Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Consumer Archive

Consumer

New rule demystifies loan rejection

 Permanent link
MCLEAN, Va. (8/1/11)--Consumers turned down for a loan will now have the opportunity to find out why. As of July 21, lenders must give consumers a free copy of their credit score when they are rejected for a loan or approved for a higher-rate loan due to a low score (USA Today July 21). The new law, a component of the Dodd-Frank Wall Street Reform and Consumer Protection Act, requires lenders to provide consumers with the credit score used to make the loan decision, and an explanation of that decision. The explanation must show how the credit score ranks nationally, and identify which factors negatively affected the score. Consumers can use this information to gain an understanding of how to improve a less-than-stellar credit score. If you need help raising your credit score, start with these suggestions from the Consumer Financial Protection Bureau, Washington, D.C.:
* Make timely payments. Paying all of your bills on time can boost your score. Ask creditors to assign you an easy-to-remember due date, and take advantage of automated bill pay services that may be available at your credit union. * Don’t max out your credit. Using too much of your available credit can bring down your score. That’s because scoring formulas calculate that consumers who use too much credit may struggle to pay it back. Aim to use 30% or less of your total credit limit. * Limit new accounts. Applying for or opening too many new lines of credit in a short period of time can ding your credit score. Avoid opening new credit accounts if you’re planning to take out an auto, mortgage, or other significant loan. And stay away from store credit cards, which also can lower your score. * Check your credit report. You can receive a free copy of your credit report from each of the three main consumer reporting agencies--Experian, Equifax, and TransUnion--every year. Stagger your requests to each agency throughout the year to stay as up-to-date as possible. Visit annualcreditreport.com to obtain your copy. * Look for errors. When you receive your credit report, examine it for mistakes that could be hurting your credit score. If you do find a problem, contact the consumer reporting agency and the creditor in question. Be sure to include documents and other evidence to support your claim. If the agency and the creditor find your claim to be valid, they’ll correct your report.
For more information, listen to “Does Your Credit Score Tell the Truth About You?” and watch the “Build Your Best Credit Score” video in the Home & Family Finance Resource Center.

HandFF Radio Build a better relationship with money

 Permanent link
WASHINGTON (7/29/11)--Sunday’s H&FF Radio program helps you make smarter budgeting decisions, plan for future security, set financial priorities, and cool your home for less. The show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
* “The Psychology of Money.” Syble Solomon, executive coach and founder, Life Wise, Boston, explains why we sometimes make poor financial decisions even when we know better. * “Ways We Sabotage Our Financial Security.” Pam Krueger, executive producer and host, “MoneyTrack,” and official spokesperson for the California Jump$tart Coalition, San Francisco, shares effective ways to plan and save for future financial stability. * “Are You Saving Too Much?” Susan Tiffany, certified credit union financial counselor and director of consumer periodicals, Credit Union National Association (CUNA), Madison, Wis., discusses how to choose between saving money and paying off debt. * “Tips for Surviving a Heat Wave and the Electric Bill That Follows.” Jim Bausell, vice president of business development, National Rural Electric Cooperative Association, Arlington, Va., covers energy-efficient and money-saving strategies for cooling your home.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; and the Defense Credit Union Council and member credit unions, serving those who serve the country worldwide. Home & Family Finance airs Sundays at 3 p.m. ET on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network. CUNA and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites. For more information, use the “Should I Pay Off Debt or Save?” and “Budget Blueprint” calculators in the Home & Family Finance Resource Center.

