Page not found – Partners Financial Federal Credit Union Richmond VA https://www.partnersffcu.org Wed, 19 Jul 2023 16:01:42 +0000 en-US hourly 1 Another Data Breach? https://www.partnersffcu.org/blog/another-data-breach/ https://www.partnersffcu.org/blog/another-data-breach/#respond Wed, 19 Jul 2023 16:01:42 +0000 https://www.partnersffcu.org/?p=3758 ...Read More]]>

Don’t Get Data Breach Fatigue.

Spend a moment thinking about how many entities have your personal identifying information. You likely provided it to them for a legitimate need, like a credit card application or a medical claim. These organizations have data on millions of individuals, and we trust them to maintain the security needed to protect it for us. If you add to the list of companies those that only have your name, email and home address, and credit card information, that’s essentially every website from which you’ve ever made an online purchase.

The list just got a lot longer, and the security of small retail websites is typically more lax than that of large medical or financial ones. Hackers spend their lives searching for a way in, using sophisticated techniques to get through cyber security measures and steal valuable information from entities of all types.

Now, think about the last time you received an email that started something like this: “We are writing to you because of an incident involving access to information…” It probably wasn’t very long ago. We might even receive so many notifications or hear so many news reports regarding breaches that could affect us that we’re becoming apathetic.

“It’s just part of life now,” we might say. Or “It’s a risk of being online in 2023.” However, we can do more than cross our fingers and hope ours isn’t the next information that gets sold to the highest bidder.

A quick web search for “data breach” reveals countless recent hits detailing major data breaches. In fact, during June 2023, the Oregon DMV experienced a data breach and the information of more than 3.5 million Oregonians was compromised. You might have even been affected by a data breach or received a notification from a retailer or other organization that your personal information could have been compromised. What did you do next? Did you feel helpless, or did you know how to safeguard your data after the fact?

The National Association of Attorneys General defines a data breach as the unlawful and unauthorized acquisition of personal information that compromises the security, confidentiality, or integrity of personal information.

What is considered personal information depends on state law but typically includes an individual’s first name (or initial) and last name plus one or more of the following:

  • Social Security number
  • Driver’s license number or state-issued ID card number
  • Account number, credit or debit card number, combined with any security code, access code, PIN, or password needed to access an account

One of the biggest risks following a data breach is that scammers could use your stolen personal information to open a loan or a line of credit in your name, potentially damaging your credit score or leaving you to pay for the fraudulent charges.

This article from IBM summarizes data breach research from 2022, stating that the average data breach cost the affected U.S. company $9.44 million last year. While losses to companies are huge, potential losses to individuals are not to be ignored. When a data breach leads to identity theft, the cost can be staggering. Therefore, it is important that you know what to do when (not if) you receive a data breach notification and also that you take steps to help protect yourself as much as possible in the future.

Immediately after receiving a data breach notification in your inbox or hearing about a retailer breach that might affect you, it’s important that you act quickly to take a few precautionary steps.

  1. Change your passwords right away. Even if the company hasn’t stated that passwords were affected, immediately change not only your password for the involved company but for any other businesses where you’ve used a similar password (we’ve all done it). Look into using a password manager that will help you create unique passwords—and you won’t have to memorize them.
  2. Identify any compromised information. Look further into what information was exposed so that you can take the appropriate action.gov/databreach has information on what to do to help protect yourself in each case.
  3. Report the data breachto the Federal Trade Commission.

To help protect yourself in the case of future data breaches, the following actions can help you save time and money for the inevitable next time:

  1. Don’t reuse passwords.
    Even if the data breach notification you receive is for an account you don’t use anymore, so it doesn’t have your current credit card information, you might have used a password that you’re still using on other sites. Hackers know there’s a good chance you’re using the same password on multiple platforms. If they access your old gaming password from college, they might also be able to use it to log in to your current financial accounts.
  2. Turn onmulti-factor authentication (MFA) whenever it is available.
    Accounts that offer MFA provide extra security by requiring additional forms of identification beyond a password to log in to an account, such as a passcode or secret key obtained via text or email. This will help keep your account secure even if your password is compromised.
  3. Keep a close eye on your credit report.
    It can often take months for a company to find out that their customers’ data has been stolen and then communicate the information to their users. By then, your personal information could have already been sold on the dark web and used to open lines of credit before you have even been notified of the risk. Federal law entitles you to a free copy of your own credit report at least once every 12 months from each of the three main consumer credit reporting agencies: Equifax, TransUnion, and Experian. Reports can be requested atcom or by calling 1-877-322-8228.
  4. Consider placing a fraud alert.
    If you’ve been impacted by a data breach, you may also consider placing a fraud alert on your credit report. An initial fraud alert is free and will stay on your credit file for at least 90 days. The alert informs creditors of possible fraudulent activity within your report and requests that the creditor contact you prior to establishing any accounts in your name. Additional information is available at http://www.annualcreditreport.com.

Next time you receive a notification about a possible data breach, follow the steps above, both to put a stop to harm that may have already begun and to make it much more difficult for them to impact you in the future.

If you or a family member worry that you have become a victim of identity theft after a data breach or another fraud event, do not hesitate to reach out to one of our Identity Theft Recovery Advocates that are available to you as a Premium Checking account holder at Partners Financial FCU. They can help you assess what information has been compromised and quickly begin the process of recovering any losses that have occurred.

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The Growing Threat of Phishing https://www.partnersffcu.org/blog/the-growing-threat-of-phishing/ https://www.partnersffcu.org/blog/the-growing-threat-of-phishing/#respond Fri, 16 Jun 2023 12:57:15 +0000 https://www.partnersffcu.org/?p=3723 ...Read More]]>

In the recently released 2022 Internet Crime Report by the FBI’s Internet Crime Complaint Center (IC3), it has become evident that cyber actors continue to plague Americans, with dollar losses escalating by 49%. Among the staggering number of complaints received by the IC3, over 37% were related to phishing attacks. Phishing has emerged as the single most prevalent category of cybercrime, causing significant financial losses, particularly among citizens aged 60 and older. This article delves into the origins of phishing, its evolution into a top hacking category, and offers essential tips to help protect you from falling victim to these malicious schemes.

Understanding Phishing

Phishing is a technique employed by cybercriminals to deceive individuals into divulging sensitive information or installing malware on their devices. This method is executed through various channels such as phone calls, emails, SMS texts, or even social media messages. The term “phishing” was coined in the late 1990s when hackers began using email lures to “fish” for passwords and financial data from unsuspecting internet users.

The Evolution of Phishing

The concept of illegal hacking began in the 1970s, long before the introduction of the internet, with a scam called “phone phreaking” or simply “phreaking”. This form of hacking used machine-driven audible tones to manipulate telephone systems in order to make free phone calls around the world. By the late 1990s, when hackers began using lures to “fish” for passwords and financial data from unsuspecting internet users, they coined the phrase “phishing”, as an homage to their criminal predecessors of the 1970s.

Over the past two decades, phishing has become increasingly sophisticated, pervasive, targeted, and costly. In 2022 alone, the IC3 reported losses of $52 million due to phishing attacks. It is worth noting that unreported losses from such incidents are significantly higher, making it crucial to stay informed about the latest phishing techniques and safeguard oneself against these threats.

Types of Phishing Attacks

  1. Email Phishing: Attackers send fraudulent emails that mimic reputable sources, such as banks, government agencies, or popular online services. These emails often create a sense of urgency, urging recipients to click on malicious links or provide personal information.
  2. Spear Phishing: This targeted approach focuses on specific individuals or organizations. Cybercriminals gather personal information to craft tailored messages that appear authentic, often impersonating colleagues, vendors, or clients to manipulate victims into revealing sensitive data.
  3. Smishing and Vishing: Phishing attacks have extended beyond emails. “Smishing” refers to fraudulent text messages, while “vishing” occurs through voice calls. These tactics rely on social engineering to deceive victims into sharing personal information or clicking on malicious links.

