Is There A Difference From One Credit Union To Another?

If you are unhappy with banks, you may consider having a credit union membership. However, once you start looking around, you may notice there are more credit unions than you imagined. 

If so, you'll be wondering if there are any significant differences from one credit union to another. Are there differences? Let's find out.

Who Can Join?

While many credit unions are open to almost anyone, others offer memberships only to select individuals. For example, some credit unions may be open only to military personnel and their immediate families. 

In contrast, others may be open to students and staff from a certain college or university. Thus, before selecting a credit union, make sure you're eligible for membership.

Federal and State Credit Unions

When you examine credit unions, you will find some are federal credit unions, while others state credit unions. While federal ones are regulated by the National Credit Union Association, state credit unions are often supervised by state regulatory agencies. 

However, whether you choose the Credit Union of Denver or another credit union, be aware that all credit unions insure deposits up to $250,000, just as the FDIC does with banks.

Lower Interest Rates

Even though credit unions are well-known for offering interest rates on loans that are generally lower than those found on bank loans, remember that there will be differences in interest rates among various credit unions. 

Thus, if you are interested in pursuing a loan, it will be smart for you to check out several different credit unions before you pick one to join. By doing so, you'll get a loan at a low-interest rate, meaning more money will remain in your pocket.

Community Involvement

Finally, many local credit unions prioritize giving back to the communities in which they are located. For example, they may help support local food banks, do fundraisers for children's hospitals, or even help out the local animal shelter by donating food and other supplies. 

If this is also important to you, be sure to closely examine many community credit unions to find one that aligns well with your priorities and values.

Once you find a credit union to join, you will reap these and many other great benefits. Whether you are taking a class at the credit union to learn more about debt management or seeking a low-interest loan to buy a home or car, you will soon find belonging to a credit union was one of the best financial decisions you ever made for you and your family.

What Rules Should You Follow When Using a Credit Card?

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There are over 365 million active credit card accounts, and the average US household has $5,300 in credit card debt. Credit card debt isn't necessarily bad - even any type of debt should be managed carefully - there are several pros to having money on a credit card.

The amount of money a lender is willing to give you - otherwise known as a credit limit - will depend on your credit score. Your credit score is something you build up over time as you begin to take out credit, which is one of the reasons why a credit card is a good investment.

That soon changes if you don't follow the rules of owning a credit card. Below, we'll explore what rules you need to follow when using a credit card.

Rule #1: Pick The Right Card For Your Needs

There isn't a one size fits all credit card. There are different types of credit cards and offers available to people with the right credit score. For example, you can have a credit builder credit card, balance transfer cards, or low-interest cards.

Which card you select will depend on your needs. If you want a credit card to have some fallback money to rely on, a low-interest card or even a credit builder card would be wise. 

People with a poor credit score and looking to improve it should also look for a credit builder card. Chances are, someone with poor credit wouldn't get accepted for any other card.

Rule #2: Don't Miss Your Payments

Missing payments is a big no-go when bearing the responsibility of having and using a credit card. Missing your payments can result in detrimental damage to your credit score. 

To classify as a late or missed payment in the US, it has to be 30 days after the due date, which differs from countries like the UK, France, and Spain. In the UK, a late payment is recorded as soon as the day after someone misses a payment.

In the US, however, people have 30 days to try and find the money to pay the fee. The minimum payment is calculated based on the amount of money you've spent on the card and your annual interest rates - it's the minimum amount you must pay each month to avoid fees. 

If you're struggling to meet the minimum payment because you have multiple ones due at once, its easy to consolidate your credit card debt and bring everything into one payment. Follow the link for more advice.

Rule #3: Don't Exceed Your Credit Card Limit

Exceeding your credit card limit is a no-go if you want to keep your credit score looking healthy. Your credit card limit is given to you based on the amount companies think is safe to lend you. 

The first thing that's likely to happen if you exceed your credit card limit but pay it back straight away is a fee. A credit card balance in arrears for a prolonged period could lead to increased interest rates and or even rejection from future credit card applications.

The most common cause of an exceeded credit limit is failing to pay the minimum payment, which results in late payment fees, and then interest rates taking money from the account that isn't there. 

People that have reached their credit limit should take care to ensure there is enough money there to cover the monthly interest rate charges and the minimum payment.

Rule #4: Keep Your Credit Utilization Rate Low

Your credit utilization ratio is simply the amount of credit you're using. For example, if you have three different credit cards and two store cards equal to $10,000, and you've spent $1,000 across them all, you're only utilizing 10% of the available credit. As a general rule, lenders like people to use 50% or less of their available credit.

