All You Need to Know About Going Cashless

Woman in cafe paying for coffee with her mobile phoneAs our world grows increasingly digitized, more and more consumers are banishing the cash and coins from their wallets and choosing other ways to pay for their purchases. There’s no lack of alternative payment methods today, from credit and debit cards; to electronic payment apps like Zelle, PayPal and Venmo; to mobile payment wallets like Apple Pay and Samsung Pay; to cryptocurrencies like bitcoin. You may be thinking about following the masses and getting rid of your cash. Or maybe you’re wondering if every transaction in the country will soon be digitized.

We have answered all of your questions about going cashless on a societal and personal level.

What if the entire country went cashless?
Futuristic as it sounds, many people believe our country will soon be completely cashless. They point to the growing number of consumers who rarely touch cash, and claim it won’t be long before the government discontinues the printing of paper money. If that happens, cash would have no value and every vendor, from plumber to dry cleaner to pizza deliverer, would need to have a way to process electronic payments.
In truth, there’s no indication of the government considering this move anytime soon, but, if it ever comes to pass, society would be deeply affected on many levels.

Here are just a few ways society stands to gain by eliminating cash:

  • No anonymous transactions for funding black markets. Most illegal transactions, like the purchase of recreational drugs and unlicensed weapons, happen with cash. Digital transactions always leave a trail, and getting rid of all paper money can significantly curtail the viability of these black markets.
  • Fewer white-collar crimes. Similarly, money laundering and other white-collar crimes will be more difficult to pull off without the availability of cash.
  • No cash management. Printing money, storing it and transferring large amounts of cash all costs money. These expenses will be eliminated along with cash.
  • Easier international payments. If every developed country accepted cashless payments, there’d be no need to exchange your money for local currency when you visit a foreign country.

On the flip side, there are serious concerns associated with the possibility of a completely cashless society. Here are just a few of them:

  • Increased risk of fraud. With everyone paying for every purchase through digital means, hackers have a much wider pool of victims to choose from. Plus, if your accounts are hacked in a cashless world, you’d have no way to pay for anything.
  • Lack of privacy. When every transaction happens online, your personal choices are no longer personal.
  • Inequality. A cashless society is unfair to the poor and unbanked. Without mobile devices for digital payments, or even a credit card, they’d have no way to make purchases.
  • Extra fees. While eliminating cash management might save some money for businesses and financial institutions, there’s no guarantee that payment processors and peer-to-peer payment apps won’t cash in on their sudden rise to significance and start charging higher fees for every transaction.
  • On a personal level
    Regardless of whether the country goes cashless anytime soon, you can decide to lighten up your wallet and pay for every one of your purchases with a mobile wallet or debit or credit card. You may choose to do so for the incredible convenience of cashless payments, or maybe you like the way you can effortlessly track your expenses with cashless payments.

However, before you get all hung up on the idea of going completely cashless, consider these important personal benefits of holding onto some of your cash:

  • Multiple studies show that most people spend less when paying with cash. One such study, performed by MIT and published by Carnegie Mellon Magazine, proved that card-swiping diners spent 42 percent more in a fast-food place compared to cash spenders.
  • Cash is free. Card transactions and digital payments often come with fees to help the retailer offset their cost of the transaction. Cash, however, is always free to use. Some retailers, like gas stations, even offer a discount for consumers paying with cash.
  • Some vendors only accept cash payments. You may not be able to shop everywhere or use the services of every vendor if you go completely cashless.
  • Cash always works. Cards and digital payment processing rely on electrical power and/or internet service. Cash always works, and it can really come in handy in case of a power outage. If you went completely cashless, something as simple as a dead phone battery could render you penniless.
  • There’s no risk of fraud. The worst thing that can happen to you when you’re carrying cash is getting pickpocketed and never seeing that money again. Contrast this to the very real risk of identity theft that every card transaction inherently carries and it’s a no-brainer: Cash is generally the safer way to pay. (Of course, care should be taken to conceal your cash and keep it in a safe place away from nimble fingers.)

Right now, the future of cash is anyone’s guess, but as our society grows more digitized, cash is becoming increasingly obsolete. Whatever personal choice you make about carrying cash, consider the various safety factors involved before making your decision.

Your Turn:
How do you feel about a cashless society? Share your thoughts with us in the comments.

Learn More:
moneyunder30.com
thebalance.com
usatoday.com

Financial Resources Available for Veterans

Army soldier holding and kissing his laughing son on the cheek.We owe the strength and security of our country to our heroic veterans. These brave men and women sacrifice the comforts of home, time with family and often their physical well-being to protect us. Unfortunately, though, many veterans are struggling to make ends meet and to support their families.

If you are a veteran, you likely already know about VA loans, which are no-money-down home loans just for veterans. But did you know there are many other ways the government and charitable organizations can help you get back on your feet?

Here’s a list of financial resources created especially for veterans. Having served our country, you deserve all this and more.