Avoid and Identify Phishing Attempts

  1. Stay Vigilant: Be cautious of unsolicited emails, especially those requesting sensitive information or containing urgent requests. Look for signs of poor grammar, generic greetings, or email addresses that don’t match the claimed sender.
  2. Verify the Source: Before sharing any personal or financial information, independently verify the legitimacy of the email or message. Contact the organization directly through their official website or customer service channels to confirm the request’s authenticity.
  3. Be Wary of Links and Attachments: Hover over hyperlinks to reveal their true destination before clicking. Avoid downloading attachments or files from untrusted sources, as they may contain malware or ransomware.
  4. Strengthen Passwords and Enable Two-Factor Authentication: Use unique, complex passwords for each online account. Enable two-factor authentication whenever possible, adding an extra layer of security to your accounts.
  5. Keep Software Updated: Regularly update your operating system, web browsers, and antivirus software. Software updates often include security patches that help protect against known vulnerabilities.
  6. Educate Yourself and Others: Stay informed about the latest phishing techniques and trends. Share knowledge with friends, family, and colleagues to raise awareness and help them avoid falling victim to phishing attacks.

And remember, if you feel that you are at risk of identity theft, make sure that you have activated monitoring of your credit to be alerted as quickly as possible to credit fraud. But, don’t rest there. Be vigilant in watching your checking account transactions and watch for suspicious postal mail that may indicate fraudulent accounts opened in your name. If you feel you could be a victim of identity theft, we have you covered! With a Partners Financial FCU Premium Checking account, you have access to Fully Managed Identity Theft Recovery Services. We can provide a professional Identity Theft Recovery Advocate to help you rescue your good name!

 

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How Many Personal Loans Can You Have at Once? https://www.partnersffcu.org/blog/how-many-personal-loans-can-you-have-at-once/ https://www.partnersffcu.org/blog/how-many-personal-loans-can-you-have-at-once/#respond Mon, 05 Jun 2023 16:47:54 +0000 https://www.partnersffcu.org/blog/personal-loans-good-idea-2-copy/ ...Read More]]> A woman does research on her laptop about how many personal loans you can have at once.

How many personal loans can you have at once? While there is no technical limit to the number of personal loans you can carry, paying down more than one loan at once could come with some serious consequences. We take a hard look at when having multiple personal loans may be necessary and what the effects on your finances can be.

Back for More: Can You Have Multiple Loans at Once?

Personal loans offer longer terms, a fixed interest rate, and a predictable monthly payment—which are all good things if you are looking to manage your debt well and build financial stability. 

However, unforeseen needs, changing personal circumstances, and different loan terms can all result in situations where you need to take out two or more loans, and you are therefore paying down more than one loan at a time. Let’s take a look at how holding multiple loans works and how this is likely to affect your personal finances.

What Is a Personal Loan?

A personal loan is a lump sum lent to you by a bank or credit union. Personal loans can be for any amount and can be used for anything you please. Interest rates are usually fixed and terms are typically between two and seven years. Personal loans are also usually unsecured, so your property is not at risk.

Personal loans provide access to significant amounts of capital while offering:

  • A fixed, predictable monthly payment
  • Flexible repayment terms 
  • Relatively low-interest rates
  • Easy application and speedy approval processes

This makes personal loans a popular choice for financing major purchases, repaying unexpected expenses, and consolidating debt. For this reason, changing circumstances mean many people might find themselves in a situation where they are repaying more than one personal loan at a time. 

How Many Loans Can You Have?

There are no technical or legal limits to the number of personal loans you can carry at any time. Many lenders will be happy to consider extending you a second or even third loan, especially if you have already made steady progress on paying down your original loan and have a good history of making your payments on time.

That said, many lenders limit the amount they will extend in personal credit to a single borrower. This can be either a limit on the number of loans they will provide to a single individual or the total dollar amount they will lend. 

Of course, there is nothing stopping you from borrowing from different lenders, but each new creditor will usually want to check your existing financial obligations before extending more money.

Challenges of Holding Multiple Personal Loans

Personal loans are quick and easy to apply for, but it’s important to consider the implications of adding more borrowing to your portfolio. These include:

Multiple Payments

A simple payment schedule is one of the biggest advantages of consolidating credit card or other high-interest debt into a single personal loan. However, if you have more than one loan, you will need to make multiple payments each month and be certain you have the funds on hand to cover those payments. 

Inefficient Fees

Multiple loans mean you are duplicating any fees or charges that come with each additional loan, especially if these are rolled into your monthly payment. While you likely did not plan initially to carry multiple costs, it’s important to be aware that loan costs are duplicated.

Increased Debts

More loans, of course, also mean you have more debt. That also means coming up with more money every month to pay for things you have already bought. Debt not only eats up your available income, but it also limits your ability to build savings you will need in the future.

Lower Credit Score

While demonstrating that you can manage and pay down debt over time can help improve your credit record, taking out another personal loan will almost certainly lower your credit score. This will mean future borrowing from credit cards, auto loans, or a mortgage will cost you more over time. And, it’s possible that it may become more difficult for you to qualify for credit at all.

Additional loans affect your credit score in two ways:

  • Multiple Hard Pulls: Every time you apply for a new personal loan, your lender will initiate a “hard pull” on your credit report, which lowers your credit score slightly. But if you are applying for new loans regularly, these repeated credit score drops can add up.
  • Debt-to-Income (DTI) Ratio: One of the most common criteria in FICO® and other credit scoring systems is the ratio of your total debt to your available income. The more total debt you are carrying, the more this ratio will weigh negatively on your credit score. DTIs above 35% are considered a major red flag by many lenders, especially for unsecured debt.

When Do Multiple Loans Make Sense?

While not ideal, carrying multiple loans at the same time is not unusual. You might, for instance, have sensibly consolidated several credit card balances into a single loan. But then, you found you needed to spring for urgent repairs to keep your beloved German import on the road and make that crucial down payment to secure a wedding venue

In cases like this, additional debt may be unavoidable and another personal loan might be your best option.

Multiple personal loans can also make a lot of sense if they help you to:

  • Avoid excessive credit card debt: Consolidating your existing card debt or taking out a loan to pay for a major purchase can help you avoid high-interest, variable card debt.
  • Avoid revolving credit: Using a single lump sum to fund an unexpected expense can help avoid over-borrowing small amounts from a line of credit that then needs to be repaid at a higher annual percentage rate (APR).

Alternatives to Multiple Personal Loans

Let’s take a look at some of the most popular ways to avoid having to take out more than one personal loan at a time. These include:

Credit Cards

Using a credit card for smaller unexpected costs or necessary purchases that you can repay in a month or two may be easier and cheaper than taking out another long-term personal loan.

Lines of Credit

Lines of credit, typically secured by a property, allow you to borrow small amounts of money when you need it and pay it off over time. This can work better than a personal loan for smaller, ongoing costs like a major home renovation. But beware of over-borrowing and then failing to make more than minimum repayments.

Debt Consolidation

It might make sense to roll your existing debts, including personal loans, into a new or refinanced personal loan. This allows you to stick with a single, predictable APR to allow you to pay off your total debts faster.

Whether debt consolidation makes sense for you depends both on current interest rates and your credit score. If you are considering consolidating two or more personal loans or other debt into a new personal loan you should:

  1. Figure out your maximum affordable monthly payment
  2. Based on your monthly payment, determine how long your repayment schedule should be  
  3. Check your credit score
  4. Talk to your existing lender and others about your needs
  5. Gather documents detailing your personal information, income, and existing debts
  6. Apply for your loan
  7. Pay your loan fees, accept your lump sum, and start making payments.

It’s also possible to consolidate multiple personal debts into a secured home equity loan, but you usually need to have very significant debt to justify the additional costs that go into this type of borrowing. Tapping your home equity to pay off shorter-term debt also reduces the stake you hold in your home in the long term.

Keep It Local With Partners Financial FCU

Existing partnerships and long-term relationships matter when it comes to managing personal borrowing, especially multiple personal loans and debt consolidation. Choosing a local credit union like Partners Financial FCU guarantees you’ll get incredible personal service, great rates, and lower fees and charges.

At Partners Financial FCU, we’ve been helping Richmond-area residents reach their financial goals for more than 60 years. With branches in downtown Richmond’s Federal Building, as well as in Glen Allen, Chesterfield, and Henrico County—we’re easy to find and always ready to talk.   

