Tuesday, September 27, 2016

Don’t Sleep On Your Savings: Avoiding Dormant Accounts

One of the best things you can do with a savings account is to forget about it and let it earn dividends. However, don’t forget about it so long that it becomes dormant. A dormant savings account is one that has had no activity in a while. While it varies by institution, generally accounts that have been inactive, no deposits or withdrawals made, for more than 2 years are considered dormant.

All dormant accounts cost financial institutions money since they are required to keep records of the account and send statements. Often, those statements are returned due to incorrect addresses and then require additional effort from the institution. These minimal costs add up when involving hundreds of accounts.

In Michigan, after three years of no activity, financial institutions are permitted to close these accounts and transfer the funds to the state treasury department through a process known as escheatment. State treasury departments hold those funds in an unclaimed property fund. This money isn’t lost, but it is difficult to access. To reclaim it, you must complete numerous forms and wait several weeks while your request is processed. It’s much harder than visiting your credit union!

Fortunately, there are steps you can take to avoid this.

1.) Keep track of your accounts. 
You should always know where your money is. Money management apps let you monitor all your accounts in one place by combining them in one screen. This way, you’ll never risk dormancy by forgetting about an account.

If you prefer a physical approach, keep your account statements in a file folder and create your own ledger so that you have one place where you can see all your accounts.

2.) Automate your savings. 
An account can’t go dormant if it’s getting transactions regularly, even if it’s only $5 a month. But who can remember to do that every month, or would want that burden?

To achieve this easily, set up automatic transfers between your primary account and your savings, even for a minimal amount. This form of automatic savings keeps your account active.

3.) Clean up and roll over old accounts. 
If you create different accounts for different savings goals, you might accumulate a dozen accounts over time, some of which you’ll forget to close when they’ve served their purpose. Each of those accounts is at risk for dormancy!

One way to avoid this is to make a general-purpose savings account and consolidate your funds there once every few months. Use that money for any purpose – anything is better than taking the risk of it being lost.

If you haven’t checked your Community Financial account in a while or need to update an address on file we are here for you! Act before it’s too late; clean up your dormant accounts today!

Tuesday, September 20, 2016

How to Get By In an Emergency: Personal Loan or Credit Card?

Unexpected expenses, by nature, can come out of nowhere. Your check engine light comes on, and your car demands you put another thousand dollars into keeping it on the road. That cough that just won’t go away turns out to be more serious than you thought. No matter what causes these personal catastrophes, they all have one thing in common: they’re expensive.

The best financial advice suggests a rainy day fund for situations like these. However, for many people, that’s just not practical. An emergency fund is one of those things it’d be nice to have, but sometimes there’s just no room for it after the bills have been paid.

If you feel the pressure of not knowing where your emergency spending could come from, you’re not alone. A Federal Reserve survey found that 47% of Americans would not be able to come up with $400 in an emergency. So how would they cope with that emergency? They’d borrow.

As a credit union member, you have options when it comes to borrowing. Two of the most popular choices for emergency funding are a personal loan and a credit card. There are pros and cons to both, so let’s take a look at a few.

1.) Limits 
Credit cards have credit limits in the thousands, enough to cover a small emergency. The value of credit cards is their convenience; there’s no need for a new loan each time you incur an expense.

However, many people don’t have sufficient credit to cover major financial emergencies and instead choose to utilize a personal loan. Your personal loan approval amount depends on several factors: income, credit score and other assets. For borrowers with good credit history and a strong ability to repay, these loans could be $50,000, enough for serious unexpected expenses.

2.) Repayment Options 
Credit card repayment is handled monthly. There’s a minimum payment and no fixed term to repayment; if you continue charging and only pay the minimum, paying off your loan could take forever.

In contrast, a personal loan, includes a fixed monthly fee that lets you repay the loan in a set amount of time. It’s amortized so you’re making equal payments of both interest and principal over the loan’s life. There’s also no penalty for early repayment.

3.) Usability 
Credit cards only work at a merchant terminal; they’re difficult to use for paying back friends.

A personal loan is deposited directly into your checking account. You can withdraw it as cash, write checks or use auto draft features.

If you’re negotiating a reduced price for a major expense, many businesses offer a cash discount. They pay for processing fees and prefer cash. If you’re paying a hospital, they may also accept a lower fee if you pay cash.

4.) Interest Rates 
Credit card interest rates can be high; the global average is 15%. Some credit cards fluctuate their interest rates based on the prime interest rate and can alter your rate if your credit score changes dramatically, making it difficult to plan your financial future.

A personal loan has a fixed interest rate that never increases if you don’t miss a payment. You can make a future budget that involves paying a fixed amount over approximately 5 years. Interest rates on personal loans are usually lower than on credit cards. For people with average credit, interest rates can be 5% lower; for those with better credit it can be even lower.