USA Cares Emergency Assistance Program
If you’re a retired service person who is struggling to cover your basic monthly bills, including rent and utilities, you may be eligible for a grant from this organization. The exact amount awarded varies with each case, but the average grant size is $650. You can apply for a grant from the USA Cares Emergency Assistance Program here.

The American Legion Temporary Financial Assistance
This organization helps veterans who are also parents of young children to create a stable home life for their families. It offers cash grants to help qualifying veterans pay for expenses like housing, utilities, food and medical costs. You can read up on the eligibility requirements and apply for a grant here.

Operation Family Fund
Veterans who were severely disabled while serving in Operation Enduring and Iraqi Freedom may be eligible for grants to help cover their medical bills, emergency transportation, vehicle repair and housing. Review the eligibility requirements and apply for an Operation Family Fund grant here.

Coalition to Salute America’s Heroes
This organization provides financial assistance to veterans who were severely wounded while serving in Iraq and Afghanistan. Click here to apply for assistance.

U.S. Department of Veterans Affairs Aid & Attendance and Housebound Assistance
If you are a veteran receiving a VA pension, you may be eligible to increase your monthly amount through Aid & Attendance and Housebound Assistance. If you are bedridden or you need the services of an aide to help you with everyday activities, you can apply for assistance here.

Operation First Response
This organization offers financial assistance for wounded veterans and their families while they are in the midst of the VA claim process, which can stretch on for a year or more. Qualifying veterans can use the funds to cover immediate needs like housing, transportation, utilities, groceries, clothing and more. You can review the eligibility requirements and apply for assistance here.

The Armed Forces Foundation
The Armed Forces Foundation is a nonprofit organization dedicated to providing comfort and financial relief to members of the military community through career counseling, housing assistance, recreational therapy programs and financial support. These programs are available for service members who are on active duty as well as those who are retired. You can read up on the assistance offered by The Armed Forces Foundation and apply for aid here.

Hope for the Warriors
The mission of this noble organization is to enhance the quality of life for members of the military and their families who have been affected by physical injuries or death in the line of duty. Its programs include financial assistance for immediate needs, as well as a special “Warrior’s Wish” program for families. Click here to apply.

Operation Homefront
This wonderful organization provides financial assistance for the immediate family members of the wounded, ill, injured or deployed. Exact criteria for assistance varies by location. Visit OperationHomeFront.net, click on “Get Assistance,” input your ZIP code and an application for assistance through your local chapter will be available for download.

Semper Fi Fund
The Semper Fi Fund (SFF) provides financial relief for any needs that may arise during the hospitalization and recovery of a service member due to an injury sustained while serving in the line of duty. Programs under the SFF include Service Member and Family Support, Specialized & Adaptive Equipment, Adaptive Housing, Adaptive Transportation, Education and Career Transition Assistance, Therapeutic Arts and Team Semper Fi. Assistance is available for all post 9-11 Marines and sailors, as well as members of the Army, Air Force or Coast Guard who serve in support of Marine forces. Apply here.

If you or anyone you know is an active or retired service member who is struggling to make ends meet, don’t hesitate to ask for help. Use the resources listed above, and stop by Advantage One Credit Union if you could use further assistance in basic money management. We’d love to help!

Your Turn:
Have we missed any major financial resources for veterans? Let us know in the comments.

Learn More:
takechargeamerica.org
veteransfamiliesunited.org
military.com

Beware the 2020 Census Scam!

2020 census sheet being filled outEvery 10 years, the Census Bureau makes an effort to count every person living in the U.S. Though the process won’t start until mid-March 2020, the Federal Trade Commission (FTC) is already warning of scammers exploiting the process to con you out of your sensitive information. That’s why it’s important to familiarize yourself with the census procedure; so you know what to expect and so you can easily spot a scam.

We have answered all your questions about the 2020 census.

What’s the purpose of the census?
The U.S. Census is conducted every 10 years to provide the federal government with an accurate count of every living person in the country. This number will affect the amount of federal funding each area receives. This, in turn, pays for Medicaid, affordable housing, mass transit, schools, parks and more. It also affects the degree of congressional representation each area receives.

How will the 2020 census invite people to respond?
To obtain accurate information, the US Census Bureau will reach out to every household, giving residents the option to respond online, via mail or by phone.
Here’s how those invitations will be distributed throughout the country:

  • 95 percent of households will receive their census invitation in the mail.
  • Close to 5 percent of households will receive their census invitation through personal delivery by a census taker.
  • Less than 1 percent of households will be personally counted by a census taker instead of being invited to respond on their own.
  • There are special procedures in place to account for individuals who do not live in households, such as university students and the homeless.

Households that do not respond to the invitation delivered via mail will receive reminder letters, postcards, and questionnaires until they do respond. If they still have not participated in the census by May 2020, the household will be visited by a census taker, who will count them in person. If no one answers the door when they come by, the census taker will leave a door hanger with a phone number for the household residents to call for scheduling another visit. The census taker will continue trying to reach the household personally, or by phone, up to six times.

