COVID-19: We’re Going to Get Through This – Let Us Help Where We Can

Now that we’re near the end of the second week of Ohio’s state-wide “Stay at Home” order we wanted to take a moment to give an update on the services we at ProMedica Federal Credit Union are committed to continuing to provide to all of our Members.

For now, we will continue to offer extended hours of operations through our drive-thru service at the 2301 W. Central Avenue branch. Monday – Friday 7:00am-7:00pm. Due to low demand we will be ending our temporary Saturday hours of operations. We will continue to review this on a week by week basis.

Outside of this, our Members can always access our services and their accounts through other safe and secure methods – please be sure to contact the Credit Union if you need help accessing any of the following:

  • ATMs: We will make sure our ATMs continue to be stocked and in service. You may also use this Co-Op Shared Branching Locator to find other fee-free ATMs wherever you are.
  • Mobile Banking: Our Online and Mobile Banking allows a full range of services – including: Account Inquires, Mobile Check Deposit, Funds Transfers, and Electronic Bill Pay.
  • Electronic Account and Loan Processing: We are fully capable of receiving, processing, and completing applications for new Membership, secondary accounts, and loans without the need to meet face-to-face. Look here for our full suite of options at our Online Application Portal

Don’t forget we are your Credit Union – the wellbeing of our Members will always be our top priority. The current crisis has created difficulties and, with more uncertain times possibly ahead of us, we’ve rolled out a series of programs that you can look into to gain a little breathing room.

  • Emergency Loans     A $1,000 Emergency Loan will be made available to our Members in need of short-term financial assistance at only 5.99% APR* and a 12-month term. Members may make no payments for the first 90 days. Apply, get approved, and sign online at our Online Personal Loan Portal
  • Payment Deferments     Members in good standing will be able to defer payments on any existing ProMedica FCU Consumer loan for up to 90 days. This will be offered, with no processing fee. Contact us by phone at 419-479-4040 or by email at MemberServices@promedicafcu.com for instructions and details.
  • VISA Skip-a-Pay     We will help facilitate a Skip-a-Pay for qualifying cardholders that will run April 1 through May 31, 2020. Look to your next VISA statement for more details.

These assistance programs are another area we are always looking to review and improve. If there is some way we can offer better service please let us know by email at: MemberServices@promedicafcu.com

Lastly, we want to warn our Members to be careful and cautious of bad actors looking to take advantage of people during situations like this. The Federal Trade Commission (FTC) has compiled tips for avoiding and dealing with recent and emerging scams, including:

  1. Avoid phishing scams by keeping your anti-malware and anti-virus software up to date on your computer and never click on links from sources you don’t know.
  2. Go directly to the Centers for Disease Control and Prevention(CDC) and the World Health Organization (WHO) for the most recent information on the coronavirus, rather than obtaining information from emails and other sources that may not be legitimate.
  3. Watch out for advertisements or “investment opportunities” around coronavirus prevention, treatment, or cures. Consult a medical professional for questions about prevention and treatment.

Always stop and think critically about what is being asked of you – especially if you are being asked to give any personally identifying information (SSNs, Account Numbers, etc..).

We do our best to keep our Members up to date on potential scams by sharing consumer alerts from the FTC on our Facebook page. Another great resource to help you keep your money safe, especially with the Federal Economic Stimulus checks due to start going out soon, is the IRS Corona Virus Center where you can find a wealth of information straight from the source.

Remember, we’re here to help. Be kind and be safe out there!

*APR = Annual Percentage Rate. Credit subject to credit approval. Terms and conditions apply. Programs, rates, terms, and conditions are subject to change without notice. This credit union is insured by the National Credit Union Administration.

 

Tips for Managing Credit Card Debt

 Ohioans may fair better than the average American when it comes to credit card debt.

The most recent ValuePenguin data showed the average Ohio household holds just $5,446 in credit card debt. That’s the least of any state, while the typical household in Alaska carries the most credit card debt at an average of $13,048.

While credit card debt varies widely by state and region, it’s clear that there is a crisis in America with debt approaching $14 trillion. Credit cards are a big contributor, making up over a quarter of that amount. According to Debt.org, more than 189 million Americans have credit cards. An average household has at least four cards, carrying roughly $8,400 in credit card debt.