CLASS Act falls short if it survives

 Permanent link
NEW YORK (7/27/11)--The government’s new long-term care insurance program could be axed as the debt-reduction framework shapes up. But regardless of the decisions being made now, seniors would be wise to consider private long-term coverage (CNNMoney July 19). The Community Living Assistance Services and Supports Act (CLASS Act) is part of the 2010 health reform law. CLASS was designed to help seniors who need help with daily tasks, most of which are not covered by traditional health insurance or Medicare. No one can be rejected under the plan because of health, and it covers many services that are not eligible for benefits under most long-term-care plans: homemaker services, home modifications, and transportation. But the CLASS Act won’t benefit everyone. Retirees are not eligible. Working people age 18 or older will have to pay premiums for five years to become eligible for a cash benefit of between $50 and $70 a day. Helpful as they are, the CLASS Act benefits are not enough to cover the actual cost of long-term care: Today it costs about $219 a day to stay in a nursing home or $168 for eight hours of care by a home health aide. If the plan survives, CLASS Act premiums are estimated at $125 to $160 a month. They can be as low as $5 a month for those below the poverty line. The $160 estimate is similar to the monthly price of a private long-term-care policy for consumers in their 50s, yet it would provide only about one-third of the daily benefit amount. Private long-term policies offer different benefits than CLASS, so it’s wise to make comparisons. Don’t buy out of fear or emotion. Here’s what to consider before you buy a private long-term care insurance policy:
* Determine how much you can afford. The price of your premiums depends on your age, the coverage you select, and the policy. The average cost of annual premiums for long-term coverage for all age groups was $2,207 in 2007. Insurers have raised rates substantially since then, and are expected to continue to do so. * Decide how much insurance you want to pay for. Consider using regular income to pay for some long-term-care costs, such as supplies and medication, and getting a small policy to cover the rest. Find out now if any family members are willing and able to help with some of your anticipated care needs. * Choose how long you will pay for it. For most policies, you pay premiums until you begin to receive benefits. Some policies let you pay premiums only for a specified period--10, 15, or 20 years. Then your coverage is fully paid up. A few companies give you the choice of paying for the insurance in a lump-sum payment. * Look at all the features. In addition to the daily cost benefits, policies differ in terms of consumer protection provisions, lifetime benefits, lifetime premiums, discounts and other features. * Don’t buy too little. It’s easier to decrease the coverage you have than to add to it, especially if your health declines. * Look at your risk factors and your personal desires about where you want to live. Long-term-care-insurance policies aren’t “one-size-fits-all.” Get one that matches your needs. * Buy coverage when you are younger. For most policies, premiums remain the same each year, unless they are increased for an entire class of policyholders at once. The younger you are when you first buy a policy, the lower your annual premium will be.

Save now or struggle later

 Permanent link
MADISON, Wis. (7/25/11)--A recent study of people aged 66 to 69 found that 51% of singles were likely to run into serious financial trouble in retirement (National Bureau of Economic Research July 13). Although married couples fared better in the study, they too were vulnerable. More than one of five are in danger of outliving their savings. But those facing the greatest risk of running out of money before they die are 73% of single women without a high school diploma. To prevent this, the message--as always--is save early, save often, save as much as you can. Douglas Rice, Ph.D., president of the Institute for Financial Planning Education, Castro Valley, Calif., is a strong advocate of this approach. In an interview with MoneyMix(July 2011), the Credit Union National Association’s online periodical for young adults, Rice said, “The biggest danger of pushing off retirement savings is that the amount you need to save to retire goes up every year, so the problem gets bigger and harder to solve. So by putting saving for retirement off, you end up making it worse and it can get so bad that you lose hope.” To put it differently, said Rice, “People in their 20s are in the best position to benefit from savings. This is because savings compound over time, and they have more time." The difference can be considerable. For example, you can build a $200,000 nest egg in 40 years by investing $100 a month at 6%. But delaying 20 years before pursuing the same goal requires a monthly investment more than four times greater--$431. The editors at MoneyMix offer this advice to young people who wish to avoid the fate of so many people in their late 60s today:
* Try to invest at least 10% of your income for retirement. If your budget doesn’t allow that much, get in the habit by setting aside even as little as $1.50 a day. * If your employer offers a 401(k) retirement plan, participate. This tax-deferred savings vehicle offers a consistent and automatic way to save for retirement. In addition to the elective deferrals you make, your employer also may offer matching contributions up to a certain percentage--that's free money to build your retirement fund even faster. * Devote part of every raise to your future. For example, if you get a 3% raise, put one-third of it toward your retirement goals. If you do this consistently over your working life, you'll accumulate a tidy sum by the time you’re ready to start making withdrawals.

