New NTCUE Video: "A Bank" Story

Here is my latest video featuring a quick story about an experience I had at a branch of a national bank.

2011 Next Top Credit Union Exec

Yes, the rumors are true! I have thrown my hat in the competition to be the Next Top Credit Union Executive! Check out my video:

Do Not Get Comfortable With Credit Card Debt

For many Americans, credit card debt is a big burden on their financial freedom. Yet they can't seem to give them up. This is partially due to the "must have it now" mentality. You see that new big screen TV and have the credit card in your pocket. Even better, the store will give you a sweet deal if you get their store credit card at 29.99% interest. Take two seconds to breath and then remember that you will save money in the long run if you put money aside and pay cash (debit or check). By doing so, you will save yourself from paying interest. Keep this in mind next time you see something you MUST have.

So You Have Spent All Your Money on Christmas Presents, Now What...

Many Americans woke up Friday morning before the sun was up, got in line at a retailer, and when the doors flew open grabbed everything they wanted and paid for it with money they did not have. I personally know people who have financial troubles but somehow found $500 or $1k to buy Christmas gifts. If you have to take out debt to buy Christmas presents, what is the point? You are creating a bigger hole for you to big yourself out of and this stuff is not even for you! You are just going to give it away! If this is you, WAKE UP! You are under no obligation to buy gifts for anyone. If a friend or family member gives you a hard time about you not giving them a gift, then they are not truly a friend OR family to you. If someone really cares about you, they will not let you do something so detrimental to your well-being.

Remember, spend only what you have, not what you want to spend. If you have any debt, give yourself the greatest Christmas present of all and pay down you debt.

The End of Small Credit Unions

Increasingly, smaller credit unions are finding it harder to compete for their member's business because of new governmental regulations, increasing competition, and lack of an adaptive business model.

The federal government passed major banking regulatory overhaul recently which will put additional burdens on financial institutions. If you are a credit union with only four or five employees total, this will represent a significant increase in costs. Some people even believe that this is the federal government's plan all along. Drive the smaller financial institutions into insolvency so they are forced to sell out to bigger institutions. If you haven't noticed, when the FDIC shuts down a bank, it is "sold" to a bigger bank. Soon we will only be left with mega banks which will be easier to control by the federal government.

Most of your small credit unions are one branch financial institution that services one company's employees. Also, some credit unions that have defined employer based membership are finding it more and more difficult to compete with those credit unions with community based charters. This is only natural because for the smaller credit unions your potential membership base is much smaller that as community chartered credit union.

When speaking of business model, financial institutions have traditionally relied upon taking deposits and making loans to supply their interest income. As the deposit and lending rates become more competitive, the amount of income you make from this decreases. The only way you can make up for this is the either make more loans or diversify your income stream. The smaller credit unions are unable to expand lending due to limited membership size, but they have yet to embrace other avenues of generating income. Some people find it strange when I speak about profits when it comes to credit unions because of their not-for-profit status, but every organization to remain solvent needs to generate profits or else they will soon go under.

My advice to credit unions are too either adapt to the new business climate or merge with a compatible credit union to increase your membership base. Either way, they should keep in mind that they should always do what is best for their members since they are the ones who own the credit union.

Quick Tip on Paying Down Credit Card Debt

Paying just the minimum payments on all your credit cards means that it will take you years to pay off the balance....5, 10, sometimes 20 years! If you look at your monthly credit card statements, it will tell you how long it will take to pay off the debt just making minimum payments. For those of you trying to pay down your credit card debt, here are some quick helpful tips to help you pay them off as quickly as possible.

First, you need to write down your balances on each card along with the interest rate being charged on each debt. This will allow you to come up with a plan of attack to pay your credit cards off quicker.

Now, instead of paying cards randomly, you need to start paying just the minimum payments on your lowest interest rate debt and apply the most money you can to the debt with the highest interest rate. This will help you tackle your debt faster because you are paying down the most expensive debt first.

After you pay that debt off, move to the next highest debt and repeat until your debt is paid off completely.

The Three Credit Bureaus

When it comes to personal credit in the United States, there are three companies that make up the credit reporting bureaus: Equifax, Experian, and Transunion. These three companies issue scores based on your credit information. Now, I will not go into the details on each company, but your score with each company will be different. This has to do with the differences in the information about you that is reported to each bureau.

I recommend obtaining a complete copy of your credit report from all three bureaus once a year. The best place to go is www.annualcreditreport.com which was established by the credit reporting companies in accordance with the Fair and Accurate Credit Transactions Act or FACT Act. Here is a tip! Since the information reported to each credit bureau is similar, request one free report every four months. That way you are spreading it out over the year and more likely to catch any discrepancies quicker.

Check out my Credit Score Power eTips which is a list of specific actions I have used to help hundreds of people increase their credit score immediately and for the long term!