What kind of questions will I find on the census form?
True to purpose, the census questionnaire will primarily focus on the number of people living in the household at the time the form is completed. You will also need to note each household member’s sex, age, race, ethnicity, relationships to the other residents, phone number and whether you own or rent the home. There will not be a citizenship question on the 2020 census.

How can I determine if a census taker is really a scammer?
One of the most widely anticipated census scams involves a fraudster posing as a census taker, obtaining sensitive information from unsuspecting residents and then using that information to commit identity theft.

You can easily verify a census taker’s legitimacy by asking to see their required photo ID.
Authentic ID will include a U.S. Department of Commerce seal and an expiration date. If you’re still feeling doubtful, ask for their supervisor’s contact information. You can also call the census regional office phone number to verify your census taker’s authenticity.
The most suspicious behavior a census scammer will exhibit is asking intrusive and inappropriate questions. Be wary of answering anything that sounds suspicious and read through the checklist below to learn how to spot a scammer.

A census taker will never ask you:

  • If you are a U.S. citizen
  • For your full Social Security number
  • For credit card numbers or checking account information
  • For a donation
  • To pledge your support for a political party
  • For personal information, such as your mother’s maiden name or the name of the elementary school you attended

A scammer might sometimes try to reach you by phone. By using caller ID-spoofing technology, it may appear as if they are actually calling from the Census Bureau. Remember, though, that a census taker will not reach out to you by phone unless you have failed to respond to several mailed invitations and reminders, and you have not answered the door when a census taker visited you personally. Be wary of any suspicious questions being asked over the phone. If you have reason to believe you are speaking with a scammer, hang up immediately.

If you suspect fraud, call 800-923-8282 to report the incident to a local Census Bureau representative. You also can file a report with the FTC . Your reports will help law enforcement agencies stop the scammers from committing additional crimes.

Your Turn:
Have you ever been targeted by a census scam? Tell us about it in the comments

Learn More:
abc7chicago.com
abclocal.go.com
consumer.ftc.gov

How will my Insurance Premiums be Affected by a Car Crash?

two men involved in a minor car accident exchange insurance informationQ: I’ve recently been involved in a car crash and I’m wondering what to expect as far as my insurance rates. How big of an increase can I expect to see in my monthly premiums?

A: In most cases, car insurance providers will add a surcharge to your monthly premiums following a car accident involving one of the drivers on the plan; however, the exact increase you’ll see, and whether you will see one at all, varies by the driver, insurance carrier and state.

Here are the answers to all your questions regarding vehicle accidents and insurance rates.

What should I do after an accident?
If you’ve been in a car accident, you may be wondering whether you should involve your insurance provider and the authorities at all. If only minor vehicle damage was sustained in the accident at costs that are below or just above your deductible, it may be smarter to pay for the repairs on your own and not to involve your insurance provider. Before you decide to take this route, though, check your policy to see if there is a caveat requiring you to report all accidents.

When you need to file an insurance claim, you’ll also have to file a police report. Be sure to do so as soon as possible after a vehicle accident. You can find the information needed for filing an insurance claim on the insurance documents that you should have in your vehicle at all times. Exchange the following information with the other driver while still at the scene of the accident:

  • Name of driver
  • Name of car owner
  • Names of any passengers in the car at the time of the accident
  • The vehicle make, model and license plate number
  • The driver’s insurance company name, policy number and contact number for claims filing
  • If the police are at the scene of the accident, ask for an official police report right then as well. If you are incapacitated because of the accident, you may need to do some follow-up work when you are back on your feet to get this information. You should be able to access it through your local police department.

How much of an increase in my monthly premiums can I expect to see after an accident?
The exact increase (if any) you will see in your monthly premiums depends largely on what kind of accident you were involved in and whether you were at fault. Other factors that come into play when determining this number include your particular policy and the state where you live. Another crucial point that insurance providers consider is whether this is your first at-fault accident while on the plan. Some providers will allow one minor accident to slide without any lasting impact, while a second crash can raise your rates up to a whopping 80 percent.

A joint study between Insurance Quotes and Quadrant Information Services, which looked at data in all 50 states, found that drivers who made a single insurance claim worth $2,000 or more saw their premiums increase on average by 44.1%, or $371 a month.

Is there any way I can guarantee that my insurance provider will look away from the accident?

If you’ve been with the same insurance provider for a while, you may qualify for accident forgiveness, or a program many insurance providers offer in which they waive the usual post-accident surcharge for qualified drivers. In general, only drivers who’ve been insured by the carrier for a lengthy period of time and who have excellent driving records will be eligible for this free program. Some carriers allow other drivers to join the program for an additional monthly fee. If you are not enrolled in accident forgiveness and you think you may be eligible, speak to a representative of your insurance company to see if you can enter the program.

