Reasons Credit Unions and Millennials Are a Perfect Match

A recent study of 10,000 millennials found that four of their most hated brands were banks. So when millennials find out about credit unions, it can feel like fate. But more than just being an alternative to banks, there are a number of reasons millennials and credit unions are a good match.

You’re a member, not a customer.
Finances in the new millennium can feel huge and alienating, especially if you came of age during a time of worldwide financial havoc. Credit unions offer saving accounts, debit cards, and loans just like banks do, but at a credit union the money you deposit—no matter how small—makes you a partial owner or “member.” At Hopewell Federal Credit Union, you have a voice, and this can feel inclusive and empowering.

Credit unions excel at customer service.
The democratic structure of credit unions makes them more responsive to their members’ needs. This is a plus for millennials who count Amazon among their favorite brands because of its ease-of-use. A recent survey by CO-OP Financial Services, Cucamonga, Calif., found that 81% of millennials believe that their credit union provides “outstanding customer service,” compared with 59% of bank customers.

Credit unions are not-for-profit.
This is perhaps one of the biggest reasons credit unions and millennials are a natural fit. Credit unions return profits to their members, often through better loan rates, fewer fees, and perks like surcharge-free ATMs. Despite being saddled with more student debt than any generation in history, millennials have proven to be one of the most giving and to value organizations that are not driven solely by the pursuit of profit.

Credit unions are local.
Millennials have grown up with the local movement—the idea that you should eat and shop locally whenever possible as part of a lifestyle that helps keep your communities vibrant and healthy. With banks, up to 97% of the money you deposit can leave the community. At a credit union your deposits could be part of a loan that helps a local teen buy her first car or a family buy their first home or an entrepreneur set up a small business.

Credit unions are part of the original sharing economy.
Millennials have helped spur a new economy that sidesteps traditional businesses by renting out something they’re not using—a house, apartment, car, or bike—for use by others. This model helped make start-ups such as Airbnb.com and Lyft.com quickly and massively popular—to such a degree that the hotel and taxi industries have been going after them in court.

Credit unions began as a way for people without access to traditional bank services to pool their money and make loans to each other. And after taking off in America during the Great Depression, that’s essentially how they still operate today.
We want to thank you for being a Hopewell Federal Credit Union member and we love to see you and hear from you. Stop today or call 740.522.8311. Check out our website at http://www.hopewellfcu.org to get a glimpse of what we offer.

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Consolidating Your Debt: Why It’s Important and When to Consider It

Feeling like you’re drowning in debt? You’re not alone. According to the U.S. Census Bureau, 69% of American households carry at least some debt. If you’re looking for a way to get on top of this burden, you may want to consider consolidating what you owe, which can be an effective strategy for managing bills and paying off those obligations once and for all.

Understanding debt consolidation

Multiple bills from auto loans, credit cards and a mortgage often come due at different times, fostering a perfect climate for human error. Even one forgotten bill can result in costly interest and late fees, and simple arithmetic mistakes can lead to overdrafts and even more penalty fees.

Debt consolidation involves combining payments to many lenders down to one, often a sum that’s less than the total of the individual bills it replaces. This makes it easier to stay on top of finances, improve credit and reduce overall debt. But keep in mind that cutting back what you pay each month may mean you’ll ultimately be charged more interest by the time you eliminate what you owe.

Why now?

One of the main benefits of debt consolidation is that it can reduce interest on what you owe, which brings down what you pay each month. Although rates are still holding at near historic lows, the Federal Reserve is currently deciding when to allow them to rise. So you may be able to avoid higher costs by acting soon and locking in low-interest financing. The advantages can be even greater if you’re carrying debt with variable interest rates, which will undoubtedly climb in the not-too-distant future.

Consolidation options

Several ways to consolidate debt are available, each with its own advantages and considerations:

Home equity financing

Homeowners who owe less on a mortgage than the market value of their property may be able to put the resulting equity to work to help pay off high-interest credit cards and other debt and reap the added advantage of a tax benefit in most cases. This type of financing has two major options: home equity loans, which are a type of second mortgage, and home equity lines of credit (HELOCs). Both are considered secured financing, using real estate as collateral, so a dependable income is required. Credit unions often offer the most competitive rates, and you may be able to borrow up to 90% of the appraised value of your house.

