What is the easiest way to prevent fraud on my credit cards?

We recommend that you sign up for fraud alerts that are offered by your financial institution. If you are notified of potential fraud, it’s important to respond in a timely manner. An added level of security is to add your debit or credit cards to mobile wallets like Apple Pay and Google Pay on your smartphone. Use this payment method with merchants and your transaction will be processed using a token number and not the actual card number.

Another good practice to identify fraudulent transactions is to review your statements periodically and report suspicious activity to your credit card company or financial institution as soon as possible.

GECU is introducing a mass fraud alert program that notifies members when suspicious, fraudulent activity occurs on a GECU debit* or credit card.** Enrollment is automatic for members and provides an added layer of security.

If my identity is stolen, will that impact me being able to get a credit card or loan in the future?

Having your identity stolen will not impact you from applying for a credit card or loan in the future. If you have been impacted by identity theft, we recommend contacting the three major credit bureaus. Report that you have been a victim of identity theft and request to place a fraud alert on your credit report. A fraud alert simply sends out a blanket request to all creditors to contact you before any new accounts are opened on your behalf.

How does credit card fraud happen?

Fraud can happen in different ways. Fraudulent activity involves when a person obtains personal information, identifiable documents, or discarded receipts without consent. Friendly/family fraud is another form that can also happen when someone close to you uses your debit or credit card for purchases without your permission.

Phishing is another form of fraud and it entails the process of tricking you into giving out your personal information under the false pretense that the person you are speaking with is authorized to obtain your information.

It’s important to protect your personal information by shredding documents and receipts and staying aware of who you allow to use your debit or credit card. It’s helpful to know that financial institutions will not initiate contact with you to obtain your information.

Placing fraud alerts on your accounts is another way to prevent fraudulent activity from happening. GECU is introducing a mass fraud alert program that notifies members when suspicious, fraudulent activity occurs on a GECU debit* or credit card.** Enrollment is automatic for members and it provides an added layer of security.

How common is credit card skimming?

Credit card skimming is most common at less monitored credit and debit card terminals like the ones at gas stations. Skimming is less likely to happen when the terminals are continuously being monitored like at grocery or department stores.

By using the mobile wallet on your smartphone or contactless payment methods, scammers can’t steal your card information because the transaction is processed using a unique, untraceable token number that replaces your actual card number.

What steps should I take if my credit card is lost or stolen?

If your credit card is lost or stolen, contact your financial institution or credit card company immediately. If you have a GECU debit* or credit card,** you can place a block on the card. You will also be directed to CO-OP’s fraud detection department to report that the card is lost or stolen.

How should I go about reporting a fraudulent charge?

Contact your credit card company or financial institution to report any unauthorized transactions on your accounts as soon as possible. GECU will place an immediate block on your GECU debit* or credit card.**

Does fraud happen with only credit cards or can it affect my debit card too?

Fraudulent activity can occur on debit and credit cards. Steps to prevent fraud include stopping and analyzing the situation or website, never giving out your personal information, and contacting your financial institution immediately if you suspect suspicious or fraudulent activity.

What am I liable for if my credit card is stolen?

Cardholders are liable for credit card balances prior to the fraudulent activity and are not liable for fraudulent charges made on the credit card.

I have a zero-liability credit card. Does that mean I am safe from fraud?

Having a zero-liability credit card means you are not responsible for fraud that occurs on that credit card. Check with your financial institution and credit card company about zero-liability cards. GECU offers a zero-liability credit card.**

Is it true that credit card fraud can be committed by someone stealing my statement from the mail?

It is possible for fraud to be committed by stealing your statement through the mail. The risk of fraud is very low because merchants will require more than an account number to process a transaction. Statements will not include the card expiration date or the security number located on the back of the card. These are items needed to complete a merchant purchase.

We recommend that GECU members*** sign up for electronic statements to avoid personal information being lost or stolen through mail theft.

Are some credit cards safer from fraud than others?

Debit and Credit cards with chips are safer to use than older card versions. Making your transactions using a mobile wallet on your smartphone or other contactless payment methods is another added layer of protection. Scammers can’t steal your card information because the transaction is processed using a unique, untraceable token number that replaces your actual card number. You can add your GECU debit* and credit cards** to your smartphone’s mobile wallet for added security when making transactions.

Insured by NCUA

*Must have a GECU share account to open a checking account. A one-time deposit of $20 in a GECU share account is all it takes.

**Subject to credit qualification and approval. Other conditions apply. Equal opportunity lender.

***Learn how to become a member at gecu.com.

Do you have traveling credit cards to get points? 

GECU offers a rewards credit card* that earns you points with every qualifying purchase. Earn three points for every $1 spent on qualifying purchases during the first three months, and redeem those points for things like cash back, gift cards, merchandise and more. A GECU Rewards credit card also comes with 1.5 points on qualifying purchases after the first three months and no annual, balance transfer or cash advance fees. The GECU Rewards credit card is mobile-wallet compatible and offers Mastercard® Cellular Protection Services and ID Theft Protection.** 

The GECU Rewards card also comes in black or the GECU Pickaxe Rewards design to show your support of the UTEP Miners.*** 

How can you help me save money for a Europe trip? 

Taking a vacation out of the country is an exciting memory to create. Planning and setting a financial goal can put you in the right direction to have a stress-free vacation.  

