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Buying a Used Car Part Two: Loans and Negotiation

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If you missed part one of our guide to buying a used car, take a moment to click here and check it out.  We covered choosing the right car, understanding the value of the vehicle and many aspects of the process up to the point you sit down with the person from whom you’ll make a purchase.

Question:  Do I really have to negotiate?  It’s such a terrible experience and I feel so intimidated. 

Negotiating a car sale isn’t most people’s cup of tea.  If you’re buying from a dealer, it means sitting down with someone who may have more experience than you do, particularly with car sales.  It doesn’t have to be an intimidating process, though.  You have all the power in the transaction:  you can buy a car from the first person or the 10th, while the salesperson needs to make every sale he or she can. 

Question:  How can I make the negotiation go smoothly?

Know your price – The Internet is a fantastic resource.  Once upon a time, the salesperson knew more than the customer about car prices, and that was particularly true of used cars.  Now, you can determine the price you’re willing to pay before you ever walk in, and refuse to pay one cent more than that.  If you want, you can even email back and forth between multiple salespeople, letting them bid against each other.   

Don’t say too much – There’s very little you can say to make a negotiation go better, but there’s a lot you can say to make it go worse.  You’re not going to cause the other person to have a sudden change of heart and cut you a better deal, but you might give the clues they need to know they can hold out for more money.  If in doubt, don’t say anything.  It can be difficult, particularly when the silence is awkward and tense, but saying nothing is often the right thing to do.

Walk away – It’s an old saw in sales: “He or she who can walk away controls the deal,” and it’s been passed down from bullpen to bullpen because it’s true.  If you aren’t willing to walk away and leave the salesperson without a sale, then what incentive does he or she have for lowering the price?  It feels terrible to spend an entire Saturday on car lots and still wake up on Sunday without a car, but you need to get over it.  When you go out to buy a car, make a resolution to wait a week before you buy.  That will make it easier to walk away and give you time to make sure you’re certain of your purchase.  If you wait, you might even get a phone call during the week with a better price, particularly if it’s near the end of the month or if it’s been raining.  Is it worth a few day’s wait and another day’s work to save a few hundred dollars?  In most cases, it is. 

Question:  Should I finance the car at the dealer? 

One of the keys to negotiating a car deal, whether at the dealership or from a private seller, is securing the best financing available.  After all, even one percent difference in your interest rate can be worth hundreds, or even thousands, of dollars over the life of the loan. 

Get your financing first – The best way to get the best rate is to borrow from your credit union.  Our auto loans have fantastic rates, and we’re not trying to sneak in any hidden charges or fees.  If you come to us first, you can make a clear plan for how much you can spend, so you’re not surprised when that first payment is due.  We can also tell you how much you’ll need as a down payment, and we might even have some good tips on who you can trust in town.  You can start the pre-approval process online. 

Hopefully, if you’re planning on buying a used car, you’ll save money and get a vehicle that will make you happy for years to come.  If not, feel free to trade your vehicle in and start the guide over from the beginning. And remember, you’re always welcome to talk with your partners at Destinations Credit Union for more information and guidance to make your car buying experience as enjoyable as possible.

Nightmare On Your Street – Finances And Horror Movies

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As Halloween gets closer and you want to avoid the chilly darkness of October evenings, grab a blanket and stream a marathon of scary movies. Horror flicks are classic fun, whether they’re good enough to keep you up all night when you’re home alone or bad enough to laugh at while with a group of friends because we all know what’s going to happen next. The classics follow a simple formula, but it works. 

The same is true when it comes to your finances. Spend less than you earn, pay off debt and invest your money with trustworthy people.  Still, we have trouble getting all of the complex parts of our financial lives sorted out.  Let’s try applying the scary movie formula to your finances so you’ll never have that heart-racing moment of panic when you check your balances again. 

The scary cat.  In the first 15 minutes of all the classic horror movies, our protagonist gets startled by a cat. It’s a silly little trope that keeps coming up, but screenwriters use it because viewers tend to get bored without a scare in the first few minutes. Bringing out the monster too early can kill the suspense, so it’s an easy-to-insert moment to keep viewers on edge.  Watching scary movies in my household, I can tell you that it works: That stupid cat has caused my heart to race faster than any workout I’ve done.

