Weaving the strength of our past with. to ensure your financial success. Jeanne D Arc Credit Union THE POSSIBILITIES OF THE FUTURE

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1 Weaving the strength of our past with THE POSSIBILITIES OF THE FUTURE to ensure your financial success. money management guide Jeanne D Arc Credit Union we share a common thread

2 elcome to Jeanne D Arc Credit Union Once upon a time, the dime a father handed to his son for a job well done went a long way. And his sound advice of, Don t spend that all in one place, has echoed through the decades as a familiar reminder that hard-earned money should be both savored and put away for a rainy day. Financial management has come a long way over the years from people stashing money in a coffee can to the use of credit cards and electronic banking. Yet, even though products and services associated with borrowing, lending and saving have changed dramatically over the years, the basic needs of keeping a roof over your head, buying groceries and taking care of other daily expenses have changed very little. For generations, we ve been helping families make smart financial choices when it comes to managing their money. That s why our goals are the same today as they were back in 1912 when we first opened our doors: to help people save for their futures and to be a trusted source for sound financial advice. It s why we say, we share a common thread. Today, there are a number of factors that affect your financial health: your income, your expenditures, your use of credit and your investments. The purpose of this guide is to help you identify your financial strengths and weaknesses so you can put more of your hard-earned money in the plus column. As your financial partner, Jeanne D Arc Credit Union is committed to helping you create a spending plan, manage your credit, control your credit score and chart a path to successfully reach your financial objectives. Of course, if you ever have questions or if there is anything we can do to enhance your membership experience, help is always as close as the nearest Jeanne D Arc Credit Union branch. we share a common thread

3 Creating a spending plan A spending plan is a helpful tool to help you measure your income (credits) against your expenses (debits). It will help you organize your finances so that you can look for areas to minimize your expenses thereby maximizing your income. To get started, simply take a piece of paper and start listing your income on the left side and your expenses on the right. When you re done, add each side up and look at the difference. Is the left side larger than the right? If so, that s a great start and hopefully you re stashing some of that money away for your future. But if that right side, the expense side, is larger (or if it s pretty darned close to the total of the income side), it s time to examine your spending habits to identify where you can cut expenses. Tips on how to save First, look at your outstanding loans. Is the interest rate on your credit card as low as it can be? What about your car loan or mortgage? Visit our website at JDCU.com and compare your current loan rates to ours. Depending on the outstanding balances of your loans, just a percent or two in the Annual Percentage Rate (APR) can make a big difference in your monthly payments. And refinancing is as simple as contacting our Member Service Team at or stopping by a branch or loan center. Next, take a look at your daily spending habits. Keep an itemized list of everything you buy for a month to give yourself a better idea of where and how you are spending your money. At the end of the month, take a long, hard, objective look at this list. The goal here is to identify non-essential purchases so you ll see where you can save. Another concept is the idea of Paying Yourself First. This can be done in a number of ways. One way is to set aside a portion of your paycheck pick a number like 5 or 10% and put it into a Jeanne D Arc Credit Union interest-bearing savings account. Use the money in this account only for emergencies or larger planned purchases such as a vacation. A second way to Pay Yourself First is to put a small amount of cash aside on a daily basis. It could be as little as $1 or perhaps all of the leftover change in your pocket or purse. Let all of that money accumulate and take it to the credit union at the end of every month to deposit it into your interest-bearing savings account. In fact, you can earn 7.00% APR * on the first $ you deposit when you open a Statement Savings account with us. You won t find a rate like that at any other financial institution around and we guarantee it s more than your money will earn sitting at home. Managing your credit Credit cards are a smart financial tool because they re convenient and often safer than carrying cash. They re also great for emergencies or for times when your cash flow is temporarily slow. If used correctly, credit cards can also help you establish or increase your credit rating. However, many people abuse credit cards by purchasing items they don t really need and cannot afford, just because their credit limit allows them to. If you do not have a plan to pay off purchases in a timely manner, the cost of carrying that credit may be more than you can handle in the future. Consider the following: If you purchase an item for $2, on a credit card with an 18.00% Annual Percentage Rate (APR), then you stop using the card completely and only make the minimum monthly payment (based on 2.00% of the outstanding balance or $20.00, whichever is greater), it would take you 19.3 years to pay off that debt. In addition, you ll end up paying $5, on that $2, item because of the compounding interest. *APY=Annual Percentage Yield. Dividend rates are effective as of April 15, 2009 and may change at any time without prior notice after account opening. Requires a $5.00 minimum balance to open the account. A 7.00% APY will be paid on the balance in your account up to the first $ A dividend rate of 0.50% will be paid on the remaining balance in your account that exceeds $ with a $ balance earning a 7.00% APY and a $1, balance earning a 3.87% APY, as examples. Fees could reduce earnings on the account. $5.00 membership account required.