First, determine a strong estimated cost of your vacation expenses and mark this as your savings goal. Calculate how much you can save by dividing the vacation expenses by the number of paychecks remaining until the trip date. This gives you a good estimate of how much to save at each pay period.  

Setting up automatic payments is also a hassle-free way of saving. Cutting out daily coffee purchases and placing those few dollars into your savings account can also add up quickly. Another option is to meet with a GECU financial coach which can benefit you in helping you plan and budget for your trip while you also manage day-to-day expenses. 

To schedule a free meeting with a GECU financial coach, visit gecu.com/communitydevelopment.  

How long ahead of a vacation should I start saving? 

Once you determine strong estimated costs for your vacation, you can start planning how you will save. Consider all the activities, meals and shopping that you might do on your vacation. For example, let’s estimate that the vacation as a whole will cost $2,000. Now, divide the $2,000 by the number of paychecks you’ll receive before your trip. Then, you can start to save that amount per paycheck or in increments to build up to that amount.  

It may also be helpful to start smaller and realize what you can cut out of your daily spending. Making these small cuts sooner can add up to big savings for vacation.  

Many times when I do go out of town, I will get an alert from my bank about suspicious spending. Is there something I can do ahead of time to avoid this? 

Financial institutions like GECU want to protect members from fraudulent and suspicious activity. You should contact your financial institution before going on your trip to let them know that the spending trends will be different than normal. This helps protect your purchases and prevents potential card suspensions from suspicious activity that are in place for your protection. 

How much money should I have set aside ahead of a vacation? 

It’s best practice to first determine the total cost of your vacation plans, including travel, food, lodging, activities and more. This is your savings goal. A helpful tip to start saving is to divide your upcoming vacation expenses by the number of paychecks remaining until your trip. Then, you will learn how much to save with each paycheck. Adjustments can also be made to accommodate your daily expenses and bills. It’s also helpful to place your vacation funds into a separate savings account to avoid accidental spending.  

If I am out of the country, is it smart to use my debit or credit card? 

You can use both your debit or credit cards when you travel out of the country. It is also good practice to let your credit card company or financial institution know before going on your trip when and where you will be traveling so that they can note that on your account. This prevents possible suspension of your debit or credit card, a standard protection effort against fraudulent or suspicious activity. 

Can I set up a different account to save for vacation? 

Yes, we recommend opening a separate savings or checking account to save for your vacation. You worked hard to save money for a specific goal like vacation and this simple task helps avoid accidental spending before you’re ready. This is also good practice when you’re saving for any particular goal. Less spending brings you closer to your savings goal sooner.  

GECU offers savings accounts for all stages of life. Learn how to become a member at gecu.com. GECU is federally insured by NCUA.  

Are there any budget tricks to help save more for a vacation? 

Setting goals is important in all areas of life. When it comes to savings, setting a financial goal first helps paint a clearer picture for the amount you’re trying to reach, and it helps you create a plan to reach that goal. Along the journey of saving, there are also many tips that can help you stay on track.  

Set up automatic transfers from one account into your vacation savings account. This is a simple and hassle-free way of building up your savings. Also, the next time you decide against going out to a restaurant, take that amount you would have spent and place it into your savings account. It’s a creative tip to grow your savings account quicker and helps train your savings habits.  

Meeting with a financial coach can help you plan and build your budget — setting you up for financial success. GECU Community Development has free financial coaches ready to help you. Visit gecu.com/communitydevelopment to learn more. 

Whats the best way to use a credit card with travel rewards? 

Rewards credit cards can help you earn points that you can redeem for things like flights, hotel stays and restaurants. There are higher interest rates tied to rewards credit cards. It’s important to shop around for the credit card that appeals most to your needs and interests and that has a comparable interest rate. You can avoid paying a higher interest rate by paying off the balance each month while earning reward points. 

GECU offers a rewards credit card* that earns you points with every purchase. Earn three points for every $1 spent on qualifying purchases during the first three months. Then, redeem the points for cash back, gift cards, merchandise and more. A GECU Rewards credit card lets you earn 1.5 points on qualifying purchases after the first three months and it comes with no annual, balance transfer or cash advance fees. Learn more about how to become a member and about the GECU Rewards credit card at gecu.com.  

*Subject to credit qualification and approval. Other conditions apply. Cash advances, balance transfers, ATM transactions and transactions with the use of convenience checks are not eligible to earn points. Offer applies to new GECU Rewards credit cards only. You will only earn three points for every $1 on qualifying purchases within the first three months of opening the account, up to $5,000 total spent. Once you spend $5,000 within the first three months, you will earn 1.5 points per $1. Other limitations apply. Learn how to become a member at gecu.com. GECU is an equal opportunity lender.  

**Additional conditions apply. Please see the Mastercard benefits at gecu.com 

***The GECU Pickaxe Rewards credit card is not a UTEP-sponsored affinity program. 

If I am 27 years old, how much money should I be putting into my savings account monthly?

The amount that you put away will depend on your current income and expenses. If you are barely starting to save, aim to save up for a small emergency fund, which is around $500. If you save $10 a week, you will have your small emergency fund within a year. If you already have a small emergency fund, your next goal could be to save up for a large emergency fund, which would be about double the amount. If you would like to find out exactly how much you should be saving, call the GECU Community Development at 915.774.2160 to attend a free financial seminar on savings or speak with a financial coach.

