Suzanne Klenk from WSECU tackled five of the most common questions she receives from customers and the public.
For more information about WSECU, visit their website: www.wsecu.org
Email Suzanne with your financial question, or to arrange a FREE financial workshop for your business or organization: SKlenk@wsecu.org
Here's a look at today's questions (and answers!):
We have all had questions with regard to our finances, whether it is about fees, finance options, what’s going on with the mortgage rates, etc…But many times we just don’t know who to ask! It seems like the answer can be different depending on where you get your information. The internet is great, but if you have questions, it is nice to have someone to talk to.
First Question: “I sometimes have to use my overdraft protection. It is less expensive than having a check returned, but at $25-$40 each time, that too can get really expensive! Are there any less expensive options?”
Suzanne: Overdraft protection or ODP is a much less expensive alternative than having a check returned, but you are correct, it can get pricey! There are a couple of options that may be open to you, depending on your financial institution. First, if you know you are going to need to utilize your overdraft protection, contact your financial institution and ask if you can move one lump sum, for one fee, instead of getting a fee for each transaction. The second, and preferable option in my opinion, it to apply for a “Personal Line of Credit” (PLC). This functions much like ODP, but without a fee. If your account is taken below zero, funds are moved from your “PLC” at no fee. Now, because this is a loan, you will pay interest for the time that you borrow the money, but usually at a substantially lower rate and you have 30 Days from the day you borrow the money to make a payment. At WSECU our PLC rate is 8.32%!
Second Question: “We are seeing Mortgage Rates going back up. Is this the time to buy a house?”
Suzanne: Mortgage rates are beginning to change direction. The average rate is about 4.40% for a 30 year fixed with a good credit rating, but we are still seeing them lower for a 15 year fixed. I would say that if you are in the market to purchase a home and you are prepared for the cost of owning a home, then YES! This is a great time to buy. But, the key words there are “If you are prepared”. Buying a home, regardless of the rates, is a huge commitment, emotionally and financially. If you are not ready to be a homeowner then, even with low rates, it is not smart to buy. It is also important be clear about what you can actually afford. The temptation is to purchase more house than you are ready for now with the expectation that you will be able to grow into it, can be a gamble. Talk with a trusted Mortgage Loan Officer or your financial institution and get an evaluation of where you are at financially and what price range you should be looking at for the life you live today.
Third Question: “I have seen commercials that advertise the ability to deposit checks by taking pictures of them. How does that work and is it secure?”
Suzanne: Yes! Mobile deposits! This is for those of us on the go and not wanting to be tied down to a brick and mortar building or to even a particular state! It is the ultimate in convenience for your deposit needs. The WSECU Mobile Banking App is fantastic! I use it all the time…regardless of where I am at, I have access. So, how it works is, you must sign up for your financial institutions’ mobile banking App. This gives you access to your account and ensures that you are depositing to your account. With your mobile device, you take a picture of the front and back of the check, you may also be asked to enter the amount of the check. Then hit submit! It’s a breeze. Now, you need to know that the same terms and conditions apply to this type of deposit as they would to a check you bring in to the building. If the check is no good, or fraudulent, the money will be removed from your account and a fee may be assessed. Also, as to safety and security: Mobile devices are at risk for theft and therefore everything you have stored in them can be stolen as well. Protect your mobile device with passwords and keep them secure. If they are lost or stolen, utilize software to wipe them clean and report the loss to your financial institution so that they can take steps to protect your account. Security is always a concern, but just taking the basic steps to protect your information with passwords is a step in the right direction.
Fourth Question: “How often should I check my credit report and what I am really looking for when I get it?”
Suzanne: That is a great question. Many people ask how often, but most folks don’t know what they are really looking for when they get it! First, you should check your credit reports; plural…there are three agencies out there that are keeping a record on your credit life, at least once per year. At WSECU we recommend, annualcreditreport.com. It is the only website that is sanctioned by the Federal Trade Commission. You need to request all three reports, do not stagger them. You want to be able to compare the information and since it changes every 30 days, you must look at them together in the same time frame.
Now, what are you looking for! First make sure your personal information is correct….Name, Date of Birth, Social Security Number, Address, etc. Many posting errors are due to mistaken identity, so accurate information is important. Then you want to make sure that all the accounts that are listed are yours and that they are posting correctly…i.e.: payment history, balance, length of time you have had the account. If you find any errors, they need to be corrected immediately. I recommend getting assistance from your Member Consultant or Member Service Officer. If you see accounts that do not belong to you…take action immediately.
Fifth Question: “Is it better to put money into savings or to pay off debt”
Suzanne: Both are important, but for many it is difficult to do both at the same time. WSECU has been providing Financial Education for several years now and we specifically discuss savings and debt elimination. The recommendation is that you get an Emergency Fund in place. My personal recommendation is $1,000. That is usually enough to tackle most financial emergencies without going into further debt. Then, with a good spending plan in place, begin hitting the debt hard. I like the “snowball method”, paying the smallest debt off first and then taking that payment and adding it to the next lowest debt, and so on. Little victories here and there keep the motivation up! Talk with your credit union about getting assistance with getting a spending plan and a debt elimination plan in place. Once the debt is paid off, then go back and start saving all that money you were paying out to other people. You will have your full Emergency Fund of 6 months of expenses put away before you know it…and be debt free to boot! Mission accomplished! J