Vacation

Planning your dream vacation is an exciting venture, and considering financial options is a crucial aspect of the process. Let’s delve into the pros and cons of using a personal loan to fund your trip, with a special focus on relevant insights for credit union members.

Pros of a Personal Loan for Vacation

  1. No Collateral Required: Personal vacation loans don’t necessitate using property or assets as collateral, providing a sense of financial security.

  2. Fixed Monthly Installments: Repayment occurs through fixed monthly installments over a predetermined period, aiding in budgeting and financial planning.

  3. Credit-Dependent Eligibility: Factors like your credit score and annual income influence eligibility and interest rates, allowing for personalized loan terms.

  4. Competitive Interest Rates: Vacation loans often offer lower interest rates compared to credit cards, translating to potential cost savings.

Cons of a Personal Vacation Loan

  1. Potential Fees and Interest: Borrowers should exercise caution, as hidden fees and interest charges could increase the overall repayment amount.

Considering a Line of Credit

For credit union members exploring alternatives, a line of credit, such as a credit card, presents another option. While providing flexibility, it’s essential to be mindful of potential impacts on credit health. Accumulating a high balance might signal financial strain, negatively affecting creditworthiness.

In Conclusion

While the allure of a loan can expedite your dream vacation, prudent financial planning is paramount. Budgeting and patiently saving a portion of each paycheck into a credit union savings account remains the optimal strategy. This approach ensures you enjoy your getaway without the burden of debt.

Optimal Financial Decision-Making with The Family Credit Union 

For tailored financial advice and guidance on choosing the right option for your dream vacation, connect with us. The Family Credit Union is committed to empowering our members with sound financial decisions. Let’s embark on your journey to financial well-being together!

Remember, your dream vacation is within reach – and with wise financial choices, you can make it a reality without unnecessary financial strain. Contact The Family Credit Union for personalized assistance and embark on your vacation with confidence!

Have you ever wondered about the secret recipe behind your credit score? While some ingredients are straightforward, others can be confusing or open to interpretation. One such element is the “credit account mix,” which may leave you with mixed feelings. Let’s shed some light on this topic and gain a better understanding.

Your credit score has one element that plays into it call the credit account mix.

The Credit Account Mix Demystified

Your credit account mix refers to the blend of different types of credit in your financial portfolio. It goes beyond simply having multiple credit lines—it showcases your ability to handle various types of debts successfully. From cards to car loans and mortgages, each account type adds to your credit mix.

Why it Matters

Lenders value a diverse credit mix as it demonstrates your capability to manage different financial obligations simultaneously. Being able to handle both installment loans (e.g., mortgages, car loans) and revolving credit (credit cards) reflects positively on your creditworthiness. It instills confidence in lenders that you will repay borrowed money reliably.

VantageScore and Credit Account Mix

VantageScore, one of the prominent credit scoring agencies, emphasizes the significance of credit mix in its scoring model. In addition, VantageScore also considers credit experience. A varied credit mix, consisting of different types of products, indicates your expertise in managing diverse financial responsibilities.

How it Works With FICO

FICO, another major reporting agency, assigns a 10% weight to credit mix in its scoring model. Although this may appear relatively small, it shouldn’t be underestimated. FICO not only evaluates the types of credit you possess but also scrutinizes the payment history associated with each loan. A solid credit mix won’t compensate for a questionable payment history, as payment track record contributes 35% to your FICO score.

How You Can Build and Improve

If you currently lack a diverse credit mix, there’s no need to panic or rush into applying for multiple credit cards or loans. Haphazardly pursuing such avenues can harm your credit score. Remember, every loan application triggers a hard inquiry, which can cause a slight score drop. The most effective way to build and enhance your credit score is by consistently paying your bills on time, without exception.

The Family Credit Union and CreditSense

The Family Credit Union offers Credit Sense, powered by SavvyMoney®, is a tool that provides you ongoing access to your credit score, along with recommendations on how to improve it. Credit Sense℠ gives you the ability to monitor, improve, and ultimately save you money by managing your credit scores.

