Wednesday, August 26, 2015

Shop Local!

Your credit union is built on the idea of people helping people.  You already know we can do a better job looking after your money than a mega-chain bank that answers to shareholders, because we know you and our community.  So why give that up when you find a bargain online?  Shopping locally is better for the community, better for the environment and the best way to find something unique that can make all of your friends say “wow.”

Shopping locally benefits your community.

When you shop locally, the money you spend stays in the community.  Buying a new pair of shoes from a local shop takes dollars out of your pocket and puts them into the pockets of a local resident, of course.  What you might not consider is that those dollars get spent by the business owners as well, and they’re also likely to spend their money locally.

Friday, August 14, 2015

Is It Time To Refinance?

 
With rumblings about a possible Fed hike in the prime interest rate, Janet Yellen has much of America scrambling to make sense of their savings. Many of us are uncertain about how to allocate investments to maximize our money.  For most of us, the bulk of our money is tied up in our homes, and any change in the prime rate brings with it one major question:  Is it time for me to refinance?  Unfortunately, any time macroeconomics dominates the national news, it’s difficult to find experts who can agree on what’s going to happen and even more difficult to understand what they have to say. That’s why we’re here.  We’ll do our best to explain what might happen, what it means for you, and help you figure out whether or not it’s time to refinance.

Question:  Why would the Fed raise the prime rate?

Answer:  While it’s impossible to guess all of the factors the Fed looks at when it makes a decision, a good indication that rates might go up is the fact that rates haven’t gone up since the Bush administration. Interest rates aren’t supposed to be this low for this long.  When interest rates are low, Americans are punished for saving and encouraged to spend, often racking up incredible debt.  Between credit cards, college tuition, and similar factors, the Fed might want to rein in all of this spending.

Question:  OK, then why wouldn’t the Fed raise the prime rate?

Answer:  There are a lot of really odd factors occurring in the global economy right now, and oddness makes for uncertainty, which increases risk, which causes economists to perspire.  Chief among the factors that might lead to an increase in the prime rate is the rapid rise in the value of the dollar, which hurts exports, particularly because the dollar is strengthening against the currencies of two of America’s largest trading partners: China and Europe.  Raising the prime interest rate makes Americans more likely to save their money, which takes dollars out of the market and raises the price of the dollar even further. This exacerbates the trade deficit by making importing products cheaper and exporting them more expensive.  An interest rate hike also makes it harder for businesses to expand, since they will have to pay more for their loans, and hits average Americans in two sensitive areas:  their mortgages and their credit card debt.

Question:  How would a rate hike affect my mortgage?

Answer:  A rate hike can only have one of two effects on your mortgage:  It can raise your payments or do nothing.  The only way a rate hike won’t raise your payments is if you have a fixed-rate mortgage; otherwise, your monthly payment is going to go up.

Question:  How can I keep my mortgage bill from going up?

Answer:  If you don’t want to start paying more every month for the house you already have, consider refinancing into a fixed-rate mortgage before the Fed raises interest rates, whether that’s next month, next year or both.

Question:  I already have a fixed-rate mortgage.  Is there any reason to refinance my home?

Answer:  If you were planning on refinancing at any point during the life of your mortgage, now is a great time to do it (and perhaps the best possible time to do it).  Once the prime rate goes up, you won’t be able to get as favorable a rate on your next loan as you would now, even if you’re moving from fixed rate to fixed rate.  If you want to get out of your old loan and into a new one, act before the Fed does, whenever that turns out to be.

Question:  Should I buy points?  Does the prime rate affect the price of points?

Answer:  The Fed won’t change the price of points on your mortgage, just the starting point for your rate before you buy any.  Whether you should buy points depends on a lot of different factors, and your best plan is to talk directly to a specialist at CORE Credit Union to figure out what’s right for you.

But a rate hike decreases the value of points. If you were going to buy those points with cash, the value of money in your savings account will go up if the Fed increases rates. If you were going to use some of the equity from your original loan, you might be better off putting it toward variable-rate loans, like the balance on your credit cards.