How much savings should I have if I am in my late 20s?

It is recommended to have a small emergency fund of $500 in your savings to cover unforeseen expenses, such as a flat tire, a broken windshield or doctor bills. If you don’t have a small emergency set up, consider saving $10 a week and you will have a small emergency fund within a year! If you already have a small emergency fund ready or have more than $1,000 saved up, consider saving up 3–6 months of expenses, which would include, rent or mortgage, food, and bills.

What’s the best way to save for my child’s education?

Start saving as soon as possible. Even if you feel like you have a long way before your child goes to college, it will come sooner than you think. Opening a 529 Plan is a good option to start setting money aside for your child’s education. When saving, you want to consider not just tuition fees but also additional expenses such as room and board, books, laptop and other additional items that they may need while in college.

Can I open account specifically for saving for college? What are my options?

Account options that you have for saving for college are a 529 Plan or a Coverdell Education Savings Account. If you use the funds from either a 529 Plan or a Coverdell ESA for something that is not considered a qualifying expense, you will be fined a 10% fee. A 529 Plan and a Coverdell ESA allow you to use the funds for other qualifying expenses such as room and board, laptops, books and more.

What is a 529 Plan for college? Who is eligible?

Anyone can open a 529 Plan which allows you to save for your own or your child’s education without spending those funds on other expenses. The money you invest grows tax-free and can be withdrawn tax-free, provided it is used for educational purposes. When opening a 529 Plan, you will need to provide your personal information and choose a beneficiary. A beneficiary is the person who will receive the funds when they are available to be distributed.

How else can I pay for college if I haven’t saved enough?

If you are eligible, you can look into different academic scholarships, athletic scholarships, privately funded scholarships and department scholarships. If you fall within the income requirements for Federal Student Aid, you can also apply to receive financial aid to help cover a portion of your education. If you or your parent were in the military, there are also options such as the GI Bill for former or current active duty military personnel or Chapter 35 benefits for dependents of veterans. Another option is to ask the university or college if they have any additional aid.

What is considered a good interest rate on a credit card?

Depending on your credit score and the type of credit card you are looking at, the interest rate that you will be offered will vary. The lowest interest rate on a card that you can receive is your best option but ultimately it comes down to what you are looking for in a credit card. Typically, credit unions offer lower interest rates on credit cards than other financial institutions.

When should I apply for my first credit card?

Applying for your first credit card is a big financial decision. You should apply for your first credit card before you need it. Do some research now so that you can properly evaluate your choices and find a card that will fit your lifestyle and financial needs. Once you narrow down your choices and choose a credit card, make sure that you have the required income that you’ll need to repay any purchases you make with the card.

If I have a large balance on multiple credit cards, should I pay them off from highest to lowest or from lowest to highest?

This all depends on your goals and preferences. However, most people have found it easier to pay off the lowest balance as that allows them to see their progress more quickly. If you want to pay the highest balance due to the interest rate, you can start with the highest to lowest to pay less in interest. However, if you want to see your debt go down more quickly, lowest to highest may be the better option.

Will my credit score be impacted if I close a credit card?

Yes, your credit score will be impacted because closing a credit card account lowers how much credit you have available in total. When you open a credit card, depending on how much you qualify for, that is additional credit you have on hand. When you close the credit card, you no longer have that credit available — which results in a lower credit availability and reflects on your credit score.

Why does my APR go up even if I make payments on time?

Most credit cards have a variable interest rate which means that the rates are subject to change throughout the course of the year. Also, since your credit score directly impacts the rate you receive, it’s important that your credit card balances haven’t increased during this time as that may cause a drop in your credit score and affect the rate that you receive. Your credit score is determined by five categories: payment history, amounts owed, length of history, new credit and credit mix. Any one of these categories can affect your credit score.

How can I get a credit card if I have no credit history?

If you don’t have credit history, a credit card is a great place to start building credit. You can go to your preferred financial institution and apply for a credit card. Since you don’t have credit history built up yet, your max available credit on your card may be limited. However, if you use your card responsibly and pay it on time, the amount of credit will increase over time and it will also start building your credit history.

What’s a good credit score?

A credit score of 700 or above is generally considered good. However, if you have a credit score lower than 700, there are ways for you to build it up to a good score. If you need help building your credit, contact GECU Community Development at 915.774.2160 to sign up for free financial seminars that can help you understand and build your credit.

How many credit cards should I have in order to build credit?

Your credit is determined by five categories: payment history, amounts owed, length of history, new credit and credit mix. Of those five, payment history has the highest impact. Having a few credit cards with low balances and on-time payments can contribute to payment history and the other categories which will in turn help you to build credit.

What does it mean to be preapproved for a credit card?

When you receive a letter of preapproval for a credit card, it means that you can apply to receive the credit card offer and you will receive the amount that they have approved in the letter. If you choose to accept the offer, you will receive a credit card with the amount that is stated in the letter. If you would like to get preapproved for a GECU credit card,* visit any of our branches or call us at 915.778.9221.

*Subject to credit qualification and approval. Other conditions apply. Learn how to become a member at gecu.com.

Equal Opportunity Lender

I’m trying to build my credit score. Is it bad to use a credit card for every day expenses if I pay the balance right away?

