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together
SP/SU 2014
YOUR FINANCIAL RESOURCE FROM THE
NORTH ALABAMA EDUCATORS CREDIT UNION
THE MONEY
LESSON
Resources for
Teachers
FRAUD
PREVENTION
in a Digital World
New Car
QUEST
WELCOME
to Together!
IN THE SPIRIT OF THE
North Alabama Educators
Credit Union philosophy—
“Not for Charity, not for Profit,
but for Service”—we are
pleased to bring you Together, a
publication designed to inform
and inspire your financial
decisions.
Inside, find articles about
getting the best deal on auto
financing, NAECU’s community
outreach efforts, avoiding
scams and fraud, personal
finance lessons for middleand high school-age kids, and
understanding credit scores,
among other topics.
We hope that you enjoy this
premier issue of Together and
find that it furthers your financial
outlook today and tomorrow, and
better connects us to you and the
community.
Sincerely,
Greg Olmsted
PRESIDENT/CEO
NAECU
NOT FOR PROFIT, NOT FOR
CHARITY, BUT FOR SERVICE!
CONNECT
WITH YOUR FRIENDS AT THE
NORTH ALABAMA EDUCATORS
CREDIT UNION (NAECU).
START FOLLOWING US ONLINE TODAY!
WE ARE AN EQUAL CREDIT OPPORTUNITY LENDER.
QUALIFICATIONS MUST BE MET ON ALL LOANS.
RATES AND LOAN AVAILABILITY SUBJECT TO CHANGE
WITHOUT NOTICE. YOUR LOAN INTEREST RATE WILL BE
DETERMINED BY YOUR CREDIT WORTHINESS AS WELL AS
OTHER FACTORS, SUCH AS THE LENGTH OF YOUR LOAN.
SAVINGS FEDERALLY INSURED UP TO $250,000 BY NCUA.
COMMUNITY OUTREACH
You Are So Kind!
WE’D LIKE TO THANK YOU—our very generous members—for
the help and support you provided for two community causes close
to our hearts: Crisis Services of North Alabama and the Huntsville
Hospital Foundation.
As a result of fundraising in 2013, we were able to present
a $2,200 check and other goods to Janet S. Gabel, Executive
Director of Crisis Services of North Alabama, and a $2,300 check
in honor of breast cancer awareness to Candy C. Burnett, CFRE,
President of the Huntsville Hospital Foundation, at our 58th annual
membership meeting this past February.
Without you, giving back to the community would not be
possible. Thank you for your support!
FINANCIAL CLASS
IS IN SESSION
LET’S FACE IT—the learn-as-you-go approach to financial literacy can be
very costly; yet many schools are unable to provide students with financial
lessons due to limited resources. That’s where the National Endowment for
Financial Education (NEFE) comes to the rescue.
NEFE—a private, nonprofit, noncommercial organization—provides free
personal finance lesson plans, workbooks, and more to teachers, parents,
and students in grades 8–12 through the High School Financial Planning
Program (HSFPP).
Visit HSFPP.org to download digital resources or order print materials
focusing on six areas of financial planning, including:
→→ Borrowing
→→ Earning
→→ Financial services
→→ Insurance
→→ Investing
→→ Planning
North Alabama Educators Credit Union
shares NEFE’s belief in the importance
of teaching children and young adults
how to manage personal finances.
SEND AN EMAIL TO
FEEDBACK@NAECU.ORG
TO ARRANGE FOR AN NAECU
INDUSTRY SPEAKER ON
FINANCIAL LITERACY.
« NOT FOR PROFIT, NOT FOR CHARITY, BUT FOR SERVICE »
NAECU.ORG
Keep Your Pay
IN YOUR POCKET
WHEN YOU NEED CASH QUICKLY FOR AN
EMERGENCY, A PAYDAY LOAN MAY SEEM LIKE A GOOD SOLUTION. BUT FOR MANY
BORROWERS, THAT SHORT-TERM LOAN CAN TURN INTO LONG-TERM DEBT.
