Vicksburg, Miss. – – Mutual Credit Union is pleased to announce the selection of Roderick Bradford as branch manager of the Mutual Credit Union Cherry Street branch located in Vicksburg, MS effective August 31, 2020. Roderick is a graduate of Grambling State University where he earned a Bachelor of Science degree in Management in 1999. He brings to Mutual Credit Union over 20+ years of management experience and over 7+ years of specialized experience in the financial services industry working for both Capital One and Chase Home Mortgage. Roderick serves in the Men’s Ministry at Calvary Baptist Church and is an active member of the Omega Psi Phi Fraternity. Roderick is a veteran of the United States Air Force where he served his country between 1989-1991.
We are excited to welcome Roderick Bradford as one of the newest members of the Mutual Credit Union family.
For more information about Mutual Credit Union, please follow this link to our webpage. For additional questions, please contact the marketing department at email@example.com or call (601) 636-7523 ext. 1226.
MEMBER: Can you tell me what I can expect to happen if my house goes into foreclosure?
CREDIT UNION: Well, let me first ask you this; are you having trouble paying your mortgage?
M: Not yet. But the holidays are coming up and my credit cards limits are starting to lose the wiggle room I used to count on. So, I’m thinking I’ll just skip my mortgage payment next month. Then, I can use that money for holiday expenses.
CU: You’ll what?
M: I know … it sounds crazy. But you heard right — skip paying the mortgage for a month, maybe two.
CU: (Sigh) You know I am going to have to break the news to you that going this route is never a good idea, don’t you?
M: I know, I know … foreclosure and all that. But tell me what I could expect to happen if I go this route.
CU: Whoa — let’s back up a second here. You’re looking for a way to cover your holiday expenses, right?
CU: Well, there are much – MUCH – better ways to do that than skipping your mortgage payment!
M: Like what?
CU: First of all, you can try to scale back this year. Take a look at your list of holiday expenses and trim it as much as possible. There’s no need to go deeply into debt just to get through the holidays.
M: I can do that. But even after I cut back on my holiday spending, I’ll definitely have some expenses I can’t afford. Still need some cash. And the mortgage payment …
CU: OK, hear me out. After you cut your budget as much as possible, look into your options for finding the funds to pay for it all.
M: Like what?
CU: Well, for starters, you can take out a personal loan at Mutual Credit Union. Our personal loans feature low interest rates and a reasonable payback plan you can probably afford. You can also choose to open up a Mutual Credit Union credit card with a generous spending limit, but that might not be the smartest move if you’re already pushing your existing credit card limits.
M: I see. Well, the loan might work for this year, but I don’t want to fall into the cycle of taking out an annual loan for the holidays.
U: Mmm hmm. Smart. Paying for expenses with a loan means paying more for your purchases because of the added interest charges.
M: Is there any other way?
CU: Actually, there is. You can open a Mutual Credit Union Christmas Club Account to help pay for your holiday expenses.
M: A Christmas Club Account? What’s that?
CU: It’s a way for you to cover your holiday expenses in an affordable manner.
M: Through another account at the credit union?
CU: Yes, but this is one is built especially for the holidays.
M: How’s that?
CU: Your Mutual Credit Union Christmas Club Account is a savings account we created to help you better finance your holidays. You’ll contribute a little bit to the account throughout the year so that you’re planning ahead for these expenses instead of being hit with a mountain of bills each January.
M: So I keep this money in the account and add to it all year until the holidays?
CU: That’s right. There’s a penalty for withdrawing your funds more than twice in a twelve month period of time, so you’ll want to keep the money in the account until the holiday shopping season begins.
M: That makes sense.
CU: Yes, it does. A Christmas club account is a way for you to plan for the holidays responsibly.
M: It sounds amazing. My holiday expenses will be so much more manageable when they’re spread across the entire year.
CU: Exactly. And don’t forget the dividends!
CU: Yes. Instead of being charged interest by a credit card issuer or a lender for the privilege of borrowing to pay for your purchases, the money you save will earn dividends so it actually grows.
M: Wow! Why didn’t I think of this?
CU: That’s what we’re here for! The current APY rates on a Mutual Credit Union Holiday Club Account can be found by visiting mutualcu.org. Your money will grow just by being here.
