Credit Card Accountability, Responsibility and Disclosure Act of 2009

Remember to always use credit cards responsibly.

You may have heard about this on the news or read about it online, but I’d like to go into some detail about what this means for you as a consumer. First, let me remind you that good spending practices and budgeting are ways to avoid financial pitfalls, especially in the state that the economy is in. Avoid buying solely on credit, as your credit score will reflect negatively. Good credit will make future purchases less expensive, so it acts as a reward to those who are responsible.

Back to the subject at hand, this new act will not save you from current debt. It will not guarantee that rates won’t increase or that alterations to your lenders’ policies won’t change. What it does is give you a fair chance to be informed, prepared, and forewarned on any changes made by your creditors. For example, credit card companies will have to give you 45 days’ notice before raising your interest rate (Effective August 20, 2009). This increase only affects charges after the bill officially goes into effect (which is February 22, 2010). Your pre-existing debt will be locked in at the interest rate you’re paying prior to then. That being the case, I’d look for credit card companies to inflate interest rates and lower credit limits in the near future in preparation for their lack of muscle-flexing power that’s to come. The good news is that once the bill goes into effect, interest rates can’t be raised without a good reason (promotional periods ending, variable rates, etc).

Perks of the Credit CARD act include:

Creditors can not base your interest rate off of past payment history on other creditors. This practice is known as “universal default”.

Double billing cycles where finance charges are placed on charges made during the current and previous billing cycles will no longer be allowed.

Due dates can not be on days/times when the creditor is closed (holidays, weekends, midnight, etc).

Credit card holders must be made aware of the consequences of making only the minimum payments in terms of finance charges and how long it will take to pay off a debt under those circumstances.

Statements issued by creditors must give card holders at least 21 days’ notice to pay at least the minimum payment.

You can not be charged a fee for over-the-phone or online payments

To the younger crowd, keep in mind that this act will make it harder for you to get a credit card. Additionally, you must prove that you will be able to pay back the debt. Anybody who’s claimed as a dependent will now have to get a parent/guardian signature that will hold them liable, should the dependent default.

We gotcha covered!

Do you have a loan with Park Community? If so, chances are that our representative went over something called Credit Life and Disability Protection with you. In a nutshell, it’s insuring you against unfortunate events such as layoffs, accidents, and even death. If something happens to you, any loans that are protected through this coverage are paid (up to a maximum of $850 per month per loan). The coverage is through CUNA Mutual Group, which has been credit unions’ primary insurance provider for nearly 75 years.

Don’t think that you have to be confined to a hospital bed for months to qualify for disability insurance protection. Sometimes, even the simplest of injuries can hinder you from working. Even if it’s a short term disability where you miss a few weeks of work, you’ll be covered.

Of course, some would argue that their work has disability coverage and/or life insurance through their benefits package. This is true; however, most disability policies pay out at 66.7% (or less) of your normal paycheck. With the reduction in income, how much harder would it be to make your loan payments? Also, even if the unthinkable happens and you pass away, do you want your life insurance to be used as an inheritance, or to pay off the bills you leave behind?

It might seem like you’d never need such coverage, but it has definitely come to the aid of plenty of our members. That being said, if you come by Park Community for a loan, consider the payment protection plans and what they could do in the event that you’re a victim of an unfortunate circumstance.

My Florida Trip with the Mouse

Mickey, that is. But no, it wasn’t to Disney World. My wife and I just recently took a vacation to lovely St. Augustine, Florida. I highly recommend it, but that’s not what I wanted to talk about. I want to talk about my credit card that happens to have Mickey Mouse on it (my wife’s idea).

While we were on vacation, we didn’t want to be bothered with keeping up with cash, so we charged everything…I mean everything. One time we were at the outlets and bought a single fountain drink for just $1.06 using our credit card. Ah, it was liberating not having to worry about balancing the checkbook while we were on vacation or wondering if the cashier gave us the right amount of change back. We just charged, charged, charged!

This sounds fun, right? Going on vacation, charging everything, and relaxing by the beach…actually it sounds a little irresponsible if you ask me. Not really though. Before vacation, we sat down and figured out how much money we would need for the trip: gas, food, fun, and shopping. Over several months we saved enough money in our savings account to cover the trip. Yes, we were charging, but we kept all the receipts and added them up every couple of days to make sure we didn’t spend more than we had.

The last night we had to settle for McDonalds, but it was nice to have fun on our vacation and not have to pay interest. We paid it off as soon as we got back home.