THE PROBLEM IS that many borrowers are not able
to repay the loan when payday rolls around—which is
exactly what payday lenders count on. The vast majority
of their profit comes from extending the loan, allowing the
borrower to pay the minimum amount and move the loan
forward to the next payday. The borrower ends up paying
more interest at a very high rate.
Payday lenders in Alabama can charge their customers
a whopping 456.25% annual percentage rate (APR)! Repeat
borrowers can soon find themselves forced to skip paying
bills or delay buying necessities just to break the cycle of a
payday loan.
The National Consumer Law Center reports that
personal loans from credit unions are among the most
sensible alternatives to payday loans. With reasonable
interest rates and realistic repayment plans, a credit union
loan can help you solve the cash crisis you’re experiencing
today and maybe even help improve your future financial
standing.
North Alabama Educators Credit Union offers personal
loans with affordable fixed interest rates, loan terms up to
60 months, and payments as low as $50 per month.
TO LEARN MORE, VISIT NAECU.ORG/RATES.PHP.
Skip the Scams
IF YOU ARE TEMPTED BY MYSTERY SHOPPER ADS
OR EMAILS, READ THIS BEFORE YOU COMMIT. SOME
SECRET SHOPPER PROMOTIONS ARE SCAMS THAT
CAN LEAVE YOU FOOTING THE BILL.
SECRET SHOPPER COMPANIES have flourished during
the past 20 years as a way for retailers and service
providers to gain a better understanding of their customer
experience. Before signing up as a secret shopper, though,
be on the lookout for telltale signs of a scam. These
include requests for you to pay a registration fee, often to
a website, or in another common, more elaborate scam, to
“evaluate” a money transfer service.
In the money transfer scheme, the scammer sends the
mystery shopper a check for a large sum of money. The
shopper is instructed to cash the check and use a wire
transfer service to send the bulk of the funds back to the
company. As payment, the scammer tells the shopper to
keep a portion of the money from the cashed check. In
NAECU.ORG
« NOT FOR PROFIT, NOT FOR CHARITY, BUT FOR SERVICE »
reality, the check turns out to be counterfeit, the shopper is
out the transferred money, and the scammer is long gone.
FINDING THE REAL DEAL
If you want to work as a mystery shopper for a
legitimate company, know what to expect. Mystery
shopper jobs pay on a per-item basis, so think of it as
an occasional job. Legitimate secret shopper companies
reimburse their mystery shoppers for the purchased goods
or services and allow the mystery shopper to keep the
products. Some companies also pay a small amount—
between $15 and $20 per job. In return, you provide
a detailed evaluation form to the company before
being paid.
3
WHEELS AND
Deals
IS IT TIME TO TRADE IN YOUR CLUNKER FOR A NEW RIDE? DO YOUR HOMEWORK
BEFORE YOU HEAD TO THE CAR DEALERSHIP—IT COULD SAVE YOU A BUNDLE.
Y
OU AND YOUR spouse are strolling through the
car lot one Saturday morning and come across the
slightly used car of your dreams. Its sticker price
seems reasonable, and the bright neon letters promise $0
down and low interest. After a test drive, the salesman
takes you back to his office to draw up the papers. Moments
before you’re about to sign the dotted line, you look at the
final purchase price and financing terms and realize they’re
worlds apart from what the sticker promised.
Sound familiar? Car buyers often experience this
disconnect. Fortunately, you can do a few things to prepare
yourself for the car-buying experience and avoid costly
surprises.
KNOW BEFORE YOU GO
Before your trip to the dealership, remember these
financial tips:
→→ C
ONTACT A NORTH ALABAMA EDUCATORS CREDIT UNION
LOAN OFFICER ABOUT A CAR LOAN. “We have seen good
4
members with great credit scores near 800 who have
been charged an auto loan rate that’s four times higher
than what they could have received through NAECU,”
says Greg Olmsted, President/CEO at the credit union.
“If we can’t offer the best rate, we say so and advise
members to finance through the dealer.”
→→ RESEARCH THE DEALER’S INVOICE PRICE. Knowing how
much the car costs the dealer—rather than just the
manufacturer’s suggested retail price or list price—is a
good starting point if you plan on negotiating the price
down. An Internet search can usually provide a reliable
estimate of a car’s invoice price. That way, you’ll have
a better idea of how low the salesperson can actually go.