Credit scoring models favor people with a low credit utilization rate because they think they're doing an excellent job at not overspending and have better money management skills than someone close to or has exceeded their credit utilization. 

The lower your credit utilization and the higher your credit score, the more likely you'll be accepted for loans and credit cards with lower interest rates, and the more lenders will be willing to give you.

Rule #5: Only Spend What You Can Afford

A simple and conclusive rule - only spend what you can afford. Just because a credit card company gives you a specific amount; doesn't mean you need to splurge it. Any expert will advise that credit cards should either be for building credit by carefully spending small amounts and paying them off or as a last resort if money is short. 

The less you use, the less you'll pay in interest, and the smaller the minimum payments will be. Be wise with your spending and only spend what you can afford to pay back.

Credit cards are a lifeline. They're also not to be underestimated by not following the credit card rules. Careful spending and repayment are essential, as is understanding how credit cards work and the specific terms and conditions of your credit card agreement. 

How you use your credit cards will influence your credit score, and your credit score determines purchases like houses, cell phones, and cars.

How a Loan Can Get Your Business Off the Ground

If you need a bit of financing to start your business, a loan can be a great option. A business loan is one of the quickest ways that you can help an entrepreneur like yourself get the upfront cash to start operating a business while it’s still in the initial stages. The right business loan for you can help your startup company differently.

A Quick Cash Source

As soon as you’re approved for a loan, you’ll have access to money that can be used to pay for different business expenses. Most loans have short turnaround times for approval, and securing one of these loans can be especially helpful if you need fast cash to pay vendors, inspectors, or other individuals who are trying to help you launch your business. 

You can also use the money that you receive from your loan to pay for office supplies and other important items that are essential to running your company. 

Whether you need a few hundred or several thousand dollars to get your business going, you can apply for as much cash as needed and get the entire amount upon approval.

Helps You Establish Credit

Even though you likely already have personal credit that’s in good standing, you’ll still want to establish credit for your business that’s separate from your own financial history. 

A business loan can help you establish credit for your company so that you’ll have an easier time getting approved for future business loans if needed. Business loans that are paid off in full without any outstanding balances left over can help companies like you earn even higher credit scores.

No Immediate Need to Repay

In most cases, you won’t be required to pay off an entire business loan right away, and you can carry a balance and make only the required minimum payments until your company becomes more financially stable. 

Even though it’s best to pay off the entire loan quickly to avoid finance charges, you’ll have more time to repay the loan and ease some of your financial burdens if you cannot acquire all the money to pay off the entire loan amount immediately.

Starting a business often involves some major financial investments, and you’ll have an easier time paying the expected and unexpected expenses that come with getting a new business off the ground if you can get a business loan for financing. 

A lender can offer you one of these loans and explain the financing terms so that you’ll have a clear understanding of your rights and responsibilities with the loan.

Is It Better to Get a Home Loan From the Bank or a Lender?

When you are ready to buy your home, there will be plenty of choices. The two most common options to finance your home are non-bank lenders or large banking institutions. However, each of them has some differences, and your choice could depend on what's important to you. Learn more about how they differ below.

What is the Difference Between a Bank or Mortgage Lender?

Either a bank or a lender can help you get the funding to secure your new home. The applications will depend on credit, income, and debt qualifications. However, there are some critical differences between the two.

Mortgage lenders have several loan options, while banks have fewer options. Also, banks will usually have tighter credit requirements. It's common for mortgage lenders to sell your loan to another lender after closing. Home loans can be secured with either option, but you should consider how they differ.

No matter who you choose, having a decent credit score can only help in your effort to secure a loan, whether it be through a lender or a bank. 

If you’re unsure of your credit score or how it would perform, you’ll want to focus on increasing your score to at least 700 or higher. In fact, if you were able to get a score of over 800, you could likely get yourself a better interest rate.

How to Know Which Is Right For Me?

There are some pros and cons to each option. Let's start with banks. Banks generally have lower interest rates and will continue to service your loan after closing. Also, they may offer special rates if you already have other financings through them. Banks typically try to promote better loan terms and products to maximize their revenue.

Some cons to bank lending include having stricter lending standards, more fees, and longer closing times. One of the more challenging pieces of a bank loan is getting approval. It's generally more difficult to qualify for a bank loan, and the process takes much longer.