We work with our members to understand your dreams and challenges and determine the best way to manage debt for future success. We offer personal loans of up to $25,000 with:

  • Competitive rates
  • Fixed APRs and fixed payments
  • Loan terms of up to six years
  • No loan origination fees
  • No prepayment penalties

Best of all, our loan decisions are made locally. To us, you’re a neighbor and a partner, not just a number in an algorithm. Stop in today to start the conversation or click below to learn more about our affordable, flexible personal loans.

SEE OUR PERSONAL LOAN OPTIONS & BENEFITS

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Is a Personal Loan a Good Idea? https://www.partnersffcu.org/blog/personal-loans-good-idea-2/ https://www.partnersffcu.org/blog/personal-loans-good-idea-2/#respond Mon, 22 May 2023 17:43:39 +0000 https://www.partnersffcu.org/blog/debt-consolidation-vs-personal-loan-copy/ ...Read More]]>

With easy terms, quick approvals, and almost instant cash in your hand, personal loans can be a tempting way to afford things that would normally be out of reach. When is a personal loan a good idea? We take a hard look at when personal borrowing makes sense.

Cash Course: When Are Personal Loans a Good Idea?

Personal loans are different from mortgages, credit cards, and other types of credit. While a mortgage loan secures a home and an auto loan secures a vehicle, a personal loan can be used for a wider range of reasons. Personal loans let you easily borrow money to finance large purchases, cover unexpected expenses, or even pay for home improvements.

Below, we’ll take a look at some of the most sensible uses for a personal loan and consider when taking out a personal loan is a good choice for you. We’ll also lay out some of the pros and cons of personal loans and explain how to go about applying for one. 

What Are Some Good Uses for Personal Loans?

Personal loans offer reasonable rates, flexible terms, and predictable payments. That makes them a good choice for making many different types of large expenses more manageable. Here are some examples:

Consolidating Debt

Credit cards and other forms of short-term credit usually have high-interest rates. This means it will cost you more to pay for goods or services and their flexible repayment rules make it easy to build up a larger balance than you had planned. 

By using a personal loan as a debt consolidation loan, you can swap two or more payments for a single, fixed installment payment every month. And, while it will likely take you longer to pay off your personal loan, in the end, you’ll save money on your interest payments.

Covering Unexpected Expenses

Nothing can derail your budget faster than unforeseen expenses. Car repairs, home maintenance, or unexpected medical bills can overwhelm your monthly income and savings. A personal loan can help you cover these expenses in an affordable, structured way. 

Financing a Big Purchase

Sometimes a necessary purchase is too expensive to be covered by your monthly budget. Many home appliances can sell for $1,000 or more, while a new computer or new clothes for work can quickly add hundreds to your expenses in a single month. A personal loan can also be a quick and painless way to finance home improvements. 

Building Better Credit

Your credit score is based on several different factors including the length of your credit history, how regularly you pay your bills, and the mix of credit products you use, like store cards, credit cards, and utility payments. A personal loan can help improve your credit score by demonstrating your ability to make on-time payments and by adding to your credit mix. 

When Are Personal Loans a Good Idea?

Taking out a personal loan for any purpose is a serious decision. Here are some key considerations to bear in mind to make sure your loan works for you.

You Have Good Credit

Most personal loans don’t require collateral, so the lender is relying solely on your credit score and history to determine your loan terms. With a good credit score, you can expect the lowest rates and more flexible terms, making a personal loan a far better option than a credit card for many major purchases that you cannot cover within your monthly budget. 

You Have a Budget…

Don’t consider taking a loan unless you also have a good monthly budget in place. First make sure you can afford the expected monthly payment for your loan by first considering obligatory payments like rent and utilities and then unavoidable expenses like groceries, clothing, and personal supplies. Be honest about what you need and what is “nice to have.”

… And You Stick to It

Making a budget is just the first step. Following it is the real challenge. Ideally, you should have a demonstrated track record of both making and keeping a budget (and adjusting it to save money and meet new needs) before you consider a personal loan.

You Use It Well

While loans are easy to apply for and usually quickly approved, using the money that appears in your account frivolously can have long-term consequences. A good yardstick is to ask yourself if an item, service, or experience will contribute to your long-term wealth or if it will open up new opportunities to advance yourself.

You’re Serious About Repaying

The most important thing to remember about a personal loan is that the money must be repaid on time, every month. Unlike a credit card, there is no option to make a smaller minimum payment if you fail to budget correctly. 

Therefore, you should only take out a personal loan if you can commit to repaying it regularly and on time over a period of many months to several years.

What Are the Pros of Personal Loans? 

Personal loans are easy to apply for and come with heavyweight advantages. Some significant pros of most personal loans include: 

Cash Payments

A personal loan is a lump sum of cash in your hand with few strings attached. It can be used for a wide range of purposes, but check with your lender about approved and prohibited uses before applying.

Low Rates

Personal loans generally have annual percentage rates far lower than those charged by credit cards. Depending on the length of your personal loan, you may be able to save money on interest on a major purchase or by consolidating debt.

Fixed Monthly Payments

With a fixed interest rate and loan life, your monthly payment on a personal loan will always be the same. The predictability of a single monthly payment makes it easier to budget and is much more manageable than multiple card payments.

Flexible Terms

Personal loans can be extended from a few months to several years. While you should always choose the length you can afford, being able to pay for important items over a longer period may allow you to free up more money every month.

No Collateral

Most personal loans are unsecured. While that means you’ll pay a somewhat higher interest rate, it also means you do not need to put up a substantial asset like a car or boat as collateral.

What Are the Cons of Personal Loans?

A personal loan is a serious, long-term financial commitment. Some potential downsides of personal loans include:

Higher Payments

Although payments on a personal loan are fixed, you may find some lenders charge higher rates than the minimum payments you can make on a credit card. This is particularly true if you have poor credit. Remember that you need to be able to afford these payments over the entire life of your loan.

Higher Interest Than Some Loans

Interest on an unsecured personal loan is also higher than you would be able to get on various forms of collateralized lending, including secured personal loans, home equity loans, and possibly on some home equity lines of credit. 

Loan Costs

For some personal loans, the lender may charge costs like loan origination or processing fees that can increase the cost of borrowing. These are either charged upfront or rolled into your monthly payments. Some lenders also charge penalties for early payment of your loan, or balloon payments that require you to “top up” payments later in the life of a loan.

Potential Credit Damage

Taking on significant debt in a personal loan can raise your debt-to-income ratio, which can affect your credit score. Being saddled with a personal loan that will take years to pay can cause long-term damage to your credit report. 

How Do I Apply for a Personal Loan?

Getting a personal loan is normally quick and easy. Here are the main steps when applying for a personal loan:

  1. Check your credit score: Your credit score remains the most important factor in determining what interest rate you will receive. 
  2. Shop around: Get lenders to run a soft credit inquiry to get an idea of the rates and terms you may get. Credit unions often offer lower rates and more flexible terms than banks.
  3. Choose your loan: With several pre-qualified offers in hand, it’s time to choose your loan. Be sure to ask about fees you might be charged while applying for or paying back your loan.
  4. Gather documents and complete an application: Be ready to show proof of identity and address, proof of employment, and details about any other debts or liabilities you have.
  5. Pay fees, get approved, and receive funds: You may have to pay loan application or origination fees up front. Once approved, you’ll often receive loan funds in a few hours.

Partners Financial FCU: Your Local Loans Expert

Partners Financial FCU has been serving the greater Richmond area for more than 60 years with great products and friendly personal advice you won’t find at any bank. No matter if you’re a River City native or a grad looking to put down roots in “Mecca,” we have the local connections and financial products you need to get ahead in RVA.

Our unsecured personal loans can help you set up a home while you get a handle on post-college debt, turn your artisan’s passion into a business, or be smart when it comes to affording your wedding

We offer:

  • Competitive, fixed annual percentage rates (APR)
  • No origination fees
  • No prepayment penalties
  • Approval in as little as 30 minutes

Partners Financial FCU has been proudly serving the greater Richmond area, including Chesterfield, Hanover, and Henrico counties, since 1958. If you live, work, or study in these areas, we’re here to help with smart, affordable financing to make the most of living in our community.

Talk to us today about how we can help you with your financial needs or click below to learn more about our personal loans.