Are you jumping from the cat?  Does every market hiccup cause you to change strategies?  Are you yanking money out of savings to throw at the stock market (or vice versa) every year?  It’s time to get past that initial scare.  The market isn’t going to kill you overnight, just like it won’t make you rich overnight (Black Tuesday 1929 and Google’s record-breaking July 15th notwithstanding). 

If you want to develop a plan with which you can feel safe during the scary cat moments, give us a call at 410-663-2500. If you want to do it yourself, we can get you into a safe plan for saving with a high yield account or certificate in just a few minutes, which can help balance the risk of your other investments.  If you’re trying to build a safer safety net for retirement or college savings, we’ve probably got more savings options than you’ve ever heard of, many of which have major tax benefits. We can walk you through a few plans, help you pick the one that’s right for you, and in many cases, we can even set it up with automatic deposits so you don’t have to think about it again.

The victim who runs upstairs when she should run out the door. Why?  Why?  Why are you running upstairs, you silly soon-to-be victim?  Of all the silly horror movie clichés, this is the one that drives me bonkers.  We always get a few establishing shots of the house early in the movie, which shows us that this house is enormous enough for a final-reel chase scene with the killer.  No one needs this much house. It’s usually a teenage girl with a single parent (who is not at home) in a house big enough to hold the entire football team of her late boyfriend.

Do you have too much house?  Are you cleaning extra bedrooms you don’t use? Do you have a home gym, office, or library that you never visit?  Maybe it’s time to simplify.  You can sell that house and move into something a little sleeker, and use your windfall to put in all of the custom features you’ve ever wanted on that new house.  Which would you rather pay for:  the storage room that’s basically a walk-in junk drawer or a dressing room with a walk-in closet?  Give us a call to find out how we can help you. 

The killer who just won’t die.  In every great horror movie, there’s a killer with an uncanny ability to survive anything the protagonists throw his or her way.  In your finances, sometimes large debts can feel that way.  No matter how fast you run, they just keep coming, like Michael Myers chasing Jamie Lee Curtis through two decades of Halloween movies.  You throw cash at the balance every month, but nothing happens.  What can you do?

If you want to kill a scary movie monster, you can’t do anything that the protagonist does in a scary movie.  After all, the scary movie wants to make a sequel, but that’s the last thing you want out of your debt. Instead, let’s adapt a strategy from the Terminator:  Even an unkillable robot from the future can’t stand up to a vat of molten steel. You need to submerge your debts in one large vat that can consume them all: Turn all of your high-interest, variable-rate, hidden-fee credit card debts into one simple, low-interest, fixed-rate homeequity or debt consolidation loan with all of the transparency and confidence you’ve come to expect from Destinations Credit Union.  The first step is calling a Loan Officer to discuss your goals. Through our partnership with Accel, you can also get free unlimited financial counseling to develop a plan. 

Hopefully, your finances aren’t a horror movie.  Horror movies play on our fears for entertainment, but it’s not as fun in real life.  If they are, though, it’s better to call in some help than it is to split up and try to explore the woods alone. That’s why we’re here.  With a little help, your money can look more like a swords-and-sorcery epic:  Everyone’s a hero and everyone gets a happy ending.

