Credit Union Is It Right For You

Wednesday, December 19th, 2012

Credit Unions and banks share many of the same services. You can open saving accounts, checking accounts, get loans and do pretty much all the same things with both of them. So if they both offer all the same things, why does it matter which one you choose? While both credit unions and banks offer the same services, that does not necessarily mean they are equal. One may be better for you then the other.

So how do you figure out whether or not a Credit Union is it right for you? Well look into the pros and cons of both credit unions and banks and see which fits your situation better.

Pros:
1: A credit union is typically a non profit organization, whereas banks are a business like any other. What this means is that credit unions do not worry as much about making a profit as banks do. This translates into lower fees for you and better savings. Because of this, the interest rates and fees will almost always be better with a credit union.

2: Since credit unions are non profit organizations, if they make more money then they need to operate they will often pass that back to their customers, giving you a greater benefit if your credit union is doing well.

3: The dreaded overdraft fee is something we all have dealt with at one point or another. But with credit unions, their overdraft fees are ten to fifteen dollars cheaper than a bank’s overdraft fee. This difference is also shared in other fees such as late credit card payments.

Cons:

1: Finding out if a Credit Union is it right for you also requires you to look into the cons as well as the pros, and one of the major cons is that using ATMs can cost a fair bit. Credit unions may have lower payments on other aspects, but they often charge high fees for using an ATM. If you are someone who uses an ATM regularly, then these fees may negate any benefit you get from using a credit union.

2: The requirements to open an account at a bank are typically quite low, in most cases they only require you to be above a certain age. And even then that is often bypassed by having a guardian co-sign with you. Credit unions are often far more strict, having a variety of requirements you must meet in order to join. If you do not meet these requirements, it does not matter if a Credit Union is it right for you, you wont be able to use it.

3: Credit unions are not insured by the FDIC, also known as the Federal Deposit Insurance Corporation. This means that if something happened to your money, you would be out of luck. However some credit unions are insured by the National Credit Union Administration. So if you plan on using a credit union make sure to look into it and check to see if it is insured or not. You do not want to trust your money to someone who does not have insurance.

Credit Score Controlling Insurance Rates

Tuesday, December 18th, 2012

When dealing with insurance, there are a lot of factors that determine just how much your premiums are. Anything from your gender and age, to your driving record or criminal record. But there is actually another factor that a lot of people might not know about. Your credit score can play a huge role in determining just how much you have to pay for insurance.

Credit Score Controlling Insurance Rates is not a very well known fact, but it has become one of the norms in recent years. Insurance companies will now look at your credit history and if you have bad credit, you can expect to pay much higher premiums.

As can be expected, many people do not agree with this change in policy. Many people will argue that your credit score has nothing to do with whether or not you will file a claim on your insurance policy. One has nothing to do with the other.

While it is an undesired policy, it has also become a standard in the insurance industry, so as much as we may not like it, it is here to stay. That means you should be aware of your credit score when attempting to get insurance. If you have a bad credit score you should make plans for paying higher premiums.

With Credit Score Controlling Insurance Rates you should also be aware of how your insurance company determines your premiums based on that credit score. There are several agencies in the United States that will create your credit report. Insurance companies look at all of these, since those agencies use different methods and often come to different conclusions.

They will look at various things, such as pending bills, loans, bankruptcy and more. When factored all together you get your credit score, which is what your insurance company will look at.

Even though this policy is more than a little dubious, there is a bright side to it. A lot of people who are sick of having to pay high premiums are actually taking better care of their finances in an attempt to raise their credit score so that they do not have to pay as much.

So in some kind of twisted way it can be a bit beneficial since it gives more incentive to be more careful with your money. That does not make it any better, but it is something you can look at to make things a little easier.

However, if you do not want to look on the bright side and do not want to deal with your Credit Score Controlling Insurance Rates, all is not lost. There are still some insurance companies out there who have not yet adopted this policy. They are few and far between, but they do exist.

If you do not want to be penalized for your financial troubles in these difficult times, then looking into these companies that do not have this policy is probably your best bet. You should also recommend them to friends and family if you are happy with their service, since if they get strong business they may be less inclined to adopt this policy.

Borrowing Money From Family-Think Twice

Friday, December 14th, 2012

Borrowing Money From Family can be a tricky business to say the least. When you borrow money from say, a bank, and you are unable to make your payments they will simply come after you for collateral. But what happens if you lend money to a family member and they are unable to pay you back? Are you going to go and take their car? Of course not. This is what makes lending money to family members so difficult.

If you are planning to lend money to any family members, you need to be prepared to say goodbye to that money forever. In most situations the odds of you being paid back are quite small, so you need to be aware of that. Since lending money to family members can be difficult, there are some tips to help make it easier.

1: Never lend out money that you need or want. If you yourself are on a tight budget you can not afford to go giving money to friends and family. It may sound harsh but you have to come first, if you go broke who is going to help you? As I stated above, any money you give you need to be prepared to never get back. So if you have no money to spare, then you can not give any away.

2: Assess the risk involved. When someone is Borrowing Money From Family they will of course tell you they will pay you back. But you need to assess the situation they are in to see if they can pay you back. Every circumstance is different, but if that family member has a history of not paying back loans or are reckless with their money, why would you lend it? Make sure they are able to pay you back, or at least make sure you know what you are getting into.

3: Never co-sign on loans. In certain situations family members may require a co-signer for a loan. The bank may not like their situation enough to give them a lone unless they get someone to co-sign for them, and so they may turn to you. However, it is advised you do not co-sign on loans. It puts you at risk for having to pay back the money should the other person default on their payments, money you may not have.

4: Give money freely as gifts. Seems a bit counter productive since so far I have been saying to be careful when people are Borrowing Money From Family. But that is something we forget as we age. When we are teenagers we often get money as gifts, but we really do not need it. When we grow up and actually need the money, nobody will give it to us.

Give your adult children and family members money for birthdays or holidays, if you can afford to. Not only can it help them out, but it also gives you some leverage should you ever be forced to deny them a loan. So it ultimately helps both you and your family members.