SEE OUR PERSONAL LOAN OPTIONS & BENEFITS

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Debt Consolidation vs. Personal Loan https://www.partnersffcu.org/blog/debt-consolidation-vs-personal-loan/ https://www.partnersffcu.org/blog/debt-consolidation-vs-personal-loan/#respond Mon, 15 May 2023 17:34:32 +0000 https://www.partnersffcu.org/blog/what-can-personal-loans-be-used-for-copy/ ...Read More]]>

Borrowing money to get out of debt may seem like a strange choice, but for many people taking out a loan to consolidate debts while working to tackle and limit their spending is the first step to taking control of unpaid bills and unsustainable credit card balances.

While there are several ways to consolidate debt, choosing a personal loan to pay down other loans is usually the most effective. That said, not all personal loans are ideal for debt consolidation. We’ll compare debt consolidation vs. personal loans, consider what makes a good debt consolidation loan, and when you should consider some alternatives.

Which Is Better: Personal Loan or Debt Consolidation?

While some banks and credit unions offer “debt consolidation loans,” these are fundamentally the same as a personal loan from the same lender. At the same time, there are important things to look for that will make a particular personal loan an effective debt consolidation loan. Let’s start by clarifying what we are talking about.

What Is Debt Consolidation?

Consolidating debt means transferring money you owe to several creditors into a single account. To do this you borrow a lump sum from a single source, usually at a lower interest rate or over a longer term, and use this to pay off all or some of your outstanding debts. 

Debt consolidation can be an effective route to taking back control of your finances, but it needs to be part of a larger plan to track and control your spending while continuing to pay off debt.

What Is a Personal Loan?

A personal loan is a lump sum borrowed from a bank, credit union, or other lender that is paid back over an agreed period of time in fixed installments. Personal loans can be used for any purpose the borrower sees fit. They usually have a fixed interest rate and are not typically borrowed against a fixed asset that is used as collateral.

What Is a Debt Consolidation Loan?

While personal loans are used to cover all sorts of short- to medium-term funding needs when they are used to pay off other higher-interest loans they are known as debt consolidation loans. A good debt consolidation loan has favorable terms designed to help the borrower reduce risk and pay off the loan in a timely manner.

How Does Debt Consolidation Work? 

By borrowing additional money to pay off your existing debts, debt consolidation allows you to replace higher-interest debt on credit cards, outstanding bills, or other borrowings with a single lower-interest loan. This has several advantages:

  • You limit the interest you would have paid on higher-interest debt
  • You make fewer monthly payments
  • You pay less in fees, including late payment penalties and overdraft fees
  • You get out of debt sooner
  • You improve your credit score

A good debt consolidation strategy, whether making use of a personal loan or another source of credit, should help you achieve many or all of these alternatives.

When Should You Consider Debt Consolidation?

Debt consolidation may be a good idea if you are beginning to build up significant balances on one or more credit cards. You should consider a debt consolidation strategy if:

  • You are juggling balances on several credit cards
  • You are struggling to pay off several bills or store accounts
  • You are incurring regular overdraft charges on your checking account
  • You are regularly paying penalties for missed payments

The right debt consolidation strategy (possibly including a personal loan) combined with a long-term commitment to avoid further high-interest borrowing as well as sticking to an effective monthly budget, should allow you to escape what could become an unsustainable debt trap.

When Shouldn’t You Consider Debt Consolidation?

If, however, you have maxed out one or more credit cards, or you are using one credit card to pay off another, or you have multiple accounts that have already been sent to collections—your credit score has likely been severely damaged.

Therefore, you will struggle to borrow further at a low enough rate to be able to consolidate your debts. In this case, you should approach your creditors directly or seek help from a debt counseling program.

Benefits of Using a Personal Loan to Consolidate Debt

If you are committed to consolidating your debts, then a personal loan offers significant advantages over other debt consolidation alternatives.

Single Lump Sum

You’ll replace multiple sources of debt, including hard-to-manage revolving credit balances, with a single manageable lump sum that you can work to pay off over time.

Lower Rates

In most cases, a personal loan will attract a lower interest rate than the high-interest penalty or credit card rates you are using it to replace. That can mean smaller payments every month and big savings over time.

Fixed Schedule

Personal loans are paid off in fixed installments. You’ll always know how much you still owe and when you will be debt free, even if interest rates change.

Predictable Payments

Rather than juggling multiple payments, you’ll have a single, fixed payment due at the same time every month. 

Lower Fees

You’ll spend less on fees, including credit card annual fees, late and missed payment penalties, and bank overdraft fees. And, if you get your personal loan from a credit union like Partners Financial Federal Credit Union, you’ll avoid common loan processing and pre-payment fees.

Improve Your Credit Score

Exchanging high-interest credit card scores and overdue accounts for a single, lower-interest fixed-rate debt will help you begin rebuilding your credit score, so you can qualify for better rates when you are ready to borrow for things you really need like a car, student loan, or home. 

Debt Consolidation Alternatives

There are several alternatives to using a personal loan for debt consolidation. Each of these comes with its own advantages and disadvantages.

Balance Transfer Cards

Balance transfer credit cards allow you to borrow a lump sum to pay off other high-interest loans, often without fees or payments during an introductory period. This can be a good way to get some breathing space if your credit card balances are small, but you are still replacing your hard-to-handle high-interest debt with another source of high-interest borrowing.

HELOCs

Home equity lines of credit (HELOCs) work a lot like credit cards, offering a relatively affordable revolving credit secured against your home. It can work to pay off high-interest debt if you pay down your HELOC balance immediately. 

But, unless you owe a very large amount, the cost of taking out a HELOC will outweigh any savings—plus you need to own a home to qualify for one!

Home Equity Loans and Cash-Out Refinancing 

These other forms of borrowing can help to pay off very large debts but at a significant cost. 

Once again, the fees associated with accessing this kind of funding will probably outweigh the interest saving you hope to achieve. You’ll also reduce the equity you have worked hard to build in your property, and will ultimately put your property at risk by using it to pay off shorter-term loans.

What to Look for in a Debt Consolidation Loan

Compared with these options, a personal loan offers an affordable, flexible, and convenient way to turn high-interest, short-term debt into manageable long-term borrowing—without the need to use your home, car, or a cash lump sum as collateral.

This is especially true when you choose a personal loan that is structured as a debt consolidation loan. A good debt consolidation loan includes:

    • A low, fixed annual percentage rate (APR)
    • Low or no application or prepayment fees
    • Longer-term borrowing to reduce monthly payments
    • No collateral requirements

Partners Financial FCU: With Us, It’s Personal

At Partners Financial FCU we know that borrowing money can be intimidating, even if you plan to use the cash to build a long-term future for you and your family in the greater Richmond area. As a local, member-owned credit union, we offer flexible, unsecured personal loans at great rates and we always take the time to get to know you and understand your financial needs.

Talk to us about how we can help you structure a personal loan that meets your debt consolidation needs. All of our personal loans offer: 

  • Fixed rates, fixed terms, and fixed monthly payments
  • No origination or prepayment fees
  • Competitive APRs for the life of the loan
  • No collateral requirements

Membership at Partners Financial FCU is open to anyone who lives, works, worships, attends school, or volunteers in the City of Richmond or in Chesterfield, Hanover, or Henrico counties. Whether you’re a Cap City native or a newcomer looking for a great place to put down roots, we’re here to help you build a better future in central Virginia. 

Contact us today or click below to learn more about how you can use a Partners Financial FCU personal loan to better manage your debt.

PERSONAL LOANS FOR DEBT CONSOLIDATION

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Beware of Fraud at ATMs & Other Transaction Terminals https://www.partnersffcu.org/blog/beware-of-fraud-at-atms-other-transaction-terminals/ https://www.partnersffcu.org/blog/beware-of-fraud-at-atms-other-transaction-terminals/#respond Fri, 28 Apr 2023 20:23:14 +0000 https://www.partnersffcu.org/?p=3696 ...Read More]]> You’ve probably heard about it on your local news over the last few years; criminals caught with equipment that allowed them to capture credit and debit card activity of unsuspecting consumers fueling up at the local gas station or using their cards at other outdoor accessible transaction terminals. These criminals are typically found with cash, devices, and hundreds of fake cards manufactured from the data they stole. Even more terrifying is that these seemingly local intrusions are almost always part of a larger international criminal enterprise.