Buying A Used Car, Part One: Finding The Car

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You’ve probably heard that a car is the second-largest purchase the typical American makes after their home, but that’s not really true.  It might seem like it, since the median home price in the US was just under $190,000 last year, while a new Honda Civic starts at about one-tenth as much.  When you look a little deeper, though, you’ll probably only ever own one home at a time, and when you sell it, you’ll get your money back. You might even make a profit on the sale.
With a car, though, the life expectancy is just under a decade, it has limited resale value, and many families own several automobiles. Because of facts like these, the actual cost of car ownership over a lifetime can be staggering. More specifically, you can still expect to spend a minimum of $120,000 (in 2015 U.S. dollars) per driver over the course of a lifetime. That number goes up if you trade in your cars in less than nine years or if you drive a vehicle that’s nicer than an entry-level coupe.  A two-car family who drives a new pickup truck and minivan and trades in every five years can expect to spend roughly three-quarters of a million dollars on their cars in their lifetimes.
So why do we assemble a team of professionals to buy a house and then spend weeks or months agonizing over our decision, but dedicate little more than a Saturday afternoon to buying a car?  This guide is meant to help bridge the gap between the seriousness with which we tend to take home buying and car buying.  It’s meant to make an important financial decision easier, but it is just a simple guide.  When you’re done, be sure to talk to Destinations Credit Union before you head to the dealership.  We can get your loan secured, walk you through the buying process and make sure you walk onto the lot ready to hold your own with whatever slick salesperson greets you. 
Question:  Why am I buying a used car? 
Answer:  Maybe you’re not.  Some people only want to buy new cars. New cars have time left on their warranties, can be customized to exact specifications of the buyer and help reduce uncertainty.  If those are important to you, you might be willing to spend the extra money to buy a new car.  Grab a copy of Consumer Reports’ 2016 car buying guide, or pay the $6.95 for a one-month subscription. Consumer Reports is generally fantastic and its car guide is still better than anything you’re going to find online for free.
Buying a used car is a much better value for most people, however.  Few products lose their value faster than a car, whose value plummets the minute it’s driven off the lot.  Maybe buying dinner at a fancy restaurant loses its resale value more quickly than a new car, but little else does. Buying a one- or two-year-old vehicle can save thousands of dollars off the sticker price of a vehicle, but even buying a used version of this year’s model can be a windfall, because someone else has paid for the initial depreciation once the vehicle lost its new car smell. 
Question:  How do I know if a used car is in good condition?  I don’t know much about cars. 
Answer:  Even if you know a lot about cars, you should take it to someone who knows as much or more about cars as you do.  You’re not going to be objective, because your bias toward a car you like (or your desire to just be done with test drives) will lead you to overlook flaws that a neutral observer will not. Dealerships will usually let you take a used car to a mechanic you trust, which is your best bet to make sure the car is in good condition. 
Question:  What if I’m not buying from a dealer?  What if I’m buying from a friend or off of Craigslist? 
Answer:  If, for some reason, you can’t take the car to a mechanic – which should make you skeptical – or if you want to find out about a car before you meet up with the seller, ask for a CarFax report.  They cost around $50 and will tell you about all sorts of things you’ll want to know.  Many sellers will foot the cost of the CarFax, because they can still use it for the next potential buyer even if you don’t buy the car. 
Question:  Anything else I can do to protect myself? 
Answer:  No matter if you’re buying from a dealer, a friend, your pastor or the reanimated corpse of Henry Ford himself, you should always take a car for a test drive.  Find a route that simulates your morning commute; don’t just go on the route the dealer wants to take you. Take some left turns.  Accelerate to freeway speeds.  Ride in the back seat for a while.  Make sure you actually like the car before you spend thousands of dollars on it.
There are few feelings worse than writing a sizable check every month for something you resent.  Just ask anyone who’s paying off student loans but not using their degree.
The first part of buying a used car is not the most fun, that’s for sure.  It’s all about research and preparation.  If there’s anything we all hate more than driving around to used car lots, it’s homework.  But this is the best way to make sure you get a car you’re going to love for a long time, which means the more time you put in now; the longer you can wait until you have to do it again.  

In our next installment, we’ll go over the negotiation process, including everything you could want to know about financing.  If you’re planning to buy a car this weekend, the most important thing to know for now is that you’ll want to come see us about our auto loans before you go to the dealership. If you’re looking to research a particular model, our AutoSmart buying service may help. It can save you hundreds or even thousands of dollars to talk to us first.  You can find our rates and apply online here.

