“I have no desire to suffer twice,
in reality and then in retrospect.”
-Sophocles, Oedipus Rex
Sophocles is referring to hindsight. With this article, we are hoping to avert some of that fantastic hindsight we have all experienced.
Every day we, you, Trademark, your neighbors, your family and your friends are encountering something new. Our collective “new” ranges from how to clean differently, how to properly put on and take off gloves and masks, and where to find cleaning supplies to how to care for loved ones and manage finances.
Even if you are working and receiving a paycheck, you are impacted. Your grocery bills are different, you may have a new streaming service for more viewing options or maybe you are commuting to deliver groceries for friends and family – our lives are different right now.
Since mid-March, our management team has met daily (shout out to technology) to make sure our business continues to move forward and serve our Members during this time. When we meet, we discuss everything from cleaning supplies (Do we have enough?) to staff (How are they doing?) to our Members. Our conversations about our Members went from anticipating how they might be impacted (and how we might be able to help) to what we wish (or hope) our Members know. What we came up with were a few things we would want our Members to know, not just in this environment (although it is very prevalent right now) but for anytime.
It is important to remember there are rarely absolutes. What is right for one person is not necessarily going to be right for the next. With that in mind, we put together these ideas and hope you will find them useful.
When asked what she wishes Members knew, Jessica, our VP of Service & Operations, was quick with a response.
A: After working in collections for 10+ years, I wish more people would call their credit union (or bank) before draining their savings or 401Ks.
I appreciate that there are people out there who go into “plan mode” when life happens [e.g. divorce, job loss, sick family member, missed work etc.]. I love those people – I’m one of them.
When a Member reaches out to us, we begin by talking with them and gathering information. This information helps us reach the best long-term solution. Over the years I have helped identify ways to save Members money so they did not have to touch their savings, or, in other cases, they could just dip into it versus draining it. We work with budgets every day, so we have a good idea of what is reasonable for expenses like car insurance, cable and utilities. Not only can we explore how to help you with your loan(s) here, we can provide suggestions on where you can save money [on other expenses] or point you in the direction of other services that might be available to you.
Q: How would you save money on car insurance?
A: After you’ve seen as many budgets as we have, you get a sense when something is not right or if someone may not know that they can shop around. With car insurance, if someone reports a high premium as an expense, we will engage the Member and let them know that it seems a little high. Using a few questions (e.g. any tickets, what kind of cars do you insure, etc.), we can recommend shopping around or their answers may justify the price. It never hurts to ask though.
Calling your bank or credit union does not guarantee anything, but in the 18+ years I have been in finance there have only been a handful of times where there was nothing we could do. It is worth it to just ask. We want to help, and we cannot help if we do not speak to each other.
Cindy, our VP of Lending, also had some insightful things to share about some attractive deals on new cars.
Cindy: When we were first met with the possibility of businesses being [temporarily] closed, we saw great deals on new cars – 0% with no payments for six months was one of them. That is awesome and could save someone hundreds, even thousands, of dollars in interest. The key is to be informed. When a consumer buys a brand-new car, it depreciates as soon as it is driven off the lot. Fact. A brand-new car usually means that you have a warranty and that is very appealing to many consumers. If you buy a brand-new car, just be realistic about your long-term plan. Do you want to have that car until it dies, or will you want to trade-in and upgrade in a couple of years? Do you know what to do to prevent being upside down?
If someone drives a new car off the lot and does not have to make a payment for six months, the loan balance can end up being even higher than the value.
Q: So, this sounds like a trick, should Members not buy a new car?
Cindy: It’s not a trick; it is about being informed and having a plan. If you take those six months to redirect what you would pay on the auto loan and pay down another loan or do improvements to your house, that may be a great plan. Doing that means you have paid off another debt or do not have to borrow for the home repair at the time when you begin repayment for the car/truck. That is smart. Choosing to save the money you would have made on payments to start an emergency fund is another smart way to take advantage of the offer.
If a consumer takes advantage of an offer like this, it is important to know that if in a year if they decide to trade-in the vehicle and are upside down they will either not be able to trade-in or they will have to “roll-over” part of the balance to another vehicle [loan]. Rolling over a balance can cause a rate to go up and even make payments higher. If a consumer does that, their next car can start upside down too. It can be a hard cycle to break.
Also, it is worth reminding consumers to read the fine print. Make sure the 0% is not contingent on something else. Some deals may have prepayment penalties or may have a default clause, meaning if the borrower is even one day late their rate could be higher going forward.
The takeaway is not to avoid these deals; it is to make sure you, as a consumer, are informed.
Payday loans. Bills still come due regardless of what life throws at us and you might be considering a payday loan. It is not our style to talk poorly about any business. Soooooo, instead, we are going to ask that you think twice about getting a payday loan. It serves a purpose, but there might be another way. Please call us. If you need money, call Trademark. We cannot approve every loan application (and, spoiler alert, neither can any other bank or credit union), but here is what we will do:
- We listen. We want to hear what your need is, big or small.
- We will take your loan application. You will either get the loan or we will talk to you about why we cannot do the loan. That means you can get professional advice on what to focus on moving forward to get you to a better place. (Another spoiler alert: 1. There is a method to credit score madness and 2. You cannot believe everything you Google; talk to a professional).
- We can talk to you about Trademark Defender. Trademark Defender is our in-house overdraft protection. If, for example, you get a flat tire and need to get it repaired (but have a tight budget) you may be able to use Trademark Defender to temporarily overdraw your account. Yes, there is a fee. No, it is not intended to supplement your income. No, we do not recommend you use it for daily purchases like coffee or gas. However, there are those times when we forget to note something in our check register, and it can cause problems when a check or debit transaction gets retuned or declined. One fee for Trademark Defender would be better than multiple fees from merchants and/or the credit union for returned items.
- If Trademark Defender doesn’t seem like the right fit and we cannot find a loan product that makes sense for you and you feel like you HAVE TO GET a payday loan, at the very least we can talk to you about payday loans and what to look for (e.g. penalties, fees etc.) and how to avoid falling into the cyclical trap of repeat borrowing.
I do not want a debit card.
Some of you will read that and think it is madness. How do people function without debit cards? While it is not as common in 2020, there are still people that do not want a debit card and the reason behind that can range from a preference for cash to a concern for security.
During this time there is a desire for cleanliness. Cash is not clean, there is no way around it. More often than not a debit card stays in your hands so you can minimize the germs spread.
Cash lost is cash gone. You cannot easily replace cash. If you lose a debit card (or it is stolen) the cardholder (that’s you) has 0% liability to fraud, and we can replace the card. We print debit cards at the branch. If you need a card replaced immediately – we can do that!
If you are concerned about the safety of a debit card, call us. We also offer Apple, Samsung and Google Pay. This gives our cardholders the convenience of a debit card but with the number masked every time they make a purchase. No one ever has access to your debit card information. For more information on that, check out our website here.
We hope you found this article helpful. If it has spurred questions or made you think of something else, please reach out. We are available by phone, email or online banking messaging Monday – Friday 7:30-4:30p. We really are in this together.