Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Consumer Archive

Consumer

Paying taxes with plastic could backfire

 Permanent link
NEW YORK (3/2/09)--Although the convenience of charging your tax bill may be tempting, fees and interest could end up costing a bundle (SmartMoney.com Feb. 19). By paying your taxes with plastic, you commit to pay an additional 2.49%--the fee merchants usually pay credit card companies when you charge purchases. The Internal Revenue Service (IRS) isn’t interested in doling its revenue to card companies, so you must foot the charge. If you’re thinking of putting your 2008 tax bill on a credit card, understand the costs:
* Paying a $14.94 fee to charge a $600 tax bill may seem worth the convenience to some. But if that tax bill climbs to $3,000, or $4,000, you’re looking at fees between $75 and $117. And, unless you pay off your credit-card balance in full the next month, any one of these tax bills will begin to pile on interest. * Some more financially sound options include a personal loan from a friend or family member, a signature loan from your credit union, or an installment plan with the IRS (Bankrate.com video Oct. 1). The $52 installment setup fee and the 0.667% monthly interest rate (8% annual percentage rate or APR) is lower than most credit cards. Even if your card carries a lower APR, the installment plan can help you make quicker and more regular payments. File IRS Form 9465 to get started. * If you decide to use plastic to gain credit card reward points, frequent-flier miles, or other benefits, make sure you're able to pay off the balance in full right away. Accumulating interest on a very large tax bill can quickly wipe out the benefit of those rewards.
Even if you can’t afford to pay your tax bill, be sure to file on time. The monthly interest rate for not paying a bill that has been filed is 0.5%, but jumps to 5% for those who simply chose not to file. On a $1,000 tax bill, that amounts to $10 and $50 a month, respectively. You can find more information about payment options at irs.gov. For more information, read “Don’t Miss Out on Tax Breaks” in Home & Family Finance Resource Center.

HandFF Radio--CUNA economist on economy forecast

 Permanent link
WASHINGTON (2/27/09)--The state of the economy is the focus, and the Credit Union National Association’s (CUNA’s) Governmental Affairs Conference (GAC) in Washington, D.C., was the setting for this week’s H&FF Radio show, featuring two prominent experts sharing economic forecasts and financial tips. Home & Family Finance airs Sundays at 3 p.m. EST on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network. The Credit Union National Association (CUNA) and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA’s websites. Sunday’s show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
* “State of the Economy and an Economic Forecast,” with Bill Hampel, senior vice president, economics & statistics, and chief economist, CUNA, Washington, D.C.; and * “How You Can Do Better in Difficult Times,” with Jack Gillis, director of public affairs, Consumer Federation of America, and president, Gillis & Associates, Washington, D.C.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; Western Corporate FCU, also known as WesCorp, and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve our country worldwide. For more information, read, “February Financial Fitness Challenge--Keep Your Head When Facing Job Loss” in Home & Family Finance Resource Center.

Military members encouraged to beef up savings

 Permanent link
MADISON, Wis. (2/25/09)--Current economic events are making it harder to save, even for high-wage earners, self-employed professionals, and business owners just one paycheck away from disaster. For those who struggled to save before, it may be even harder now, says Credit Union National Association's Center for Personal Finance. "In the military, personal financial stability has a direct impact on mission viability. If military personnel are distracted by financial problems caused by too much debt and inadequate personal savings, they'll be less likely to be focused on the mission," says Sarah Shirley, director, Military Saves, Consumer Federation of America, Washington, D.C. "For that reason, Military Saves is a cornerstone in the Department of Defense Financial Readiness Campaign. Personal and family financial readiness is a crucial component of military readiness," she adds. Join thousands of other military members during Military Saves Week this week through Sunday--and step up your savings. Military Saves is part of the nationwide America Saves campaign that focuses on the way Americans save money. Military Saves encourages servicemembers to evaluate their savings progress and take action to save and spend responsibly. No matter your financial situation or how much you earn, you can save. Even the smallest amounts tucked away regularly will accumulate into a nice savings cushion. To get started:
* Scrutinize spending. Find out and record how you spend money. Write down what you spend--even on little things--to see where your money is going. * Take advantage of direct deposit. Direct deposit is convenient, timely, and environmentally smart--a wise choice for all, but especially for deployed members who might not be stationed near their credit union. * Use a tax refund. If you’re receiving a refund, use it to start a rainy day fund, pay extra toward a credit card bill, or pay off other debt.
To join Military Saves, visit militarysaves.org. For help developing a spending plan, use the “Budget Blueprint Calculator” in Home & Family Finance Resource Center.