4 This isn t to say that you shouldn t use credit cards. In fact, many credit cards pay you cash back or provide you with points for every dollar you spend that can be traded for merchandise or trips. The trick is to have money available so you can afford to quickly pay off the balances you put on the card. There are a number of costs and fees associated with credit card use some clear and some less obvious. To help you better understand the cost of credit, here are some terms you should understand when applying for a card: annual fees Some financial institutions may charge a fee for the use of their card. They may waive the fee the first year to lure you in, but you re better off looking for a card with no annual fee (like Jeanne D Arc s Platinum VISA Credit Cards see the Choosing A Credit Card section in this guide for details). interest You will be charged monthly interest on any outstanding balances you have on the card, because using a credit card is just like having a personal loan. Interest rates are expressed as an Annual Percentage Rate (APR). The higher the APR, the more money you ll pay monthly in interest charges. APRs can be variable or fixed. variable rate A variable rate APR is based on a published index, such as the Prime Interest Rate, plus percentage points added by the credit card issuer. The rate fluctuates and can change without notice. fixed rate A fixed rate APR usually does not change, but if it does, you must be notified in writing 45 days prior to the change. cash advance fee A fee charged for using the credit card to get cash. This fee can be a flat per-transaction fee or a percentage of the amount of the cash advance. Most cash advances carry a higher interest rate than regular purchases. convenience checks These are pre-printed checks linked to your credit card. As the name implies, they are convenient for making mail-in payments. Many financial institutions charge an up-front fee for their use, make you pay a higher APR and eliminate your grace period when you use these checks. teaser rates Low or zero interest rates that are usually offered for a limited timeframe. Before accepting a teaser rate, it is important that you understand when your interest rate will increase and what the new rate will be. late fees If you make a payment after the due date stated on your monthly credit card statement, you will be charged a fee usually a flat fee. Even if you mail your payment prior to the due date, if it is not processed by the financial institution before that date, you will be charged. over credit limit fees When you apply for a credit card, you will be provided with a credit limit based on your creditworthiness. For every purchase you make that exceeds the limit, you will be charged a flat fee. If you continue to make purchases after you have reached your credit limit, your card could be suspended until the balance is sufficiently lowered. bounced check fees If the check you use to make your credit card payment is returned for insufficient funds, your card issuer will likely charge you a flat fee. This could end up being especially expensive because the financial institution you wrote the check from will also charge you a bounced check fee. choosing a credit card Jeanne D Arc Credit Union offers exceptional Platinum VISA Credit Cards to help you make the most of your charges when needed. Travel & Gift Rewards Earn points you can redeem for brand-name merchandise or travel awards, including airline tickets, cruises and more. CashBack Rewards Put money back in your pocket with your everyday purchases. The more you use your card, the greater your cash back. Low Fixed Rate Save money with a rate that starts low and stays low. All of Jeanne D Arc Credit Union VISA Credit Cards offer exactly what you need in a credit card: VISA Security & Protection that provide multiple levels of security to prevent, detect and resolve unauthorized use of your card. If fraud should occur, you are never held liable for unauthorized charges. 90-Day Product Protection that covers your retail credit purchases against loss, theft or damage within 90 days of the purchase. balance transfers Moving a balance or partial balance from one card to another. Balance transfers can be beneficial when transferring a balance to a lower rate card, but be aware of any additional fees charged for the transfer.