Credit use car maintenance on HandFF Radio

 Permanent link
WASHINGTON (7/22/11)--Sunday’s H&FF Radio program covers do-it-yourself car repair, research on credit use, wedding registry websites and gift-giving ideas. This is a rebroadcast of an earlier H&FF Radio program. The show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
* “Top Five Car Repair Jobs You Can (and Should) Do Yourself.” Robert Baldassari, master mechanic, AutoMD.com, Carson, Calif., discusses easy do-it-yourself vehicle maintenance that can save you money. * “Unrealistic Overuse of Credit.” Dr. Marsha Richins, professor of marketing at the University of Missouri in Columbia, analyzes research findings on consumers who overuse credit. * “Seven Unique Wedding Registry Websites.” Andrea Woroch, consumer savings expert, Santa Ana, Calif., reviews registries that allow guests to give unconventional wedding gifts, such as a donation to charity or toward a couple’s future home purchase. * “Give the Gift That Keeps Giving.” Madeleine Greene, accredited financial counselor and co-author of “The Best Little Money Book,” Barnesville, Md., shares financially useful gift ideas for graduations, weddings, anniversaries, and more.
Home & Family Finance is a resource center for personal finance information at the Credit Union National Association (CUNA). The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; and the Defense Credit Union Council and member credit unions, serving those who serve the country worldwide. Home & Family Finance airs Sundays at 3 p.m. ET on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network. CUNA and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites. For more information, read “Keep Your Old Car Running” and “Put Your Financial House in Order Before Tying the Knot” in the Home & Family Finance Resource Center.

Budget travel sparks hotel alternatives scams

 Permanent link
BOSTON (7/20/11)--As the economic stall lingers, households continue to cut back on nonessential expenses, including vacations. The good news is, online vacation rental and hospitality sites offer affordable--even free--accommodations. Online marketplaces offer good deals, but vacation rental scams are on the rise, especially during summer (Boston.com July 12). To help avoid scammers:
* Be cautious on Craigslist and similar sites, which have been popular venues for marketing scams. * Search the property address. Some scams involve nonexistent properties. When possible, have someone you know visit the property. * Check out the party from whom you’re renting. Consumer Affairs, the attorney general, and the Better Business Bureau are all good sources for finding complaints against businesses. A quick Web search is also a good idea. * Never pay for a rental by wiring money, and avoid using cash or checks. Paying by credit card provides the most consumer protection.
Research which site is right for you. Three of the most popular services are:
* CouchSurfing. Ideal for the penny-pincher and adventurer, CouchSurfing connects travelers with locals’ couches and spare beds in more than 230 countries and territories. The hospitality is free and you’ll have a true cultural experience. Hosts typically are more than willing to give local advice or show visitors around. On the downside, there’s less privacy than in hotels and no safety guarantee. * Airbnb. Reaching 13,000 cities in 181 countries, Airbnb connects prospective travelers with everything from spare beds to castles and tree houses. It handles payment transactions and, if problems arise, Airbnb does not pay hosts until 24 hours after check-in. You’ll find a range of privacy from sharing bedrooms to host-free stays; links to Facebook and Twitter show users where friends have stayed. On the downside, you can expect a more urban, less rural focus and no guarantee of safety. * HomeAway. HomeAway.com specializes in vacation home rentals. The site represents more than 560,000 listings in more than 145 countries. HomeAway owns several websites, including VRBO.com (Vacation Rentals by Owner). You can expect a high degree of privacy by renting an entire property, with plenty of space to spread out. But HomeAway is just a matchmaker; the site doesn’t handle payments or provide free protection or assurance.
While CouchSurfing and Airbnb are generally safe, staying in a stranger’s home involves an inherent risk. Choose hosts recommended by peers, and travel with other people. Women especially should consider travelling in groups and selecting only female or family hosts. Knowing how different rental or hospitality sites operate will help you find the most reliable platform for accommodations. Who knows--you may even find a way to make extra income from your home’s unused space. For more ideas, read “Find Good Travel Deals Even in a Bum Economy” and watch the video “Money and Travel” in the Home & Family Finance Resource Center.

Protect yourself from mobile fraud

 Permanent link
DAYTON, Ohio (07/18/11)--The use of mobile banking services in the U.S. is expected to rise from 19% of cell phone users---about 17% of the adult population--to 22% within the next year, according to a recent study by Luth Research (bizjournals.com July 10). The growing acceptance and popularity of mobile banking makes recent actions of the Federal Financial Institutions Examination Council (FFIEC) important for consumers. The FFIEC established guidelines to make handling personal finances on mobile devices more secure. The guidelines require financial institutions to implement antifraud measures for mobile banking services similar to those on their websites (credit.com July 8). These anti-fraud measures may include using multiple ways to authenticate logins to mobile banking services and identifying suspicious transactions that could indicate fraud. While these rules may help, the best protection for consumers is to be proactive in managing their mobile activities. Practice these five guidelines from ConsumerReports.org to protect yourself from mobile fraud:
* Secure login. Make sure you are logging in to a secure mobile site when using your phone’s Web browser to access mobile banking sites. Look for indications on your browser that the site is secure, such as a lock symbol or “https” at the beginning of the site’s web address. * Trusted apps. Only allow trusted applications the ability to send text messages or update social networks. Untrustworthy apps may initiate fraudulent messages or spam, and add charges to your cell phone bill. * Public Wi-Fi. Never conduct mobile banking, e-commerce, or other business involving user names, passwords, or other personal information on a public Wi-Fi network. Crooks may be able to capture login and password information. * Reliable source. Avoid downloading spyware, which may accompany an application by obtaining your smart phone applications from a trusted source. Cell phone spyware can seize personal information including messages, conversations, and, via GPS coordinates, even your location. * Security software. Purchase and install security software on your cell phone. Security software for your phone may help you find your cell phone if misplaced, allow you to delete data if the phone is lost, and prompt you to remove malicious software.
For related information, listen to “Perfect Storm for Identity Theft Brewing” on the Home & Family Finance Resource Center.

