Credit Card Facts and Tidbits

Comments gleaned from credit card experts...

• Do department store cards affect your credit report?
If the store cards are reported to the major credit bureaus, store cards can either help or hurt your credit. If your late or missing payments, or have maxed them to the limit, it'll hurt. On the flip side, if the credit is managed responsibly, they'll help your score.

• How many credit cards are too many?
There's no pat answer regarding how many cards are too many. FICO scores are computed on a number of factors. Open the store cards you really need and pay them off as soon as you can. Interestingly, if you have some on your report you don’t use anymore, FICO generally recommends you leave them alone rather than closing them.

• Cash advances from credit cards make for expensive loans!
Most credit card issuers charge a higher interest rate (20% or more) plus a one-time fee (as much as 5%!) of the amount advanced. Be aware that cash advances don't qualify for the usual interest-free grace period, so interest accrues promptly. Additionally some credit card issuers don't apply your payments to the cash advance until whatever lower interest rate balances you have on the card are paid-off.

• Credit card issuers may increase APRs if your credit score drops or if you miss a payment on another credit card
Higher interest rates go hand-in-hand with higher risk and they provide motivation for cardholders to pay-off their higher APR balances first. Card issuers don't want a loss on a credit card account so if they see you are having financial trouble they want to send you the message to pay-up and go elsewhere. Though seemingly unfair to penalize you in this manner it is permitted under current federal regulations.

• Watch Your Credit Lines
They may be lowered without your knowledge. Card companies are moving away from raising interest rates on risky cardholders to simply reducing credit lines. Monitor your account to make sure you still have the credit line you remember; otherwise you might easily go over the new and reduced credit line. Going over your credit limit at any time can cost money. Stay safe - always stay 10% or more under your credit limit.

•The average family owes more than you think on their credit cards
Based on current industry statistics and consumer surveys the average American household with at least one major credit card owes $9659. However, given that 13% of Americans carry credit card balances above $25,000, the median is about $6,600 for the typical card using household.

• How high can interest rates go?
The highest amount of interest that can be charged monthly on credit card debt is nothing short of exorbitant. Credit card companies based in Delaware or South Dakota can by law charge what they want. You might well see rates as high as 32% to 41%.

• Call your credit union!
The bottom line to all this is manage your credit wisely, and pay no more than you need to for borrowed money. Call your Credit Union to discuss you loan needs before you turn to your credit cards!

Credit Unions - Once Again Beat the Banks!

A new national survey by Bankrate.com has found that credit unions, on a national average, provide better deals to their customers for many types of loans and investment products than do banks.

For example, new and used car loans, second mortgages, home equity lines of credit, and credit cards are items in which the credit unions consistently beat the banks. In doing so the credit unions are again proving their worth to their shareholders and customers.

Not all credit unions provide the same products as do banks. As a point of fact, ATDFCU tailors its products to reflect membership desires for the highest possible returns. Therefore, ATDFCU does not offer credit card services, ATMs or checking services in order to provide both a better rate of return for investments and lowest rates on loans for borrowers.

Some examples might be in order...
In California, banks surveyed charge from 5.832% Annual Percentage Rate (B of A) to 8.9% APR (Wells Fargo) for a $25,000, 15 year fixed rate second mortgage... and some have additional requirements like deferred loan application fees and electronic transfer mortgage payments that considerably increase the cost of a loan. ATDFCU doesn't engage in those types of practices, preferring instead to make the loan in a straight-forward fashion, without a lot of "catches". And by the way, ATDFCU's current rate (available until December 31st, 2008) for variable rate second mortgages is 5.00% APR.

Car loans are another popular service you expect from your credit union, and once again they deliver! Nationally, for a new car loan of $16,000 (48-month term), credit unions betters the banks by an average .60% (8.41% vs 9.01%). ATDFCU beats the national credit union averages by a wide margin, offering its members a rate of 6.50% for a similar loan.

In short, often the very best in value and service are tried and true friends, those at the ATDFCU! The paperwork is held to a minimum, and processing of your loan is done quickly by people you know and trust. How many banks can you say that about?

Experience the incredible personal service each and every member gets from your credit union. Try it yourself when exploring ways to free up cash and reduce monthly bills... call your credit union at 408-365-4444!

Budget busting expenses

After deciding to cut back on expenses in order to put more away for a rainy day, what's left??

The biggies you've already taken care of; that cruise to the Far East has been replaced by a trip to the city (San Francisco to you none-Bay Area folks). Likewise, you've decided that you can make that 4 year old coupe last another couple of years, thus saving a big chunk of change that would be spent on a car payment.

What else is there?

Experts advise to start looking for the small but frequent things, daily expenses that you might be able to forgo, or for which you might find cheaper alternatives.

According to Bankrate.com, there are several often overlooked daily habits you might examine...
• Coffee - Stopping by Starbucks on the way in to work for a Grande drip will set you back as much as $481 over the course of a year. Alternative? Buy Starbucks beans at Costco, brew at home before you leave and cut expenses by 80% or more!
• Lunch - Buying lunch everyday seems a necessary evil, but consider packing it with you. Sure, you've got to crawl out of bed ten minutes earlier, but the payoff is worth it. Consider that the annual expense of the daily lunch (at $8) is $2080!
• Happy Hour - This might be harder to change if drinking is part of your social life but here goes. A couple of $4.50 beers, plus a tip for the barkeep works out to as much as $2600 per year! Consider stretching that one beer over the entire Happy Hour to cut the cost in half.

If you look at the everyday habits, you can uncover more, I'm sure. For example, smoking is costly, and at an average per pack cost of$4.50, expensive. And perhaps even more expensive in terms of your health....

With rates starting to rise from all time record lows, your Credit Union can offer you some of the very best in variable rate second mortgage rates - currently 5.00% ANNUAL Percentage Rate, available until December 31st, 2008, and unparalleled ease of application.

Why a variable rate second mortgage? Read on and discover the benefits available to homeowners. As a homeowner, a variable rate second mortgage is a means by which you can use the value of your home to save you money. The loan can allow you to consolidate the balances of a number of existing bills and debts into just one loan... and one monthly payment. The beauty of this is that high interest credit card balances, for example, may be paid off with a loan having a considerably lower interest rate, which saves you money every month! And the difference in your monthly payment can be astounding!

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