M: Wow! Is there a minimum balance for opening a holiday club account?
CU: There is a minimum, but it’s very reasonable, at just $10. We understand that you’ll be saving up for the holidays all year, so you might not have a large sum to work with when you first open the account.
M: This sounds fantastic! I’ll be putting away money for the holiday season all year, and when it’s time to hit the shops, I’ll have the funds I need waiting for me in my Christmas club account. No more Santa shock in January! And my money will be growing all this time, too.
CU: Doesn’t this beat going into foreclosure?
M: You bet! Where do I sign up?
Interested in opening a Christmas Club Account? Visit mutualcu.org 24/7 for complete details.
Rosemarie Groner knows what it’s like when your financial aspirations are in conflict with your personality. After all, she’s been there herself.
When Groner left her job as a state trooper to be a full-time mom, her family had spent its way into $30,000 of debt. By her own admission, most of her financial mess could be attributed to the family’s disorganized lifestyle.
“We spent a fortune in groceries,” she writes on her blog, “only to let them rot in the fridge when we got busy and had to eat out. Our sink was always piled high with dishes, making it hard to cook at home, and we tried everything to stop spending so much money only to fail time and time again.”
After lots of frustrating trial and error, Groner and her husband, Jon, finally discovered a strategy for organizing their lives and their finances and pulling themselves out of debt. Through her self-developed 90 Day Budget Bootcamp, the Groners learned that budgeting and efficient home management cannot be separated. By focusing on improving home management, they successfully paid off $30,000-plus in debt and slashed the family’s annual spending by more than $23,000, all while finding a way to make up for the lost income upon leaving Rosemary Groner leaving her job.
When she had reached her goal, she was so ecstatic with her newly organized home, life and finances, that she launched a blog, The Busy Budgeter, to share all her newly discovered wisdom. The blog exploded and has been visited by 18 million readers since its launch in 2014. Through her insightful posts on all things financial, and her tried-and-true system for home and life organization, hundreds of thousands of followers have pulled themselves out of the paycheck-to-paycheck cycle and have started living financially responsible lives.
The Busy Budgeter focuses on organization and home management, and aids those who find it impossible to create a budget, track monthly expenses and stick to a spending plan. Through Rosemarie Groner’s innovative tips and strategies, the chronically disorganized can learn the secrets of successful home management and budgeting.
Blog visitors can choose from a wide variety of trending posts to read, like How to Play Pickleball: A Budget-Friendly Game and How to Quit a Job You Hate. Topics also include How to Budget; Organization; Easy Meals and Make Money. Tips and tricks are always presented in a down-to-earth language, making for easy reading and almost effortless implementation.
For visitors looking for more intensive training, the free 90 Day Budget Bootcamp is the perfect beginner’s guide toward organized living and budgeting. Participants receive a daily challenge to help them make small yet significant changes in their daily routines.
Groner also offers several paid courses to teach participants how to transform their homes and their budgets with organized, efficient systems.
As she says, “[T]here is absolutely nothing standing between you and a life with less stress, constant money wins instead of fails and a house that you’re excited to come home to.”
Do you want to be an outstanding homemaker and budgeter? Check out Groner’’s blog and follow her on Facebook and Twitter to learn the Busy Budgeter’s secrets.
Your Turn: Are you a Busy Budgeter follower? Tell us in the comments how you’ve applied the advice in your own life.
Q: With interest rates falling and home prices rising, it seems like a great time to tap into my home’s equity using a home equity loan. What’s the best way to use these funds?
A: A home equity loan, can be a fantastic way to source extra funds during a falling-rates environment. Tapping into your home’s equity, or the positive difference between what is owed on a home and its current value, will give you the funds you need for a large expense with no additional strings attached.
With interest rates on a Mutual Credit Union Home Equity Loan as low as 4.00% APR*, the repayment plan is always affordable. If approved, you’ll receive the funds in one lump sum within a few days. There are no restrictions on how to use these funds, but since you’re essentially risking the loss of your home with this loan, it’s important to choose wisely when deciding how to use the funds.
Here are four forward-thinking uses for a home equity loan:
1. Home improvements
One of the most popular uses for home equity is for home renovations and improvements. These can be as major as adding a 1,000-square-foot extension to your home, as minor as replacing old carpet with new hardwood flooring or anything in between.