Remember, a well-balanced credit mix can unlock favorable borrowing rates and potentially save you thousands on loans for significant investments like homes or cars. Stay informed and proactive, and watch your credit score soar!

Now, access your credit scores from anywhere, anytime within your Home Banking session or in the Mobile Money app.

Understanding the nuances of credit cards vs debit cards is vital for financial management. While credit cards offer credit building and fraud protection, misuse can lead to debt. Debit cards limit spending to available funds but don’t impact credit scores. Explore our resources at The Family Credit Union for informed decisions.

Credit Card Pros and Cons

Pros:

  1. debit cardBuild your Credit History – Credit card use is reflected on your personal credit report. This includes positive use, such as on-time payments and low credit utilization, as well as negative items such as late payments or delinquencies. Your credit report information is then used to calculate your credit scores. Your credit score will help you buy a house or a car, so it’s important to build up a good credit score.
  2. Fraud Protection – Credit cards offer much greater protection against fraud than debit cards in most cases. As long as the customer reports the loss or theft in a timely manner, their maximum liability for purchases made after the card disappeared is $50. Unlike debit cards, which have much higher liability costs, especially if the card is not reported stolen right away.
  3. Great for Emergencies – Credit cards can be a great way to take care of larger, unexpected costs. Car problems, medical bills, and unexpected bills can be covered by a credit card if you don’t have funds in your checking account. As long as payments are made on time after the fact, it is an easy way to have peace of mind.

Cons:

  1. Irresponsible Use Leads to Debt – Credit cards are paid back with interest, so maxing out your credit cards and not being able to pay them off leads to debt. This can also harm your credit score, making it harder to buy a home or car. Make sure to use your credit cards responsibly!

Debit Card Pros and Cons:

Pros:

  1. You Can Only Spend What you Have – You can’t spend what you don’t have with a debit card, therefore you can’t go into debt when using a debit card.
  2. Spending Won’t Affect Your Credit Score – Debit cards hold no sway over your credit score, which can be both positive and negative.
  3. Make ATM Withdrawals – You can pull cash out of an ATM with a debit card. For purchases that require cash, a debit card will almost always be necessary.

Cons:

  1. If You’re Out, You’re Out – Debit cards only allow you to spend the money you currently have, so if an emergency comes up and you don’t have money, it can be a difficult situation to face.
  2. Can’t Improve Your Credit Score – As talked about before, you will benefit from having a good credit score when making large purchases such as a house or car. Without using credit, you can’t build up good credit history and therefore you will either have no credit score or a poor score.

Understanding the nuances of credit vs debit is vital for financial management. For more information on building your credit, explore our resources like Credit Climber or engage in financial coaching. No matter your decision, The Family Credit Union is here to help you understand your finances and what choices are best for you! Contact us today to open a line of credit, open a checking account, get a debit card, and more.

The Family Credit Union is offering a holiday helper loan to give you a boost just in time for the holidays! This loan has an easy application with as low as 6.99% APR for 12 months. You can even skip a payment in December or January. Our Mastercard rates will be lowered through the end of the year with 1.99% APR on purchases. You can also give gift cards, which has a zero purchase fee.

This holiday season, let us work for you! We know 2020 has no been easy on most of us, so let us give you a helping hand. The Family Credit Union can be your little helper. To learn more about this Holiday Helper loan, contact our office or visit our website. We would also like to wish you a Merry Christmas and happy holidays!

holiday helper

credit cardsDo you have a credit card? Do you have more than one? According to Fortune, the average American has 3.84 cards per person. What are the pros and cons of having multiple credit cards? Let The Family Credit Union show you the reasons you should have more than one card and also some things you need to avoid.

Convenience, Protection, and Rewards

It’s important to protect yourself in this age of identity theft and hacking. If your card is compromised, lost, or stolen, it may take several days to replace it or unfreeze the account. If you have a backup card, you will be able to use that while you wait for your main card. Another way that a second card can protect you, is using one just for online shopping. You can keep track of how this card is used and see what is being spent. In addition, make sure this card isn’t attached to your checking or savings account. If it were to be compromised, the crooks wouldn’t be able to clean out your bank accounts.