Experian reports that credit card debt is the second-fastest-growing debt behind personal loans and has been on a steady climb since 2015. Interest rates seem to be on the decline, with CreditCards.com stating the average credit card interest rate for new cards is currently 17.3%, down three quarters of a percentage point since the Federal Reserve cut rates in fall of 2019. But the annual percentage rate (APR) is still at a near record high – up from 16.8% in 2018.

Credit cards certainly have their advantages if used responsibly, especially if you’re able to pay off the balance in full every month by the due date. Credit Karma reports that credit unions typically offer lower interest rates, as well as competitive rewards and membership benefits. If you do find yourself struggling with credit card debt, you’re not alone. Your local credit union may be able to help you get back on top of your finances.

Credit unions are not-for-profit financial institutions owned and democratically-controlled by their members. Built on the philosophy of “people helping people,” their focus is on better serving their members with great financial benefits, like making life more affordable by dealing with credit card debt.

 

Tips for dealing with credit card debt

 

  1. Assess your financial situation. Come up with a list of everything you owe, including monthly bills, credit card balances and the annual percentage rate (APR) for each card. Then, compare expenses with income.
  2. Prioritize your spending. Before tackling credit card debt, be sure to cover the basics first, such as food, housing and clothing. Next, pay the minimum amount on all secured debts, like your home and car loans. Then, start working on paying down credit card debt with useful tools like the Credit Karma Debt Repayment Calculator, followed by student loans. Try to use cash or debit cards only while paying down debt. Above all else, pay at least the minimum balance on all outstanding debt to avoid hefty late fees.
  3. Establish a budget. Once your debts have been prioritized, it’s important to come up with a budget to track spending and minimize credit card debt. Use online tools like YNAB (You Need a Budget) to get started. Try to adhere strictly to your newly established budget.
  4. Secure a better rate. Negotiate a lower interest rate on your credit cards. According to CreditCards.com, sometimes all it takes is a simple phone call to (politely) request a better rate. Shaving off even a percent or two could save you hundreds of dollars while repaying your debt.
  5. Decide on a strategy. When paying down credit card debt, it’s important to settle on an action plan. There are two main ways to do this. One is to focus on paying down the card with the highest interest rate first, while making minimum payments on the other cards. This is the fastest way to decrease credit card debt, eventually freeing up more cash to pay toward the lower interest rate cards and creating a snowball effect. The other strategy is to pay the lowest balance first, while paying minimums on the others. Though not as cost-effective, this is the fastest way to get rid of debt on a single card.
  6. Stay focused by creating concrete goals and staying motivated. Keep your eye on the prize! Perhaps getting rid of credit card debt will afford you a down payment on a house, new car or dream vacation. CreditCards.com suggests writing your goals down and keeping them in your wallet or purse. When tempted to overspend, take a peek at them for a big picture reminder.
Zero Percent

6 Questions About Auto Financing

Navigating automobile financing can be one of the biggest financial headaches you’ll encounter. But, unless you want to walk everywhere, it’s something you’ll have to deal with. The biggest hurdle is figuring out the angles and understanding the entities that stand to profit from the transaction. Let’s go through some of the more challenging parts of automotive financing by addressing some of the questions about automobile financing.

1) How do dealerships secure financing?
Car dealers usually have a department that is responsible for setting up financing and insurance (commonly referred to as “F&I”). These people take the estimated price of the car, the actual value of the car, and your credit history to a number of different credit providers. These include major national lenders, auto manufacturer financial departments, and depending on the dealership, some local lending institutions. These vendors each quote an interest rate and other fees.

Car dealers usually have longstanding business relationships with their lenders, which often include incentives for the dealer as a “reward” for financing a loan through that lender. Because the lenders are competing for the dealer’s business, not necessarily for yours, those incentives are for dealers and not consumers. While the dealer knows that lower interest rates make you more likely to buy a car, in this transaction, you’re not the customer. You’re the product. The dealer is trying to sell your business to a lending organization and usually makes a profit on the transaction.

