Archive for August, 2015

When to Say “Debit” or “Credit”

applestoorangesWhen your PFCU ATM card has a VISA® logo on it, it is referred to as a “Debit Card”. The money comes out of your PFCU Checking account and not a line of credit attached to the card (Unless you have a PFCU Overdraft Line-of-Credit, which will kick in if you run short on funds.) An actual Credit Card is a loan with specific terms, interest rates, and fees, which you can access as-needed by using your plastic card. Here is where the terms “Debit” and “Credit” can get confusing, though. It’s not quite apples and oranges. When using their PFCU Debit Cards, members are often asked “Debit or Credit”? While the transaction goes through either way, one requires a PIN and the other a signature. An actual Credit Card is always processed as a “Credit” transaction and is usually processed using a signature rather than a PIN. A Debit Card can be processed as “Debit” or “Credit”. Choosing “Credit” can bring you extra protections on your purchases, such as a greater ability to return items. Remember, though, that places like hotels, gas stations and rental car companies may place a security hold on a good portion of your funds, which can tie up your checking account for days. For this type of transaction, an actual Credit Card is usually best. Also, when you are traveling, it is good to use your PIN a few times in a new area to establish that you are there. Our stringent security system sees signature-based transactions in a geographical area where you don’t usually transact as red flags. You can also call us at (626) 799-0882 to let us know you will be traveling. We’ll note your account for our security team.

So, even though you might choose “Credit” when completing a Debit Card transaction, you are really only choosing to have VISA® process it rather than the ATM network. See a companion article “Millenials Rethink Credit Vs. Debit” for another angle to this discussion.

The Truth is: ARMs Differ and Can Have Great Value.

ARMHome buyers often focus on obtaining the lowest possible rate on a 30-year loan, but most mortgage loans are used for only three. Cash out transactions for improvements, additions, repairs, weddings, tuition and major purchases occur with great frequency. If you think you might refinance for any reason anytime in the next seven years, read on. 

Lower Rates, Flexible Terms – Today, most Adjustable Rate Mortgages (ARMs) are “hybrids.” They start out at a fixed rate for the first 3, 5, 7 or even 10 years. During this time, you save on interest cost, and even though your payment is less, you still pay more toward principal. 

Inside Information – Lenders give you a discounted rate up front because they know the rate will float with the market later on. If you sell your home or refinance again prior to that happening, it’s their loss. You have the advantage here because you control the timing of your next step. 

Managed Risk – One way to prepare for the possibility of a higher rate and payment later is to pay extra principal each month to reduce your balance faster. If the rate ultimately adjusts up, your balance will be lower and the payment change will be less as a result. As well, you would already be accustomed to paying more. 

The Bottom Line – A fixed rate loan provides the certainty that it will never change. A hybrid ARM provides a guaranteed savings but for a limited period of time. The best way to decide is to balance your expectations for using any particular loan with the peace of mind that can come from being assured of stability, even if your time frame changes. 

Either way, we’re here to help you explore the pros and cons and to come to a conclusion that’s uniquely right for you.

Whether you are purchasing or refinancing a home, call us now at (626) 799-0882 or 1-800-445-PFCU to get started on the best mortgage loan solution for you.

 

PFCU is a Leader in Our “Village”

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PFCU’s Veronica Reigelman helps kids at the coloring tables.

The Credit Union motto is people helping people, and PFCU has been doing just that since we were first founded by employees of the City of Pasadena back in 1935.  Over the years we have grown to serve dozens of businesses and organizations in the SGV.  Our partners include many of the key organizations that consistently make the SGV such a great place to live and work.  We serve organizations such as Union Station Homeless Services, Rosemary Children’s Services, The Girl Scouts of Greater Los Angeles, Art Center College of Design, The Los Angeles College of Music, Pasadena Museum of California Art, The Pasadena Chamber of Commerce, The San Gabriel Chamber of Commerce, and many more.  We have gained a reputation for providing quality financial services to our community and have taught thousands of individuals of all ages financial literacy information such as budgeting, proper use of credit, saving strategies and much more.  In fact, we have teamed up with award-winning children’s financial literacy expert Sam Renick, creator of the lovable Sammy Rabbit character, to teach more than 7,000 girls about saving, budgeting and goal-setting. PFCU is the 2014 Pasadena Chamber of Commerce Corporate Citizen of the Year and winner of the “It Takes a Village” Award from the San Gabriel Chamber. We have been named “SGV’s Best Credit Union by readers of thirteen local newspapers in 2015. PFCU also volunteers to prepare and serve a meal at the Union Station Homeless Services Family Center once each quarter.  Our PFCU Paws for a Cause Wiggle Waggle Walk team has raised thousands of dollars to help the animals at Pasadena Humane Society and SPCA over the years.  We help out at Police and Fire Department events for the cities of Pasadena, South Pasadena, San Gabriel and Sierra Madre.  We participate in the Earth Day Festival, NATHA’s (Neighbors Acting Together Helping All) Lincoln Village Festival,  each year.  We are a sponsor of the San Gabriel Mission Fietsa, The Altadena Sheriffs Summer Concert Series, The Spark of Love Toy Drive, Monte Vista Grove’s annual dinner, just to name a few.  Our new Pasadena FCU and YouTube channel is helping us spread the word about Credit Unions and the way to make smart financial choices.  We educate the community through this blog, our PasadenaFCU Facebook page and our Twitter account. Enjoy this video from our participation in the recent National Night Out Festival in Kings Villages https://youtu.be/qR3Q4_0DJZk