If you’re getting ready to plan a vacation, open a vacation savings account at Park. Set up a budget now, and make sure your vacation is as relaxing as ours.

First Time Home Buyers Win in 2009

The White House is currently offering up to an $8,000.00 tax credit available for “Qualified First Time Home Buyers”. The tax credit is available for qualified tax payers on homes purchased before December 1, 2009. Go to whitehouse.gov and keyword search “tax incentives” for additional information. Park Community recommends that you consult with a tax advisor or the IRS for complete rules. 

Park Community may also be able to help “Qualified First Time Home Buyers” get up to $5,000.00 in grant money. This money can be used to help with down payment and/or closing costs. Please call Denise Dixon in our Real Estate Department for details at 502/815.1154 or 800/626.2870, ext. 1154. (Grant money available for a limited time only and is subject to income and other qualifications.) 

Park Community Federal Credit Union always recommends that you be pre-approved before going to look for your “Dream Home”. Pre-approval helps you determine what price and payment range you feel comfortable with. You can even apply online at parkcommunity.com. In the quick links section, select mortgage from the “Apply for a loan” drop down menu.  Then click apply now. Complete your application, and you will be on your way to owning your “Dream Home”.  (Mention you saw this blog article and receive a $25.00 Visa Gift Card when you close your loan. Offer valid only for new loan applications received by July 1, 2009.)

 If you are ready to buy, you may want to consider using a local realtor who will work with you to find your “Dream Home”. Realtors have access to many resources that can make finding that “Dream Home” easier than you ever imagined. If you are interested in finding a real estate agent, please visit louisvillerealtors.com.

Frieda digs not-for-profits.

Did you know that credit unions are not-for-profit?  Frieda knew, that’s why she brought her nest egg to Park Community.  She wanted a place that had her best interest in mind, not their own.  At Park Community, we literally go out of our way (we don’t want to get pecked) to give Frieda the peace of mind she needs to grow her nest egg.  It’s worked, too.  She started with 2 eggs, and she now has 4. 

By the way, we figured out that Frieda is a type of ringed plover called a Killdeer.  Remember that dance she was doing?  She was pretending her wing was broken, so that we’d come after her instead of her babies.  She’s one smart bird!

Freida does a dance.

It’s Friday, and Frieda is ready for the weekend.  In fact, this morning she was doing the Friday dance.  Come on, we’ve all done it.  You get up like any other day, put your pop tarts in the toaster, and then you realize:  It’s Friday!  You bust a move like you’re trying out for “So You Think You Can Dance,” but unfortunately you’re one of the contestants that doesn’t get on Mary’s hot tamale train.  Anyhow, you get the picture. 

Frieda’s dance is a little different though.  She’s not really excited about Friday, she’s trying to protect her eggs.  Frieda’s a little bird, but to make herself look big she bushes out and shakes her tail feathers ( I think there’s a song about that).  I said yesterday that there are a lot of similar qualities between Frieda and Park Community, and this dance is one of them.

In the same way that Frieda protects her eggs, credit unions protect your eggs…in this case, your money.  You won’t actually see one of the Park staff shaking their tail feathers, but behind the scenes your money is being guarded by FraudWatch Plus and protected by NCUA.  So rest easy, there’s no need to shake your tail feathers, we’ve got you covered.

I wonder what Frieda has in store for us next week…

Meet Frieda, the credit union bird.

I would say it was your ordinary Monday, but it was actually Tuesday (gotta love “credit unioners” hours and holidays).  I was walking toward the employee entrance when I noticed a rather cute but loud little bird.  I kept my ground with my destination in mind, but the little bird didn’t move.  “TWEET, TWEET,” she screeched as I approached her.  She didn’t budge.  I swung out a little, continued inside the building, and didn’t think much about it until lunch.

As I walking to my car and thinking about where I was going to eat, I was startled by her again.

“TWEET, TWEET!” she shouted.

I again swung out not to invade the bird’s personal space, went to lunch, and tip toed my way back into the building when I returned.  When I made it in, I went on a mission to see if others had encountered my feisty feathered friend.

After a little investigating, the word around the water cooler is that the little bird has laid her eggs in the landscaping that borders the parking lot.  She wasn’t a mean bird from those Alfred Hitchcock movies after all; she was just a good mother trying to protect her eggs.  Aww…

It’s Thursday now, and I’ve done a lot of thinking about Frieda (that’s what I’ve named her).  Frieda has a lot in common with credit unions, and over the next few days I’ll be discussing these similarities…

The unemployed are not without options.