Using your home’s equity for home improvement projects is a smart choice for multiple reasons. For one, the money you put into the renovations acts as an investment. If you choose improvements that increase your home’s value, you can make back the money you spent or even see a return when you sell your home. Also, if you use the funds from a home equity loan to increase your home’s value, you may be able to deduct the interest paid on the loan from your taxes (be sure to consult with your tax adviser if you plan to go this route).
If you plan to use your home equity funds for home improvements, be sure to choose wisely. It’s best to go for improvements that add lasting value to your home instead of blowing big bucks on superficial remodeling projects that may look dated just a few years down the line.
2. Debt consolidation
Another popular use for a home equity loan is to consolidate high-interest debt. Paying off multiple debts at high interest rates can be cumbersome and difficult to manage. Worse, the heavy interest rates mean more of the borrower’s money goes toward the lender and less goes toward paying down the principal of the debts. Using a home equity loan to consolidate debt to a single and no-interest or low-interest loan can slash a pile of debt by several thousands of dollars and help shorten repayment time by several years.
3. College education
When interest rates are falling, funding a college education through a home equity loan instead of a high-interest student loan can be a smart choice. Similarly, homeowners struggling to meet their student debt payments without defaulting on the loan might want to use their home’s equity to pay off the debt quickly and replace it with a more manageable low-interest loan. It’s important to note that paying off a federal student loan with home equity might not be the best choice, as these loans are sometimes eligible for partial or complete forgiveness.
4. Emergency fund
Most of us know that financial experts recommend having three to six months’ worth of living expenses stashed in an emergency fund to be used if the need arises. But reality keeps this magical-sounding fund a distant dream for too many people. If you’ve been struggling to get your own emergency fund off the ground, tapping into your home’s equity can be a great way to get that boost you need. You’ll have a large stash of cash to build your fund, and the manageable payment plan will help ensure you put money into savings each month. As a bonus, if you experience a financial emergency of any kind after taking out your home equity loan, you’ll already have the funds on hand to help pull you through.
Before you take out a home equity loan
A home equity loan can provide homeowners with the funds they need for a home improvement project, to get their debt under control, pay for their college education or to build an emergency fund. However, before making either of these moves, it’s important to run the numbers so you are sure you can easily meet the regular loan payments. Otherwise, you risk defaulting on the loan and losing your home.
If you’re ready to take out a home equity loan, look no further than Mutual Credit Union. Our rates and terms are always competitive. Call, Click, or visit to get started. Apply online by visiting mutualcu.org.
* APR = Annual Percentage Rate and is valid as of August 24, 2020. Some Listed APR is AS LOW AS and is based on credit qualification. Eligibility is based on credit history and proof of income. Applicant must be or become a member in good standing. Rates are subject to change based on market conditions and borrower eligibility. Other restrictions may apply. Federally insured by NCUA.
Your Turn: How did you use the funds from your home equity loan? Tell us about it in the comments.
Q: I love the convenience of payment apps, like Cash App and Venmo, but I’ve heard there’s been an increase in scams being pulled off within these apps. How can I continue to use my payment apps without compromising my safety?
A: Payment apps offer users the ability to effortlessly send payments to friends, making it easy to split the tab at a shared meal, buy a present for a mutual friend and quickly pay back a small loan. Unfortunately, though, scammers are using these apps to cheat people out of their money.
Here’s all you need to know about payment app scams and how to protect yourself from being the next victim.
How the scam plays out
There are several variations of the mobile payment app scam, most of which involve the scammer hijacking the victim’s linked checking account or credit card and using it to pay for their own purchases. Now, though, with the COVID-19 pandemic changing people’s attitudes toward money, there is another, more nefarious scam being played out through mobile payment apps.
In this trending scam, a payment app user is invited to participate in a contest on Twitter or another social media platform. The host of the contest is giving away a bundle of cash to one lucky winner as a way of helping them through the economic downturn caused by COVID-19.
After entering the contest, the victim receives a message informing them that they’ve won the giveaway — but they need to pay a small fee to verify their account and, later, receive their cash prize. Thrilled to be the winner and suspecting nothing unusual, the victim will gladly pay the fee and wait for their big payday. Unfortunately, though, the money never lands in their account, and they won’t see the funds they used to pay the “fee” ever again.