→→ B
EWARE OF HIDDEN FEES. If the final purchase price
seems higher than it should be, ask the salesperson
to explain each fee in an itemized fashion. Fine-print
costs such as document fees are often highly negotiable.
When talking cost, always ask if an offered price
includes all fees and taxes.
« NOT FOR PROFIT, NOT FOR CHARITY, BUT FOR SERVICE »
NAECU.ORG
Don
’t m
iss
ecial offer.
s sp
i
h
t
NAECU is offering a
fixed-rate car loan
for as low as
2.49%
ANNUAL PERCENTAGE RATE
New
or Used?
through May 2014.
Both new and used cars carry their
own benefits and drawbacks. New cars
are often covered by a manufacturer’s
warranty, which means you don’t have to
worry about paying for any major repairs
in the first few years. However, new cars
lose approximately 18% of their value in
the first year alone. The rate of value loss
slows down as a car ages, which makes
a used car a more appealing purchase in
terms of resale value. It also costs less
to insure an older car, although an older
vehicle tends to require more maintenance
costs and may be less fuel-efficient than a
newer model.
Certified pre-owned vehicles may be
the most cost-conscious option. These
used cars are typically only a few years
old and have been thoroughly restored
and inspected, reducing the risk of
hidden repair costs. They also come with
warranties similar to a new car but without
the sticker shock.
Fill ’Er Up
When considering which car to buy, don’t forget to factor in
ongoing expenses of owning and maintaining the car—including
fuel cost. The U.S. Department of Energy offers a helpful
breakdown of savings according to a car’s fuel efficiency. As you can
see, buying a 35-mpg vehicle versus a 25-mpg vehicle can save you
more than $700 annually if you drive 20,000 miles a year:
YEARLY FUEL COSTS
15,000
20,000
25,000
25 mpg
$1,860
$2,480
$3,100
30 mpg
$1,550
$2,067
$2,583
35 mpg
$1,329
$1,771
$2,214
MILES DRIVEN →
FUEL ECONOMY↓
*BASED ON $3.10/GALLON AVERAGE PRICE OF GAS
MOVING PARTS
Another ongoing expense to consider? Repairs. High-end
luxury vehicles tend to have a larger number of imported parts,
which can be costlier to replace. Popular brands may not be as
glamorous or unique as a European sports car, but repairs are
often significantly less expensive.
→→ RESIST OVERPRICED INSURANCE ADD-ONS. If you
choose to finance through the dealership, watch for
unnecessary or expensive warranties and supplemental
auto protection coverage. If you’re in the market for
additional coverage options, try your local credit union
first. For instance, automotive dealers routinely charge
up to $700 for guaranteed auto protection (GAP), a type
of supplemental coverage that pays the remainder of
the cost not covered by your primary insurance plan
for a totaled vehicle. GAP coverage bought through a
dealership is also frequently financed into the auto loan,
which means you’re paying interest over and above the
flat fee. NAECU offers members GAP coverage for a flat
$195 fee per covered plan.
READY TO BUY A CAR? VISIT YOUR LOCAL NAECU BRANCH. WE CAN TALK THROUGH YOUR FINANCING AND COVERAGE
OPTIONS, INCLUDING GAP COVERAGE AND OUR LOW-INTEREST VEHICLE LOANS. LEARN MORE ABOUT OUR LOANS AND
DOWNLOAD A PREAPPROVAL APPLICATION FROM NAECU.ORG.
NAECU.ORG
« NOT FOR PROFIT, NOT FOR CHARITY, BUT FOR SERVICE »
5
FRAUD
PREVENTION
in a Digital World
DO YOU KNOW HOW TO KEEP YOUR CREDIT AND DEBIT
CARD INFORMATION SECURE AND WHAT TO DO IF IT’S
COMPROMISED?
IN FALL 2013, a data breach at Target Corporation jeopardized the information of
40 million consumers. Retailer Neiman Marcus and hotel management company
White Lodging also experienced customer data theft last year.