Using your credit card responsibly and paying it off before the due date will help improve your credit score. It is recommended to use your credit card at least once a month to keep your credit score up.

Is it safe to use a credit card if I travel outside the country?

Yes, it is safe to use a credit card when you travel outside of the country. However, it is good practice to let your credit card company know where and when you will be traveling to so that they are aware of any purchases you will make that come from a different location.

What are cash-back credit cards? How does that work?

Cash-back credit cards are credit cards that reward you for purchasing items with that credit card. Depending on the interest rate for the cash back, you can make as little as $1 per $100 and as much as $5 per $100 that you spend on that credit card. Some credit cards are specific on what you can purchase in order to receive that cash back, such as entertainment, fuel, travel or dining out. You can use cash-back rewards to purchase something that you want or to pay off a portion of your credit card balance depending on how much you have accumulated.

What sort of annual fees should I expect from a credit card?

As you identify the different credit card options available to you, you typically want to select a credit card that does not charge annual fees. However, if you have selected a credit card that charges an annual fee, look to see if the benefits gained from that card actually outweigh the cost of the annual fee.

If I can pay for some of my college but not all of it, is it better to take out a small student loan or put the difference on a credit card?

The biggest thing to consider is how much debt you will be taking on. If you can pay the difference within a month, a credit card may be a good option. However, if you will be taking on

a few thousand dollars in debt, federal student loans are the best option as they have the lowest interest rate. Federal student loans start around a 3% interest rate, whereas a credit card has interest rates up to 24%. Depending on whether you get a subsidized or unsubsidized federal student loan, you may also have a grace period of six months after you graduate to pay your student loans without interest

Can I lose money with a Roth IRA?

A Roth IRA is a type of account, not a specific investment. This means that the value of an account will not go down. However, the value of some investments can fluctuate with the changes in the market. The monetary value you have invested will not go down, but inflation over time will make it less valuable.

Is it better to invest in a Roth IRA or a 401(k)?

A 401(k) will allow you to put aside more money for retirement because you can contribute up to $19,500 to your 401(k) annually ($26,000 if you are over 50 years old). Roth or Traditional IRA contributions are limited annually to $6,000 or $7,000 if you are over 50 years old. A 401(k) is a company-sponsored retirement plan. This means that you can only invest if you work for a company that offers it. If you are self-employed, you can open an IRA to set aside money for your retirement. It is also possible to invest in both, as long as you stay within the IRS guidelines.

What fees and penalties are associated with the different retirement accounts?

IRA penalties occur when you make a withdrawal before the age of 59 ½. The penalty is usually 10%, but in some instances, the tax penalty may be waived.

Fees for an IRA account will vary depending on your investments. If you would like to find out more information about your retirement and investments, set up an appointment with a GECU financial counselor by calling 915.778.9221.

Can I make withdrawals from a Roth IRA without penalty?

You can withdraw without penalty from the Roth contributions you have made. However, if you withdraw earnings, you will pay a 10% penalty if you are under 59 ½ years old and/or have not had the Roth for more than 5 years. Again, there are exceptions and it is recommended to check with the IRS for more information.

I am 60 years old, what type of Roth IRA works best at my age.

It depends on your situation. We recommended that you speak to a financial advisor to discuss your particular situation in order to find the best account that works for you. Contact the GECU Investment and Trust Services* team to set up an appointment with a financial advisor by calling 915.778.9221.

*GECU Investment and Trust Services Financial Professionals are registered representatives of CUNA Brokerage Services, Inc. Representatives are registered, securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, which is not an affiliate of the credit union. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. CUNA Brokerage Services, Inc. is a registered broker/dealer in all 50 states of the United States of America.

Do you finance houses in New Mexico?

GECU finances houses within up to a 150-mile radius of El Paso county, including areas of New Mexico. To find out more about our financing options, call the GECU Mortgage* team at 915.778.9221.

*All loans are subject to credit qualification and approval. The property must be located in the United States, within a 150-mile radius of El Paso County, to include Hudspeth County. Certain fees and conditions apply. Learn how to become a member at gecu.com.

Equal Housing Opportunity Lender

What is a good age to buy a house?

The age at which you purchase a home will vary on your individual circumstances. To purchase a home, you need to meet all eligibility requirements to ensure that you are able to qualify for a home loan. GECU Community Development offers free financial education courses that help you understand the basics of buying a home and what you will need to purchase a home.

Do property taxes change depending on the area of El Paso?

If you are within El Paso city limits, your taxes will be determined according to your property value and the imposed city property taxes. For additional details please refer to elpasotexas.gov.

How much savings do I need to retire?

How much you should save for retirement depends on the lifestyle you plan to maintain when you retire. The best thing to do is to prepare a budget based on what you think your monthly expenses could be when you retire. Include everything in the budget — healthcare, insurance, taxes, recurring monthly expenses, entertainment and travel. Multiply that amount by 12 and you will have an annual budget. Then, factor in inflation and look at how much it will cost to maintain this lifestyle for 10, 20 or 30 years. This method can give you a good picture of how much retirement income you should have.

What is a good age to retire?

A good time to retire would be when you have retirement investments and/or pension benefits that create enough income to support the lifestyle that you want to have for the remainder of your life. Retirement is not realistic if you don’t have enough ongoing income to cover your expenses.