Savings week also encourages responsible spending

 Permanent link
ALEXANDRIA, Va. (2/23/09)--Saving money goes hand in hand with responsible spending during tough economic times, and America Saves Week--which ends Sunday--focuses on both. Consumers came close to saving more money in the last three months of 2008 than in 2005 and 2006 combined. The personal savings rate jumped to 2.9% of disposable personal income as consumers squirreled away $310 billion in the final quarter of 2008 (fool.com Feb. 12). While the increase in the personal savings rate is a step in the right direction for consumers, experts agree that the savings rate will need to climb to at least 6% to be an adequate amount for people to rely on during tough economic times (Businessweek.com Feb. 15). So, how can you save and spend responsibly? For the third year in a row, hundreds of local and national organizations promote better savings and spending habits through events, positive press, and the Internet during America Saves Week. Visit Americasaves.org to enroll and make your dreams a reality. In addition to the nformation provided through America Saves, here are a few tips to help you improve your savings habits:
* Re-evaluate spending. You may find extra money to sock away into savings. For example, you could skip one pizza a week, downgrade your cable package, or use the library instead of purchasing books. * Look for layaway. Layaway programs provide an alternative to using your credit card. You pay a small fee up front, make regular interest-free payments over a period of time, and take the item home from the store once you’ve paid the full purchase price. But there are downsides to layaway. Not every retailer offers it, and typically there are cancellation fees and returned-check fees. Make sure that you’re able to make the payments over the agreed time, and check the store’s layaway policy before you plunk down your cash. * Automatic deductions. Specify an amount to be automatically deducted from each paycheck and deposited directly into your savings account. Before you know it, you’ll forget that the amount is being deducted from your paycheck and your savings will continue to accumulate. Ask the credit union or your employer how to set up the automatic transaction.
For more information, read “10 Ways to Spend Smarter,” “A Dollar Saved is Two Dollars Earned” and “Living Within Your Limits” in MoneyMix: Launch Your Life.

Use America Saves Week to jump-start savings habits

 Permanent link
WASHINGTON (2/20/09)--America Saves Week, from Sunday to March 1, is the focus of this week’s H&FF Radio show, with guests focusing on simple habits that have lifelong benefits. Home & Family Finance airs Sundays at 3 p.m. EST on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network. The Credit Union National Association (CUNA) and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA’s websites. Sunday’s show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
* “America Saves,” with Nancy Register, associate director, Consumer Federation of America, Washington, D.C.; * “Lower-Income Household Savings Initiatives: Saver’s Bonus Act and AutoSave,” with Ray Boshara, vice president and director of Asset Building Program, New America Foundation, Washington, D.C.; * “Never Too Young to Save: Start Young Savers Off On the Right Foot,” with Eric Porter, executive vice president, business development and marketing, Co-op Network, Rancho Cucamonga, Calif.; and * “Build an Emergency Savings Fund,” with Ethan Ewing, president, Bills.com, San Mateo, Calif.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; Western Corporate FCU, also known as WesCorp, and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve our country worldwide. For more information, read “Tough Times Series: Gen X: Ditch Your Debt and Become Smart Savers” in Home & Family Finance Resource Center.

