Millennials: Timely Credit Card Payments Are Crucial

Between juggling student loan payments, rent, and other bills, you might be tempted to skip a credit card payment. Don’t do it. Missing a payment can lower your credit score, which can lead to difficulty getting a loan or even a job.

Millennials, young adults ages 19 to 29, actually have the fewest number of credit cards and the lowest average balance on them, according to Experian’s annual state of credit report.

But, they also have the lowest credit scores and frequently make late payments on their cards.

The average overall credit score in Experian’s report is 681; the average for millennials is 628. Shorter credit histories and high utilization rates are two factors that account for the low scores.

To learn more about your credit score and give it a boost, understand the following:

What makes up a credit score—Payment history, amounts owed (especially as a percentage of credit available–the utilization factor), length of credit history, new credit, and types of credit in use determine your credit score.

How to get your credit report—You can request one free credit report a year from each of the three major credit reporting bureaus by visiting annualcreditreport.com, the only website authorized to provide these free reports. You also can call 877-322-8228 or complete the Annual Credit Report Request Form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA, 30348-5281.

How to improve your credit score—Pay all bills on time, every time. Also consider using a secured credit card. A secured card trades access to credit for your commitment to keep a certain amount of money in a savings account. This is a great credit builder. The professionals at New Century Credit Union can set you up with a secured card. Contact us today!

Teach Your Children Financial Independence

Are your kids on the right track to financial independence?

For many of today’s young adults, the weakest link lies in learning the basics. Only 35% of teens know how to balance a checking account or manage credit cards. During the past several years, a decline in overall financial knowledge is especially pronounced among 18-year-olds, and 13% fewer teens have bank accounts.

Achieving economic prosperity is difficult, and it’s especially hard for young people who’ve never learned how to manage money.

New Century Credit Union is ideally positioned to respond because we believe in the power of education. We’re here to help you launch the youth in your life toward financial independence, and here’s how:

Join. For starters, open a NCCU Kids Account for each child in your family. As soon as your children can write, have them fill out deposit and withdrawal slips. Guide teenagers through using a debit card and tracking transactions.

Share. Include your children in household money discussions. Show them how you budget income and expenses. As their skills improve, give them challenges—such as finding a better cell phone plan, calculating the total monthly cost of owning a car, or sticking to a budget for back-to-school or holiday spending.

Coach. Remind your children to ask for help when they need it. And turn to NCCU, Your Financial Family, when you want help. Our tradition of service and philosophy of self-help make us and ALL credit unions a natural partner in pursuing financial security.

We’re here to help. For more information, contact us!

 

Smart Starts for Young Credit Card Users

While credit is a terrific money management tool, using it carelessly can affect your ability to get a job, lease an apartment, or buy a vehicle. Follow this advice from the National Foundation for Credit Counseling and the Credit Union National Association for using credit cards:

• Choose a low-rate, low-fee card. Make New Century Credit Union the first stop. Credit union credit cards typically have lower rates and fees than other financial institutions.

• Don’t charge daily living expenses. Refrain from using a credit card for daily living expenses such as groceries and gas. Consider using a debit card or cash instead, and monitor your account balance online to keep spending on track.

• Don’t charge more than you can pay for when the bill arrives. Think twice about charging a vacation, a new wardrobe, or other items that won’t be worth the debt if you can’t pay for the items when the bill arrives. Instead, set up a special savings account for future purchases at New Century Credit Union.

• Don’t let anyone else use your card. If you allow a family member or best friend to borrow your card, it’s still your responsibility to make payments and pay off the debt.

• Protect your card. Identity theft often is committed by people the victim knows. Keep your credit card in a purse or wallet instead of lying around your apartment for all eyes to see.

• Get a secured credit card from New Century Credit Union to help build or rebuild credit. “If you’ve dinged up your credit record with careless habits, it’s hard to qualify for credit,” says Susan Tiffany, certified credit union financial counselor and director of consumer periodicals, Credit Union National Association, Madison, Wis. “A secured credit card trades access to credit for your commitment to keep a certain amount of money in a savings account. Once you’ve made, say, 12 months or so of on-time credit card payments, you’ll have developed or redeemed your credit record and be eligible to apply for a conventional credit card.”

Contact us today to get more information about NCCU’s secured credit card option.