2) When should I tell the dealership I already have financing?
Let’s be clear: Financing is profitable for dealerships in many ways. If they know they can’t turn a profit from financing, they’re more likely to push harder to find profit elsewhere. You’re almost always better off keeping the auto loan for the last part of your transaction with the dealership, particularly if you plan on securing outside financing. This doesn’t mean, though, that you don’t want to think about financing until that point in time. Discuss your plans with a representative at ProMedica Federal Credit Union (PFCU); including the type of vehicle you are planning to purchase. Discuss what rates PFCU can offer. By doing your research ahead of time and knowing what financing options are available to you, you can let the dealer think there’s still money to be made in the financing, which may strengthen your negotiating position on other parts of the transaction, like the price of the car or the value of the trade-in.

3) How do dealerships make money offering 0% financing?
If you’re shopping for a car because you’ve seen an advertisement for 0% financing, you’re not alone. Campaigns that offer manufacturer’s deals like 0% financing for 60 months are incredibly popular for car buyers and dealers alike. If it were honestly a losing proposition for the manufacturer, they wouldn’t keep doing it. This might invite you to ask how they could possibly make money on the financing. The answer is two-fold: volume and selectivity.

The volume part of the money-making strategy is simple. 0% financing gets people on the lot and encourages them to think about buying a specific brand of car. The manufacturer and the dealer both make money on each car sold, so the 0% financing trades some profit per car in the hopes that they’ll make up for it in number of cars sold.

Selectivity is the other side of volume. Not everyone who comes to a 0% financing event will qualify for that rate. Because most people who get to the point of discussing financing have decided to purchase a car, they’ll settle for a non-zero rate when it’s presented to them. Between these two strategies, advertising 0% financing does pretty well for a car dealer.

4) Does my salesperson benefit from financing my car purchase?
This really depends on the dealership. Most of the time, your salesperson only benefits from the price of the car, the warranty, and some high-markup items, like undercarriage treatment, upgraded tires, and other products. The financing department – the people who are responsible for getting quotes and delivering them to the salesperson – is likely to be the folks who receive any kind of commission on the financing. In these instances, it’s also very likely that the salesperson with whom you’re dealing has little to no control over your financing. He or she might be able to go back to the financing department and ask them to attempt to negotiate a better rate, but this negotiation may not have much success. In any case, someone at the dealership profits from getting you a loan.

5) What is GAP insurance, and is it right for me?
“GAP” or guaranteed asset protection insurance is automobile insurance that covers the difference between the total amount of the loan and the value of the car. It provides protection against the worst-case scenario, that you total a car (or the vehicle is stolen) and you owe more than it is worth. Your comprehensive insurance coverage will only pay out the value of the car, leaving you on the hook for the remaining interest and finance charges. A dealer may require you to purchase GAP insurance as a condition of financing your purchase. The cost of the insurance is almost always paid up front as part of the financing charges.

GAP insurance is designed for long-term, high-interest, or low down-payment financing. If you are buying a car without putting a lot of money down, or if your credit history is not stellar, you should consider getting GAP insurance. But, like any other purchase, you should shop around. Because most financing arrangements require you to purchase GAP insurance, dealerships maintain institutional arrangements with insurance agencies, expecting you to purchase it without much thought. It’s one last effort to make money off your purchase, and they rely on you to not notice. PFCU’s Gap insurance rates are about 50% less than what you would pay at a dealer. Please contact us for more information.

6) What steps can I take to avoid being railroaded by last-minute financing changes?
Financing is among the easiest places for dealers to make money, because it’s almost always the last stop in the car-buying process, and they expect you to be both committed to purchasing a car and exhausted from making a series of decisions. High-pressure salespeople use this fact to their advantage. When it comes time to talk financing, frequently, the license plates are off your old car, and you’re sitting down with a sales manager. While it may seem counter-intuitive, this is the best time to walk away and ask PFCU about financing options. See if PFCU if can offer you a better rate, lower fees, or a more flexible term. Ask the dealer to commit as much as possible to a price on an offer sheet. Then, tell them you’d like to take some time to think about it. If you come back with a pre-approval offer from PFCU, the sales manager may hem and haw a bit. But, at the end of the day, they’d rather make the sale than make a little extra on financing.

This is an especially important step if your history with credit is complicated. A giant lending corporation won’t see the steps you’ve taken to solidify your financial position. They don’t have the same relationship with you that PFCU does. They see you as a risk number and an interest rate they can justify, not as a Member of a community institution. Always give your Credit Union the first chance to beat the dealer’s offer – we work for you, not for a commission.

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