Sources: 
http://web.consumerreports.org/cars/v1.html?EXTKEY=SG72C00&gclid=Cj0KEQjwkeiwBRCzmo-wiKL49pEBEiQAhvGKYR5ohiXqwx6y0ifJ4370XmXyp6vp5rCY6KQC3StG2b8aAqCX8P8HAQ http://www.cars.com/go/advice/Story.jsp?section=fin&story=car-loans-how-long&subject=car-loan-tipshttp://www.huffingtonpost.com/2014/03/13/median-home-price-2014_n_4957604.html

http://automobiles.honda.com/civic-sedan/

http://www.chrysler.com/en/town-country/?sid=1037056&KWNM=%252Bprice+%252Btown+%252Bcountry&KWID=43700005857714820&TR=1&channel=paidsearch

http://www.latimes.com/business/autos/la-fi-hy-ihs-automotive-average-age-car-20140609-story.html

http://www.ford.com/trucks/f150/?searchid=199279626|11841765906|17527972|&ef_id=VZinGAAABSKGYTa4:20151011161224:s

Investing In Your Career

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When you think of your investment portfolio, you probably think of stocks, savings and maybe a few other financial products you own or things you’re planning to use for buying a house, fund retirement, or to keep yourself protected.  What you might overlook is the investment you’ve made in your career. You’ve invested time in your career, and if you’re still paying off student loans, you definitely know you’ve spent money on it as well.  Just like any other investment, your career has risk and return.  If you want to get the best return on your investment in your career, then here are a few tips that can help: 

Get a degree.  If you haven’t finished college, you might have found yourself bumping up against a glass ceiling.  You can finish your degree online, often in a short amount of time and without spending a ton of money.  If you’d rather go back to school in person, talk to us about student loan options.  

Get an advanced degree.  It’s no surprise that the average income goes up with each advanced degree that individuals earn.  If you’re looking to advance your career, consider using one of our loansto finance an MBA, which is useful in virtually every field. 
Build your brand.  More and more, career changes and advancement can be built through the Internet and social media.  You can work on building your personal online brand or get training and a certification in all sorts of software and design to help others build their brand, making money in the process.
Learn another language or another culture.  There are very few job skills as portable as language and communication.  If you find yourself out of a job, knowing another language can help you get that next one lined up. Understanding different cultures makes it easy to move if the next job is across the country or even elsewhere in the world.
There are a lot of ways to invest in your future, but the one we tend to overlook is spending money to develop our jobs.  Unless you got in on the ground floor of investing in Google, you’re probably never going to find an investment that pays you more over the course of your life than the one you’ve made in your career. Don’t neglect it.

High Yield Investment Fraud

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Whenever the stock market takes a hit, unscrupulous individuals will try to find a way to use the misfortune of worried investors to make a quick profit.  In light of this year’s problems on Wall Street, it’s no surprise that old scams are coming back, and like all of the classic scams, this one is based on the oldest premise there is:  make a lot of money, really fast, with no work.

High yield investment fraud is most commonly found on the Internet, where it’s much easier to put together a website that appears trustworthy and professional than it is to create the same appearance in person.  Such sites claim to provide amazing returns, sometimes as much as 40 or 50% per month, and are supported by dubious charts and testimonials from people who may not actually exist. Between a quality website, impressive charts, and some meaningless investment buzzwords describing a “magic pill” of an investing philosophy, unwary consumers can be easily fooled into forking over a chunk of their savings to an investment broker who is not licensed by the SEC and makes claims the SEC would call illegal.

The clearest warning signs of these scams are easy to remember, just like avoiding them should be simple to do: don’t trust anyone who offers to-good-to-be-true returns, dismiss cutting-edge investment opportunities if they come from anyone but an investment professional with whom you’ve worked before, and ignore any evidence of success that can’t be verified by an outside party.
Big returns are appealing.  You want to retire someday, send your kids to college, or start a business to get away from the morning commute, and the more money your investments make, the quicker you can do so.  But it’s important to trust the process.  Return on investment is tied to the risk involved in spending money on that investment.  The stock market offers better returns than treasury notes because it’s far riskier to bet on United Airlines than on the United States.  High-yield investment scams are successful because we want to believe that someone can beat the market so well and that we can have returns that are better than the stock market with risks that are lower than treasury bonds.  It just doesn’t happen that way.
At Destinations Credit Union, we believe we’ve created a nice sweet spot with our savings products. No matter what your preferences are, we can fit into your investment portfolio. In times that the market does well, the money you have with us will keep you moving towards retirement, but when the market slows down, you don’t have to worry about losing your financial security because the money your entrust us with is safe.
To put it another way, the U.S. economy has traditionally done three things very well:  lower prices, create jobs, and price risk.  The last recession was caused by doing a poor job of pricing risk, and that hurt our ability to do the other two.  But that’s exactly the point.  As an economy, we are so good at pricing risk that when we screw it up, it’s an enormous, world-altering event.  If you find someone who can price risk so much differently than every other investment professional in the world, you need to also be ready to bet that the economy is going to take a radical shift in an entirely new direction, because that’s what happens when we do a bad job pricing risk.
Finally, if you want to avoid all kinds of investment scams – and the SEC, FTC, and USA.gov all have many pages listing the variety and creativity of these scams – the best thing to do is remember why you bank with us.  We’re part of your community, not a giant multinational corporation.  We share our revenue with our members, not shareholders who may not even be connected to our local community. Our kids go to school with your kids and you can always come in to talk to us for helpful advice. 

