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As more banks consolidate and try to lure new customers with “special” checking accounts, be sure to choose one that meets your specific needs.
While the bank may offer you a new toaster, television or vacation, take time to study the various checking accounts to find one that matches your monthly banking habits. Many people pay extra fees each year because they choose the wrong checking account.
Before choosing a specific checking account, take into consideration how many checks you write each month, whether you want to maintain a minimum balance, occasionally “bounce” checks or prefer online or telephone banking.
Let’s review some of the checking accounts offered by most banks.
Basic Checking Account
This account is used primarily to pay bills and some account holders use a debit card to pay daily expenses. This account usually requires a minimum balance in order to avoid a monthly service charge and doesn’t generally pay interest to the account holder.
Free Checking Account
Generally there is not a monthly service charge or any per-item fees. However, there are likely to be fees for overdrafts and stop payment orders. You do not have to maintain a minimum monthly balance.
Interest-Bearing Account
This account usually requires a higher balance to avoid a monthly service charge and other fees. Although these accounts do pay monthly interest, it is funds usually at a very low rate and not worth having to maintain a minimum balance.
Joint Checking Account
With this type of account, two or more people share the account and each person has equal access to the account. However, in order to avoid overdrafts, each person needs to be careful to maintain accurate records.
Express Checking Account
This account is geared to the student or younger customer who does not want to pay monthly fees or spend a lot of time balancing their checkbooks. This account is designed for the customer who prefers telephone or online banking.
Lifeline Checking Account
With this account, individuals with low incomes can write a limited number of checks each month. It requires a low minimum balance.
Senior/Student Checking Accounts
Many banks offer these types of accounts to students or individuals over 55 years of age. The account may include free checks and free ATM use. Many of these types of accounts also limit the number of checks you can write each month.
Consider your financial situation and then visit with your local community banker to find out which account is right for you.
Provided as a public service by the members of the Nebraska Independent Community Bankers.
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In today’s world, you can purchase your entire Christmas gift list online, pay your child’s college tuition online and balance your checkbook online, along with a myriad of other tasks. But with this convenience comes threats to your personal and financial safety from hackers, viruses and spies!
The good news is that routine maintenance of your computer can save you a lot of headache and worry from “uninvited“ guests.
What is Spyware?
Spyware is software that monitors your computer and tracks your actions and Internet use. Spyware sends your personal information, such as buying habits, to a third party without your permission. This third party will often use this data to send you unsolicited targeted advertisements.
If you have ever downloaded a free game, software or media players, you probably are infected with a marketing type of software. While most spyware is not dangerous, you may receive a barrage of unwanted e-mails and pop-up ads.
There are some actual spyware surveillance tools that allow a user to monitor all types of computer activity, including snapshots and e-mail chatrooms. These types of tools are often used by parents to monitor their children’s computer activity or businesses to monitor their employees’ computer use.
Here are some warning signs from the Federal Trade Commission which may indicate that spyware has been installed on your computer without your knowledge:
- A barrage of pop-up ads
- A browser that takes you to other sites other than those you type in the address box
- A sudden or repeated change in your computer’s Internet home page
- New and unexpected toolbars
- New and unexpected icons on the system tray at the bottom of the computer screen
- Keys that don’t work. For example, the “Tab” key might not work when you try to move to the next field in a Web form.
- Random error messages
- Sluggish performance when opening programs or saving files.
Make sure your computer is a valuable tool and not an open portal to your personal information by following the advice of experts to lower the risk of spyware:
- Update your operating system and Web browser software
- Download free software only from sites you know and trust
- Don’t install any software without knowing exactly what it is
- Don’t click on any links within pop-up windows
- Purchase virus and spyware protection software to keep uninvited users from accessing your computer.
Provided as a public service by the members of the Nebraska Independent Community Bankers.
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Now that we find ourselves in an Internet-driven world, we are constantly flooded with e-mails. While e-mail makes it easy to conduct personal and corporate business, it also makes us easy prey for e-mail scammers.