Data breaches are infrequent, but incidents across all industries increased 30%
from 2012 to 2013, according to the Identity Theft Resource Center (ITRC). Last
year, business sector breaches accounted for nearly 34% of the all-industries total
of 619 incidences, with hackers committing the most offenses, ITRC data shows.
Cybercriminals may use the information to make fraudulent charges and commit
other crimes.
STAND UP FOR SHOPPING SECURITY
These tips can reduce the risk of your information being caught in a
compromising situation and limit headaches if it is:
→→ S
IGN UP FOR MOBILE BANKING, which will allow you to check your accounts
often for suspicious activity.
→→ FORM A FINANCIAL BACKUP PLAN to ensure your family is able to pay for
essential goods and services if your data is compromised and your credit and
debit cards are temporarily unavailable.
→→ ONLY MAKE ONLINE PURCHASES from a secure Internet connection.
Cybershop with Visa gift cards to keep your data off the Web.
→→ PAY RECURRING BILLS via automated clearing house rather than your debit
card to avoid the hassle of setting up payments with a new card if the old
one is compromised.
→→ USE YOUR CREDIT CARD for purchases as much as possible. Avoid entering
your personal identification number when using your debit card.
Immediately report any dubious transactions or suspicions of compromised
data to North Alabama Educators Credit Union. The sooner we know about
potential fraud, the quicker we can act to protect your assets.
When it comes to managing data breaches, your credit union has your back.
Monitor your accounts using NAECU’s free CU-Online Homebanking, Mobile
Money, and MemberLink Audio Response services.
STOP BY A BRANCH TO LEARN MORE OR VISIT NAECU.ORG.
6
Priceless
Peace of Mind
Never worry about being
held responsible for
fraudulent charges to
your NAECU accounts—
WE DO NOT charge
our members a fraud
liability fee.
The Burden
of Breaches
By mid-February 2014,
U.S. credit unions spent
more than $30 million
managing the effects of last
fall’s Target Corporation data
breach—without factoring
in fraud charges, according
to the Credit Union National
Association (CUNA). Reissuing
4.6 million credit and debit
cards to affected members cost
credit unions an average of
$5.68 per card. Alabama credit
unions reported more than
$400,000 in costs to CUNA by
late January.
Consumer protections
can mitigate the financial
consequences of breaches
for shoppers, but credit
unions must expend time
and money identifying and
replacing affected cards,
as well as absorbing and
repaying members’ losses.
Credit unions are not-forprofit entities that pass along
earnings to members, so when
a credit union takes a financial
hit from a breach, the people it
serves may feel the effects, too.
« NOT FOR PROFIT, NOT FOR CHARITY, BUT FOR SERVICE »
NAECU.ORG
Decoding Your
CREDIT SCORE
Psssst! Know what?A GOOD CREDIT SCORE CAN HELP
YOU HOOK UP CABLE TO YOUR TV, BUY A HOME, AND
EVEN GET A JOB. DISCOVER HOW TO KEEP IT IN
TIP-TOP SHAPE.
YOUR CREDIT SCORE is a number ranging from 300 to 850 that reflects
the payment history shown in your credit report, the length of time you’ve
had credit, and your ratio of debt to available credit. When you apply for
a loan, sign up for insurance or new utility services, or rent an apartment,
prospective lenders and landlords purchase your credit report and use the
information in it to help make lending decisions, such as whether or not to
approve your loan and at what interest rate.
WHO’S KEEPING SCORE?
The debt you owe on credit cards and in mortgage, car, and student
loans, the number of credit cards in your name, and whether or not
you pay your bills on time are all reflected in your credit score. Matters
of public record, such as bankruptcies, lawsuits, and arrests, are also
considered.
The North Alabama Educators Credit Union recommends contacting
the three major credit-reporting agencies—Equifax, Experian, and
TransUnion—on a rotating basis every four months to maximize your free
credit report reviews (see “It’s Free—That’s the Law!”) and keep an eye out
for credit report errors or fraudulent activity. Each time that you review
your credit report, highlight any questionable information and compare
those items with your own records. If you find an error, report it in writing
to the creditor and reporting agency that issued the report and
be sure to include any supporting documents, such as
canceled checks or bank statements.