What if the accident isn’t my fault?
If you’ve been involved in an accident that was clearly not your fault, your rates may or may not increase, depending on your carrier, state and whether this is your first no-fault accident. If you’ve been involved in several no-fault accidents, you may see a significant increase in your premiums. Your insurance provider can also refuse to renew your policy at the end of its life.

Will the car accident affect my credit score?
Your accident and the consequent higher insurance premiums will not affect your credit rating; however, a lower credit score can result in higher monthly premiums, and the reverse is true as well.

Is there any way I can lower my rates after a surcharge?
Implement some or all of these tips to lower your rates:

  • Improve your credit score. Increasing your credit score by paying your bills on time, keeping your credit utilization low and working on paying down your debts can help you earn a lower insurance rate.
  • Increase your deductible. If your insurance premiums have become unaffordable, you may want to increase your deductible. It will mean paying more out of pocket if you are involved in another accident, but you’ll be able to lower your monthly premiums to a more affordable rate.
  • See if you qualify for any discounts. Lots of car insurance companies offer rate discounts for customers who qualify for a specific criteria, such as a multi-policy discount for bundling different kinds of insurance policies, or a good student discount for students who maintain a high academic average in school.
  • Shop around for another policy. If you can’t find a way to lower your premiums, you can look into rates being offered by other carriers. With a bit of research, you might find a provider offering a much better rate for the same amount of coverage.

Your Turn:
Have you recently been involved in a car accident? Tell us how your insurance premiums were affected in the comments.

Learn More:
bankrate.com
carinsurance.com
thesimpledollar.com
moneyunder30.com

Beware of Coronavirus Scams

Man staring menacingly at camera while wearing a medical maskScammers are notorious for capitalizing on fear, and the coronavirus outbreak is no exception. Showing an appalling lack of the most basic morals, scammers have set up fake websites, bogus funding collections and more in an effort to trick the fearful and unsuspecting out of their money.

The World Health Organization (WHO) has published on its website a warning against email scams connected to the coronavirus. The agency claims it has received reports from around the world about phishing attempts mentioning coronavirus on an almost daily basis.

Closer to home, the Federal Trade Commission (FTC) is warning against a surge in coronavirus scams, which are being executed with surprising sophistication, so they may be difficult for even the keenest of eyes to spot.

The best weapons against these scams are awareness and education. When people know about circulating scams and how to identify them, they’re already several steps ahead of the scammers. Here’s all you need to know about coronavirus-related scams.

How the scams play out
There are several scams exploiting the fear and uncertainty surrounding the virus. Here are some of the most prevalent:

The fake funding scam
In this scam, victims receive bogus emails, text messages or social media posts asking them to donate money to a research team that is supposedly on the verge of developing a drug to treat COVID-19. Others claim they are nearing a vaccine for immunizing the population against the virus. There have also been ads circulating on the internet with similar requests. Unfortunately, nearly all of these are fakes, and any money donated to these “funds” will help line the scammers’ pockets.

The bogus health agency
There is so much conflicting information on the coronavirus that it’s really a no-brainer that scammers are exploiting the confusion. Scammers are sending out alerts appearing to be from the Centers for Disease Control and Prevention (CDC) or the WHO; however, they’re actually created by the scammers. These emails sport the logo of the agencies that allegedly sent them, and the URL is similar to those of the agencies as well. Some scammers will even invent their own “health agency,” such as “The Health Department,” taking care to evoke authenticity with bogus contact information and logos.

Victims who don’t know better will believe these missives are sent by legitimate agencies. While some of these emails and posts may actually provide useful information, they often also spread misinformation to promote fear-mongering, such as nonexistent local diagnoses of the virus. Even worse, they infect the victims’ computers with malware which is then used to scrape personal information off the infected devices.

The phony purchase order
Scammers are hacking the computer systems at medical treatment centers and obtaining information about outstanding orders for face masks and other supplies. The scammers then send the buyer a phony purchase order listing the requested supplies and asking for payment. The employee at the treatment center wires payment directly into the scammer’s account. Unfortunately, they’ll have to pay the bill again when contacted by the legitimate supplier.

Preventing scams
Basic preventative measures can keep scammers from making you their next target.

As always, it’s important to keep the anti-malware and antivirus software on your computer up to date, and to strengthen the security settings on all of your devices.
Practice responsible browsing when online. Never download an attachment from an unknown source or click on links embedded in an email or social media post from an unknown individual. Don’t share sensitive information online, either. If you’re unsure about a website’s authenticity, check the URL and look for the lock icon and the “s” after the “http” indicating the site is secure.

Finally, it’s a good idea to stay updated on the latest news about the coronavirus to avoid falling prey to misinformation. Check the actual CDC and WHO websites for the latest updates. You can donate funds toward research on these sites as well.

Spotting the scams
Scammers give themselves away when they ask for payment via specific means, including a wire transfer or prepaid gift card. Scams are also easily spotted by claims of urgency, such as “Act now!” Another giveaway is poor writing skills, including grammatical errors, awkward syntax and misspelled words. In the coronavirus scams, “Breaking information” alerts appearing to be from health agencies are another sign of a scam.