For example, suppose you receive an e-mail from your bank or your credit card company saying that your bank card or credit card has been used to purchase some merchandise and the company wants to make sure you actually ordered the merchandise. The e-mail may ask you to enter personal information such as your name, address, social security number, checking or credit card account number so they can verify this information against the information they have on file. When you click “Send,” you’ve just played into the hands of a scam artist who will use your personal information to steal your identity.
Remember, a bank or credit card company will never ask for your account information through an e-mail. As with traditional mail or telephone solicitations, do not give out your credit card information unless you initiate the transaction or unless you are sure the website is a secure website.
Here are some of the top e-mail scams as identified by the Federal Trade Commission. Also listed is some advice from your local community banker on how to handle these scams.
“Purchase this kit and you can receive cable television transmission without paying any subscription fee.” Aside from being illegal to steal service from a cable company, you will probably find that after you assemble the kit, it doesn’t work.
Advice: Click Delete.
“Work from home. No selling. No meetings. Let someone else do all of the work while you sit back and earn up to $1,000 per day.” The e-mail will give you a number to call. You’ll probably reach a voice mail instructing you to leave your name and phone number and then someone will call you back with the sales pitch. This is probably an illegal pyramid scheme.
Advice: Click Delete.
The e-mail asks you to send $5-$10 to four or five names on a list. Replace one of the names with your own and forward the revised bulk e-mail. If you fall for this scam, you may as well throw $5 or $10 in your trash can and be done with it.
Advice: Click Delete.
On any given day, you probably receive at least one or two or more e-mails that offer pills and other herbal gimmicks to transform your body into a petite size 6 and grow a full head of hair on your balding head. Beware of terms such as “scientific breakthrough,” “miraculous cure,” and “secret formula.”
Advice: Click Delete.
“Congratulations! You’ve been selected to receive a fabulous Carribean Cruise.” If you click on this one, your “ship” will probably be similar to a small fishing boat and your luxury accommodations may be a grass hut. Don’t worry. For several hundred dollars, you can upgrade.
Advice: Click Delete.
What’s the best way to keep the e-mail scammers at bay? Click Delete!
Provided as a public service by the members of the Nebraska Independent Community Bankers.
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It's summertime and the kids are out of school spending money as fast as you can earn it. Maybe this is a good time to sit down with your children to talk about the three stages of money: Earning, Saving and Spending. You may not need to spend a lot of time on the last stage as they have probably already mastered it.
Earning Money
Your teenagers may already work to earn their money, and your younger children may earn an allowance by doing chores around the house. Earning money provides them a sense of accomplishment.
Saving Money
After earning money, your children should learn to save some money from every paycheck or allowance. Introduce your child to your local community banker and encourage them to open a savings account.
Teach your child the importance of goal-setting when handling money. It is often easier to save money if you have a long-term goal, whether it be for a new toy, a new car or saving money for college.
Spending Money
While your children may know how to spend money, they probably need some guidance on spending their money wisely.
Teach your children the importance of spending their money wisely and encourage them to keep receipts for all of their purchases throughout the month. At the end of the month, sit down with them and review the receipts and let them decide if they made wise decisions in spending their money. They won't always make wise decisions, but like adults, they will learn from their mistakes.
Whether it is parents feeling guilty because they spend so much of their time at work, or whether they are trying to ensure their children's status among peers, parents are doling out money more freely than ever.
Additionally, companies have started catering to their biggest market-teenagers. A recent report by Equifax showed that American teens spent $179 billion in 2002. Additionally, nine percent of young adults between 18-23 years of age are delinquent on their credit card balances.
Make financial education a priority in your family. Some parents prefer that their teens carry a credit or debit card instead of cash. Before entrusting your teen with one of these cards, make sure they understand how to use the card wisely. They need to understand surcharge fees, the importance of paying their credit card bill on time, paying as much as possible on their account to minimize interest fees and protecting their card from thieves. It is advisable to put a low credit limit on the card so that they will not fall too deeply into debt.