When can I start collecting Social Security?

The earliest you can start receiving Social Security benefits is at 62 years old, provided that you have accumulated at least 40 quarters of work in “covered employment.” Visit ssa.gov for complete Social Security information.

How much will I pay in taxes when I retire? 

How much you pay in taxes when you retire will depend on your annual gross income and your retirement plan. If you would like to find out exactly how much you will pay, speak with a financial professional at GECU by contacting the GECU Investment and Trust Services* team at 774.1765 or by setting up an appointment online at gecu.com.

*GECU Investment & Trust Services Financial Professionals are registered representatives of CUNA Brokerage Services, Inc. Representatives are registered, securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA / SIPC, a registered broker/dealer and investment advisor, which is not an affiliate of the credit union. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. CUNA Brokerage Services, Inc. is a registered broker/dealer in all fifty States of the United States of America.

How do 401(k) accounts work?

401(k) accounts are company-sponsored plans that allow employees and employers to put a percentage of their income in an investment retirement account. Accounts can be tax deferred or tax free, depending on the type of 401(k). When you retire, these funds will allow you to live a comfortable life and may be your main source of income for the rest of your life if you choose to invest in a 401(k).

Should I pay off my mortgage before I retire?

If possible, it’s best to be as debt-free as possible in retirement. This will help you live comfortably during retirement and help your retirement funds last longer.

Can I continue to work while collecting Social Security?

Yes, you can work while collecting Social Security, but you should talk to a tax professional about how your Social Security money will be taxed if you continue to work. There are certain rules that apply to people who are receiving Social Security benefits and have not reached full retirement age.

Are there any alternatives to a 401(k)?

There are several alternatives to a 401(k) and we recommend that you meet with an investment professional to discuss other savings or investment options. For more information, contact the GECU Investment and Trust Services* team at 774.1765 or set up an appointment online at gecu.com to help you determine the best option for you.

*GECU Investment & Trust Services Financial Professionals are registered representatives of CUNA Brokerage Services, Inc. Representatives are registered, securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA / SIPC, a registered broker/dealer and investment advisor, which is not an affiliate of the credit union. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. CUNA Brokerage Services, Inc. is a registered broker/dealer in all fifty States of the United States of America.

When should I start speaking to a financial professional about my retirement?

You should speak to a financial professional when you first start saving for retirement. Having a conversation with a professional can help you avoid mistakes, make sure that your investments are properly diversified and help you stay on track to meet your goals. Contact the GECU Investment and Trust Services* team at 774.1765 or set up an appointment online at gecu.com to speak with a financial professional about your retirement goals.

*GECU Investment & Trust Services Financial Professionals are registered representatives of CUNA Brokerage Services, Inc. Representatives are registered, securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA / SIPC, a registered broker/dealer and investment advisor, which is not an affiliate of the credit union. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. CUNA Brokerage Services, Inc. is a registered broker/dealer in all fifty States of the United States of America.

What are the penalties for taking money out of my 401(k) before retirement?

The penalty for taking money out of your 401(k) is an additional 10% tax of what you take out before you reach 59½ years old. There can be exceptions to the penalty, but you should check with the IRS for those exceptions.

How can I know if I am getting a good deal on monthly payments?

The best deal for you would depend on what your budget is and what is affordable. Your payment consists of principal, interest, property taxes, homeowners insurance and may contain private mortgage insurance. Keeping and maintaining a high credit score can give you the best possible payment. It is important to shop around and compare rates to see who will give you a better principal and interest payment. Speak with your local home loan* professional at GECU to get started on the process.        

Equal Housing Opportunity Lender

*All loans subject to credit qualification and approval. The property must be located in the United States, within a 150-mile radius of El Paso County, to include Hudspeth County. Certain fees and conditions apply. Membership-eligibility requirements apply.

Is this a good time to buy a home?           

Home prices in El Paso are extremely affordable, coupled with an extremely low conventional rate environment that could make this a great time to purchase a home. Interest rates vary depending on mortgage products, so it is recommended to speak with your local home loan* professional at GECU. 

Equal Housing Opportunity Lender

*All loans subject to credit qualification and approval. The property must be located in the United States, within a 150-mile radius of El Paso County, to include Hudspeth County. Certain fees and conditions apply. Membership-eligibility requirements apply.

I have seen houses on the market that are “owner finance.” What does that mean?

Owner finance is when the owner of the home is selling and financing the home. There is usually no real estate agent or mortgage lender involved in this type of transaction. The seller will determine the loan payment, term, rate and down payment. If this is an option that you are considering, it is best to get legal counsel to review your contract because there are no real estate agents involved to represent you in this type of transaction.

Can I get approved for a new mortgage if I am still paying my current mortgage because my home has not been sold?

It is possible to get approved while paying for your existing mortgage and applying for a new mortgage. There are certain criteria in reference to your debts and income that you will have to meet to show that you can pay for both mortgages. This may require that you have reserves on hand (additional funds that can support up to six months of payments). Each lender has different requirements when qualifying with multiple mortgages. Speak with your local home loan* professional at GECU.   

Equal Housing Opportunity Lender

*All loans subject to credit qualification and approval. The property must be located in the United States, within a 150-mile radius of El Paso County, to include Hudspeth County. Certain fees and conditions apply. Membership-eligibility requirements apply.