In the above scenario, the contest the victim entered may actually be authentic, but the follow-up post they’ve received is the work of a scammer.
Sometimes, the victim has not entered any contests but receives a message appearing to be sent directly from the payment app informing them they’ve been randomly chosen to win a cash prize — with a small processing fee attached.
Other times, scammers take the ruse one step further. After asking the victim to send the fee via mobile payment app, the scammer hacks the victim’s linked account or credit card and uses it to make their own expensive purchases.
Scammers use keywords like #coronavirus and #emergencyfunds to make their social media posts appear authentic; their efforts often pay off.
“My goal is to help those in need,” one scammer in Florida wrote. “Your deposit allows us to immediately send you your payment.”
The scam can be pulled off through any payment app, but is especially popular with Cash App users who are familiar with the app’s “Cash App Fridays.” To the unsuspecting victim, the new freebies seem like an extension of the app’s existing giveaways.
Likewise, the scam can be executed through several social media platforms, but is most commonly found on Twitter. The social media giant is a popular host for contests of this sort, and another cash giveaway hardly stands out. The “Retweet” culture on Twitter also makes it easy for scammers to pick up on a legitimate contest and choose a participant to target.
“This behavior is absolutely against our rules and outlined as such here,” Twitter spokesperson Lauren Alexander wrote in an email. “Users who see such scams should go to the ‘Suspicious and Spam’ category to report the scam.”
Luckily, you don’t need to give up on the convenience of mobile payment apps just yet. Protect yourself from this scam by learning about the medium used to pull it off and how to recognize the scam’s red flags.
Here’s what you need to know about Cash App and other mobile payment apps:
Cash App will never ask customers to send it money as a “processing fee” or for “verification.”
Cash App will not ask users to share their PIN or sign-in code outside the app.
Cash App currently has only two official Twitter accounts, @cashapp and @cashsupport, both of which have blue, verified check marks. If you receive a tweet from another account appearing to be from the app, it is likely bogus.
If a post or tweet looks suspicious, don’t take any chances; ignore it and move on.
If you believe you have fallen victim to a mobile payment app scam, contact the app’s support through the app or website. If the scam is reported early enough, they may be able to reverse the transaction. You can also report the scam to the FTC at ftc.gov and let your friends know about the circulating scam so they don’t fall victim to it themselves.
Mobile payment apps make transferring money easy, but they also make it easy for scammers to con victims out of their money. Stay alert and practice caution to keep your money safe.
Your Turn: Have you been targeted by a payment app scam? Tell us about it in the comments.
You and your buddies have just finished a wonderful meal at the local sports bar, tossed back a few cold ones and are shooting the breeze while talking smack about the rival team. Your team comes out on top, and all is right with your world.
Then comes the check.
The leader of your pack reaches for it, and carefully adds the tip and divides the cost of the night’s feast evenly among you and your friends. He’ll pay the bill with his credit card, and everyone else will pay their share back to him.
But who actually carries cash on them these days? Not you!
So, you offer to zap him the funds via PayPal or Venmo, but he requests payment by Zelle, a peer-to-peer payment service now offered by many financial institutions.
According to its website, “Zelle is an easy way to send money directly between almost any U.S. bank account typically within minutes. With just an email address or a mobile phone number, you can quickly, safely and easily send and receive money with more people, regardless of where they bank.”
How does Zelle work?
Users can either download the Zelle app or enroll via their credit union’s mobile banking app, if it offers Zelle.
Participating financial institutions can be found on the Zelle website.
To send money, users only need the recipient’s email address or mobile phone number.
If recipients are enrolled in Zelle, the funds will transfer directly into their credit union or bank account. Recipients who have not enrolled in Zelle will get an email or text notification of how to enroll in Zelle to safely receive their money.
“If they’ve enabled Zelle on their bank’s website or app, the money just goes into their bank account, thanks to its ties with the banks,” according to PCMag. “If not, there’s a 1-to-3-day wait period after they enroll into Zelle, for security purposes.”
Zelle can be used anywhere in the United States as long as either the sender or recipient has access to Zelle through their financial institution.
Is there a fee?
While Venmo charges 25 cents per transaction, Zelle does not charge any fees for money transfers. Your bank or credit union may charge a usage fee.