The FDIC has an interactive computer-based financial education program. It is free, easy-to-use and is available in both English and Spanish translations. This program enables both children and teens to have a "virtual" experience with a bank. To access the web version of Money Smart®, go to www.fdic.gov/consumers/consumer/moneysmart/mscbi/mscbi.html.
When talking with your children about money, be sure to include them in the discussion rather than turning the discussion into a lecture. Most importantly, let your children feel secure in knowing they can always come to you for financial advice and guidance.
Provided as a public service by the members of the Nebraska Independent Community Bankers.
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Before making a major purchase such as a home or automobile, there are two reports you should check-your credit report and your credit score.
While most US consumers are familiar with their credit report, some consumers may not be as familiar with their credit score, also known as their FICO score.
Your credit score includes information about your past credit history, bill paying, number of credit accounts and outstanding debt. These factors are then compiled into a statistical system that creditors use to determine your credit worthiness. This system awards points for each factor and helps predict how likely you are to repay a debt. The points are added to create your credit score.
Credit scoring models are complex, but cannot include certain characteristics like race, sex, national origin, religion, or marital status. While age can be a factor, a scoring system must give equal treatment to elderly applicants. Your credit score may also include information from a credit application such as occupation, length of employment and whether you own or rent your home.
Credit scores range from 300-850 with higher scores going to those individuals who are considered better credit risks. The national median credit score is 723. If your score is less than 620, obtaining loans and new credit may prove difficult.
To improve your credit score, consider the following:
- Pay your bills on time. Payment history makes up 35-percent of your total credit score. Late payments will negatively impact your score.
- To avoid worrying about late payments, you might consider choosing direct debit from your checking account to pay mortgage, auto, utilities and other monthly bills.
- Pay down your debts and try not to add new charges to your credit cards. The more debt you pay off, the better your credit score.
- If you intend to make a major purchase within the next year, start paying off your debt now.
- While too much credit can negatively impact your credit score, too little credit can have the same impact. You want enough credit history to prove that you are a responsible credit risk.
Don't worry about those dozens of credit card offers you receive in the mail each month. While they are very annoying, they will not hurt your credit score, unless you apply for all of them and incur new debt.
It is a good idea to review your credit report at least once a year. By September 1, all US consumers can obtain one free credit report each year. To order your free annual report, click on www.annualcreditreport.com or call 1.877.322.8228. You will need to provide your name, address, Social Security number and date of birth. A word of caution. If you receive an e-mail or pop-up ad claiming it's from www.annualcreditreport.com or any of the three nationwide consumer reporting companies or if you receive a phone call offering you a free credit report, do not respond. It is probably a scam. Make sure you initiate the contact.
You will still have to pay for your credit score and the standard report will cost $14.95. To order your credit score, log on to www.myfico.com.
Provided as a public service by the members of the Nebraska Independent Community Bankers.
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According to the latest census data, more than half of the country's 105 million households have computers. Everyone from the four-year-old to the 88-year old grandma uses the computer. And, for those people who do not have a computer at home, they have access to one through the office, school or the library.
While computer technology has made our lives easier and provided us with educational and entertainment resources, it has become increasingly important for parents to monitor the websites and "chat rooms" that their children visit online. Keep in mind that anyone in the world can publish material on the web, and much of it is not appropriate for young children or teens - or adults, for that matter!
While some Internet service provider and online services allow parents to limit access to certain parts of the Internet, it is ultimately the parent's responsibility to monitor their children's online activity. In the case of younger children, parents should not allow the Internet to become a babysitting service. And, if your teen spends hour after hour online, that could signal potential problems. Parents should be aware of the websites their children and teens are accessing.
While young children should never be allowed to log on to a "chat room" or bulletin board, parents should visit with their teens and set reasonable guidelines and expectations concerning "chat rooms," since it is primarily teens who are more likely to be the victims of child predators surfing the Internet.
Here are some tips to help guide your teenager through the risks and dangers of the cyberspace highway:
- Discuss with your teens guidelines for computer usage such as the amount of time they can be online and the appropriate websites sites they may visit.