IT’S FREE—THAT’S THE
LAW! THE FEDERAL FACT
ACT OF 2003 ENTITLES
YOU TO A FREE COPY OF
YOUR REPORT ANNUALLY.
TO REQUEST A FREE COPY
OF YOUR CREDIT REPORTS
FROM EACH OF THE THREE
MAJOR CREDIT-REPORTING
COMPANIES, VISIT
ANNUALCREDITREPORT.
COM OR CALL 877.322.8228.
NAECU.ORG
« NOT FOR PROFIT, NOT FOR CHARITY, BUT FOR SERVICE »
The Sky’s
the Limit
A GOOD
CREDIT
HISTORY
BUILDS THE
FOUNDATION FOR A
HIGHER CREDIT SCORE.
THESE TIPS CAN SET YOU ON A
PATH TOWARD BETTER CREDIT.
Pay more than
the minimum.
1
Maxed out credit cards can
negatively affect your credit score,
even if you pay your bills on time.
By making monthly payments
higher than the minimum
payment, you can pay off debts
quicker, save money on interest,
and decrease your
debt-to-income ratio.
Make payments
on time.
2
Even one late or missed payment
can mean higher interest rates,
late fees, and a negative impact
on your credit score. If you’re
having trouble keeping track of
bill payments, set up automatic
payments through your free
North Alabama Educators Credit
Union Bill Payment Service.
Be patient.
3
If you’ve filed for bankruptcy
or have other items reflecting
negatively on your credit score,
don’t get discouraged. Focus
on rebuilding your credit, and
remember, most negative items
are eventually dropped from
credit reports.
7
INDICIA
AND EXACT
ADDRESS
TO
FOLLOW
2309 WHITESBURG DRIVE, S
P.O. BOX 128
HUNTSVILLE, AL 35804
—
O
G
E
H
T
N
O
BANKING Free!
d
n
a
t
Fas
Connect with your Credit Union! FOLLOW US TODAY!
NORTH ALABAMA
EDUCATORS
CREDIT UNION
CU-ONLINE MEMBERS
CAN HANDLE THEIR
FINANCES ANYWHERE,
ANYTIME, WITH
THE SECURE
CU-ONLINE HOME
BANKING MOBILE APP.
Install our CU-Online
Home Banking
Mobile app, and
you can check your
balances, transfer funds,
make loan payments, and
review transactions 24/7 on
your phone. Here’s how:
1
2
3
In your phone app
store, search for
“touchbanking.”
Then choose
and install
the Fiserv
Solutions, Inc.
touchbanking app.
Use
GoMobile0361
as your app
code, and login with your
CU-Online
Home Banking
username.
Verify your
account by
answering
one of your
Home
Banking
challenge
questions.
You’re in! Through the CU
Home Banking Mobile app, you
can see the same accounts as
you do with CU-Online Home
Banking. It’s account access
anytime you need it. The free
mobile banking app is available
for iPhones and Android phones.
PLEASE NOTE: YOU MUST BE A CURRENT NAECU CU-ONLINE HOME BANKING USER.
NOT AN NAECU CU-ONLINE HOME BANKING USER? VISIT NAECU.ORG TO ENROLL.
together
SP/SU 2014
YOUR FINANCIAL RESOURCE FROM THE
NORTH ALABAMA EDUCATORS CREDIT UNION
THE MONEY
LESSON
Resources for
Teachers
FRAUD
PREVENTION
in a Digital World
New Car
QUEST
together
SP/SU 2014
YOUR FINANCIAL RESOURCE FROM THE
NORTH ALABAMA EDUCATORS CREDIT UNION
THE MONEY
LESSON
Resources for
Teachers
FRAUD
PREVENTION
in a Digital World
New Car
QUEST
together
SP/SU 2014
YOUR FINANCIAL RESOURCE FROM THE
NORTH ALABAMA EDUCATORS CREDIT UNION
THE MONEY
LESSON
Resources for
Teachers
FRAUD
PREVENTION
in a Digital World
New Car
QUEST