What is an escrow account?

An escrow account is an account that is designed to safely hold your property taxes, homeowners insurance, flood insurance (if any), and private mortgage insurance (if any) until they are ready to be disbursed.     

How much should I plan to pay in closing costs?

Closing costs can range anywhere between 2% and 3% of the loan amount and can be more depending on the lender and loan product. If you can get the seller to contribute toward your closing costs, it can help you come in with less money at closing. Each transaction is different and it is best to consult with your real estate agent.    

What is does it mean to be prequalified? Is this different from being preapproved?

Prequalification means that the creditor has done at least a basic review of your creditworthiness to determine if you are likely to qualify for a loan. Being preapproved means that you’ve actually been approved by a lender for a specific loan amount and the lender has already verified your documented financial information (pay stubs, bank statements, obligations, credit report, etc.).

Would I get a better interest rate with a 15-year loan or a longer term?

Usually, the lower the term, the better the rate and the longer the term, the higher the rate.  Keep in mind that a lower term will come with a higher monthly payment due to you wanting to pay off the loan in a short period. The longer term will come with a lower monthly payment due to the payment being stretched for a longer period.  

Can you explain the difference between a fixed-rate and an adjustable-rate mortgage? What are the benefits of each?

The difference between a fixed-rate and an adjustable-rate mortgage is that for fixed rates the interest rate is set for the term of the loan and will not change. With an adjustable-rate mortgage, the interest rate may go up or down during the term of your loan. One of the benefits of an adjustable-rate mortgage is that they often have lower interest rates. A lower rate means that you might be able to pay more principal for a period of time and rates can go down later.  However, with an adjustable-rate mortgage, rates can go up over time, certain caps cause negative amortization, the monthly payment can fluctuate, and you do not know what your financial situation will be when the rates change. One of the benefits of a fixed-rate mortgage is that the rate will stay the same throughout the life of the loan. The payment is the same each month, which makes it easier to plan your budget. Plus, you do not have to worry about future higher payments as you do with an adjustable-rate mortgage. Each mortgage program is unique and it is recommended to reach out to your local home loan* professionals at GECU to see what will fit your needs.    

Equal Housing Opportunity Lender

*All loans subject to credit qualification and approval. The property must be located in the United States, within a 150-mile radius of El Paso County, to include Hudspeth County. Certain fees and conditions apply. Membership-eligibility requirements apply.

What is the difference between FHA loans and conventional loans?

FHA and conventional loans are available to help facilitate the purchase of a new home. FHA loans are insured by the U.S. Federal Housing Administration and are offered by FHA-approved lenders. Conventional loans are not government-insured and are available through many banks, credit unions and other mortgage lenders.

I know I need to work on my credit. What do you recommend to do before getting a house?

You have several options, including speaking with your local home loan officer to guide you on what you will need to do to help improve your credit, speaking to a financial counselor from a HUD-approved housing counseling agency, or speaking to a credit-repair company. For more information on how to build your credit or what to do before purchasing a home, contact GECU Community Development at 915.774.2160. GECU Community Development offers free seminars on building credit, budgeting, saving, buying a home and more.

WHAT IS CONSIDERED A “GOOD” APY?

A good APY, or Annual Percentage Yield, for a money market account (MMA) is one that lands somewhere between the rates provided on your savings account and those of a Certificate of Deposit (CD). You get a higher return from an MMA than from your savings account and have more flexibility with your money than in a CD. The rates for MMAs will vary depending on what is being offered at the financial institution.

WOULD IT BE MORE WISE TO DEPOSIT MONEY IN A MONEY MARKET ACCOUNT OR CONTRIBUTE TO MY 401K?

A 401k retirement account should be used to fund your future retirement. It is a long-term investment that will grow in value over the years through your contributions, dividends reinvested, economic growth and your company’s contributions. There are restrictions to access this account before retirement, so you should plan to not access this money until you retire.

Money market accounts are similar to a savings account and are good for short- and medium-term savings and liquidity needs. Depending on your financial goals, it is recommended to consult a financial adviser to help make a plan that will help build a savings, wealth and retirement account.

HOW DO MONEY MARKETS WORK? WHERE DO THE HIGHER EARNINGS COME FROM?

MMAs are a hybrid between a savings account and a checking account that allows you to save money in an account with a higher rate. Since the minimum deposit and balance requirements tend to be higher than savings or checking accounts, that larger account balance helps earn higher earnings as it goes through compounding interest at a higher rate. The combination of a higher balance and a higher rate is what provides higher earnings.

ARE THERE ANY RISKS TO MONEY MARKET ACCOUNTS?

A MMA opened at a credit union is usually insured by the National Credit Union Administration (NCUA) and at banks by the Federal Deposit Insurance Corporation (FDIC). Make sure that your credit union or bank is insured before investing into an MMA.

CAN ANYONE OPEN A MONEY MARKET ACCOUNT?

Yes! Anyone that meets a financial institution’s standard account-opening guidelines and has the minimum required amount can open an MMA. To see GECU’s account-opening guidelines and to learn how to become a member, go to gecu.com. Insured by NCUA.

ARE MONEY MARKET ACCOUNTS INSURED?

Yes, MMAs are insured at credit unions by the National Credit Union Administration (NCUA) and at banks by the Federal Deposit Insurance Corporation (FDIC) up to $250,000.