In 2021, two cases involving international crime organizations using skimming devices were brought to a successful conclusion by the United States Department of Justice, one case involving ATM skimmers, and the other case involving skimmers installed on gas station pumps.

In each of these cases, the individuals involved had the technology, equipment, and techniques that allowed them to steal thousands of card numbers from unsuspecting consumers. Taking these criminals off the street is helpful, but busting them also led investigators to understand the real depth of this type of crime and the ever-evolving techniques the criminals are using to go undetected. Now it’s time for all of us to get a little smarter to help stop this criminal activity.

Skimmers and Shimmers. What’s the Difference?

Skimmers

According to the FBI skimming costs consumers and financial institutions over $1 billion annually. Skimmers are typically devices that are attached on top of the card reader of ATM machines, gas pumps, or outdoor drive-in fast food point of sale terminals and vending machines, and are sometimes indistinguishable from the real thing. These devices capture the information on the card’s magnetic stripe as it passes through the skimmer on its way into the card reader. For ATMs, a hidden camera near the machine also captures keystrokes to identify the user’s PIN. Instead of a camera, a more recent criminal innovation is the use of a touch-sensitive keypad overlay that may look like the keys themselves or a simple weatherproof covering. With the information gathered from a skimmer, criminals can replicate your card to sell to other fraudsters or use for fraud themselves.

Shimmers

As card security has become more sophisticated, so have the techniques of criminals. When most cards in the United States changed from magnetic stripe to EMV chip (Europay, MasterCard® and Visa®) criminals were challenged with a much higher level of security. However, fraudsters found that by carefully positioning, or shimming, an ultra-thin electronic component inside the card reader it would allow their device to record the information from the EMV chip on the card; thus, the “shimming” technique was born. Even though the criminal hasn’t defeated the security features of the EMV chip, they are able to gather the same information that is on the magnetic stripe in a manner that is much more difficult to detect.

How to Detect a Skimmer or Shimmer Device

While owners of vulnerable transaction terminals try to secure their devices, and law enforcement continues to shut down these criminal enterprises, you can also play a part in stopping card fraud and identity theft. Follow these steps to detect when a card terminal may be at risk, and if you see something, say something!

  1. Outdoor point of sale terminals, such as gas pumps, drive-in fast food purchase, vending machines, and ATMs are particularly vulnerable. One thing you can count on is that these devices are built to be sturdy. Before inserting your card, give the reader a tug. If there are any ill-fitting parts on the machine, don’t insert your card. Report the terminal to the business owner immediately.
  2. When you are at the gas pump or at the drive-in restaurant, look around at the other card readers. Fraudsters will often only have one or two skimmers that they will use at one time. If the card reader you are about to use looks different than the rest, consider using cash or paying with your card inside the business instead.
  3. Gas stations and other businesses will use a security seal over the opening of the cabinet panel to show that the machine has not been tampered with since the last inspection. If the machine’s panel has been opened, the label will read “void”. If you see a machine with a voided security seal, or the panel is bent, loose, or open, report it to the business owner.
  4. When using a vulnerable ATM, especially one that is located away from a bank building, consider the risk. If you can avoid using these machines you should.
  5. Since skimmers and shimmers can be very hard to detect, the best defense is to check your account balance regularly to spot suspicious card transactions.
  6. Working together to create more secure interactions is critical. We’ll continue to improve card security while you remain vigilant in protecting your personal information.

Keep in mind, if you suspect identity theft at any time, you have access to an Identity Theft Recovery Advocate as a no-cost benefit of your Premium Checking account.  If you suspect identity theft has occurred, a professional is standing by to help you identify and reverse the damage to get your life back on track quickly. You can count on us.

 

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What Can a Personal Loan Be Used For? https://www.partnersffcu.org/blog/what-can-personal-loans-be-used-for/ https://www.partnersffcu.org/blog/what-can-personal-loans-be-used-for/#respond Thu, 13 Apr 2023 11:34:55 +0000 https://www.partnersffcu.org/blog/how-to-choose-the-best-checking-account-copy/ ...Read More]]> A woman doing research on her laptop about what personal loans can be used for.

The great thing about personal loans is that they can be used to pay for just about anything. While there’s almost no limit on what a personal loan can be used for in Richmond, VA, we take a look at some of the better ways you can put your cash bonus to work in the 804.

Reach the Stars: A Personal Loan in Richmond, VA

A little extra cash can open a lot of doors in River City. An unsecured personal loan offers relatively easy access to a large lump sum of cash that can then be paid off over time in fixed monthly payments, usually at an annual percentage rate (APR) far below what you can get on a credit card. Best of all, it’s entirely up to you what you spend the money on.

We know what you’re thinking: that’s a lot of GWARbar burgers and craft brew, but we are here to tell you that personal loans are best used for major personal investments or “milestone” expenses that you can then pay off over time as part of your long-term financial plan. What are we talking about? Here are a few examples.

Big Day

A wedding is a once-in-a-lifetime event that often comes when you can least afford it. Whether you have your eyes on the glittering chandeliers at The John Marshall Ballrooms or an ‘I Do’ Drive Thru “micromony,” a personal loan can help make your wedding as special as you have always dreamed it would be.

Get Away

Whether you’re treating yourself or a loved one, a dream vacation can be a life-changing experience, and sometimes it’s time to just pack your bags and go. Planning a honeymoon? Let local travel experts help you coordinate, or stay (a little) closer to home with an unforgettable fall road trip along the 469-mile Blue Ridge Parkway.

Nailing It

While it’s a lot less glamorous, using a personal loan to pay for domestic appliances or fund necessary repairs and upgrades to your home lets you build equity without borrowing further against your home or building up credit card debt. 

Pay It Down

We all know the Richmond area is a mecca for all kinds of tempting, expensive things. If you’ve dipped a little too deep into your pocket to afford some of them, you’re not alone. In fact, the most common use for personal loans these days is to consolidate and pay off high-interest debt accumulated on credit cards and bills.

Blindsided?

Similarly, we can all be caught off guard by unexpected costs such as hospital bills, emergency car repairs, or urgent home maintenance.  While it could be tempting to try and pay this off using your credit card, it might be more realistic to take out a personal loan to cover an unforeseen expenditure. You’ll be able to plan ahead better and will probably pay less interest over time.

Book Smarts

While a student loan is probably the best way to help afford your tuition costs, a personal loan can be useful for covering other necessities to help you succeed at school or work. Consider using a loan for expenses like books, computer equipment, or even specialist skills training that will help you succeed down the line.

When Should You Use a Personal Loan?

Now that we’ve dipped a toe into the full range of things you could use your personal loan for, let’s consider when it really makes sense to use a personal loan and when there might be a better way to go. 

When Does a Personal Loan Make Sense?

Personal loans make the most sense when they will help to free up cash, improve your income or open up opportunities in the future. They work best when you are committed to budgeting accurately and paying back what you borrow as part of a long-term financial plan.

With this in mind, personal loans can be great for:

  • Debt consolidation, to help you save for the future and improve your credit score
  • Paying off unforeseen expenses as part of a long-term budget plan
  • Home appliances, repairs, or maintenance without borrowing against your property 
  • Affording training, books, or equipment that will benefit your career

Used right, the fixed rates and predictable payments of personal loans bring stability and long-term savings for disciplined borrowers while avoiding the risk of having to use your home, car, or cash as collateral.

When Does a Personal Loan Not Make Sense?

Personal loans are easy to apply for and come with few strings attached, making it easier to spend the money on things that will not pay for themselves in the long run. In general, a personal loan should not be used to pay for things that can be funded with less risk in other ways or to help finance other investments—especially ones where you could lose money. 

In particular, that means personal loans should not be used for things like:

  • School tuition, which can usually be funded more cheaply over time by a student loan
  • Down payments on a property, car, or other loans
  • Investments in a business, stock, or mutual fund

How to Apply for a Personal Loan

Personal loans are easy to apply for but it’s important to do your homework to ensure you get the best APR and terms. Consider talking to a community lender like Partners Financial Federal Credit Union. As a member-owned credit union, we are committed to your financial success and offer personal service you won’t find at a commercial bank.