- Encourage your teen to tell you if they receive obscene, harassing or suggestive e-mails and when you become aware of such messages, report them to the National Center for Missing and Exploited Children's CyberTipline at 800-843-5678 or via the Internet at www.missingkids.com/cybertip.
- Tell your teen to never send a photograph through an e-mail without checking with a parent first.
- Tell your teen to refrain from giving out identifying information such as name, home address, telephone number or school address in a "chat room."
- Never allow your teen to arrange or a face-to-face meeting with another computer user without your permission. If you decide the meeting should take place, be sure to accompany your teen and hold the meeting in a public place. You need to know as much about your child's online friends as you know about their other friends, including their parents.
By knowing the dangers of the Internet, you can take advantage of the positive aspects, minimize the negatives, and make the cyberspace age an enjoyable experience for your family.
Provided as a public service by the members of the Nebraska Independent Community Bankers.
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There was a time when the only cards in your wallet were a couple of credit cards and your driver’s license.
Now you may find a Barnes and Noble gift card, a Blockbuster gift card, a health benefits debit card and a host of other “stored value cards.” According to a report issued by the Federal Reserve Bank of New York, over $72 billion stored value card transactions are expected by 2006. While stored value cards may make the consumer’s life easier and more efficient, you need to be aware of the features, fees, consumer protections and other conditions of the cards.
Gift Cards
While some may think giving a gift card to someone is taking the lazy way out, it allows the recipients to choose a gift they really want or need and may save them the trouble of taking a gift back to the store and waiting in the exchange line. But remember, different gift cards have different terms and conditions that both the purchaser and recipient should be aware.
- Make sure you know whether you pay a service or maintenance fee upfront or will the fee be deducted from the balance on the card?
- Is there a transaction fee or an inactivity fee?
- Is there a toll-free number to call for inquiries or problems with the card?
- Is there a replacement fee if the card is lost or stolen? Be sure to keep your receipt for the gift card and write down the card number in case the gift recipient needs to replace the card.
- Is there an expiration date on the card? If it expires, you may not be able to use the remaining balance and it would revert to the company who sold the card to you.
- Can you use the card at all locations?
Payroll Cards
Today, almost 60 percent of Americans receive their paychecks through direct deposit. However, many employees who do not have a traditional bank account cannot use direct deposit. Many companies are turning to payroll cards.
A payroll card allows the employee to access the funds from their payroll by using the card to make purchases or ATM withdrawals.
When using a payroll card, make sure you consider the following conditions:
- Is the payroll card issuer financially sound?
- Do you receive the same consumer protections with a payroll card as you would with a traditional bank account should your funds be stolen?
- Are there limitations on where you can use the card?
- Do you receive free ATM withdrawals and if not, how much is the fee?
- Can you receive information about the card, including customer service, in a primary language other than English?
As we move more and more to a technology-driven economy, use of stored value cards will become increasingly prevalent. Just be sure you know the terms and conditions before you start swiping your card.
Provided as a public service by the members of the Nebraska Independent Community Bankers.
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Don't get hooked by Internet scammers trying to find out your personal and financial information.
In the latest Internet scam, "phishers" send an e-mail or pop-up message that claims to be from a business or organization, such as your bank or federal agency. The message may tell you that you need to update your account information. You are then directed to a website that looks like a legitimate site, but it isn't. The only purpose of this site is to trick you into divulging your personal information. The "phishers" then use your personal information to steal your identity to run up bills in your name or commit other crimes.
These "phishing" scams can be carried out over the Internet or over the phone.
For example, you might open your e-mail one morning and find a message from your bank telling you that your account is overdrawn from a check that you didn't write. The message will urge you to take immediate action and will direct you to a website that looks like the website of your bank. They may even provide a phone number for you to call. When you call, the person on the other end of the line will tell you that he or she will take care of the matter while you're on the phone and then will ask for your social security number, bank account number and other personal information. Remember, if it is really your bank, they already have the information and you don't need to provide it again. By giving this information out, you have allowed these con artists access to your finanical information to use to commit identity theft.