Tax tips for tough economic times

 Permanent link
NEW YORK (2/18/09)--Don’t be in a hurry to file your taxes this year or you may miss out on much-needed tax breaks. Check whether you qualify for deductions or credits, particularly if you lost your home to foreclosure, incurred job-hunting costs, or tapped your retirement accounts early (The New York Times Feb 10). Tax year 2008 was anything but normal, and the tough economy has tax filers asking tough questions. In response, the Internal Revenue Service (IRS) has ramped up its website with a special section to address common questions. The answers could mean a significant boost to your refund. Check how these situations affect your tax return before you file:
* Unemployment benefits. Although unemployment benefits were extended last year, those benefits are treated as taxable income. However, in most states you can choose whether or not to withhold taxes from unemployment benefits. If you have other sources of income--such as a spouse’s wages, you may benefit from withholding unemployment taxes. But, if unemployment benefits are your only source of income, withholding is not necessary because you will owe very little when you file your taxes (USA Today Feb. 10) * Retirement withdrawals. If you tapped your individual retirement account (IRA) or 401(k) and didn’t repay it within 60 days, you owe income taxes, plus a 10% penalty if you’re younger than age 59 ½. Ask about penalty waivers if you used the money for certain expenses, such as medical insurance payments, after you lost your job. You may qualify for similar penalty waivers for a 401(k) hardship withdrawal, unless you’re younger than age 59 ½. Other exceptions: You’re eligible for penalty-free withdrawals as long as you left your job the year you turned 55 or later. And you can tap your Roth IRA accounts penalty-free as long as you withdraw your own contributions but not investment earnings. * Discharged debt. If you had debt forgiven on your mortgage, you will not owe taxes on that amount--up to $2 million, or $1 million for married people filing separately. This applies only to debt used to purchase, build, or improve your home. * Earned income tax credit. More people qualify for the Earned Income Tax Credit: a married couple with two children and adjusted gross income less than $41,646 in 2008 may be eligible for a tax credit of $4,824. Even if you do not owe any taxes, you can receive the credit in the form of a check—but you must file to claim the credit. * Child and Saver’s tax credits. More taxpayers are expected to qualify for the child tax credit, the additional child tax credit, and the Saver’s Credit. Married couples filing jointly must have adjusted gross income of $53,000 or less. * Rebate checks. If you earned too much last year to qualify for the stimulus check, but your income has dropped (or you had a baby), you still may have a chance to claim it based on your 2008 income. Single taxpayers with incomes of less than $75,000 qualify for a $600 check. Those with incomes up to $87,000 will get a reduced amount. Married taxpayers filing jointly with income up to $150,000 qualify for the $1,200 rebate. Use line 70 on the 1040 tax return to claim the rebate. * Medical expenses. Itemized medical expenses exceeding 7.5% of your adjusted gross income are deductible. This includes co-payments, deductibles, premiums, health insurance costs, and other reimbursed medical expenses. * Miscellaneous deductions. To claim these deductions--which include tax preparation costs, safe deposit box fees, work uniforms, and job search expenses--all combined miscellaneous expenses must exceed 2% of your adjusted gross income. If you’re job hunting, deductible costs include résumé paper and printing, travel expenses, long-distance calls and faxes, postage, meals, and lodging expenses. If you’re forced to relocate at least 50 miles for a new job, expenses qualify. To claim the deductions, you must be searching for a job in the same business or trade as the one in which you were previously employed.
If you can’t afford to pay your taxes, file anyway--on time--and pay as much as you can afford to avoid penalties and interest. Ask for an extension, payment plan, or some other form of relief. The IRS website at irs.gov (search for “what if”) offers more answers to your 2008 tax-related questions. For more information, read “Don’t Miss Out on Tax Breaks” in Home & Family Finance Resource Center.

Childrens health insurance program expands

 Permanent link
WASHINGTON (2/16/09)--An estimated four million more children are eligible for federally funded health care as a result of legislation that President Barack Obama signed on Feb. 4 (cnn.com Feb. 4). The new law affects the State Children's Health Insurance Program (SCHIP). It expands the number of children covered by more than 50% at an expected additional five-year cost of about $35 billion, which will come from an increase in the federal cigarette tax. SCHIP offers benefits to children whose parents have income above the limits for Medicaid, the federal health insurance program for the poor, but who can't afford to buy private insurance on their own. For little or no out-of-pocket expense, SCHIP pays for children’s common health care costs such as doctor visits, prescription medicines and hospitalizations. Individual states, whose eligibility rules might differ slightly, administer SCHIP. Typically, the program covers uninsured children younger than age 19 whose families earn less than $34,100 a year (for a family of four). To learn details about SCHIP in your state, visit insurekidsnow.gov/states.asp or call 877-KIDS-NOW (877-543-7669).