Good news bad news on personal savings front

 Permanent link
NEW YORK (7/13/11)--Two recent studies paint diverging pictures of current savings habits--one reflecting a healthy increase in retirement assets, but the other revealing frighteningly low emergency savings, with roughly half of Americans unprepared to handle a financial emergency. Americans are responding to the recent “hit” to their nest eggs seriously, by working a few more years and delaying retirement, increasing savings, or shifting to slightly more conservative investment vehicles. Retirement assets are up 3% from year-end 2010, to $18.1 trillion and just below the record high of third quarter 2007, according to a study by the Washington-based Investment Company Institute (CNNMoney.com July 5). However, one-quarter of Americans have no emergency savings at all, and another 22% admit their emergency savings would cover, at best, three months’ worth of expenses, according to the most recent Bankrate Financial Security Index poll (Bankrate.com June 20). Only 24% of respondents said they have the equivalent of six months or more of basic living expenses in a back-up fund. Persistent unemployment is a major culprit. More than six million Americans have been unemployed for longer than six months, and many have had to drain emergency savings to make ends meet. Others admit they’re waiting until they have extra money but, more often than not, that day never comes. Whether you make $20,000 or $200,000 a year, create a plan to build your back-up fund:
* First, set a goal. Calculate basic living expenses--needs, not wants--for one month. Then multiply that by the number of months you wish to cover, generally between four and seven, or more if you think it may take longer to land a new job if you lose yours. * Make your fund accessible. Separate it from your checking account, and don’t keep it where you’ll be tempted to raid it for frivolous purchases. Consider a money market account that allows minimum withdrawals, or short-term certificates of deposit that earn dividends and allow you to reinvest at set intervals. * Automate it. Use direct deposit of your paycheck, then set up automatic transfers from your paycheck to the emergency fund. If necessary, start small and slowly increase the amount you designate. Make sure you have enough money in checking to cover bills. * Use it only for emergencies. Your six-month car insurance payment isn’t an emergency--you know that’s coming so budget for it. Emergencies may include major car repairs, appliance breakdowns, job loss, medical bills, or accidents.
For more information, listen to “Build Your Emergency Savings Fund” in the Home & Family Finance Resource Center.

Check up on charities to avoid fraud

 Permanent link
NEW YORK (7/11/11)--The next time you consider making a charitable donation, check out the charity first. A recent lawsuit demonstrates that not all “charities” are what they seem: New York has sued the Coalition Against Breast Cancer (CABC), claiming it is a fraudulent charity that allegedly raised $9.1 million over a five-year period but used hardly any of those funds for breast cancer programs (WalletPop July 1). According to the lawsuit, the CABC claimed a nonexistent affiliation with a leading New York cancer center and sent fake pledge invoices to individuals who never agreed to donate money. The CABC stated that donations would support research, screenings and seminars. Instead, contributions funded undeserved salaries and benefits, unnecessary fundraiser fees, and insider loans for CABC directors. Fraudulent charities can employ all kinds of sneaky tactics, but there are ways to make sure your money is going to a good cause. The Federal Trade Commission offers this advice for checking out charities before making a donation:
* Get as much information as possible. Legitimate charities should be able to give you detailed information about the charity’s mission, how your donation will be used, and proof that your donation is tax-deductible. * Check with your state regulatory office. The National Association of State Charity Officials provides a list of state offices that regulate charitable organizations. Your state office can tell you whether the charity must be registered and how much of your donation goes to the charity vs. fundraising and management expenses. * Ask questions when the phone rings. Charities sometimes hire professional fundraisers to obtain donations and use part of the money received to pay the fundraiser’s fees. If you receive a phone call soliciting a donation, ask if the caller is a paid fundraiser, whom they work for, and how much of your donation will go to the charity and to the fundraiser. If you’re not satisfied with the answer--or if it’s unclear--don’t donate. * Verify where your money is going. If a charity claims that your donation will benefit a specific organization, call the organization independently to confirm. * Be wary of pledges you don’t remember making. Phony charities might try to trick you into thinking you agreed to pledge money. When in doubt, check your records. If you don’t remember making a pledge and can’t find documentation to support it, steer clear of the charity.
To learn more about avoiding various types of fraud, read “Crooks Use High-Tech Scams to Commit Fraud” and watch “Don’t Fall for Fake Check Scams” in the Home & Family Finance Resource Center.