How much can you send?
According to Zelle’s website, the banks or credit unions that offer Zelle determine sending limits. If your bank or credit union does not yet offer Zelle, the weekly sending limit is $500. Requests to increase or decrease send limits are not permitted.
How safe is Zelle?
Only trusted recipients (family, friends, babysitter, roommate, cleaning person) should be paid using Zelle. According to its website, senders are not protected if they pay repcients for goods or services they do not receive or are dissatisfied with, such as crooked online auctions where merchandise is never received.
Online safety is always a concern, and Finder.com says, “Because Zelle is integrated into your existing bank’s website or app, if you’re satisfied with your current bank’s security and encryption, that same protection is extended to cover Zelle transactions. Zelle’s standalone app is backed by Early Warning Systems, a risk-management company that uses mobile identity authentication and advanced monitoring to ensure that your money is secure.”
Next time you need to pay your share of the dinner bill, utility bill or even rent, tap Zelle for a quick, seamless transaction.
Your turn: Have you tried Zelle yet? Tell us about it in the comments.
Vicksburg, Miss. – – Mutual Credit Union is pleased to announce the promotion of Christeena Carson to branch manager of the Yazoo City, MS branch effective July 20, 2020. Christeena began her career at Mutual in 2013 as a teller supervisor. In 2015, she was promoted to financial services representative while also obtaining her certification as a credit union financial counselor through the Credit Union National Association (CUNA). Christeena is active in the Boys and Girls Club of Yazoo City, the Yazoo County Health Network, the Yazoo City Housing Authority, and is a community relations board member for the Federal Bureau of Prisons. Christeena brings with her sixteen years of customer service experience to the members of Mutual Credit Union. She continues to go above and beyond in everything that she does. Michael Mathews, President of Mutual Credit Union stated, “Christeena has proven herself over the last several years while taking on additional responsibilities within the branch. I am excited to see her lead our Yazoo City location.”
For more information about Mutual Credit Union, please follow this link to our webpage. For additional questions, please contact the marketing department at firstname.lastname@example.org or by calling (601) 636-7523 ext. 1226.
Back-to-school season is traditionally marked by a run on discounted pencils, overcrowded malls and lots of nail-biting nerves about new teachers. But this year, the back-to-school season is entirely different. Forget the crowds and a race to find the hottest-selling backpack. This year, it’s all about the trendiest face masks and getting ready for a school year that promises to be unlike any other. And for a child, that can be more than a little frightening.
As with every transition, proper mindset and preparation is key to smoothing out the inevitable bumps and hurdles. Whether your school district is starting off the year exclusively with distance learning, going back to in-person learning five days a week or they’ve settled on something in between, we’ve got you covered.
Here’s our complete guide to helping you prepare your child for the new school year in these unconventional times.
Talk to your child about what to expect
The more your child knows about the dynamics of the upcoming school year, the better off they’ll be. As the situation evolves, and you learn more details about the year’s schooling, speak to your child about what to expect. If your school’s administration has decided to continue in-person instruction with daily temperature checks, let your child know to expect them. If the school year will start off with remote learning and tentative plans for returning to in-person instruction in January, share this information with your child. The more your child knows, the easier it will be for them to handle changes as events unfold.
Create a back-from-school protocol to keep your home safe
If your child will be going to school full-time, or even partially, it’s important to establish a sanitizing ritual for them to adhere to when they walk through the front door after each day of school.
“When children return from school, they should immediately sanitize their hands,” advises board-certified pediatrician, Dr. Candice W. Jones. “Once at home, at the very least, they should remove clothes/shoes and place them in the laundry, or in a designated safe place for disinfecting. A shower would be great, but is not absolutely necessary.”
Talk to your child about this daily disinfecting routine, and run a practice round or two to make it easier to remember when school starts.
Zooming in on remote schooling
Many states and school districts have announced the continuation of distance learning for the start of the new school year. If the idea of sitting your child down in front of the screen for hours at a time again makes your head spin, it’s time to rethink your strategy. Dr. Linda Carling, an associate research scientist at Johns Hopkins University, shares these tips for helping children succeed at remote learning:
Encourage movement. Squeeze in some stretching breaks throughout the school day and pencil in larger chunks of time for longer exercises, like a bike ride around the block. If your child finds it particularly difficult to sit still for long periods of time, set up a tablet or laptop on a raised surface and have your child stand through their classes.