Mortgage lenders have many pros, including more options, quicker loan closing, and may be more willing to negotiate the terms. However, some cons include the servicer selling your loan to another lender after closing, meaning you can expect changes to how you’d pay your loan to the new lender.

Lenders and banks both have their advantages and disadvantages to offering loan services. Thus, it's best to shop around and determine which option is best for you. You can get quotes from several different lenders and banks and compare rates, terms, and closing costs from each. Ask lots of questions to understand your agreement.

How Retired Seniors Can Maintain Their Homes

If you are retired, you know how important your home will be to you in the years ahead. As a result, you, of course, want to keep it in the best possible condition.

However, you also know trying to do some maintenance tasks yourself may now be difficult, if not impossible. To ensure your home is properly maintained as you age, here are some steps you should consider taking immediately.

Update the Plumbing

One of the best things you can do for yourself and your home is to upgrade the plumbing system. This can include having fixtures installed on sinks that are easy to use, having older pipes that may corrode replaced with PVC pipes, and perhaps even removing your bathtub in favor of a walk-in shower. By making a few plumbing upgrades, you will have peace of mind for many years to follow.

Get a New Roof

If your home's roof is nearing the end of its lifespan, getting a new roof after you've retired will be a very smart investment. A new roof can help you prevent the need for repairs in the future. 

When you speak with professionals like Schultz Roofing & Repairs, LLC, you can discuss the benefits of an asphalt shingle roof, learn more about metal roofing, and also consider getting new guttering installed that is designed to not clog up, which will eliminate the need for you to climb a ladder to clean the gutters.

Overhaul the Electrical System

As your home has undergone changes over the years, it is likely you now have many more electronics in your home. This can include not only multiple televisions but also your computer and perhaps even appliances that use smart technology. 

If this is the case, you should hire an electrician to inspect and overhaul your home's electrical system. This can include replacing wiring that may be decades old, upgrading your home's breaker box, and replacing outlets that may also be outdated.

Get New Doors and Windows

Finally, you can not only make your home look better but also make it much safer and energy efficient by having new doors and windows installed. 

Adding new windows to your home will help it stay warmer during the winter while also being made more secure so that they can be locked. New doors will also help your home stay more secure since you can have deadbolt locks installed as well.

Once you make these improvements to your home, there is no doubt you will be able to enjoy your home as you progress into your golden years.

What Is the Ideal Breakdown Between Expenses, Savings, and Investments?

If you have a steady income that more than covers your monthly expenses, you should be planning a financial future. Experts recommend balancing your income between monthly expenses, short-term or emergency savings, and long-term investments. The following ideas might help you to get started.

Expenses

These typically include your household costs each month, such as rent or mortgage payments, utilities, transportation, food, insurance, and medical care. 

You may need to include fluctuating expenses like school tuition, clothes, and entertainment. Financial gurus estimate that up to 80 percent of your income might need to be allocated to this part of your budget. 

Home maintenance and car repairs might fall into this category, although some people consider them part of a short-term savings plan or emergency fund.

Savings

Everyone needs a savings account to cover unexpected costs like replacing a home appliance that goes bad or paying for pet surgery. Short-term, occasional needs like birthdays and holidays might also draw funds from your savings account. 

Vacations, special purchases (like a great deal on a home freezer), or helping a family member through a financial setback are other uses for this fund. In addition, you should save approximately three months to six months of your current income in case you lose your job or have an accident that requires long-term convalescence when you can't work. 

You may want to save about ten to twenty percent of your monthly income if your household expenses average 70 to 80 percent.

Investments

An investment plan can start small and maintain a conservative pace with low risk. Talk to a financial adviser and carefully review stocks of interest to decide where to invest about 10 percent of your monthly income. 

You might also want to invest in windfalls like a job bonus or cash birthday gifts to grow your account more quickly. Stocks will rise and fall, so be prepared to be patient over the long haul.

Credit Unions

Coordinating your budget might seem challenging as you try to juggle these three components. Consider joining a credit union where member benefits are often stellar. 

You can expect prompt, friendly, professional service on a smaller scale that is more personal than what is typically experienced at a local bank. 

Members can get financial advice and guidance in establishing a budget that won't crimp their lifestyle or compromise their future. Interest rates are competitive with and sometimes better than a bank's rate, especially when promotional opportunities are offered.

Make the most of your money for current, occasional, and future expenses. Get professional advice and set up a budget that will financially protect your family and interests.