Personal loans

For those who aren’t homeowners or prefer not to use their property as collateral, a personal loan can provide another avenue to consolidate debt. Available as secured or unsecured financing, these loans typically carry a somewhat higher interest rate than home equity financing; however, the rates available through some financial institutions can still reduce your overall monthly payments.

Credit card balance transfers

Balance transfers offer a way out of high-interest credit card debt by moving what you owe to a new card with a lower rate. Some card companies offer very low or even no interest introductory periods, typically six months or more. Consider this option if you can pay off the full transferred amount before the low-rate period expires and a higher rate takes effect.

When consolidation can help

Juggling a stack of bills each month from multiple lenders? Or is a hefty balloon payment looming? Perhaps you’re just stuck paying interest at a much higher rate than what you can get on new debt today. When financial burdens become unmanageable, the time is right to talk with advisers at your financial institution to see whether consolidation can be a cost-effective way to bring your budget back under control.

Roberta Pescow, NerdWallet

Local Service. Global Good.™

Today, October 16, 2014, credit unions around the world celebrate International Credit Union (ICU) Day®. That’s 200+ million people … from 56,000 credit unions … in 101 countries joining together to celebrate their cooperative spirit.

Globally, this cooperative spirit has led to life-changing opportunities in the form of small business start-ups, home ownership, and education. In some countries, members encounter their first taste of democratic decision-making through their member-owned credit unions.

This year, credit unions have been present during the most tumultuous moments around the world. Throughout the crisis in Ukraine, credit union volunteers were among the protesters in Kiev and are now attempting to maintain financial stability for their members. With the help of the World Council of Credit Unions, which is supported by credit unions in the U.S., Ukrainian credit unions are working on ways to ensure loans can be made to those who need them, and uphold the confidence of their members.

On the other side of the globe, credit unions in the Philippines are dealing with the devastation left after the recent typhoon. With the help of credit union organizations around the world, they are now rebuilding and renovating affected branches to better fit members’ needs. After such destruction, these Filipino credit unions are helping people get back on their feet. And credit unions worldwide are providing the basis for development while serving local communities, with an unwavering belief in the “people helping people” philosophy upon which we were built.

Locally, as a member of Hopewell Federal Credit Union, you and your financial stability are our top priorities. Globally, you’re part of a much bigger movement—the credit union movement—working towards global good each and every day. That’s definitely something to celebrate!

The New ‘Good’ FICO Score Jumped From 720 to 760

Before the credit crisis and subprime meltdown hit, you probably could get the best interest rates on a mortgage or loan with a credit score of 720 or more. But times have changed. The “new reality” of today’s economy says a 760 credit score is the new 720.

Your credit score is one of the most important numbers in your financial life. A credit score is a three-digit number that shows credit card companies, auto lenders, mortgage lenders, and even some landlords and prospective employers a picture of your creditworthiness. The higher the credit score the better.

Now there’s a new “high,” and for some consumers, it may be tough to make the grade.

A FICO credit score–used by many lenders–ranges from 300 to 850. If you have a favorable debt-to-income ratio and a score between 650 and 850, it’s likely you’ll qualify for a home loan with no problems. But the best rates are now reserved for those near the top tier of that range.

To improve your credit score, use common sense and start with three simple changes:

*Pay on time. About one-third of your score is based on whether you make on-time payments to creditors. Late payments will come back to haunt you and can cost you tens of thousands of dollars in higher interest payments over the life of a mortgage.

*Pay down balances. Know your total line of credit, which is the top limit or ceiling amount you can charge without paying over-the-limit charges. Try not to charge more than 25% of that total line of credit. By keeping your utilization rate below 25%, you’ll ensure that lenders likely will see you as a good credit risk.

*Don’t cut up old cards. About 15% of your credit score is based on length of your credit history. Cancelling those cards cuts short your history of responsible credit usage, and it also increases your utilization rate when your total credit line drops.

Order your credit score from myfico.com or from annualcreditreport.com.

For questions about credit scores or loan requirements, contact Hopewell Federal Credit Union at 740.522.8311 or info@hopewellfcu.org today.