Sources: 
http://investor.gov/investing-basics/avoiding-fraud/types-fraud/high-yield-investment-programs
http://www.investopedia.com/terms/h/high-yield-investment-program.asp\\
http://www.ncpw.gov/blog/dont-get-scammed-investment-fraud-internet
http://www.dfr.vermont.gov/securities/top-ten-investor-scams

Rethinking Your Money With Apple Math

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When it comes to your finances, it can seem like all the advice you get is deadly boring, unbearably abstract or both.  For example, when it comes to paying off debts, how can you be expected to make a dent without first having a spreadsheet that compares all your credit cards and loans with columns for principal, interest rate, fees and maybe even frequent flyer miles?  It’s intense. At the same time, when it comes to spending, you’re no better off. How do you compare the value of a fancy dinner to buying a new outfit for the kids?

In 1986, The Economist created “The Big Mac Index” as a way to compare currency values across eras and national borders.  The index shows how many hours of labor it takes to earn the cost of a Big Mac. So, if it took you 10 minutes to earn the cost of a Big Mac last year and it takes you nine minutes today, you are – in theory – better off than you were before. That’s true whether those gains come from getting a raise, moving to a town with a lower cost of living or improvements in McDonald’s supply chain to save consumers money. While the value of a dollar changes over time, the value of a Big Mac to a hungry customer remains constant.
We’re going to use the same Big Mac concept here, but we’ll use it to explain personal finance. If you’re a fan of Apple products, fabulous. If not, feel free to substitute other luxury goods of your choosing.  As an added benefit, if you’re looking to talk about money with a young person, you may find the Apple index to be a helpful tool for starting a conversation.  After all, that young person is probably staring at their phone, tablet or laptop right now. 
The price of luxury 
If you’re carrying an iPhone, it’s probably the most expensive thing you carry every day.  You might not think so, because you might be used to those two-year contracts that artificially decrease the price of a phone by several hundred dollars.  In reality, though, a lot of companies, from your service provider to the handset manufacturer, stand to make money by concealing the price from consumers.
Even then, you could be skeptical.  “After all,” you might say, “I’m currently wearing a very expensive watch.  This Omega Speedmaster Moonwatch is the same model as the one that’s been on the moon.” Or maybe you’re glancing at your Hermès Clemence Birkin purse, believing no phone could cost as much as a bag for which a noble alligator gave its life.
Actually, it does.  You see, when a person buys a luxury watch, he or she usually expects to hand it down to their son, daughter or whomever so they may stay in a family for generations.  The same is true for Hermes bags, particularly because they have to last long enough to get back to the top of the waiting list.  A Hermes reservation can last a family for generations, too.  A $10,000 watch or bag that lasts 100 years actually costs $100 per year.  Similarly, a basic two-year phone contract typically came with a $200 credit toward a phone purchase, so even a free phone on that plan costs $100 per year, the same as an Omega watch or Hermes bag.  A $649 iPhone 6s costs more than three times that much. 
The price of five bucks 
Most phones sold this year don’t have 2-year plans.  Instead, AT&T, Verizon and many of their competitors offer plans that can be canceled at any time, with the cost of the phone spread over two years or more, disguising the total price of the product.  After all, the difference between spending $25 per month and $30 per month seems negligible. If you’re already writing a check to your service provider for $200 worth of data, talk, taxes and fees every month, what’s another five bucks, right? Of course, that difference over two years comes out to $120.  If you have three lines on your account, the bill comes to $360.
When are you planning on paying off that smartphone?  When do you expect to not have to pay another phone bill?  The smartphone manufacturers assume a two-year lifecycle, and intentionally do not design their phones to last forever. Five years ago, one of the best selling phones was the original Motorola Droid. Go back another year, and it’s Nokia at the very top of the sales charts, capping over a decade of the company’s dominance.  It’s hard to remember that environment, but it included 3G networks and sliding keyboards.
Phones have short shelf-lives, so you can probably expect to make payments on a phone for most of the rest of your life.  If you made that $5 payment into your savings account instead, that would be around $16,000 in time for your retirement.  That’s an expensive five bucks.
It’s not a Big Mac, but hopefully the iPhone works just as well to explain the value of money when it’s difficult to understand.  Buying a product that lasts a lifetime can actually be quite affordable in the long run.  On the other hand, a mindlessly squandered five dollars can be quite expensive.  We’ve got a lot more lessons from the Apple index coming up, so stay tuned! 
Sources: 
https://www.therealreal.com/designers/hermes  
http://www.economist.com/content/big-mac-index  