5 Identity Theft Victim Insurance to provide you with information, advice and an Assistance Kit, 24/7, to help get you back on track and clear your name. $1, Identity Theft Insurance that provides you with up to $1, reimbursement for out-of-pocket expenses while resolving identity theft-related incidents. Payment Card Registration so you can register all of your credit and debit cards confidentially. If they are ever lost or stolen, one toll-free call reports the loss, cancels the cards, stops unauthorized purchases and requests prompt replacements. Extended Warranty (available on CashBack Rewards and Low Fixed Rate cards) that extends the manufacturer s original written U.S. warranty period on items purchased with your VISA credit card. Generous credit limits No annual fee No balance transfer fees 25-day grace period on purchases Auto rental insurance Automatic payment option And no telemarketing, ever. For more information about Jeanne D Arc Credit Union Platinum VISA Credit Cards, visit our website at JDCU.com, or stop by any conveniently located branch or loan center. Be responsible with your new power Once you receive your new card, here are a few guidelines to help you avoid getting into financial trouble. Limit yourself to one card. Multiple monthly credit card payments can be confusing and tough to manage, making it that much easier to miss payment deadlines. Separate wants from needs. As a rule, if you can t pay your balance off at the end of the month, rethink that impulse to buy things. Pay as much as you can. If you can t make the full payment on the balance due at the end of the month, always pay more than the minimum. Stay grounded. If you use your card wisely, chances are that over time your financial institution will raise your credit limit. Don t take this as a sign to go on a spending spree. Check your statements. Always review your monthly statements to make sure that what is listed accurately reflects the purchases you have made. Stay in touch. If you move, let your credit card issuer know in advance. You re still responsible for making payments on outstanding balances on time. Don t pay needless late fees because your bill got lost in the shuffle. One last thing If you find you are having difficulty making your monthly payments, do not ignore the problem. A small problem can grow into a huge problem in a very short period of time. Stop using the credit card immediately and contact Jeanne D Arc Credit Union (or other card issuer) to see how we can work with you on payment options. Your Credit Report/Score A credit report is a collection of information obtained from your creditors that reflects the extent of your credit and payment history. Your credit score is a numeric value that is applied to your credit history by a credit reporting agency. Often called a FICO (which stands for Fair, Isaac Company) score, the value ranges from 300 to 850. The higher the number, the better your score. Your credit history and credit report are extremely important to a number of facets of your life. Lenders consider individuals with a high credit score to be low risk, desirable customers who are worthy of low interest rates on loans.

6 If you have a low credit score: You may be denied when applying for credit cards, car loans, mortgages, etc. Even if you are granted credit, you will likely pay very high interest rates. You could have trouble renting an apartment. Employers who have access to your credit score may deny you employment. Graduate schools may reject your application for admission. You will likely pay higher insurance premiums. You will likely pay large deposits for things like utilities or cell phone access. In other words, your credit report and credit score play major roles in your everyday life, so it s wise to make sure your credit report is clean and your credit score remains high. What factors influence your score? Your credit score is determined using five factors: Your payment history, the amount you owe, how long you ve had credit, your accumulation of debt and the different types of debt you have. Here s the breakdown: Payment History - 35% Making payments on a timely basis is very important. However, the longer it has been since you ve had a negative incident, the less it will affect your score. In other words, a late payment last year is going to have a more negative impact on your score than a late payment five years ago. Capacity - 30% Capacity is the amount you currently owe and your ability to borrow. As an example, if a consumer has $50, in limits on their credit cards and their current balance on those cards is $49,000.00, their capacity is 2%. On the reverse side, if that consumer has $50, in limits and their current balance is zero, their capacity is 100%. The higher your capacity, the higher your score. NOTE: If you are consolidating your debt by transferring balances from a number of credit cards to one card, it is better to leave those accounts open after the transfer. Here s why: If a consumer has a combined outstanding balance of $25, on four cards with a combined credit limit of $50,000.00, their capacity is 50%. Now suppose that consumer transfers that $25, to a card with a credit limit of $25, and cancels the other cards. That consumer s capacity is now 0%. Therefore, just cutting up unused credit cards is often a better alternative than closing accounts. Length of Credit - 15% Even if you rate highly in all of the other categories, if you have only had credit for six months, a lender may judge that you have not yet proven your ability to maintain a high score. This is another good reason to keep older accounts open, even if you do not use them. Accumulation of Debt - 10% How recently you ve accumulated debt makes up another 10% of your score. Also, the more credit cards you collect in a short period of time, the more your score will drop. Credit Mix - 10% Installment or closed-end loans, such as auto loans and mortgages, help to raise your score. Revolving or open-end loans, such as credit cards, that are used or have balances, lower scores. What factors influence your score? Now that you know how important your use of credit and your credit scores are, the next step is to make sure that your credit reports are accurate. You can subscribe to any or all of the major credit reporting agencies Equifax, Experian and TransUnion for a small fee, or you can request a free credit report once every 12 months by visiting Reviewing your credit report on a regular basis allows you to make sure that information being reported is accurate. If there are discrepancies, you have the right to appeal information that appears to be incorrect. Guarding yourself against fraud/identity theft Credit reporting agencies offer a paid service that continuously monitors your credit report to look for signs of fraud and identity theft. You can review the services they have to offer by visiting their websites: Equifax: Experian: TransUnion:

7 You may be the victim of identity theft if: You receive a credit card you did not request or a statement of an account you do not have. You don t receive an account statement, possibly signaling that a change of address has occurred. Unauthorized charges appear on your credit card statements. Debt collectors contact you regarding goods, services or credit that you didn t purchase or initiate. If you believe you are already a victim of fraud or identity theft: In all cases involving your accounts with us, please report the issue to a Jeanne D Arc Credit Union representative in person at any branch, by phone at (toll-free ) or online at JDCU.com. Contact all of the three major credit reporting agencies and ask them to place a fraud alert on your file so creditors will know to contact you before opening new accounts. Order a copy of your credit report from all three agencies, review it and contact the fraud departments for creditors who show a false or tampered account. File a police report and ask for a hard copy of that report. Contact the Federal Trade Commission (FTC) at or 877-IDTHEFT. This is the agency that maintains the Identity Theft Clearinghouse and they can provide you with additional assistance. Be on the defensive To protect yourself from the risk of identity theft, here are a few simple measures that will make it harder for would-be thieves to steal from you: Always try to use an alternative form of identification other than your Social Security Number. Keep your Social Security card at home and don t print this number on checks. Limit the number of cards and identifying information you carry in your wallet. Know your billing cycles and when statements should arrive in the mail. Contact your creditors if you have not received a bill in a timely manner. Secure important credit card receipts and shred all others. Also shred any unsolicited credit card applications. Use unique passwords. Don t use the last four digits of your Social Security Number as your password. Limit online purchases to secure websites protected with an encryption system. Keep personal information in a safe place. Never respond to a text message ( SMS ishing), message ( ph ishing) or phone message (Voice Over IP or vishing ) that requests personal information. Do not divulge sensitive information such as credit or debit card numbers, expiration dates, PINs and CVV (the three-digit security number on the back of your credit card) codes via non-secure electronic channels such as text, or over the telephone. Be aware that it is easy for criminals to imitate organizations by using electronic communications and initiating s or text message scams. If you are unsure whether or not something is a scam, always take the time to investigate it. Always verify a contact number, especially one that is in an or text message before responding. Never give your PIN or Internet password to a person. Only use your PIN on systems that have been designed for this purpose, (i.e., ATMs and point of purchase keypads at merchant locations). A final note about credit and your credit report Negative information can stay on your report for up to seven years, and in the case of bankruptcy, 10 years. It s also important to recognize that some debt can never be erased, even by bankruptcy, including: Child and spousal support obligations Criminal restitution and fines Federal student loans IRS liens So take the time to create your spending plan, stick to it, use your credit wisely and monitor your credit reports at least annually. If you ever have questions about any of the material in this guide, please contact us. As a not-for-profit financial cooperative, Jeanne D Arc Credit Union truly is committed to helping our members make smart financial choices.

8 Making the most of your finances As you can see, managing your finances is a full-time obligation. However, we share a common thread means you can rely on the same experience and advice that have served generations since We re here to help you navigate through the lows, manage through the mediums and make the most of the high points in your financial journey. If you ever have any questions about your finances or need personalized guidance, come talk with us about your options. Stop by any Jeanne D Arc Credit Union branch or call us at during normal business hours, or check us out on the web at JDCU.com.

9 Thank you for becoming a member. We look forward to serving you, and we hope to be your financial partner and advisor for generations to come. Jdcu.com toll-free Mailing Address P.O. Box 1238, Lowell, MA Jeanne D Arc Credit Union we share a common thread The shares and deposits of this credit union in excess of NCUA limits are insured by the Massachusetts Credit Union Share Insurance Corporation up to limits set by Massachusetts law. v.1 (12/09)