Debit Card Safety

How do you pay for your purchases? It may be instinct for you to pull out any piece of plastic without thinking, but your random card of choice might not be the safest way to pay. Let’s explore when and how to use your debit card. 

Credit and debit: How are they different? 
Appearances aside, your credit and debit cards have very little in common. Credit cards allow you to choose your purchases now and pay for them weeks, months or even years later. A balance that grows over time will be charged interest, but if you make timely payments, you’ll have yourself a small loan that usually costs you little to nothing. Credit cards also offer rewards, purchase protection and the ability to back out of a purchase you’ve decided against. You can also contest fraudulent charges on your account, or freeze your credit on a compromised card.  

Debit card payments, on the other hand, will take the money right out of your checking account as soon as you swipe. There’s no interest here, but there also may be less purchase protection. Debit cards are great for helping you stick to your budget and steer clear of debt. However, because they may offer little recourse in case of fraud, credit cards can be the better choice in vulnerable situations. 

Here’s where you may not want to use your debit card: 

  • At the pump. Card skimmers at gas stations are on the rise. By using your credit card instead of your debit card at the pump, you’ll have an added layer of protection against fraud. You can also choose to use cash and avoid the risk of getting skimmed altogether. 
  • At an isolated ATM. Isolated ATMs in locations with very little security and sparse foot traffic are prime targets for hackers.
  • In an unfamiliar location. When on vacation, think before you swipe. You don’t know the area and you can’t be certain which clerks are to be trusted. You’re better off paying with a credit card or with cash so your purchases are protected against fraud. 
  • For large purchases. If you’re springing for a big-ticket item, use your credit card. It’ll offer you dispute rights in case the product doesn’t turn out as you expected. 
  • Restaurants. When you hand a restaurant server your debit card at the end of a meal, they have more than enough time to also swipe your card info! 

Look out for skimmers.
DoverPhila Federal Credit Union encourages its members to use their debit or credit card with caution. It is always good practice to check the payment processor for anything that looks out-of-place, such as a newer keypad on an older machine or a hard-to-use slot for cards.

Stay ahead of hackers.
The credit union offers the My Mobile Money App, a mobile app that helps you control and monitor debit card usage anywhere and at any time using your smartphone, for free! Download the app and take control for your debit card by clicking here.

Why The Money Talk is Important

Despite financial education being one of the most important lessons to shape our adult lives, it is not something many people learn until much later in life. As a parent, you have many “talks” with your children, but too often the “Money Talk” isn’t one that happens until it is too late.  

Respondents in the Ohio Credit Union League’s 2018 consumer survey indicated they considered lessons from parents extremely important to a child’s financial literacy. However, research suggests that’s not happening.

In that same survey, 61 percent of respondents said they received most of their financial education through experience and life lessons. Only 23 percent felt they had received financial education from home and – surprisingly – only 3 percent of Ohioans received financial education in the classroom.

As a result, Ohio’s teens may not be graduating high school with financial know-how.

Each year, The National Financial Educators Council administers a 30-question financial literacy test to participants ages 10 and up in all 50 states. Teens in Ohio, ages 15 to 18, averaged 60.32 percent on the test. Nationally, students of the same age scored an average of 61.11 percent

Parents want their children to have a good handle on finances before they leave the house in their late teens or early 20s, but most aren’t sharing the necessary wisdom to make that happen.

In the 8th annual Parents, Kids and Money survey, conducted by T. Rowe Price, 69 percent of parents have some reluctance discussing financial matters with kids. And, 35 percent of parents rated talking to their children about family finances as either very or extremely uncomfortable – ranking it alongside talks about death and drugs. Partly, parents may feel too self-conscious about their financial situation to be comfortable sharing advice with their children. This survey also found parents who have declared bankruptcy are 24 percent more reluctant to discuss money with their kids. And, parents carrying more than $5,000 in credit card debt are 14 percent more likely to feel uneasy having those financial conversations. 

“Financial literacy” is an easy term to define, but a more difficult one to put into practice. Here are some tips to help you equip your children with a bright financial future:

  • Set an example. Children who consistently see their parents pay the bills on time and keep a budget are more likely to adopt those practices in their own lives. Parents who have made financial mistakes should also share the experience with their children. That knowledge can prepare kids to avoid the same mistakes with their money in the future.

  • Make savings a tangible concept. Encourage younger kids to collect spare change in a clear jar or container so they can see their savings grow. Each time the kids want a small treat, parents can offer to put the money they would have used to buy the treat into the “savings jar,” instead. Once the jar is full, children can count the money and use the funds to purchase an extra-special treat. That way, they’ll associate a sense of excitement with savings. They’ll learn that delaying gratification can lead to a greater payoff down the road. Also, be sure to stop by DoverPhila Federal Credit Union during Youth Week from April 16th through April 21st to earn extra saving bonuses on deposits made to their youth accounts.

  • Have kids learn with their own money. Kids will learn the value of a dollar better if it’s their own. Younger children who are paid a small allowance for chores they complete around the house will learn the concept of working for money. Kids can then begin to spend their own money on some of the things they want. They’ll begin to appreciate what these items actually cost and will be more open to lessons about price comparison.

  • Get kids familiar with banking. Parents can make a trip to their financial institution an exciting event for younger kids. Let them in on the process – maybe even let them press the buttons on the ATM or help to fill out a deposit slip. They’ll feel included in adult chores and won’t feel intimidated by banking later in life.

  • Get help. DoverPhila offers Banzai, an award-winning, web based financial literacy game, for free to its community. The credit union also offers other programs and events geared towards fostering financial literacy in kids, teens, and adults; as well as a financial counselor.

 For more information about financial literacy call the credit union at 330-364-8874.