The Fed will eventually raise rates. So, it could be worth tens of thousands of dollars to refinance your home now. At the very least, you owe it to yourself to fill out an application.  If you still have questions you can call us at 912-764-9846 or drop us an email at info@corecu.org.

Thursday, August 13, 2015

Tax-Free Weekend … Every Weekend

For most of us, tax-free weekend has come and gone. It was a heady rush, getting our Black Friday fix in the sunshine of August, and the kids are ready to head back to school with new clothes (that they don’t yet hate) and school supplies (they haven’t yet lost). But what about the people who missed out? What about the kids who just need one more thing? What about mom and dad who deserve a tax-free spree, too? Is there a way to shop tax-free every weekend without ending up with the IRS coming after them?

The answer is yes, you can shop with a 10, 15, or 20 percent discount every day and do it without breaking the law. Some of our favorite tips for keeping costs down are below. They also come with a plan for turning your shopping savings into long-term savings, because it’s not enough to keep money in your pocket, you’ll want to put it to good use, too.

When you’re done reading, hit up our Twitter feed or Facebook page to share your favorite tips and post pictures of your best hauls.

Bring your smartphone. Don’t buy anything in a brick and mortar store without pricing it online first. If you’re the kind of shopper who frequently buys on impulse, just bring your smartphone and do a few searches of the most likely places you’d find the item you’re looking at, like eBay, Zappos or the website for the store where you’re shopping. The Amazon app even lets you scan a barcode with your phone’s camera and does the searching for you. You can save a lot with this simple 30-second step.
Shop for used gift cards. We all know the feeling of getting a gift card we’ll never use. Well, a variety of websites offer a place for people to sell their unwanted gift cards, often for well below the face value of the card. Everybody wins: The seller gets some value out of a gift card that would otherwise be sitting in a junk drawer and the buyer gets a nice discount.

So, before you check out online or in-store, search Gift Card Granny and Gift Card Zen. They have some gift cards that will transfer to you in five minutes or less, allowing you to save 10-15% right away. All gift cards are backed by the site, so you don’t have to worry about scams. For many of the big chain stores like Target and The Gap, those online codes work in store as well, so you can save money while you wait to check out.

Clear your cookies. Retailers are smart, so they know that getting you to make a quick purchase on your first visit means they’ll probably get you to shop at their store for life. They’ll offer you a coupon for 10 or 20 percent off of your first purchase if you sign up for promotional emails on your first visit. Those offers often expire within 24 or 48 hours. As smart as retailers are, their websites are not quite as intelligent. It’s easy to make websites think it’s your first visit so you can get that coupon every time you visit. All you need to do is visit the site from a different browser than you usually use. If you don’t have more than one web browser, you can download Chrome, Mozilla or Opera for free, and use that for this trick next time, too. Sometimes you just have to use your phone. If none of that works, try clearing your cookies and browser history. Then, all you need is an email address you haven’t used at that site, and most of us have a few of those just waiting to be used.

Turn your everyday savings into long-term savings. It’s great to save a few dollars every now and then, but it doesn’t always feel like you’re really getting anywhere. But you were going to spend that money anyway, so if you put it in savings, it wouldn’t be a sacrifice. You can pull up our website at www.corecu.org or app Apple®, Android™  or Kindle™  and transfer that money to savings before you even leave the store. If you put an extra $25 away every month, that’s $300 per year … without really trying!

If that seems like a lot of work, you can also work the gift card trick into your monthly budget. If you normally spend $25 per month on coffee, buy a $25 Starbucks gift card online from Gift Card Zen for $20 at the beginning of the month, then put $5 into your savings. Now you’ve got the savings and an easy way to stay on budget. The gift card can go into their app so the whole family has it on their phones – it’s like Starbucks is paying you $5 to make your life easier.

You can do this for all the places you shop. For instance, do you budget $100 for clothes, $300 for gas, $50 for eating out, $25 for coffee and $25 for movies each month? If you get gift cards for those stores at 10 percent off, you’ll save $50 each month, totaling $600 per year. If nothing else, you can put that in one of our Holiday Club accounts and have it at the ready to take care of your holiday shopping!