Reduce distractions. Create a distraction-free zone for your child’s learning to help boost their focus. Noise-canceling headphones can also be helpful to drown out auditory distractions.
Adjust your schedule as needed. Many younger children need constant or intermittent guidance to help them with their remote learning. If possible, adjust your own schedule so you can be on hand to help your child as necessary.
Use a checklist for focus. A basic visual checklist of tasks that need to be completed can help children focus. Draw up the checklist with your child at the beginning of each day and have them cross off tasks as they’re completed.
Provide immediate positive feedback. Each time your child successfully follows instructions, provide immediate and positive feedback. You can keep it small, from a sticker on their work assignment or words of praise to an extra 15 minutes of play before bedtime.
Help your child prepare for face mask wearing while at school
School supply lists are looking very different this year, with “face masks” penciled in right next to “erasers” and “glue.” But having your child wear a mask for hours on end while sitting through school can sound next to impossible.
To help your child prepare for face mask wearing while at school, it’s best to model positivity.
It’s no secret that kids mimic the adults in their lives. Though you may find it difficult to wear a mask yourself, you can help your child build up a positive attitude about mask-wearing by talking about how your mask is keeping you and others safe, as well as how the discomfort is a small price to pay for safety.
It’s also a good idea to practice mask-wearing at home. This will serve the dual purpose of getting your child accustomed to wearing a mask, and help to ensure your child is wearing it correctly before school starts. If your child is particularly resistant to wearing a mask, you may want to employ some strategies, like having them wear the mask for the length of their favorite song, or playing dress-up as a doctor or your child’s favorite superhero.
For the sensory child, face masks can be a nightmare. Make it easier by finding the style that is most comfortable for your child, whether that’s a classic ear-loop mask, a bandanna style covering, or a neck gaiter. Extenders or button headbands can also be a welcome relief for irritated ears.
With the average American household holding almost $100,000 in debt, there are too many families in the United States struggling to keep up financially.
The best way to help your kids avoid the debt and bad habits common to many U.S. adults today is to start teaching them good habits now. If your kids start learning ways to save money while young, those good habits are more likely to stick with them when they’re older and have easier access to credit cards and loans.
Below are three creative ways you can embrace better spending habits together as a family. Some suggestions may be more appropriate for older kids than younger, but most could be applied with some variation for kids of different ages.
Here are 3 creative ways to teach good savings habits from an early age:
1. Make any allowance you provide tied to chores.
The link between hard work and money earned is a good lesson to learn early. Kids are less likely to take the money they receive for granted if they have to earn it.
If you already require certain chores without pay, there’s no need to change that. But in just about any home, there’s always more to be done. Make up a list of the chores not already covered, pick a price for each based on the relative amount of work involved, and post it where your kids can see the extra earning opportunities.
Bonus tip: To teach good savings habits, give kids a choice between taking their money right away in cash, or letting you hold onto it for them until they reach a certain amount. If they choose the latter, you can throw in a bonus few bucks to teach them the value of saving and demonstrate the way interest-bearing savings accounts work.
2. Work on creating a family budget together.
Bring the kids into the budgeting process. They might find it tedious, and perhaps a bit dull, but it will help them understand why they don’t always get everything they ask for. Be willing to bring up the family budget and your weekly spending limit anytime they ask for a new toy or a meal out, so they start to get the idea that the thought needs to be applied to every spending decision.
You can use crafts to help younger kids understand the concept. Use paper plates to represent the whole budget, and divide it into slices to represent the different categories your family spends the most on. Then explain how your goal is to make certain slices smaller.
Bonus tip: Enlist them to help you make the grocery list and talk about the different costs of the items you usually buy and how they fit in (or don’t fit in) to the family budget. Review menus together at the house before you go out and have the same discussion. Talk about trade-offs: what else can you buy later if you choose to skip the appetizer and sodas now?
3. Encourage kids to a pick a specific goal to work towards.
Whether it’s a new bike, an especially coveted new toy, or a party with friends, having something specific to work towards is a powerful savings incentive. A reminder of this goal can be helpful in the discussions you have around numbers one and two.
