FEDERAL WAY, Wash. and BEAVERTON, Ore. (12/30/11)--Thousands of consumers got an early start to a financial healthy 2012 by joining credit unions in the weeks leading up to Bank Transfer Day (BTD) Nov. 5.
BTD activities likely garnered 450,000 net new members (new members minus attrition--those who move or closed accounts) in September and October, according to estimates from the Credit Union National Association (News Now
While joining a credit union is a good start, credit unions can advise their members about four additional ways to become more fiscally fit in 2012: managing their credit cards effectively, shopping for cars and better interest rates, taking advantage of historically low mortgage rates and being realistic when selling a home, according to the Northwest Credit Union Association (NWCUA).Manage credit cards effectively.
Everyone uses plastic. The key to effective credit card management is to create a monthly budget and stick to it. Members with cards high rates from other financial institutions may consider switching to a credit union that offers a card with a lower rate.
The influx of deposits at credit unions will prompt some to offer beginning-of-the-year balance-transfer promotions that allow members to reduce their interest rate, potentially saving the consumer hundreds or even thousands of dollars in interest payments.Shop sales for the best auto rates and promos.
Many consumers have been putting off swapping out their old cars for a newer model. The new year will be a great time to take advantage of better than reasonable auto financing at credit unions, said NWCUA. For the same reason many will offer great credit card balance transfer promotions, credit unions will roll out a number of new- and used-auto financing promotions.
Loan pre-approval can be an advantage for members who enjoy shopping for cars on their own. Credit unions can encourage their members to pre-qualify for loans before they begin car shopping to avoid unnecessary hassles.
Members with cars financed through other financial institutions might consider transferring remaining loan balances to lower rate loans with a credit union. According to the National Credit Union Administration (NCUA), as five-year new-car loans at banks were carrying an average interest rate of 5.1% in September, credit unions were quoting 3.73%.Take advantage of historically low mortgage rates.
Members who are homeowners and have not refinanced in the past two years may be able to save money by refinancing with a credit union.
Credit unions should offer two tips to homeowners who are considering refinancing:
Be realistic when selling a home.
- Refinance only to the amount of current indebtedness; and
- Consider reducing the loan term to 20 or 15 years for a more attractive rate.
Home prices are dropping, which makes it easy to cling to a price from a previous appraisal. No one wants to admit they are losing money, but sellers will come out ahead if they price their homes to current market conditions, rather than continuing to pay expenses as their homes wither on the market for months, or even years.
Even if they do find a willing buyer sellers should be made aware that, the home must appraise at the sale price or the sale will fail. Reality should be the seller's guide.
Credit unions can stress there are always benefits to being a credit union member and help their members learn what benefits they are eligible for and how to take advantage of them.