Experts warn about scams shady collection practices

 Permanent link
WASHINGTON (2/13/09)--The lineup of experts on Sunday’s H&FF Radio show shares valuable advice on three timely topics: how to steer clear of foreclosure rescue scams, your rights when debt collectors call, and the social costs of not being financially literate. Home & Family Finance airs Sundays at 3 p.m. EST on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network. The Credit Union National Association (CUNA) and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA’s websites. Sunday’s show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
* “Social Cost of Financial Illiteracy,” with Jack Gillis, consumer advocate, author, director of public affairs, Consumer Federation of America, and president, Gillis & Associates, Washington, D.C.; * “Foreclosure Rescue Scams,” with Barry Wides, deputy comptroller of community affairs, Office of the Comptroller of the Currency, Department of the Treasury, Washington, D.C.; and * “Fair Debt Collection,” with Thomas Kane, senior attorney, Division of Financial Practices, Federal Trade Commission, Washington, D.C.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; Western Corporate FCU, also known as WesCorp, and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve our country worldwide. For more information, read “Tough Times Series: Lenders, Counselors Help Homeowners Avoid Foreclosure” in Home & Family Finance Resource Center.

Challenge youth to take clean energy action

 Permanent link
WASHINGTON (2/11/09)--President Barack Obama is “moving full steam ahead on energy efficiency, not despite but because of the fragile state of the economy,” said Alliance to Save Energy President Kateri Callahan in a press release. Efficient and clean use of energy benefits consumers, the environment, and the economy. “Youth want to help create this new clean energy economy. They’re the ones who will be living with it,” said Rena Crispin, managing editor of Credit Union National Association’s Googolplex. Crispin said that you can channel this youthful enthusiasm by challenging children to take action to help cut energy costs and create a clean energy economy with simple steps:
* Take lunch to school. Make food choices that minimize the “food footprint,” or the land to grow the food, land for the animals to graze, and energy to transport the food. Buy big bags of snacks and break them up to make small daily servings, and use reusable containers for lunch items. Organize friends to take action together through Kids For a Clean Environment at kidsface.org/index.html. * Ride a bike or walk. Don’t drive unless necessary--it’s good for the body and good for the planet. Bike or walk instead of burning gasoline on short trips. International Walk to School Month is every October. Find out how to participate at iwalktoschool.org/index.htm. * Buy and donate used items. Buy clothes on sale or from a discount store. Teenagers can find brand-name clothes in good condition at second-hand stores. And don’t stop there--donate old clothes in good condition. Check out Teens for Jeans, a national campaign that encourages teenagers to collect jeans for homeless peers at dosomething.org/teensforjeans/home. * Research and learn. The good news about tough economic times is that young people are passionate to do something about the problem. The federal government is a good place to get more information and ideas online. Visit kids.gov/k_5/k_5_science_earth.shtml.

Its still a good time to refinance--if you qualify

 Permanent link
NORTH PALM BEACH, Fla. (2/9/09)--With mortgage rates still near record lows, it makes sense for many homeowners to think about refinancing. Know what to consider, run the numbers, but don’t expect to get the best rates unless your credit is squeaky clean (Bankrate.com Feb. 5). Interest rates on 30-year fixed-rate mortgages fell to an average of 4.89% for the week ending Jan. 9 (U.S. News & World Report Jan. 23). Despite a slight upturn in rates in recent weeks, homeowners’ interest in refinancing remains strong. But don’t expect an instant “yes”--about half of applications are rejected because of mediocre credit scores, insufficient home equity, or negative equity (owing more on the mortgage than the property is worth). Here’s what you need to get the best rates:
* Keep your FICO score above 740. A score of 720--previously considered excellent--just isn’t good enough anymore to get the best rates. About a third of your score reflects whether you pay your bills on time. * Have equity in your home. Just to qualify for refinancing, you may need a minimum of 3% equity. You’ll need a higher percentage to get the best rates. Seattle-based Zillow (Feb. 2) estimates that one of six American homeowners are underwater, meaning they have negative equity.
Before you refinance, do your homework:
* Calculate your breakeven point. This represents how soon you will recapture the cost of refinancing through lower monthly payments. If the cost to refinance is $2,125 and your monthly savings is $125, your breakeven point is 17 months (2,125 divided by 125). * Ask about fees. If you’re paying $4,000 in fees to slash monthly payments by $100, refinancing doesn’t make sense if you plan to sell in three years. * Opt for a fixed-rate instead of an adjustable-rate mortgage (ARM). Despite a slightly lower rate on ARMs, the differential isn’t worth the higher risk of an ARM. * Consider job stability. Switching from a 30-year to a 15-year fixed-rate mortgage lowers the total interest paid over the life of the loan. But if you lose your job, you’ll likely be stuck with higher payments you might not be able to afford. If job stability is a concern for you, keep a 30-year loan and consider increasing your monthly payment now--while you have a job--to the rate it would be for a 15-year fixed-rate loan.
For more information, read “Tough Times Series: What to Do When Your ARM Is Due” and “Pay Off Your Mortgage Sooner … or Later?” in Home & Family Finance Resource Center.