Here are the key steps you should take in applying for a personal loan:

  1. Check your credit score. You will need a reasonable score to be able to qualify for a decent loan rate and terms.
  2. Access your credit history and check it. Dispute any inaccuracies and do everything you can to pay down any unpaid bills or high-interest debt, such as credit card balances.
  3. Approach lenders including credit unions, banks, and online lenders for pre-approval to get an idea of the loan terms you will likely qualify for, as well as fees or other loan costs.
  4. Look carefully at your budget and decide how much you can realistically afford to borrow and pay back in a reasonable amount of time. 
  5. Choose a lender, and apply for a loan for the amount you need. You will need to authorize a credit check and will need to provide information about employment and your existing liabilities. You may also have to pay processing, origination, or other fees.
  6. Consider your loan offer. Review the interest rate and loan length carefully. Be sure you can afford the monthly payment, but always try to pay off the loan as soon as possible. Watch out also for balloon payments and early payment penalties.
  7. Sign your loan agreement. You’ll then receive a payment into your checking account, less any closing costs or points you agreed to pay to lower your interest rate.

Your Personal Loan Partner

With a personal loan from Partners Financial Federal Credit Union, we can help you consolidate debt, pay for home repair and improvements, or finance the vacation of your dreams.

Our personal loans features include:

  • No origination fees
  • No prepayment fees
  • Competitive APRs
  • No collateral required

We make applying for a personal loan easy and fast. You can contact us or click below to learn more about how a Partners Financial FCU personal loan can consolidate your high-interest debt.

YOUR GUIDE TO PERSONAL LOANS FOR DEBT CONSOLIDATION

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How Does a Personal Loan Work? [Beginners’ Guide] https://www.partnersffcu.org/blog/how-personal-loans-work/ https://www.partnersffcu.org/blog/how-personal-loans-work/#respond Mon, 10 Apr 2023 17:59:39 +0000 http://www.partnersffcu.org/?p=1456 ...Read More]]> A younger man listening to a financial advisor explain how personal loans work.

What Is a Personal Loan?
Pros and Cons of Personal Loans
How Do I Apply for a Personal Loan?
What Should I Look for in a Personal Loan?
When Is a Personal Loan a Good Idea?

From consolidating your credit card debt to planning your next vacation, making home improvements, or rebuilding your antique car—a personal loan can bring you closer to your goals and dreams.

Personal loans are flexible, convenient, and easy to apply for. But before you consider taking one out, it’s essential to understand how they work.

What Is a Personal Loan?

A personal loan is a lump payment of cash borrowed from a bank or credit union that you can use to pay for almost anything and that you pay back with interest over time. If approved, you can receive cash within a day or two. 

Most types of personal loans are not secured. This means you aren’t offering an asset such as a car or a home as collateral to guarantee the loan, which your lender could potentially seize if you failed to repay your loan on time.

For this reason, unsecured personal loans are usually for relatively small amounts that your lender is reasonably confident that you can repay on time. While your lender will typically charge a higher interest rate, this is normally well below other types of easy-to-access credit.

That said, you’ll also pay a higher annual percentage rate (APR) if you have a poor credit history. And while lenders may allow you to repay what you borrow in anything from a few days to several years, remember that you will probably pay more in interest payments the longer the term of your loan.

On the plus side, interest rates on personal loans—unlike almost any other kind of unsecured borrowing including credit cards or lines of credit—are usually fixed for the duration of your loan. This means you will know exactly how much you will need to pay back every month and how much you will end up paying in total over the life of your loan.

Pros and Cons of Personal Loans

That combination of convenience, flexibility, and transparency, and that the money has few strings attached, make personal loans a popular way to pay for things. But it is also important to keep some potential drawbacks in mind. So let’s summarize both the advantages and disadvantages of personal loans.

Important advantages of personal loans include:

  • Lower APR than credit cards
  • Longer repayment terms
  • Usually unsecured by collateral
  • Predictable monthly payment and total cost

Some potential disadvantages of personal loans include:

  • You will need excellent credit to qualify for the best APRs
  • You may not be able to borrow as much as you need
  • You must borrow the entire sum at one time, rather than borrowing a little at a time as you need the money

How Do I Apply for a Personal Loan?

Applying for a personal loan is typically fast and convenient. The process usually involves the following steps:

1. Check Your Credit Score

Your credit score remains the most important factor in determining what interest rate you will receive. Those with a poor credit score may not qualify for personal loans although it is never a bad idea to check with your bank or credit union.

2. Pre-qualify and Compare

Contact several lenders to see how much they are willing to lend you and on what terms. You usually do this by pre-qualifying for a loan, which involves a “soft” check of your credit that does not show up on your record.

Consider credit unions when looking for lenders. Unlike big commercial banks or online lenders, local credit unions are directly invested in the success of their members. Therefore they’re more likely to take a careful look at other factors, such as your income or debt-to-income ratio as well as why you need the money when offering you a loan.

3. Choose Your Loan

With a few offers in hand from potential lenders, it’s time to make a decision. Think carefully about how much you really need to borrow and whether you will really be willing and able to continue to pay back your loan over time. Be sure to also ask about fees you might be charged while applying for or paying back your loan.

4. Gather Your Documents

Once you’ve decided, you’ll need to gather important documents and complete an application. Be prepared to show proof of identity and address, proof of employment, details about how you typically spend your money, and any other debts or liabilities you may have.

5. Pay Fees, Get Approved, and Receive Funds

Lenders may ask you to pay loan application, processing, or origination fees up front if they charge them. If everything is in order you’ll receive a lump sum payment into your checking account in as little as a few hours to a few days. It’s now up to you to spend the money wisely and make steady repayments on your loan.

What Should I Look for in a Personal Loan?

Here’s what to look for as you evaluate pre-qualified personal loan offers from several lenders.  

How Much Are They Offering?

A lender might not be willing to extend you the full amount you asked for, or could even offer more. But remember, borrowing more means you will have to make a larger monthly payment, pay more interest over time, or commit to a longer loan term.

What Is the Interest Rate and Length of the Loan?

The interest rate, or APR, will vary by lender but needs to be evaluated in combination with the length of your loan. While you want the lowest interest rate you can get, if it is paired with a longer term you could end up paying much more over the life of the loan.

Be sure to ask for the total cost of borrowing for the full term of your loan—meaning the amount you borrow plus the full interest charged over the life of the loan. This way you’ll know from the beginning exactly how much you will repay in the end.

What Is the Monthly Payment?

One of the biggest advantages of personal loans is the single, fixed payment you will make for the life of your loan. While you need to be absolutely sure you will be able to afford to pay this every month for the term of the loan, you should also not accept a lower payment in exchange for agreeing to a longer loan term because you could end up paying significantly more over time.

Again, ask to see the total cost of borrowing for your full loan term so you can see how the monthly payment, APR, and loan term all work out. While it’s tempting to have more money in your pocket every month, you should try to pay as much as you can afford so you can pay down your loan sooner. 

Fees and Penalties

Once you know the total cost of your loan, add in any additional fees you could pay. Be aware of what you are paying and how much the fees can really cost you:

  • Application, origination, and processing fees may be charged upfront—even if you don’t get approved.
  • Prepayment fees may be charged if you want to pay off your loan early to recover some of the cost of the interest you are avoiding paying.

When Is a Personal Loan a Good Idea?

Personal loans make sense when they are used to pay for things that will improve your prospects, open up future opportunities, or improve the value of something you already own. Good examples include consolidating debt, buying computer equipment that will help you at school or work, or undertaking improvements that will increase the value of your home.

Personal loans are also a wise option when they are used to help pay off debts with higher interest rates, or to manage unexpected expenses you would otherwise need to pay by using a credit card or borrowing against your paycheck—for example, unforeseen medical expenses or car repairs.

Either way, a good personal loan can help you protect your financial future and work towards your dreams. Talk to a loan specialist today at Partners Financial Federal Credit Union. We’ll help you find an affordable loan that matches your individual needs. Or click below to learn more about how a Partners Financial FCU personal loan can bring you closer to your financial goals.

WHAT ARE THE BENEFITS OF PERSONAL LOANS?

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Are You a Target This Tax Season? https://www.partnersffcu.org/blog/are-you-a-target-this-tax-season/ https://www.partnersffcu.org/blog/are-you-a-target-this-tax-season/#respond Mon, 27 Mar 2023 18:30:27 +0000 https://www.partnersffcu.org/?p=3630 ...Read More]]>

The Criminal Investigation (CI) unit is a special criminal division of the IRS. The CI is tasked with investigating and uncovering tax-related crimes and prosecuting these cases. Each year the CI provides the IRS with an annual report detailing the work of the CI and highlighting their successes and enforcements related to tax and financial crimes.