HOW ARE INVESTMENT ACCOUNTS DIFFERENT?

Investment accounts could provide a positive or negative rate of return. To find out which option is best for you, contact the GECU Investment and Trust Services* team to speak with a financial professional.

*Representatives are registered, securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, which is not an affiliate of the credit union. CBSI is under contract with the financial institution to make securities available to members. Trust services available through Members Trust Company, a federal thrift regulated by the Office of the Comptroller of the Currency. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No financial institution guarantee. Not a deposit of any financial institution. CUNA Brokerage Services, Inc., is a registered broker/dealer in all 50 states of the United States of America.

ARE THERE ANY MINIMUM REQUIREMENTS TO GETTING A MONEY MARKET ACCOUNT?

The minimum requirements for opening a MMA is having the minimum opening balance and following the general guidelines for a financial institution when opening a traditional savings and checking account.

HOW WILL I BE ABLE TO ACCESS FUNDS IN A MONEY MARKET ACCOUNT? IS THERE A DEBIT OR ATM CARD?

MMAs generally allow for up to six withdrawals per month through transfers and varying drafts. Some financial institutions offer MMAs with debit card access.

HOW LONG DOES IT TAKE TO SEE GROWTH IN A MONEY MARKET ACCOUNT?

MMAs grow over time as the account balance continues to grow through deposits made and as the MMA goes through compounding interest. In general, account growth is structured through balance (dollar amount), rate and time.

Answers from 05/04

WHAT IS A GOOD PERCENTAGE OF MY INCOME TO PUT INTO SAVINGS?

Every situation is different depending on need, expenses and income. A general rule is that saving 15–20% of your income is helpful. Keep in mind that this percentage includes income directed toward retirement accounts as well. If the goal of putting money into savings is to save for an emergency, then the goal is to reach a set amount first and not necessarily to focus on the percentage. Setting a savings goal of $500–1,000 is a great starting point. Then, transition into a second savings goal, such as saving one month of expenses, and then increase it to a third goal of saving three months of expenses. You can continuously expand the goal to reach 6–9 months of expenses and eventually have a full emergency fund.

WHAT’S THE BEST WAY TO APPROACH PAYING DOWN DEBT?

Make a list of all the debt that you have. By making a list, it will make it easier to manage when you see all of it. Look into the loan with the highest interest rate and work yourself down the list by paying the loan with the higher interest rate first.You can also make it easier by paying off the loan with the lowest balance to highest balance.Determine which installment or revolving loan you want to target. Then, make minimal payments on the ones that you are not targeting. Once paid off, continue to the next debt and add the payment from the previous debt to the next one.

WHEN AND HOW SHOULD I GET STARTED ON SAVING FOR MY CHILDREN’S EDUCATION?

If sending a child to post-secondary school is a family goal, saving money as soon as possible is helpful. Tuition costs continue to rise and though financial aid might be an option for some, it will be helpful to save for the future. Look up the annual cost of tuition (room and board if it’s outside of the city), so that you can have an idea of how much you will need to save. If saving for the full amount of a four-year degree is too much, a good goal is to save for 1–1.5 years of that tuition. Knowing how long you have until you need to access the funds can help you select a high-yield account where you can save for this goal by opening a savings account, a certificate of deposit or a 529 plan.*

*Certain tax implications and contribution limitations apply to 529 accounts. Consult your tax advisor for details

WHAT’S MORE IMPORTANT, PAYING OFF CREDIT CARDS OR PUTTING MONEY INTO SAVINGS?

With the average interest rate of credit cards being close to 20%, it’s important to pay off credit cards after a $500–1,000 emergency fund has been established. Once the emergency fund goal has been reached, you should set a goal of clearing high-interest credit cards. Once the credit card debt has been cleared, that income can help you build other saving goals. By paying down credit cards, you will likely see an increase in your credit score.

WHAT IS THE BEST WAY TO PROTECT MY FAMILY’S RAINY-DAY FUND?

The best way to protect the family’s rainy-day fund is to make sure that the account holding the funds is federally insured, has guaranteed returns, that the money is readily accessible, and that the account is not tied into a primary expense account (checking account) to avoid the temptation of using the funds as an overdraft option. Also, make sure that the account does not have monthly fees attached to it. Otherwise, the fees might offset the account gains. You should also set up an automatic deposit to help the account grow.

HOW DO I IMPROVE MY CREDIT SCORE?

The best way to improve your credit score is to make your payments on time all the time. You can improve credit by using the snowball effect or avalanche effect for paying off debt by paying more than the minimum. You may also work on it by consolidating debt into one through a consolidation loan. A helpful tip that may also help improve your credit score is to limit your credit card use to less than 30% of the limit. Also, limit the amount of times you or a lender requests to check your credit score. This can lead to your credit score going down.

Answers from 4/15
IS NOW A GOOD OR A BAD TIME TO BUY A HOME?

Depending on the consumer’s current situation, whether it is a good time or not will vary. With rates being at an all-time low, now is a great time to buy for consumers with the stability to purchase or refinance. For consumers who have lost their job or have had hours cut due to COVID-19, it might not be the right time currently and they might want to wait until their employment stabilizes. Consumers who do not feel comfortable to purchase now will still be able to find the right loan product when they are ready. Everyone’s situation is different and it is recommended to speak to GECU Community Development by calling 774.2160.

