Too often we forget that an emergency savings fund can safeguard us in times of uncertainty and can provide us with a sense of security. According to the National Foundation for Credit Counseling, nearly a third of Americans do not have an emergency fund, and 57% of those that do, don’t have enough in it. If you fall into any of these two categories, it might be time to revisit your spending habits.

Getting out of debt is only the first step towards a financially secure future. By contributing towards an emergency fund, you can be assured that in the event of a job loss or medical emergency, you won’t have to reach for your credit card, restarting the dreadful debt cycle all over again.

It is generally recommended that you save at least three to six months worth of living expenses. However, in an economy such as todays where finding employment can be difficult, you should aim toward saving six months worth of expenses.  

According to the Bureau of Labor Statistics, El Paso’s unemployment rate was at 9.3% for the month of May, putting the number of unemployed El Pasoan’s at 29,420. Nationally, employment declined by 125,000 in June.

Chart your expenses with a budget sheet to figure out how much you need to save and multiply that by 6. Expenses should include mortgage payments, property taxes, utilities, groceries, and insurance premiums.

The purpose of your emergency fund is not to make you rich. Consider depositing your money into a money market account or a high yield savings account. Don’t worry; your money isn’t going anywhere. EPEFCU is federally insured by NCUA up to at least $250,000 and ESI for up to at least $250,000.

So what is an emergency? Certainly not a beauty parlor run, even if your unruly hair is in desperate need of some TLC. Unexpected health emergencies that require a large deductible or a death in the family could qualify as emergencies and are the only reasons to dip into your savings fund.

Maintaining a savings fund can do more than just alleviate the stress of a rainy day however. According to a study conducted by the Consumer Federation of America, low-saving worriers were much more likely to say they lost sleep, suffered worse health, or were less productive at work than were high-saving worriers. Moreover, households with low liquid savings are more likely to have difficulty paying monthly bills, making mortgage payments or rent payments, bounce checks, take out high cost loans, and have impaired credit histories.

Improve you psychological health as well as your financial health by developing a savings habit. Know your net worth, have a spending and savings plan with goals and utilize free checking account features that will help you meet your goals.

Resist the urge to pull money out of your emergency fund and make sure that you revisit your fund once a year. Consider contributing additional funds if life events, such as having a new baby, have increased your spending.

Did your emergency fund rescue you from an unexpected event? Tell us! We want to hear you success stories! Or maybe you don’t have an emergency fund and would like to start one. It’s never too late to start and we want to hear about it! Feel free to leave your comments; we’d be honored to read them!

Learning How to Successfully Manage Your Money

In today’s economically troubled world, it is imperative to learn how to successfully manage our money so that we can spend our retirement sunbathing on the beaches of an exotic island. Well, perhaps we won’t all have the opportunity to retire in paradise, but with a little help, we can all work towards living a secure and financially stable life in our later years. With just a few simple steps, learning how to successfully manage your cash flow can become second nature.

Step One: Create a Financial Plan and budget, budget, budget!

Sit down and create a financial projection. Anticipate your expenses for the next several months or year if possible and begin to plan accordingly. Examine your income in order to determine how much you will be able to afford to save and spend each month. Forecasting your expenses ahead of time will help you determine when you’re most likely to have some extra cash, and when you’re most likely to need it.

Create a list of your total monthly expenses in order to prioritize where your money should go. When creating a budget, make certain to include a savings goal, learning how to pay yourself first will dramatically increase the security of your financial future.

Actively monitor your account activity. Make certain that you are aware of your current account balance, automatic payments, and any pending checks.

David Ramsey, host of The Dave Ramsey Show, and financial guru, advises “spend every dime on paper before the month begins; come up with a game plan for your money on paper and on purpose.”

Step Two: Save

The rule of thumb is to set aside at least 10 percent of your incomeduring your 20’s and 30’s, and even more if your single, according to Rebecca Pace, a Cincinnati based financial planner and CPA. The sooner you start to save, she says, the more time your money will have to grow. Of course, if you are unable to set aside 10 percent, start with what you can afford.

Setting aside at least three to six months worth of living expenses in an emergency fund will protect you from any unforeseen circumstances, such as job loss, or medical problems.  

Take advantage of checking account features offered by your credit union, such as automatic transfers. Each time your payroll check is deposited into your account, a specified amount set up by you will automatically be transferred into your savings account. Think, “out of sight, out of mind,” chances are if you don’t see it, you won’t miss it.

Step Three: Keep Your Spending Habits in Check

Focus on paying off your debt before you splurge on that lavish shopping trip. According to Ramsey, the richest 10 percent of Americans are half as likely to have credit card debt.  So why not do what the rich do? Strive towards paying off those high-interest credit cards so many of us have. Doing so will save you money on all of those annoying monthly interest charges.

Track your monthly expenses. Knowing where your money is going will help you eliminate unnecessary spending and direct your income towards the areas where it really needs to go.

Develop some will power! Avoid budget woes by steering clear of the stores, malls, or online retailers where you know you can’t control you spending. If you absolutely need to go into one of those stores, make a list of what you need to buy and stick to it!

And lastly, avoid charging purchases! However, if you absolutely must, charge only those purchases you know you can afford to repay in full by your next due date.

With a little bit of practice, we have no doubt that you will be on your way to a secure and successful financial future!

 

Please use this helpful budget worksheet to successfully manage your finances.

 

 

 

 

Are these suggestions helpful? Do you have a budget success story? What other ideas for managing your cash can you suggest? Tell us! Please, share your thoughts with us; we’d be honored to read them!

Kites for Kids

In an effort to take a break from our day to day business routines, El Paso Employees Federal Credit Union chose to step out of the office and into the fantastically warm weather that we as El Paso natives know is unlike anywhere else.

With face paints and kites in tow, EPEFCU launched its very fist “Kites for Kids Day” on Saturday, June 12th, from 11:00 a.m. to 2:00 p.m. at the Vista Del Valle Park, across from the Main Office. The first of its kind, the event served to support the Youth Club Accounts currently offered at EPEFCU.

More than 100 Credit Union families flocked to the event, eager for the kite flying festivities to begin. Fortunately, the weather was in full harmony with the event and while some might dread the windy days in our sun city, the light breeze aided in lifting the abundance of kites into the air.

Children actively participated in several kite contests. Amber Contreras and Tyler Kenney tied for the prettiest kite category, while Steven Hidalgo took the winning spot in the highest flying kite category. Each of the contest winners received $50 deposited into their Youth Club Accounts.

Youth Club Accounts are savings accounts for youth children ages 18 or younger. With a minimum initial deposit of $15, parents are free to deposit a limitless number of times throughout the year while they watch their child’s savings grow.Click here to learn more about our Youth Club Accounts.

Kite flying played only a small part in the day’s events. The summer celebration continued while attendees bobbed along to the music provided by El Paso’s KISS radio station, indulged in pizza, hot dogs and popsicles. Children waited in line while our very own, artistically inclined, Rosie Christmann, Sylvia Ramirez, and Delia Carrasco painted each of the adorably anxious faces.

All in all, the event was a success and one that we here at EPEFCU hope to duplicate from here on out. If you missed the event this year, make plans to join us for the Second Annual Kites for Kids in 2011. For more information on our Youth Club Accounts visit us at any one of our eight convenient branch locations, or call our service support center at 915.593.5866.

 

 

 

 

 

Have a story to share? Please share your thoughts and insights about our Kites for Kids Day; we’d be honored to read them! Post your pictures along with ours and tell us your favorite part of this event! We would also like to encourage you to post any suggestions, thoughts and or concerns you may have in order for us to improve our Blog for you. We look forward to reading your posts!