HandFF Radio Money tips for couples--before after wedding

 Permanent link
WASHINGTON (2/6/09)--Money is one of the leading culprits in marital disputes, and this week’s H&FF Radio show includes four guests addressing money tips for couples: do’s and don’ts of prenuptials, how to separate credit during a divorce, how military couples can manage finances during and after deployment, and how to tackle the estate planning. Home & Family Finance airs Sundays at 3 p.m. EST on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network. The Credit Union National Association (CUNA) and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo and other popular podcast library sites, as well as on Radio America and CUNA’s websites. Home and Family Finance welcomes KSRM AM 920, Kenai, Alaska. As of Feb. 1, KSRM began airing H&FF Radio on Sundays from 11 p.m. to 12 a.m. YST. Sunday’s show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
* “Prenuptial Agreements,” with Katherine Stoner, author, educator, attorney, Stoner-Welsh, Pacific Grove, Calif.; * “Divorce: Separating Your Credit While Separating Your Lives,” with Maxine Sweet, vice president of public education, Experian, Allen, Texas; * “Military Couples and Personal Finance,” with Karen Jowers, staff writer, Military Times, Arlington, Va.; and * “Estate Planning,” with Mary Randolph, attorney, author, vice president of editorial, NOLO, Berkeley, Calif.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; Western Corporate FCU, also known as WesCorp, and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve our country worldwide. For more information, read “Recognize, Minimize Financial Risks of Living Together” and “Tough Times Series: Services, Sites Help Veterans Navigate Benefits Maze” in Home & Family Finance Resource Center.

Credit monitoring services dont guarantee protection

 Permanent link
NEW YORK (2/4/09)--Recent security breaches--affecting millions of credit card users--have sparked renewed interest in credit-monitoring services, but experts warn that some companies use questionable marketing methods to get you to sign contracts laden with loopholes (SmartMoney.com Jan. 23). Credit monitoring services may carry a hefty price tag--in some cases $180 a year or more. But despite the promises, the service providers can’t guarantee that your credit or your identity will be protected, and they don’t do anything that you can’t do yourself. If you’re thinking of purchasing a credit-monitoring service, make your decision based on the facts:
* Know what will be--or won't be--reimbursed. Many services include identity theft insurance or sell it as an add-on. That so-called insurance entitles you to reimbursement for costs associated with cleaning up your credit--possibly some phone expenses or overnight packages--but it doesn’t cover any money a thief takes from your savings or checking account. * Ask whether the service pulls reports from all three credit bureaus. A promise to “guard your identity” may give you a false sense of security if the service only offers credit reports from just one of the three credit bureaus. You’ll still need to be vigilant or you may miss suspicious activity. *Read the fine print. When activating a credit card or cashing a rewards check from a credit card company, you unwittingly may be agreeing to sign up for a credit-monitoring service.
Finally, don’t fall for just any free credit report offer. The report at FreeCreditReport.com isn’t free. If you don’t cancel before a free trial period is up, you’ll be billed a monthly fee. If you forget, canceling the service after the trial period can cost you time and money. The only truly free credit report is available at annualcreditreport.com; federal law gives you the right to order one free credit report every year--from Experian, Equifax, and TransUnion--through this website or by calling 877-322-8228. For more information, read “Act Quickly to Correct Credit Report Errors” in Home & Family Finance Resource Center.