http://www.gartner.com/newsroom/id/1543014  

http://www.omegawatches.com/watches/speedmaster/moonwatch/dark-side-of-the-moon/catalog  

College Credit: It’s On The Syllabus

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No matter what you ask your professor over the course of the semester, the most likely response you’ll get is something like “It’s on the syllabus.” Yes, professors love to write up big documents governing every aspect of behavior in their class. In some instances, it might seem like the iTunes terms and conditions are easier to get through than that 30-page syllabus. Even worse are the instructors who offer a half-page of instructions while expecting you to interpret in a manner similar to applying the Ten Commandments to a dispute in your fantasy football league.

As exasperating as those syllabi might be, there’s something to be learned from them.  When you have a document that outlines your principles, it helps clarify confusing situations.  Do you have a syllabus in your life?  What is your policy for missing class?  What guidelines do you have for civil behavior?  How do you know if you’re living up to your principles if you’ve never sat down and tried to figure out what your principles actually are?  Without a syllabus, you’re just left to figure out every confusing situation as it comes along.

Your financial life needs a syllabus, too.  What’s your policy on work hours?  Will you pick up a shift during finals week?  Are you willing to quit your job if it interferes with school?  A budget can be your syllabus for spending to answer many of those questions.  For instance, if you know ahead of time that you can spend $20 per month on video games, then you know buying that video game you want this month means that you can’t buy another until the end of the year. It also means that, if you haven’t bought a new video game all summer, you don’t have to feel guilty about buying one now.  

This weekend, put together your syllabus.  Use one your professors have provided as your example … and fill in all the sections.  Start with who you are, what your expected outcomes for the semester are, and determine your tentative schedule.  Don’t worry about some of the odd sections until the end. You can probably find a way to incorporate them – for example, sexual harassment policies might become “dating principles” – but that’s something you can handle later.  For now, try to get down the most important principles to guide your path ahead.

Finally, after you know what you value, put together a budget.  Do you value time with your friends?  Then put more money aside to cover spending leisure time together.  Or maybe you value that time with your friends, but don’t value going out to eat or dancing on Saturday nights.  Maybe your budget should reflect that, so maybe consider putting money aside to host a dinner party or watch football.

Whatever plan you come up with, try not to deviate from it too much once you have it established.  That way, when a strange situation comes up in a few months, you’ve got a list of principles to help your decision process.  Tell yourself, “It’s on the syllabus” and use that to help guide you.  Creating a budget, scheduling your time, and formalizing your principles can be difficult, so drop us a line if you’d like some help.  You can find us here.

Securing Your Phone

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If you spent time on Twitter, CNN, or just about any other corner of the Internet, you might believe that they only thing that happened anywhere in the universe last week was Apple’s product announcement on Wednesday. Joined by developers from Adobe and Microsoft, the company showed off a new iPad, new iPhone, and a pencil. That’s right, a pencil.