Why is this important to you? The work of the CI is critical in protecting taxpayers as well as maintaining the integrity of our financial system. Even more importantly, the information uncovered by the CI paints a very clear picture of what criminal activities are on the rise, and their annual report provides valuable information on what to watch out for and how you can protect yourself and your personal information in the future. You can review what CI identifies as the top  “dirty dozen” schemes from 2022 and their full annual report.

In 2022, $5.7 billion was identified as tax fraud. This includes general tax fraud, abusive tax schemes, unemployment tax, identity theft, and refund fraud. While anyone can become a victim of tax fraud, it’s generally at-risk populations that are the most affected, such as older adults or non-English-speaking taxpayers. While these populations are most at risk, the criminals behind these bogus schemes view everyone as potentially easy prey.

The IRS urges everyone to be on guard all the time and to look out for others in their lives. While paying special attention is important during tax season, taxpayers are encouraged to review the list in a special section on IRS.gov and be on the lookout for these scams throughout the year. This year, tax crimes have become more complex and sinister than ever before, including scams like identity theft, phishing, fake charities, false claims, and more. This article will cover new fraud schemes and reoccurring ones in hopes of helping you understand what to watch for and how to protect yourself and your loved ones.

 

NEW SCAMS FOR 2023

Wage and Tax Statement

The IRS recently issued an alert to a new scheme making its way through social channels. This scheme prompts individuals to use tax software to manually complete Form W-2, also known as the Wage and Tax Statement, and to include fabricated income details. The scammers behind this scheme advise people to falsify significant income and withholding figures and identify the employer from which it supposedly originated.

They then instruct taxpayers to electronically submit the fraudulent tax return in the hopes of receiving a substantial refund, which can sometimes amount to as much as five figures, due to the falsified withholding.

“We are seeing signs this scam is increasing, and we worry that innocent taxpayers could be at risk of being tempted into falling into a trap that puts them at risk of financial and criminal penalties,” said Acting IRS Commissioner Doug O’Donnell. “The IRS and Security Summit partners remind people there is no secret way to get free money or a big refund. People should not make up income and try to submit a fraudulent tax return in hopes of getting a huge refund.”

Social Security Scam

This is just a new twist on an existing impersonator scam where scammers claim to be able to cancel or suspend a victim’s Social Security Number (SSN) in an attempt to gain sensitive information. In this scam, a taxpayer receives a threatening call accusing them of having unpaid or overdue taxes.

The result of this call is that the taxpayer divulges personal information before realizing that it is fraud. If you receive a threatening call, hang up and do not call the number back. Instead, report the call to the Treasury Inspector General for Tax Information using the red button at the top of their website.

 

RETURNING SCAMS

Phishing

According to the IRS, more than 90% of identity thieves start with phishing emails. These emails appear to be from a trusted company, often masquerading as your tax preparer or the IRS during tax season. These emails typically have some urgency to their request, such as “there is a problem with your account,” and ask for personal information such as passwords or account information.

The IRS will never initiate contact with taxpayers via email about a tax bill, refund, or Economic Impact Payment. Don’t click on website links in emails claiming to be from the IRS; they may be nothing more than scams to steal personal information. Phishing schemes also occur through a variety of channels, including letters, texts, and website links.

Fake Charities

Criminals frequently take advantage of current events, such as natural disasters, by setting up fake charities to steal from well-intentioned people. Fraudulent schemes typically start with unsolicited contact by telephone, text, social media, email, or in-person using a variety of tactics. Bogus websites use names similar to legitimate charities to trick people into sending money or providing personal financial information.

They may even claim to be working for or on behalf of the IRS to help victims file casualty loss claims and get tax refunds. Legitimate charities will provide their Employer Identification Number (EIN) if requested, which can be used to verify their legitimacy. In addition, you can find legitimate and qualified charities with this Tax Exempt Organizations Search Tool on IRS.gov.

Threatening Impersonator Phone Calls

IRS impersonation scams come in many forms. A common one remains bogus threatening phone calls from a criminal claiming to be with the IRS. The scammer attempts to instill fear and urgency in the potential victim.

In fact, the IRS will never threaten a taxpayer or surprise them with a demand for immediate payment. Scam phone calls, including those that threaten arrest, deportation, or license revocation if the victim doesn’t pay a bogus tax bill, are reported year-round.

These calls often take the form of a “robocall” (a text-to-speech recorded message with instructions for returning the call). Again, the IRS will never demand immediate payment, threaten, ask for financial information over the phone, or call about an unexpected refund or Economic Impact Payment.

EIP or Refund Theft

The IRS has made great strides against refund fraud and theft in recent years, but they remain an ongoing threat. Tax-related identity theft occurs when someone uses your stolen SSN to file a tax return claiming a fraudulent refund, and directing it to their P.O. Box or a fake bank account.

You may be unaware that this has happened until you e-file your return and discover that a return has already been filed using your SSN. Or the IRS may send you a letter saying it has identified a suspicious return using your SSN.

Senior Fraud

Seniors are more likely to be targeted and victimized by scammers than other segments of society. As time goes by more people who enter the senior population are using social media, online accounts, and use of the internet, which unfortunately gives scammers another means of taking advantage. Phishing scams targeting seniors continue to be a threat each tax filing season. Seniors need to be alert for a continuing surge of fake emails, text messages, websites, and social media attempts to steal personal information.

Scams Targeting non-English Speakers

IRS impersonators and other scammers also target groups with limited English proficiency. Some scams also target those potentially receiving an Economic Impact Payment from previous years and request personal or financial information from the taxpayer. Phone scams pose a major threat to people with limited access to information, including individuals not entirely comfortable with the English language. These calls frequently take the form of an automated “robocall” but sometimes may be made by a real person. A common one is the IRS impersonation scam, where a taxpayer receives a telephone call threatening jail time, deportation, or revocation of a driver’s license from someone claiming to be with the IRS. Taxpayers who are recent immigrants are often the most vulnerable and should ignore these threats and not engage with scammers.

Unscrupulous Return Preparers

Most tax professionals provide honest, high-quality service; however, dishonest preparers pop up every tax filing season. Using an unscrupulous preparer can lead to fraud using the taxpayer’s personal information or worse, the taxpayer might be talked into committing fraud themselves. Taxpayers should avoid so-called “ghost” preparers who expose their clients to potentially serious filing mistakes as well as possible tax fraud and the risk of losing their refunds.

Ghost preparers don’t sign the tax returns they prepare. Instead, they may print the tax return and tell the taxpayer to sign and mail it to the IRS. For e-filed returns, the ghost preparer will prepare but not digitally sign as the paid preparer. By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a Preparer Tax Identification Number (PTIN). Paid preparers must sign and include their PTIN on returns. Taxpayers are ultimately responsible for the accuracy of their tax returns, regardless of who prepares them. You can go to a special page on IRS.gov for tips on choosing a preparer.

Offer in Compromise Mills

Taxpayers need to be wary of misleading tax debt resolution companies that can exaggerate the chance of settling tax debts for “pennies on the dollar” through an Offer in Compromise (OIC). These offers are available for taxpayers who meet very specific legal criteria to qualify for reducing their tax bill. But unscrupulous companies oversell the program to unqualified candidates so they can collect a hefty fee from taxpayers already struggling with debt.

Individual taxpayers can use the free online Offer in Compromise Pre-Qualifier tool to see if they qualify. The simple tool allows taxpayers to confirm eligibility and provides an estimated offer amount. Taxpayers can apply for an OIC without third-party representation, but the IRS reminds taxpayers that if they need help, they should be cautious about whom they hire.

Fake Payments with Repayment Demands

Criminals are constantly finding new ways to trick taxpayers into believing their scam, including putting a bogus refund into the taxpayer’s actual bank account. Here’s how the scam works:

A thief steals or obtains a taxpayer’s personal data, including SSN or Individual Taxpayer Identification Number (ITIN) and bank account information. The scammer files a bogus tax return and deposits the refund into the taxpayer’s checking or savings account. The fraudster then calls the taxpayer, posing as an IRS employee claiming that the payment was in error and needs to be returned. The taxpayer, knowing that the refund is not consistent with what they have filed with the IRS, or that they have not yet filed for a refund, believes that this is an honest mistake.