You can keep yourself safe from the coronavirus by practicing good hygiene habits and avoid coronavirus scams by practicing healthy internet usage. Keep yourself in the know about the latest developments.

Your Turn:
Have you been targeted by a coronavirus scam? Tell us about it in the comments.

Learn More:
consumer.ftc.gov
wsj.com
blog.malwarebytes.com

Take Precautions with Connected Security Cameras

Adult viewing a child on a connected security deviceWhen parents hear, “Mommy!” yelled from their child’s room, it’s usually the result of a minor ouchie, or perhaps a stomach ache.

But, for recent users of a doorbell security camera, hearing, “Mommy!” come from their daughters’ bedroom turned their dreams of peace of mind into a nightmare.

Hackers have recently been gaining access to users’ homes via their systems’ two-way talk features. Two-way talk allows users to see what’s going on in their homes and talk to the occupants from a remote location via smartphone or tablet.

One recent attack involved an 8-year-old girl who was told by a male voice over the Amazon Ring security camera in her bedroom that he was Santa Claus and wanted to be her friend—all after calling her racial slurs and telling her it was OK to mess up her room and break her television.

The frightened girl could be seen and heard calling for her mother in the video provided to the media.

In another instance, a woman was awakened while sleeping in her bedroom by a strange voice coming from her Ring security camera. The voice was yelling for her to wake up and calling her dog.

Google’s Nest Cam security cameras are not immune to hackers, either.

One couple experienced hearing a man’s voice over the camera system. It was talking to their baby and then yelling obscenities at them before asking why the homeowners were looking at him (the crook). They also reported that the hackers had made adjustments to their thermostat.

In yet another Nest Cam incident, hackers warned a family about a supposed North Korean missile strike.

A spokesperson for Ring told The Washington Post in a recent statement that the Santa incident “is in no way related to a breach or compromise of Ring’s security. Customer trust is important to us and we take the security of our devices seriously.”

They added that the hackers “often re-use credentials stolen or leaked from one service on other services.”

Nest’s parent company, Google, told CBS News that Nest’s system was not breached, adding that reported incidents stem from customers “using compromised passwords … exposed through breaches on other websites.”

The Ring spokesperson told the Post, “Consumers should always practice good password hygiene and we encourage Ring customers to change their passwords and enable two-factor authentication.”

To prevent these incidents from occurring, CNET.com urges companies to require two-factor authentication (2FA), not just suggest using it.

“2FA would need a second form of identity, often a one-time code sent to a phone after a username and password are entered, or a physical token that’s plugged in,” according to CNET.

The report adds that hackers are using a technique called credential stuffing, a practice of acquiring lists of stolen usernames and passwords and then trying to use them on different accounts. Software tools have been created to specifically hack Ring cameras.

Ring’s representatives told Vice, “As a precaution, we highly and openly encourage all Ring users to enable two-factor authentication on their Ring account, add Shared Users (instead of sharing login credentials), use strong passwords, and regularly change their passwords.”

Take precautions before hackers take your peace of mind via your home security system.

Your Turn:
How do you protect yourself from home security camera hackers? Tell us in the comments.

Learn More:
wsbtv.com
washingtonpost.com
cbsnews.com
cnet.com
vice.com

Should I Refinance to a 15-year Mortgage?

Middle-aged man and woman work at a laptop to figure out their mortgage paymentsWith mortgage rates holding and a booming economy, lots of homeowners are rushing to refinance their mortgages to lock in low rates. One increasingly popular option is to refinance a conventional 30-year mortgage into a 15-year loan.

Borrowers may be wondering if this is a financially sound move to make for their own home loan.

We’ve researched this option and worked out the numbers so you can make a responsible, informed choice about your own mortgage.

When refinancing can be a good idea
The primary attraction to a shorter mortgage term is paying off your home loan sooner, typically at a lower interest rate. This can help you increase your home equity faster and can mean paying thousands of dollars less in interest over the life of the loan. Therefore, refinancing to a shorter-term loan makes the most sense when interest rates are falling.
It’s also a particularly good idea for homeowners who can easily afford to increase their existing monthly mortgage payments. In addition, homeowners whose home values have increased since they financed their original mortgage will be more likely to qualify for a 15-year loan, since they will have a lower loan-to-value ratio —how their home’s current value compares with their current loan balance.

How much money can I save?
There is no quick answer to this question, as there are several variables at play in each refinance. To provide a basic idea of what a shorter-term home loan can mean for your finances, let’s take a look at how the numbers would work out in a 15-year refinance on a conventional home loan.

As mentioned, a 15-year loan generally carries a lower interest rate than a 30-year loan. If national interest rates are falling when you refinance, and/or your credit has improved since you bought your home, your interest rate can be even lower. According to Bankrate’s most recent survey of the nation’s largest mortgage lenders, on Dec. 6, 2019, the benchmark 30-year fixed mortgage rate was 3.74 percent and the average 15-year fixed mortgage rate was 3.16 percent.