If you get this type of message, do not respond by e-mail or call the number that is listed. Take a few minutes to look in the phone book for the correct phone number or check your past statements for a phone number and call your bank, credit card company or federal agency to see if there is really a problem.
A new emerging scam is called "pharming," whereby spyware is unknowingly installed on your computer. When you type in a legitimate URL (Universal Resource Locater) in your browser's address bar, a redirection scheme takes you to a fake website without you even knowing it.
The Federal Trade Commission suggests the following tips to help you avoid "phishing" and "pharming" scams:
- If you get an e-mail or pop-up message that asks for personal or financial information, do not reply or click on the link. Legitimate companies do not ask for this information via e-mail.
- If you initiate a transaction and want to provide personal or financial information, make sure the organization or business has a secure website.
- Use anti-virus software and keep it up-to-date. Anti-virus software and a firewall can protect your computer from accepting unwanted files.
- Report suspicious activity to the Federal Trade Commission. If you get spam (unwanted junk mail) that is "phishing" for information, forward it to spam@uce.gov. If you believe you've been scammed, file your complaint at www.ftc.gov.
Provided as a public service by the members of the Nebraska Independent Community Bankers.
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Recent legislation makes Health Savings Accounts (HSAs) available to many consumers.
What is an HSA? An alternative to traditional health insurance, an HSA is a tax-sheltered savings account, similar to an IRA, but earmarked for medical expenses.
Many people already have a Medical Savings Account (MSA) through their employer, but with this new legislation, you can set up your own HSA through your bank to pay for current and future qualified medical and retiree health expenses on a tax-free basis. However, you can't have both.
With an HSA, you would take the money currently spent on a high-cost traditional health plan and put part of the money toward a lower-cost high deductible policy and deposit the rest of the balance into a tax-deductible HSA. The biggest advantage of an HSA is that you may withdraw funds to pay for qualified medical expenses for yourself, your spouse and dependents without a penalty.
Funds from the savings account will be used to help pay smaller covered medical expenses until the deductible is met. Then, should the need arise, the high deductible insurance policy will take care of medical expenses exceeding the deductible. However, you must first meet all of your deductible before other insurance payments start.
In order to qualify for an HSA, you must first have a high deductible insurance policy. Your minimum deductible must be at least $1,000 for an individual and $2,000 for family coverage. The annual out-of-pocket costs, including deductibles and co-pays, cannot exceed $5,100 for an individual and $10,200 per family.
You can use funds in the HSA to pay for qualified medical expenses such as dental and vision care, and long-term care premiums. You cannot use the HSA to pay for cosmetic procedures, such as cosmetic dentistry.
You can also use HSA funds to pay for over-the counter medicines not covered by your regular insurance policy.
If you are enrolled in Medicare, Medicaid or Tricare, you are not eligible for an HSA. You are eligible if you qualify for VA benefits and have not used your VA benefits and services in the past three months.
With an HSA, the account holder has control over all decisions affecting the investment of funds. Or, you can also choose not to invest funds. The unused balance in an HSA automatically rolls over year after year. You won't lose your money if you don't spend it all in one year.
After you turn 65, you can continue to use the account tax-free for out-of-pocket health expenses. If you enroll in Medicare, you can use the account to pay Medicare premiums, deductibles, co-pays and coinsurance under any part of Medicare. If you have retiree health benefits through your former employer, you can use your account to pay for your share of retiree medical insurance premiums. The only expense you cannot use your account for is to purchase Medicare supplemental insurance. Once you reach 65, you can also use your account to pay for other expenses, not related to health. However, the amount withdrawn will be taxable as income, but not subject to other penalties.
Be sure to keep all receipts in the event of an audit and remember it is your responsibility to keep track of the amounts deposited and spent from your account, just like a regular checking or savings account.
HSAs may not be the right solution for all employers or individuals. Contact your local community banker or e-mail questions to HSAinfo@do.treas.gov. to see if an HSA is right for you.
Provided as a public service by the members of the Nebraska Independent Community Bankers.
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