Wednesday, August 12, 2015

How To Take Advantage Of An Interest Rate Hike


The last time the Federal Reserve raised interest rates, Barack Obama was a U.S. senator, but many prognosticators who watch the Fed say that a number of factors suggest we’re due for a rate hike sometime within the next few months.  If the Fed raises interest rates, it will mean a raise in the price of any new loan you take in the future as well as an increase in how much you pay every month on the adjustable-rate loans you already have.  So, even if the discussion leaves you yawning, it’s important to act quickly if you think the Fed will raise interest rates. That’s because taking the right actions before a rate hike can save you thousands of dollars in interest payments after the rate hike.  Here are some tips to protect yourself, save money and maybe even make a profit if interest rates go up this year:

If you have a high credit card balance, move it to a loan with a low, fixed rate.

Credit card rates have remained around 13 percent, on average, for several years, but a Fed hike would raise those rates.  To make matters worse for people with sizable credit card debt, those rates compound quite quickly on a revolving account like your credit card.

One way to deal with your credit card debt is to move your balances from the cards you have now to a single high-limit card with a 0% introductory rate and pay it off in full before the introductory rate expires. However, using a credit card to pay off a credit card can be a dangerous strategy, because if you don’t pay off the principle by the end of the introductory period, whatever you have left will start charging interest again, and perhaps at a high rate (pay attention to the fine print).  You also run the risk of falling back into bad habits and filling your new card up to its limit again.

If you think you’re ready to move your credit card debt onto a single, low-interest card 4.9% fixed APR* for 12 months on balance transfers made between July 20 and September 30, 2015, try our CORE VISA credit card. You can apply online here: www.corecu.org.

If you have more credit card debt than you feel comfortable paying off in the introductory period of another card, you might consider a home equity loan.  Home equity loans have a low, fixed rate, so you can avoid an interest rate hike and save money in interest payments every month.  While it might seem a little scary to borrow against your home equity, if you have accumulated significant credit card debt, your home might be the only source of wealth you can borrow against to cover it.  The loan payments should be less than you’re paying your credit card companies every month, so you’ll find it much easier to make your payments and get out of debt.

If you’re interested in using your home equity to get out of credit card debt, you can start the application process here: https://core.nssecurebanking.org/loans/login or find out more by calling our home equity specialists here: 912-764-9846.

If you were planning on buying a house (or refinancing) soon, it’s time to make your move.

Fixed-rate mortgages will be unaffected by any interest rate hikes the Fed might employ, so if you think a rate hike is coming, get your mortgage now.  The difference of a few percentage points in the federal rate could mean mortgage payments increasing by as much as hundreds of dollars per month for some homeowners. Avoiding that fee is as simple as getting the paperwork for a new home loan finished before a rate hike occurs.

If you wanted the extra few months to bulk out your down payment, or you weren’t sure about refinancing this summer, it’s time to sit down with a professional who can take you through the numbers and find out how much that indecision might cost.  You can find a mortgage specialist here: 912-764-9846 or follow this link to get pre-approved right now: https://core.nssecurebanking.org/loans/login

If you’re investing, it’s time to look at conservative options.

As long as the Fed kept interest rates low, it was a good idea to invest more heavily in stocks than investment products offered by financial institutions.  Low rates meant easy loans to businesses and expansion was easy, so it was driving up stock prices.  As rates go up, credit markets slow down, and expansion becomes less profitable for all those corporations in which you own shares.

At the same time, as the prime interest rate goes up, so does the return you’ll enjoy on your Interest Plus Checking and Certificate of Deposit (CDs). Find out what we can do to put your money to work by checking out our financial products here: www.corecu.org, and if you’re trying to get some money put together for college or retirement, don’t forget about our 529 and IRA accounts.

No one knows for sure what Janet Yellen is going to do.  Predicting the Fed’s rates is a big-money business for a lot of powerful institutions.  In the end, you’re going to have to decide if you want to leave your money in places where a rate hike could increase your costs, or put it into more stable products.  If you aren’t sure what to do and want guidance, feel free to call or come by, we’d love to help you understand your options.

*APR - Annual Percentage Rate. Promotional rate applies to transferred balances only. Terms and restrictions may apply. All credit cards are subject to credit approval.