Let’s assume you refinance your fixed $300,000 mortgage with an interest rate of 4.5 percent to a 15-year loan at an interest rate of 3.5 percent.

If you kept your existing mortgage unchanged for 30 years, you’d be making 360 payments over the life of the loan at $1,520.06 a month, not including taxes, insurance and other fees.

Toward the beginning of the loan, an overwhelming majority of your monthly payment will go toward interest, with less than $400 going toward your principal. By the time you pay off your loan, this ratio will reverse itself and the majority of your payments will go toward the principal of the loan. Most importantly, over the life of your loan, you will have paid $247,220.13 in interest.

Now let’s explore what these payments would look like if you refinanced this loan to a 15-year fixed-rate loan at a 3.5 percent interest rate.

Over 15 years, you would make 180 payments of $2,144.65. Over the life of the loan, you’d be paying $86,036.57 in interest payments, bringing significant savings of $161,183.56. You’d also be chipping away at your principal at a far quicker pace, with $1,269.65 of your very first payment going toward the principal of the loan.

If these numbers are exciting you about getting your refinance process started, take a step back and slow down. First, these numbers may or may not translate directly to your own situation. In the above example, savings are calculated over 30 years, but you may be nearing the halfway point of your 30-year mortgage. A refinance can still be a good idea if it can get you a lower rate for the remainder of your loan, but your interest savings will be significantly less than those described above. Second, your interest rate may not be a full point lower after a refinance, as it is in our example. This, too, will afford you less savings.

There are other crucial factors to consider before jumping into a 15-year refinance. Read on for a review of some of the more important variables to think about when making this decision.

What will a refinance cost?
Refinancing your mortgage is not cost-free. Expect to pay a minimum of 2.5 percent of your new loan in closing costs and other fees.

Here are some of the possible fees you can expect during the refinance process:

  • A fee for pulling your credit
  • A fee for processing your paperwork
  • Lawyer fees
  • An inspection fee
  • Discount points, each of which are equal to one percent of your home loan, which will give you a lower mortgage rate
  • An appraisal fee
  • A surveyor fee
  • Title search fee
  • Title insurance

Before you get started on the refinance process, it’s a good idea to tally up these expenses and see how much it would cost you to refinance.

You might be offered the option of refinance at no cost. This means your closing costs will be rolled into your new mortgage payments. This can make financial sense if it means saving money in the long term, but it’s a good idea to work out the numbers before you continue with the process.

Finally, your existing mortgage may have prepayment penalties, which can cut into the amount you’ll save by refinancing. Find out about these fees before you set the refinance process in motion.

When refinancing to a 15-year mortgage is not a good idea
If you’re convinced that a 15-year refinance is right for you, make sure to consider this crucial factor before going ahead with the refinance: Your monthly mortgage payments will increase significantly after a 15-year refinance. In the example above, the mortgage payments increased by $624.59 a month. Your own payments may see a similar change, and any increase will impact your finances.

If you’re financially responsible, you won’t consider this move unless you are confident you can afford to meet this increased mortgage payment. However, you may not realize that tying up your spare cash in your home’s equity can be a risky move. It can make more financial sense to first build an emergency fund with 3-6 months’ worth of living expenses, and to increase your retirement contributions. If you’re carrying any high-interest debt, you’ll want to pay that down, too, before moving ahead with a refinance.
Increasing your monthly mortgage payments can mean leaving you with a tighter monthly budget and very little breathing room. Make sure you are fully prepared to swallow these costs before you go ahead with a refinance.

Are you ready to make the move to a shorter-term loan? Speak to a representative at Advantage One Credit Union today to learn about our fantastic home loan options.

Your Turn:
Have you refinanced to a 15-year mortgage? Tell us about it in the comments.

Learn More:
.bankrate.com
money.com
mybanktracker.com
themortgagereports

How To Dispute An Error On Your Credit Report

Woman on phone with credit bureauQuick-what’s your credit score?
As a financially responsible individual, you should be checking your credit on a regular basis. You can do this by signing up for free credit monitoring on a reputable website like CreditKarma.com, requesting your annual complimentary credit report from AnnualCreditReport.com and reviewing your monthly credit card statements.

If all goes well, your report will hold no surprises and your score will be in excellent shape, or steadily increasing. Sometimes, though, you may find an error in your report. It might be a sharp decline in your score when you know you haven’t changed your spending or bill-paying habits, a large transaction you’re sure you’ve never made or an unfamiliar line of credit. While it can be disconcerting to find a mistake in your credit report, the good news is you can contest errors like these and fix your score.

Mistakes you may find on your credit report
Credit report errors are quite common. In fact, 26% of participants in a study by the Federal Trade Commission found at least one error on their credit reports that brought down their score. A lower score can mean getting hit with higher interest rates on loans, and can prove to be an obstacle when applying for a new line of credit or a large loan.