New Year, New You, New Budget

Just like swearing off chocolate and carbs, sticking to a household budget is a New Year’s resolution easier made than accomplished. In fact, according to the National Foundation for Credit Counseling’s 2017 Consumer Financial Literacy Survey, last year only two in five U.S. adults said they had a budget and kept close track of their spending throughout the year.

Everybody knows it’s important to track personal finances and maintain your financial health. So, why do Americans have such a difficult time sustaining a budget?

It likely doesn’t have much to do with a lack of money. According to the U.S. Bureau of Labor Statistics, the average household in America makes $74,664, well above the $18,871 national poverty line for a family of three. It’s also unlikely that consumers are too busy to keep up with their budgets. Some budgeting apps like Wally and Mint, can track spending and income with minimal attention from the user.

Financial planning and psychology experts believe the real reason people struggle with budgeting is psychological. According to an article in the Journal of Consumer Psychology, humans only have a finite amount of willpower. We can only restrict ourselves so long before we indulge. Just like dieting, people tend to see budgeting as restrictive; therefore, struggle to preserve the motivation to stick with it.

As you ramp-up your drive for 2018, here are some tips to help you exercise good budgeting habits and overcome a craving to spend.

  • Don’t mindlessly spend: If you don’t feel you have enough money, you could be spending money unnecessarily. Search the corners of your budget for empty spending that isn’t serving you. Many financial blogs offer creative tips to help with this. Check out Lauren Greutman’s list of 13 Things You Should Never Pay For.
  • Make time: If you don’t feel you have enough time to track spending, try finding a simple solution – like an app. Phone apps such as Wally and Mint track spending and income for you. They require minimum attention and time.
  • Start small: It takes weeks to form a new habit, and the same thing applies to tracking your income and expenses. In the beginning, keep it simple. If your spending plan is too complicated or restrictive, you will not stick to it.
  • Budget with a friend: If you don’t feel confident, get some help! Apps, financial blogs, and spreadsheets might help if you’re a little stuck in your budgeting process. But if you don’t even know where to start, consider seeking help from a trusted family member or a financial expert. Your local credit union is dedicated to financial literacy and can offer help and advice for your unique budget.

To learn more about how a credit union can help you be financially fit, visit www.aSmarterChoice.org and find a credit union in your area.

Six Rules for Managing Credit Card Debt

If you want to be the master of your credit card debt load, follow these key rules: 

1. Take inventory. How many credit cards do you have? What's the balance and minimum monthly payment on each? What's the total balance? If it is more than you thought or can afford, then it is time to cut down.

2. Check out the cost of your credit cards. What is the interest rate on each card? What is the annual fee? Does your card offer a grace period? If the card does not have a grace period, or if you carry over a balance, or take a cash advance, then you are usually charged interest right away.

3. Get one low-fee or lower-interest card and use it wisely. Make DoverPhila Federal Credit Union your first stop when starting your search. Check to see if you can transfer existing debt from your various credit cards to your new lower-interest credit card.

4. Make the largest monthly payment you can afford. Even though you may not be able to pay your balance in full, paying the monthly minimum may do little more than cover the accrued interest.

5. Watch out for "teaser rates." Your mailbox may be brimming with unsolicited credit card offers that promise attractive low-interest rates. But if you read the fine print, you will see that after six months or so the issuer may double the low introductory rate. 

6. If you get in over your head, do not bury it in the sand. If you are having trouble making your monthly payments, then contact your creditors before they contact you. If you are already screening calls from bill collectors or refusing to open your mail, then you need help. 

Contact Fred Weingarth at DoverPhila Federal Credit Union. He can help you get your finances back on track.

Shop Smart and Save This Back-to-School Season

It is getting to be that time of year when most families are thinking about purchasing school supplies for the upcoming year. Back-to-school shopping is the second-largest consumer spending category after holiday shopping, according to statistics from the National Retail Federation and Research Now. An additional survey conducted by Deloitte found that 32 percent of families expected to spend more on school supplies this coming year because either their children needed more items, because materials were increasing in price, or because students needed more expensive supplies.

An increase in back-to-school expenses can be a strain on family budgets. In a 2016 survey conducted by the National Retail Federation, back-to-school spending climbed to 55 percent over the past 10 years with the average family spending $107.76. A family could end up spending an estimate of $674 on back-to-school shopping when including other expenses such as clothing, shoes, and electronics,

Despite rising costs, back-to-school shopping does not have to be a budget-buster. A little pre-planning and early shopping can help avoid extra spending. Nationally, 73 percent of back-to-school shoppers plan to shop a month to three weeks before the start of school.

Here are some ways to shop smart during the back-to-school season:

  • Timing Matters: Look for end-of-summer sales and tax-free holidays, especially on big ticket items. In Ohio, the tax-free holiday starts on Friday, August 4, 2017, at 12:00 a.m. and ends on Sunday, August 6, 2017, at 11:59 p.m. To learn more about this tax-free holiday weekend, visit the Ohio Department of Taxation website.
  • Plan Ahead: Before making new purchases, take an inventory of supplies already available around the house. From there, make a list of items still needed. Two-thirds of consumers are likely to buy more than what is on their list, so be sure to stick to a shopping plan.
  • Avoid Fancy Supplies: Instead of spending money on the brightest, shiniest, and glitteriest supplies with a licensed logo – which adds cost – create do-it-yourself art projects for kids to decorate their own supplies.
  • Use Technology to Find Deals: Let technology help save money by doing an online coupon search, monitor favorite stores’ website and social media accounts to get advance notice of sales, and sign up for coupon links.
  • Stock Up: If there are good deals for certain supplies that have an on-going need then stock up on those items in case something runs out, gets lost, or breaks.

To learn about credit unions and how they can help plan for the back-to-school season, visit www.aSmarterChoice.org.