The fake IRS caller tells the taxpayer that the money returned immediately. The taxpayer is told to either use a payment service, such as Zelle, or the taxpayer is told to buy specific gift cards for the amount of the refund and send them by mail.  Either way, these methods are the same as cash and it’s not recoverable. Anytime you receive an unexpected refund or a call from anyone out of the blue demanding a refund repayment, you should reach out to Partners Financial FCU and the IRS.

We are here for you!

Following the IRS’s advice in each instance is important, but know that we are here for you! While it’s important to stay aware of the above tax-related risks and practice good habits to protect your identity, we want you to remember that Partners Financial FCU has you covered in the event of tax fraud related or any type of identity theft. If you are an account holder with Premium Checking you have Fully Managed Identity Theft Recovery. Should you feel your identity has been compromised, we have professional Identity Theft Recovery Advocates standing by. These Advocates work on your behalf to help recover and to help you reverse any damage caused by identity theft.  Contact us or find out more about your benefits of Premium Checking by visiting our website.

 

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How to Choose the Best Checking Account https://www.partnersffcu.org/blog/how-to-choose-the-best-checking-account/ https://www.partnersffcu.org/blog/how-to-choose-the-best-checking-account/#respond Thu, 27 Oct 2022 12:46:36 +0000 http://www.partnersffcu.org/?p=1899 ...Read More]]> A woman chooses a bank account that offers mobile banking.

The key to choosing the right checking account is knowing what you need and want. You may be willing to pay a small monthly fee so you can take advantage of advanced features, or you may want a simple account with no recurring fees. Whatever type of checking account you choose, make sure it offers free Online and Mobile Banking services plus features like Bill Pay and Mobile Deposit.

Read on to find out what to look for in an account, what to avoid, and how to choose the right account from all the different types that are available today.

What to Consider When Choosing a Checking Account

There are many types of checking account options out there, so how to choose the one that’s best for you? Here are six tips for choosing an account that will meet your needs without breaking the budget.

1. Compare What You Get for a Fee vs. Free

When finding a checking account, you need to check all possible fees you may be charged. A Free Checking Account may seem like a good deal because it has no monthly fee, but be aware you may miss out on many useful services and features or you may need to pay for things that come free with other accounts.

Monthly maintenance fees can be as much as $15. If you opt for an account with a monthly fee, look for a financial institution that charges an affordable amount with valuable benefits.

In return for your monthly fee, make sure you’re getting free checks, free replacement debit cards, free credit monitoring, ID theft recovery, mobile insurance, and overdraft protection.

2. Look for Free Online Access

You should not be charged to access Online Banking from home or work. Mobile-friendly services like Mobile Deposit are common and essential in today’s world so you don’t have to visit a brick-and-mortar institution. You should also be able to pay bills online without incurring additional fees.

3. Make Sure the Mobile App Is Free

Mobile Banking apps make it easy to manage your account anytime, anywhere. You can check your balance, transfer funds, and even deposit checks. But some financial institutions charge extra for their apps, and some limit the types of transactions you can perform. Be sure to compare Mobile App services and fees before choosing an account.

4. Decide If You Can Meet the Minimum Balance Requirement

Some banks and credit unions may charge a monthly fee unless you maintain a balance above a certain amount. The minimum could be anything from $100 to $5,000. If you don’t think you can maintain that balance, then you should choose a different account with no minimum balance requirement.

5. Ask About Other Perks

Your account may come with bonus features like discounts on car insurance, mortgages, and credit cards. Some financial institutions provide ATM reimbursements on out-of-network fees and overdraft protection. Look into these benefits and figure out which ones would make the most difference in your life.

6. Find Out What ATMs Are Available

A traditional bank may charge you a fee to use any ATM from a different financial institution. On the other hand, credit unions often belong to a nationwide network and you can use their in-network ATMs free of charge. Before you sign up, make sure there are ATMs near you that you can use fee-free.

7. Check the Security Measures

Checking accounts may offer a range of security features, but some may offer none at all. You can look into the security services available and consider whether you need them to protect your assets. You may decide your financial activity is low risk and you don’t need all the high-level protections available with some accounts, or you may want as much protection as possible.

8. Consider Your Relationship With Your Financial Institution

A man writes a check drawing on his checking account.
When you open a checking account, you’re opening the doors to other financial products and services, as well as the chance to form an ongoing relationship with the financial institution. Ask yourself if you prefer a local credit union where you can form a relationship with the tellers and other employees, or if you prefer a national chain with many locations across the country.

Credit unions tend to offer specialized local member services, while banks offer general customer service.

What Is a Checking Account Used For?

You can use your checking account to make deposits into your account, write checks against it, and withdraw cash from ATMs. But you can do much more than those three actions. A checking account is also known as a transaction account, meaning that you can perform transactions such as transferring funds electronically or sending a paper check from the account to pay someone else.

What Is a Checking Account Used For?

5 Types Of Checking Accounts

Here are five popular checking account options beyond a standard personal account. Each has its benefits, and some cater to a specific population. If you’re not sure how to choose a checking account, you can consider whether any of these accounts can benefit your financial status and needs – or if a standard account is more suitable.

1. Premium Checking Account

To get the best, you sometimes need to pay a little extra. Most Premium account options require a monthly fee. In return, you get a wide range of features, protections, and free products that may not be available with a free account. For example, you may get a free replacement debit card, free checks, ID theft protection, credit monitoring, and phone insurance all for $6 per month.

2. Free Checking Account

A free checking account can be a good option because you don’t have to pay monthly maintenance fees to keep it open. Many monthly bank fees range from $3 to $12 or more per month, so you can save over $100 per year in fees alone. The downside is that a free account may not offer all the features other accounts may offer.

3. High-Yield Checking Account

A high-yield checking account allows you to earn higher interest rates on the money in your account. This is useful if you plan to maintain a high balance so you can see more benefits over time. Keep in mind that this account isn’t designed to be a long-term savings account – there are many better options for saving money, like Money Market Accounts.

4. Rewards Checking Account

A rewards account may let you earn a percentage of cash back on your debit card purchases, or you may collect points to redeem for awards like merchandise and travel. Your eligibility to earn the rewards can vary, so it’s important to review the details and take notice of spending categories or other restrictions. These features are also common with credit cards.

5. Student Checking Account

A student account is specifically designed to support young adults during their crucial transitional period in high school and/or college. For this reason, the fees are low, yet you have access to many banking privileges, including using a debit card and mobile banking.

6. Second Chance Checking Account

If your credit means you can’t qualify for a standard checking account, you may be able to open a second chance checking account. This account is designed to help you recover from financial difficulties like a low credit score or poor banking history. You can then establish a good banking history and positive spending habits so you can move to a regular account.

Partners Financial Credit Union Checking Accounts

At Partner’s Financial Credit Union, we want to make choosing a checking account easier. That’s why we have streamlined our offerings with two great options to suit your needs and wants.

Both our checking accounts come with all these features free of charge:

  • Online Services
  • Mobile Banking
  • Bill Pay
  • Direct Deposit
  • Mobile Deposit so you can deposit a check without visiting a branch
  • Debit card access
  • Surcharge-free ATMs in the Culiance Network
  • Occasional overdraft privilege service (OOPS)
  • e-Statements
  • Notary service
  • Phone pal

Premium Checking Account

As well as all the standard checking account features, our Premium Checking Account comes with a range of protection services including fully managed ID Theft recovery, credit monitoring, dark web monitoring, and mobile phone insurance. Plus, consumer loan discounts!

Basic Checking Account

Our Basic Checking Account offers essential services with no fuss and no frills. This is a standard personal checking account with an opening deposit of $25, no monthly fee, and no minimum balance requirement each month.

Next Steps: How to Choose a Checking Account to Suit Your Needs

Partners Financial Credit Union offers two convenient checking accounts to fit different lifestyles and goals. If you’re still wondering how to choose an account, you can click below to see details about each option, key benefits, and a handy table to compare checking account features.

Partners FCU Checking Account Options

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