Most of these errors can be traced back to clerical mistakes, though some are caused by a lack of action on your part, or by criminal activity.

Credit report errors include the following:

  • You’re mistakenly identified as someone with a name similar to yours.
  • A credit account was never included in your report, weakening your perceived credit worthiness.
  • Your loan or credit card payments were applied to the wrong account.
  • A legitimate credit account or debt has been reported and recorded multiple times.
  • Your name is still linked to your ex-partner’s accounts and debts.
  • Identity thieves have used your name and credit file to open accounts and take out loans you knew nothing about – and it’s unlikely they have been making payments on those loans.

To avoid credit report errors, make sure to use your legal name on every line of credit you open, to remove your name from any accounts you are no longer associated with and to have all of your creditors report your open accounts to the major credit bureaus. As mentioned above, it is also crucial that you monitor your score to find mistakes as quickly as possible.

3 steps to disputing an error

If you’ve spotted an error on your credit report, don’t panic. Follow these three steps to dispute the error and fix your credit:

Step 1: File a dispute with each of the major credit bureaus.
You’ll need to inform all three major credit bureaus, Equifax, TransUnion and Experian, about the error. All three bureaus allow you to file disputes online.

In your written dispute, you’ll need to clearly identify each disputed item in your report, explain why you are disputing these items and ask that the errors be deleted or corrected. Include your full contact information, as well as copies of any documents that support your claim. You can also include a copy of your credit report, highlighting the items you are disputing.

To file your dispute online, follow these links for each of the three major credit bureaus: Equifax, TransUnion, Experian.

You can also file your disputes by mail to Equifax and TransUnion; Experian currently accepts online disputes only. If filing by mail, it’s best to send your letter via certified mail with a requested return receipt. It’s also a good idea to keep a copy of your correspondence for your own records.

    • Mail your Equifax dispute to the following address:
      Equifax Information Services LLC
      P.O. Box 740256
      Atlanta, GA 30348
    • Mail your TransUnion dispute to the following address:
      TransUnion LLC
      Consumer Dispute Center
      P.O. Box 2000
      Chester, PA 19016

Step 2: Contact the creditor
After you’ve contacted each bureau, you can also reach out to the creditor that’s linked to the error in your report. This step isn’t necessary, but it may speed up the correction process.

Most creditors will provide a link or an address for disputes. When filing your dispute, follow the guidelines above and include all relevant information and documentation. Be sure to let the creditor know you’ve also contacted the credit bureaus, as they’ll want to include this information and a copy of your dispute if they report their findings to the bureaus. You can also ask to be copied on all correspondences between the creditor and the bureaus.

Step 3: Follow up in 30 days
Expect to be contacted by the bureaus and the creditor within 30 days after filing your disputes. If all goes well, your dispute will be accepted and your credit will be restored. In many states, you are eligible to receive a complimentary credit report following a registered dispute.

If one of the credit bureaus or a creditor refuses to accept your dispute or does not resolve the error in your favor, you can ask the bureau or creditor to include a copy of your dispute in your file and in all future credit reports. This way, a lender or creditor will be made aware of the alleged error when reviewing your credit. You may be charged a small fee for this service, but it is generally worth the price. If you feel the error is too significant to ignore, consider hiring a lawyer to help you contest the report and fix your credit.

Disputing an error on your credit report is fairly simple. Always monitor your score and be vigilant about correcting errors. The payoff can affect your financial wellness for years to come.

Your Turn:
Have you ever filed a dispute for an error found on your credit report? Tell us about it in the comments.

Learn more:
creditkarma.com
myfico.com
consumerfinance.gov

How to Make Your Career Choice Fit Your Budget

Young woman sadly regards a document on her desk.As you prepare for graduation and begin scouting different employment opportunities, be sure to look at the larger picture before you accept a position.

Hopefully, you’ve chosen a career path that will bring you joy and gratification. Equally important, though, is a job that can support your lifestyle choices. While the positions you consider for your first post-college job will likely offer the opportunity for growth, you’ll still need to pay your bills—and make your student loan payments—as soon as you graduate. A job that brings you satisfaction and a pleasant working environment will not last long if the salary it offers causes you to sink into debt.

How do you determine what kind of salary will be large enough to support your desired lifestyle?

To get this information, you’ll need to create a mock monthly budget for your post-college self.

Using a spreadsheet or paper and pen, create two columns, one for expenses and one for actual dollar amounts. In the expense column, list your typical monthly expenses, including housing costs, transportation costs, health insurance, groceries, entertainment costs, clothing costs, dining out, savings, etc. In the dollar column, list the amount of money you expect to pay every month for each expense.