HandFF Radio covers strategies for saving

 Permanent link
WASHINGTON (7/8/11)--Sunday’s H&FF Radio program discusses saving strategies, food prices and identity theft protection for kids. The show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
* “The Three Worst Things We Do to Sabotage Ourselves Financially and What We Can Do to Fix It.” Pam Krueger, executive producer and host of “MoneyTrack,” and board member for the Jump$tart Coalition for Personal Financial Literacy, San Francisco, covers solutions for common savings mistakes. * “Food Prices: Why Do They Keep Increasing?” Phil Lempert, food-industry analyst known as the Supermarket Guru and host of “Food Sense,” Santa Monica, Calif., lists factors affecting food prices. * “The Cost of Skipping Vacations.” Susan Tiffany, certified credit union financial counselor and director of consumer periodicals, Credit Union National Association (CUNA), Madison, Wis., explores the unacknowledged cost of saving money by forgoing a vacation. * “How to Protect Your Child’s Identity: Seven Tips for Parents.” Adam Levin, founder and chairman, Identity Theft 911, Scottsdale, Ariz., highlights steps parents can take to prevent theft of a child’s identity.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; and the Defense Credit Union Council and member credit unions, serving those who serve the country worldwide. Home & Family Finance airs Sundays at 3 p.m. ET on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network. CUNA and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites. For more information, read “Vacation Means Re-Creation” and watch the “How to Prevent Identity Theft” video in the Home & Family Finance Resource Center.

Job-search help for returning vets

 Permanent link
McLEAN, Va. (7/6/11)--Federal Reserve officials have a more pessimistic view about economic growth and employment prospects today than they did two months ago. The economy is expected to grow only 2.7% to 2.9% this year, according to the Fed, down from the April estimate of 3.1% to 3.3% (USAToday.com June 21). Among those still struggling to find employment are servicemembers fresh out of the military. Unemployment payments to servicemembers have doubled since 2008--evidence that many veterans return to civilian life unable to find work. The estimated jobless rate among male veterans ages 18 to 24 is more than 30%. That’s compared with 18% for male civilians of the same age group, according to the Bureau of Labor Statistics. Military and civilian life are different, to say the least, and although military members have many talents, a military career often doesn’t prepare vets for a civilian job search. Veterans should take these steps when hunting for civilian jobs, according to Vault Career Intelligence, a website providing job search help:
* Ditch the lingo--Many civilian employers aren’t familiar with military lingo. And while military and civilian jobs have different titles, many underlying skill sets are similar. Try to bridge the divide between your experiences and the skills that employers are looking for. Research civilian job ads and pay attention to the language used. Correlate past military assignments with private sector roles, such as financial planning, operations management, purchasing, human resource management, systems administration, and administrative support. In addition, try to explain what your rank entailed since many people in the civilian world aren’t familiar with military hierarchy. * Focus on strengths--Show prospective employers how your military talents, skills, and abilities relate to their civilian business and industry. People with military experience often are decisive and resourceful, and make excellent leaders. They also can make great team players and perform under pressure. * Know where to look--Many companies understand the military and are dedicated to hiring veterans. Doing a simple Google search will show companies that make it a practice to hire returning vets. Research companies to help you understand company culture and salary ranges as well. * Use social-networking sites--LinkedIn, Twitter, and Facebook social networking sites work well for job-searching; you can tap people you’re already connected with and meet people who have the same career aspirations you do, according to the Credit Union National Association’s Center for Personal Finance. And yet, there’s a fine line between using these sites for professional and personal use. Use caution, and remember not to post anything that you wouldn’t want a prospective employer to see.
For more help finding employment, see “Get Back in the Game After Losing a Job” in the Home & Family Finance Resource Center.