Just about everyone has this happen to them: You go to buy something and the card is declined. You know that there is money in the account, but for some reason, the system isn’t letting the payment go through. If you have a second card, you can use that to pay for your purchase. Traveling? You may find that your main card isn’t accepted. If you have a secondary card, you will have a protection, so that you can continue enjoying your trip.

There can be a financial bonus to having multiple cards. Different cards may offer different rewards. You may get points for travel, airfare, cash back, and other perks. You may want to use one card for points and another for the kind of warranty it offers on the purchase.

In addition, places like The Family Credit Union offer secured credit cards. These cards allow people with no credit or bad credit to build or rebuild their credit. A secured card offers a lower line of credit, but if you use the card and make the monthly payments, it will help increase your credit score.

Words of Caution When Using Multiple Credit Cards

You’ll need to be organized. If you have multiple lines of credit, you’ll need to make sure you pay them on time or you will be charged late fees and damage your credit. If you miss too many payments, your interest rate may increase. In addition, make sure you use the cards for the purpose you got them. If you’re not careful, you can run up charges on all the cards. You will have to make sure your will-power is ready to go.

If you are already in financial trouble, don’t open another card as a solution. All that will do is compound the problem and lead to bigger debt problems. Talk with a trusted financial advisor for other debt solutions.

It is recommended that you don’t max out your cards. Most experts suggest not using more than 30% of your available credit. This keeps the payments manageable and gives you some cushion if an emergency were to occur.

If you need help keeping track of multiple cards, services like online banking from The Family Credit Union can be a big help. It’s important that you make your payments on time, or your credit score can suffer. Automatic payment reminders and online bill pay can make handling multiple cards much easier.

Be Informed Before You Make A Decision

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Hopefully, the information above will help you decide if multiple credit cards are the right choice for you. If you have questions or would like more information, stop into your favorite Family Credit Union branch or give us a call. We’d be happy to help you with a TFCU credit card or other resources.

credit card for The Family Credit UnionGetting your first credit card can be an exciting, but scary thought. If you are wanting to buy a house or car down the road with a good interest rate, building credit is important. The Family Credit Union has put together a list of tips for first-time credit card users.

Control Your Spending

Create a plan for your money. By taking note of what you are spending, you can know exactly where your money is going. This will give you an idea of how much you should be charging during a certain period. If there is something that you can’t afford in your budget, don’t rely on your credit card to pay for it.

Pay Off the Balance Each Month

As long as you stick to your budget, your credit card shouldn’t be a problem to pay off each month. Paying off your balance each month will prevent you from paying interest fees. A credit card balance each month results in interest that can add up.

Monitor Activity

Many first-time credit card users don’t check their activity as often as they should. A large portion of identity theft is stolen through credit card information. By signing up for email alerts every time the card is used or checking your account every few days, can help users to monitor their activity.

Pay Your Bill On Time

It is very important to pay your credit card bill on time and to at least pay the minimum. Late fees can add up quickly. Your payment history is the most important influencer on your credit score. The Family Credit Union has different options of credit cards available for our members. Contact us today and we will be happy to provide you with more information.

Tax seasonWe get it, tax season can be very stressful. That’s why we have a special reduced 1.990% APR rate on balance transfers made on or between March 14 and May 31, 2019. For twelve months from transaction post date, you will have this reduced rate. After 12 months any remaining balance from this promotion will return to the current purchase APR of your usual card rate. In other words, you have a whole year to pay back the balance transfer. We want to make things a bit easier for you this tax season.

Credit Accounts with the Family Credit Union

If you are looking to open a credit card with us, you can look at our different options to see which one might work best for you. We have our rewards credit card or our mastercard basic. With your credit account, you can take advantage of this special. Contact us today to learn more about this special, or about opening a new credit account to take advantage of this rate. We can answer any questions you might have. Give us a call!