Your budget should look something like this:

ExpenseMonthly Cost
Housing$1,200
Transportation$300
Health Insurance$250
Groceries$350
Student Loan Payments$350

It will take some research and some hard, honest thinking to come up with these numbers. For housing costs, take a moment to think about where you see yourself settling down after college. You don’t have to know the exact neighborhood you’ll live in, but it’s good to know the city that will work best for you in terms of lifestyle, career path, and family plans. You can narrow this down to a few choices so long as you keep it reasonable. Once you’ve chosen your desired location, research the median rental prices in the area on real estate sites like Zillow and Redfin.

Next, work on transportation costs. If you already own a car, you’ll have an idea of what it costs you each month. Otherwise, spend some time thinking about what kind of car you want to drive. You can find listings on Carfax.com. Include costs like auto insurance, gas, and upkeep, in this category.

Or, if you plan on living somewhere with reliable public transportation, you might choose this route instead. Make a calculation of how much you’ll spend on bus and/or train rides, along with the occasional cab or ride-share ride.

Complete your budget using your best estimates for each category. Once you’ve filled out each expense amount, add up your total and multiply it by 12 to give you the amount of money you’ll need each year for supporting the lifestyle of your choice. (This number will increase with inflation, but since current salaries will likely increase along with the inflation rate, this exercise can still give you an idea of the annual salary you’ll need.)

Now that you have these numbers, you’re ready to go ahead with your job search. When considering possible positions, you don’t have to choose the one that pays the highest salary if there are other things about the job you don’t love. However, it’s best to pursue positions that can actually support you.

Your Turn:
Are you choosing your first job for the salary or for other factors? Share your take with us in the comments.

Learn More:
knsfinancial.com
money.usnews.com
money.usnews.com
brazen.com

Beware The Fake Check Scam Targeting College Students

Young man standing in line at a credit union with a 2' x 4' checkMaking the transition from high school to college isn’t easy. You need to deal with a whole new set of rules, adapt to dorm life and get to know your new classmates, teachers and roommates. Then there’s the financial aspect: applying for financial aid, grants and scholarships; paying for school supplies, electronic devices and textbooks. And don’t forget about budgeting for food costs, clothing and more.

Unfortunately, scammers are making this transition even more challenging than it already is. There’s recently been an uptick in fake check scams targeting new college students. Young adults make excellent targets. In fact, according to the BBB Institute for Marketplace Trust, consumers ages 18 to 24 are three times more likely than seniors to fall prey to a scam. In addition, the BBB’s ScamTracker Risk Report of 2018 found that 41.6% of students reported a loss when exposed to a scam as compared to 28.3% of non-students.

Don’t be the next victim! Here’s how you can recognize a fake check scam and take steps to keep yourself safe.

How does the scam play out?
There are several variations of the fake check scam, but all of them ultimately lead to the victim cashing an extra-large fake check and returning the difference to the scammer.
In one scenario, the scammer will send a bad check to a potential new roommate. The check allegedly secures the renter’s spot in the room, and will be made out for an amount that is greater than the requested holding deposit. The victim will be asked to deposit the check and send the extra funds back to the “renter.” Unfortunately, the check won’t clear and the victim will never see that money again.

In another variation, a young college student will be offered a remote position working for an alleged business. The student will receive a check to use for purchasing supplies or to cash as their paycheck. Here, too, the check will be made out for more money than necessary, and the victim will be instructed to send back the difference to the scammer.

Again, the check will ultimately not clear and the student will be out the money they sent.

In yet a third variation of this scam, students will receive phone calls or messages from companies promising to lower their student loan payments. After applying for this “service,” the student will be sent an extra-large check. The rest of the scam will follow the same script described above.

How can I spot a fake check scam?
Watch out for these red flags which likely indicate a scam:

  • You’re asked to cash a check that is made out for more money than necessary and to return the difference to the sender.
  • The alleged roommate, employer or loan company insists on paying you via check only.
  • You cannot find any information online about your potential new roommate, employer or loan company.
  • The alleged roommate, employer or contact from the loan company refuses to answer any of your questions about their location and refuses to meet face to face.

If you suspect a scam, cut off all contact with the scammer and report it to the Federal Trade Commission at FTC.gov and to the Better Business Bureau at bbb.org. It’s also a good idea to warn your friends and classmates that this scam is circulating so they don’t fall prey to it.

It’s also a good idea to keep an eye on your credit. As a young student, you are a primary target for scammers. If your financial information has been compromised and a scammer is helping themselves to your credit file to open loans or lines of credit in your name, you may not learn about this fraudulent activity until extensive damage has been done. You can monitor your credit via a free service like CreditKarma.com, and by requesting your annual complimentary credit report from AnnualCreditReport.com. Review your monthly credit card statements as well and check for suspicious activity on your accounts.

Adjusting to college life is hard enough without dealing with scams. Proceed with caution and be wary of anyone offering you more money than you’re expecting for whatever reason. Stay safe!

Your Turn:
Have you been targeted by a fake check scam? Tell us about your experience in the comments.

Learn More:
abc7chicago.com
whnt.com
affordablecollegesonline.org