ARE INTEREST RATES FOR HOME LOANS LOW RIGHT NOW?

Interest rates vary from product to product, especially as we are in a fluid interest environment.   

WHEN IS IT A GOOD TIME TO REFINANCE YOUR HOME?

Depending on the product that you are looking for, now could be the perfect time to refinance.  Conventional interest rates are at an all-time low. But there are several factors to consider such as how long you have owned your home, how much equity you have and how refinancing will benefit your financial situation. In many cases, a refinance can help lower the rate, lower the payment or lower the term.

WHAT IS A REVERSE MORTGAGE?

A reverse mortgage loan is available for homeowners who are 62 years old or older and have considerable amount of equity in their primary homestead. A reverse mortgage allows the homeowner to borrow against the value of their home and have the option of receive the funds in a lump sum, fixed monthly payments, or through a line of credit depending on the lender. The loan becomes due and payable when the borrower passes away, permanently moves out of the home or sells the home. Reverse mortgages may benefit certain consumers, depending on their current needs. If you are considering this option, consult your financial adviser before taking this route.   

CAN I USE A HOME EQUITY LOAN TO PAY OFF A HIGH CREDIT CARD BALANCE? WHAT WOULD BE THE REPERCUSSIONS?

A home equity loan is a good option to pay off high-interest-rate credit cards and any other debt with high monthly payments. This helps pay off accounts that would otherwise take years to pay off if only the minimum payment were to be made. Home equities tend to have higher rates than traditional mortgages but home equity rates tend to be lower than credit card rates. With a home equity loan, the home is collateral so if payments are not made, the home can go into foreclosure.  

HOW MUCH MONEY DO I NEED TO PUT DOWN TO BUY A HOME?

There are many options for a consumer when it comes to a down payment. The biggest determining factor is the buyer’s credit score and loan program. There are down-payment assistance programs which help with a percent or all of the down payment. Down-payment assistance may be a good option for some but may not benefit others. The down payment requirement ranges from zero to 20%, depending on the product.     

WHAT CREDIT SCORE DO I NEED TO HAVE TO QUALIFY FOR A HOME LOAN?

The higher your credit score, the more likely you will be offered a lower interest rate. Each lender has a different credit score requirement. Many lenders have programs that accept credit scores as low as 580. Some lenders may accept even lower scores. To find what credit score you need, contact your local mortgage lenders like GECU Mortgage* to guide you through your options. *GECU is an Equal Housing Opportunity Lender. All loans subject to credit qualification and approval. The property must be located in the United States, within a 150-mile radius of El Paso County, to include Hudspeth County. Certain fees and conditions apply. Membership-eligibility requirements apply.

IF I GO INTO FORBEARANCE ON MY MORTGAGE, WILL IT HURT MY CREDIT RATING?

During forbearance, credit bureau reporting is turned off to prevent damage to the credit score.  

WHEN WILL I HAVE TO START PAYING MY MORTGAGE AGAIN IF I GO INTO FORBEARANCE? 

This will vary on a case-by-case basis. The forbearance being offered by Fannie Mae and Freddie Mac is for a 12-month period. We ask for members to make half of the payments for one to six months if they need it and have the remaining six months to make up the missed payments. We also remind our members that escrow needs to be made up by November of this year for it not to increase their payments for the following year.

WILL MY MORTGAGE LOAN AUTOMATICALLY DEFAULT INTO FORBEARANCE IF I DON’T MAKE MY PAYMENT THIS MONTH?

No, you will need to contact your mortgage lender and provide the documentation needed for the forbearance.

WHAT IS THE BEST WAY TO SAVE FOR COLLEGE FOR MY KIDS?

The best way to save for college is to have a plan and commit to it. The sooner you start your plan to save money, the better position you will be in once you need those funds. Consider looking into a 529 plan that will have tax benefits for you. Speak to a financial adviser to help you decide what is the best route.

IS IT WISE TO PULL MONEY OUT OF 401K PROGRAMS CONSIDERING THE EFFECT COVID-19 HAS HAD ON THE STOCK MARKET?

Everyone’s situation is different and it is important to take your risk tolerance and time horizon into consideration. General advice is to have a well-diversified portfolio and stick to it. During market downturns, emotions kick in and most people are tempted to get out of the market. This causes a permanent loss and takes away the opportunity of you missing out on market upturns that help get your portfolio at where it was before this pandemic. There have been many downturns in the economy over our lifetime and the market continues to recover and grow. Be diversified in your holdings and don’t chase the latest trend in investing. 

IS THERE A WAY TO INCREASE YOUR SAVINGS WHEN THEY ARE IN THE BANK?

Yes. There are many options available to you and different investment vehicles that can help increase your savings. It is important that you speak to a financial professional to discuss your specific situation and all options that are available to you.

SEVERAL EXPERTS THROUGHOUT DIFFERENT NATIONAL NEWS OUTLETS ARE EXPECTING A RECESSION IN THE COMING WEEKS/MONTHS. SHOULD I EMPTY ALL OF MY SAVINGS AND CHECKING ACCOUNTS FROM MY BANK? 

No, don’t panic. Make sure your credit union or bank is financially strong and stable. Most credit unions and banks are FDIC or NCUA guaranteed.