The reality of being laid off due to downsizing and corporate failure is much more apparent these days. With that in mind, it might be a good time to hope for the best, but prepare for this worst. Below are some helpful links that could point you in the right direction if you happen to be one of the unfortunate victims of a receding economy or want to learn more about your state’s economic situation:

Alabama Department of Industrial Relations on Unemployment Compensation
Georgia Department of Labor
Indiana’s Department of Workforce Development FAQ on extended unemployment compenation
Kentucky Office of Employment and Training

If you feel that you have a chance of being laid off, you can also visit your local unemployment office and get the ball rolling on finding temporary jobs while you are searching for more career-oriented employment. Initiative and optimism will be powerful allies in these uncertain financial times, and Park Community is here to assist you in every possible way we can!

Tips for My Other Full Time Job: Being a Mom

Everyone seems to be under a lot of pressure lately with the financial world in turmoil. However, working mothers are under a different sort of pressure. It’s a juggling act to balance family (the most important part of life) and work (a necessity for most of us in today’s world.). I am definitely no authority on the subject, but these are a couple of ideas that I have come up with in a trial and error process of raising my kids while being a good employee:

1. I make my daughters’ lunch almost everyday. Not only is it economical, but I also like to feel that I am contributing to her care when I am at work. I include a smiley face drawn on her napkin (something different each day). She confided that it is her favorite part of her day and she has recently started returning the favor. I opened my lunch at work and found a smiley face of my own.

2. We leave 15-20 minutes early in the mornings. This gives us plenty of time to go back home if something is forgotten (which does happen occasionally). Instead of being frustrated, I can just turn back around without worrying that we will be late. An added bonus is that if we make it through the morning without any disasters or mishaps, I get a nice relaxing drive to work or a few minutes to drink my coffee and get a little done at work before the day actually starts.

3. Another nice way to start the day is having breakfast together. Dinner together is great and we do that around the dinner table almost every night, but something about breakfast together is very enjoyable. It really makes us feel like we have spent part of our day together.

Hopefully someone will find something helpful in these ideas. I know life is busy, but let’s remember that our children will not be little forever so we need to enjoy them while we can!

Blog entry contest results!

For those of you who don’t receive the Thrive or haven’t seen the blog until now, we recently held a blog entry contest challenge that was posted in the Thrive newsletter. Members who received the Thrive were encouraged to submit a few paragraphs on how the economic crisis had affected them and how they were coping with everything that has happened.

We had many entries, and I want to thank everyone for making this a tough decision. Those of you who made submissions had some compelling things to say, and I wish I could give more credit to you other than the thanks of the credit union. That being said, one entry stood out as being more of the meat and potatoes of what we were looking for in terms of the negative impacts of this economic crisis has had and how you have overcome them. Here is what Corey of Louisville had to say:

We are your typical young American family, a mother and father in our late 20s and our two and a half year old son. We are also a single income family, and that single income was cut 25% at the beginning of this year due to the current economic crisis this country is facing. Its hard to remember how lucky we are to still have an income while worrying whether or not well have enough money this paycheck.

It was tough looking at our budget over and over trying to see if there is any way to reduce the amount of money going out every month. Its was also shocking to see how much money you can save when you really put some thought into your finances instead of just blindly paying your bills every month because you can afford to.

Here are a few things that we have done to help save money every month:

1.) We were able to keep hundreds of dollars every month just by refinancing debt from high interest bank credit cards to low fixed interest loans at our credit union.

2.) We have also moved to the budget billing provided by LG&E to help even out our heating and electric bill throughout the year.

3.) Another thing we have done is to call up utilities like garbage collection and our cable/internet provider to negotiate a better price by shopping around for other providers.

It was definitely hard adjusting to our new income but I think overall the pay cut helped us really take a hard look at how we were spending our money. Even though we are making less we are in a much better financial position. Hard to believe isnt it? We have even been able to start a savings account now that we aren’t throwing away all of our money every month.

I leave you with this challenge. No matter what your financial situation is, whether you still have your full income, have gotten a pay cut, or have lost your job, dont give up, dont ever give up. Take a long hard look at your finances and Im sure youll see ways that you can make things work.

Thanks Corey! I hope your words will inspire others to do the same and start taking charge of their financial life. We at Park strive to help our members do just that.