As a member of Community Financial Credit Union, you have access to competitive rates for personal loans. If you’re in a hard place, we can help. For more info, visit cfcu.org/personal. What’s your emergency financial plan for unexpected expenses?

Tuesday, September 13, 2016

Prevent ID Theft: Destroy Those Documents!

Protecting oneself from theft used to be as basic as securing the doors and windows of your home. But in today’s modern age, an enterprising thief can take control of your assets without breaking a window. Identity theft continues to be one of the fastest-growing crimes in the United States. According to the Federal Trade Commission (FTC), approximately 10 million Americans have their identities stolen each year.

So how do you secure your identity? 
Clues to your personal and financial information are often buried throughout your personal paperwork and mail. One search through your mailbox or trash could garner enough evidence for a thief to take control of your identity — and your finances. Thieves use credit cards, financial statements and utility bills to obtain and exploit that personal information.

The first line of defense is to destroy documents that contain your personal information before anyone can access it. Private documents and credit or debit cards, which contain sensitive information, should be destroyed once you no longer need them. Here are four suggestions for properly destroying those personal documents:

Fire 
Reducing your documents to a pile of ash is a surefire (pun intended!) way to destroy them. Use documents as kindling, or add them to a fireplace, wood-burning stove, or bonfire. You can add other scrap paper to the fire to confuse anyone who may be looking through the ashes for pieces of documents that may not have fully burned.

Water 
A good soaking will render any document illegible. Simply immerse a stack of junk mail in a tub filled with water before dumping it.

Confetti 
This option is more time-consuming, but it can be a great rainy day activity. If only a small area of a document contains sensitive information, hole punching that area will make the document useless, and you’ll get lots of homemade confetti.

Expired credit cards still contain important data and need to be disposed of properly. Rubbing a magnet across the card a few times will disable the magnetic strip on the back. You should also cut the card into pieces, making sure that each set of four numbers is cut in at least two places. Then smash the chip (if applicable) and dispose of the pieces in different garbage bags

Shredding 
A paper shredder will transform your documents into unidentifiable strips of paper. If you don’t have a shredder, but there’s one at your workplace, check with your management to know if it’s okay for you use it for your personal paperwork.

Or… bring your documents to Shred Day! Community Financial is offering a community Shred Day event on Saturday, September 17 from 2 - 4:30 p.m. Bring your confidential documents to securely shred at three of our branch locations:

Livonia Branch 
 34000 W. Seven Mile Road 

Canton Branch 
6355 N. Canton Center Road 

Gaylord Branch 
1360 W. Main Street

Using these basic steps to destroy your personal documents can protect your information, and your finances. As a general rule, it is better to have as few physical documents on file as possible. Switch to online banking, and opt-out of paper statements. Keeping your finances digital will help simplify your daily chores and help protect you from fraud.

Tuesday, September 6, 2016

Three Easy Ways to Make Your Dorm Room Feel More Like Home

The first few weeks in a dorm room can be tough. Between adjusting to a new roommate and being in a new place, you might dwell on how nice mom and dad’s house is compared to your dorm room. 

Don’t despair! There are a few low-cost hacks that can turn the institutional discomfort of your dorm room into the comfort of your parents’ home. Make a list, pop down to the home improvement store, and check out these three quick fixes:

1.) Soften your bed 
Most people don’t get a good night’s sleep in college. Part of it is staying up all night to study, but part of it is the terrible institutional mattresses. Dorm mattresses are somehow simultaneously too rigid and too squishy. Compared to the nice mattress you had at home you may notice your dorm bed is kind of lame.

You don’t need to break the bank on a new mattress. A memory foam mattress topper can give you endless comfort at a fraction of the price. For less than $100 you can sleep on an inch and a half of pure bliss.

2.) A shower landing place 
One of the worst parts of dorm showers is stepping out of a warm shower onto cold tile floors. Your parents fixed this problem with a cushy bathroom rug, but that’s not an option for you unless you want to share it with the whole floor (ick!). What’s a student to do?

Consider a pair of bathroom slippers to complement those sandals. Slippers can help you step out of the shower and onto a cloud. Look for footwear with moisture-wicking soles. Hang them up to dry when you’re not using them.

3.) Fix the lighting 
Institutional lighting is the worst. The hum and flicker of institutional lighting is obnoxious. That’s why your parents put concealed, indirect lighting in every room but yours. How can you recapture that feeling?

A table lamp or clamp lamp can get the same charm of indirect lighting without breaking the bank. An LED bulb will last forever and the fixture can be had for as little as $20. Put it on your desk, on your headboard or on your dresser for all-year class.

There are plenty of ways to make a door room feel more like home. Check out DIY sites like Pinterest for ideas on decorating on a budget. With a few small changes you can make your space your own and focus on your studies and making it a great school year!

Community Financial Credit Union, P.O. Box 8050, Plymouth, Michigan 48170-8050;
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Federally insured by NCUA.