Bonus tip: Look for opportunities to point out choices your kids can make that could lead to more savings. If a birthday’s coming up and they’re pushing for an ice cream cake, point out how much they would save by making a cake at home and offer to add the extra to their savings if they choose that option instead.
Not only will your family benefit by implementing these ways to save money together, but it presents opportunities to spend more time together as well.
Q: I’d love to improve my credit score, but I can’t get ahead of my monthly payments. I also find that my spending gets out of control when I’m paying with plastic. How do I use my credit cards responsibly?
A: Using your credit cards responsibly is a great way to boost your credit score and your financial wellness. Unfortunately, though, credit card issuers make it challenging to stay ahead of monthly payments and easy to fall into debt with credit card purchases. No worries, though; Mutual Credit Union is here to help!
Here’s all you need to know about responsible credit card usage.
Refresh your credit card knowledge
Understanding the way a credit card works can help the cardholder use it responsibly.
A credit card is a revolving line of credit allowing the cardholder to make charges at any time, up to a specific limit. Each time the cardholder swipes their card, the credit card issuer is lending them the money so they can make the purchase. Unlike a loan, though, the credit card account has no fixed term. Instead, the cardholder will need to make payments toward the balance each month until the balance is paid off in full. At the end of each billing cycle, the cardholder can choose to make just the minimum required payment, pay off the balance in full or make a payment of any size that falls between these two amounts.
Credit cards tend to have high interest rates relative to other kinds of loans. The most recent data shows the average industry rate on new credit cards is 13.15% APR (annual percentage rate) and the average credit union rate on new credit cards is 11.54% APR.
Pay bills in full, on time
The best way to keep a score high is to pay credit card bills in full each month — and on time. This has multiple benefits:
Build credit — Using credit responsibly builds up your credit history, which makes it easier and more affordable to secure a loan in the future.
Skip the interest — Paying credit card bills in full and on time each month lets the cardholder avoid the card’s interest charges completely.
Stay out of debt — Paying bills in full each month helps prevent the consumer from falling into the cycle of endless minimum payments, high interest accruals and a whirlpool of debt.
Avoid late fees — Late fees and other penalties for missed payments can get expensive quickly. Avoid them by paying bills on time each month.
Enjoy rewards — Healthy credit card habits are often generously rewarded through the credit card issuer with airline miles, reward points and other fun benefits.
Tip: Using a credit card primarily for purchases you can already afford makes it easier to pay off the entire bill each month.
Brush up on billing
There are several important terms to be familiar with for staying on top of credit card billing.
A credit card billing cycle is the period of time between subsequent credit card billings. It can vary from 20 to 45 days, depending on the credit card issuer. Within that timeframe, purchases, credits and any fees or finance charges will be added to and subtracted from the cardholder’s account.
When the billing cycle ends, the cardholder will be billed for the remaining balance, which will be reflected in their credit card statement. The current dates and span of a credit card’s billing cycle should be clearly visible on the bill.
Tip: It’s important to know when your billing cycle opens and closes each month to help you keep on top of your monthly payments.
Credit card bills will also show a payment due date, which tends to be approximately 20 days after the end of a billing cycle. The timeframe between when the billing cycle ends and its payment due date is known as the grace period. When the grace period is over and the payment due date passes, the payment is overdue and will be subject to penalties and interest charges.
Tip: To ensure a payment is never overdue, it’s best to schedule a time for making your credit card payments each month, ideally during the grace period and before the payment due date. This way, you’ll avoid interest charges and penalties and keep your score high. Allow a minimum of one week for the payment to process.
Credit cards can easily turn into spending traps if the cardholder is not careful. Following these dos and don’ts of credit card spending can help you stick to your budget even when paying with plastic.
When making a purchase, treat your credit card like cash.
Remember that credit card transactions are mini loans.
Pay for purchases within your regular budget.
Decrease your reliance on credit cards by building an emergency fund.
Use your credit card as if it provides you with access to extra income.
Use credit to justify extravagant purchases.
Neglect to put money into savings because you have access to a credit card.
Using credit cards responsibly can help you build and maintain an excellent credit score, which will make it easier to secure affordable long-term loans in the future.
Your Turn: How do you use your credit cards responsibly while keeping your score high? Share your best tips with us in the comments.