In all the excitement of a new $70 pencil, it was easy to miss Apple’s discussion of iOS 9, which is to be released September 16. For some, however, that date was surprising, because their phones had been asking them to upgrade to iOS 9 for days. Unfortunately, that update was not from Apple. It was from scammers, hoping to gain access to people’s mobile phones, where we keep all of our secrets. The effects of the attempted scam appear to be minimal so far, but it’s a great reminder to brush up on our mobile security. Here are some quick steps you can take to protect yourself on your phone:
 
1). Always update your software. It can be annoying to find a time to plug in your phone when you’re on Wi-Fi, and sometimes you don’t want to put your phone down for an hour or more while it downloads the most recent operating system. For smaller apps, it can feel like you’re dealing with a new update every other week. What’s the deal? Those apps never seem to add anything useful. 

The reason you get so many little updates is that the apps from major developers are constantly getting security updates. Google and Microsoft update every two weeks, usually with minor bug fixes and security updates, but they’ll update more frequently if security risks dictate it.  It might be annoying sometimes, but the frequency of those updates is the best security you have for the software you use on your phone everyday. 

The biggest security issues are covered by operating system updates. Apple is notoriously slow on OS updates, just like they are with many of their apps, which only serves to make their updates even more important.  When iOS 9 comes out on the 16th, it will be their third major update of the year, which is far more frequent than usual.  If you’re currently running anything before iOS 8.4.1, your security is out of date, and only going to be more antiquated next week.  Take the time to update–it’s worth it. 

2). Think about the Wi-Fi you connect to.  If you’re still on a restrictive data plan – and with the price of mobile data being what it is, no one would blame you – you understand the relief that finding the open Wi-Fi connection of a fast-food restaurant or coffee shop can provide.  But that relief might be misguided.  After all, that barista – the one with the tattoos, piercings, and boho sense of cool – isn’t an IT specialist.  It’s unlikely they get paid much more than minimum wage plus tips, and that kind of salary doesn’t attract tech-savvy security experts.  When was the last time the router was replaced? When did they last update the firmware or check the network for viruses?  You’re about to connect your phone, which may be the most expensive object on your person, the object you use the most often, and the most irreplaceable tether to your family and friends to a network whose security is at best questionable and at worst far from safe. If all you were planning to do was check social media or the box score of last night’s game, you might want to just stay on your LTE or 4G network.  If you were going to do anything more private, whether it’s email, banking, or shopping, you definitely want to consider whether that coffee shop wi-fi is a good idea. 

3).  Reconsider what you do on your phone.  If you had a time machine and could show your smart phone to a younger you from the 1990s, the younger you would be stunned.  If you were into grunge music, you might use Spotify or Apple Music to explain that you now carry every song ever recorded in your pocket at all times.  If you spent the 1990s rollerblading, you might pull up MyFitnessPal or Nike+ to show how you can track your heart rate, calories burned, and steps taken every day.  If you spent the 1990s in an office, you might pull out Excel or PowerPoint to explain that, well, basically it’s the same thing, but on a smaller screen.  The next thing that would happen, though, is that they younger you would ask what else you use it for everyday.  You’d explain messaging and email, but when you explained mobile banking how would you react? 

If you told your younger self that you had a personal computer in your pocket at all times, and that you put your most private secrets in it – from medical information to intimate conversations with your romantic partner to your financial data – which you then sent out into the world through an invisible network (which you don’t understand), which then ran your secrets through servers (in a location that you don’t know), before traveling through another hard-wired network (that you can’t explain) to your financial institution or investment firm, where the information immediately reversed course and came back to you over the same mysterious connections…If you told that to your younger self would they be impressed?  Or would they smash the phone on the ground and slap you in the face for your stupidity?  How can you trust your secrets that way?  Why are you putting all of that information in one place? 

If you want to protect your information online, you need to use the kinds of software that are built with security protocols and frequent updates.  With Destinations Credit Union Mobile Banking, we have found the best software security providers in the business and built layer after layer to protect your information.  We’re not interested in disappointing the 90’s version of you, who still believes that there’s a difference between public life and private life.  We want your information safe and secure. 

Our app also lets you deposit checks with your camera, make transfers, track your spending, report fraudulent activity, or do virtually anything else you could do in our brick and mortar locations.  Most importantly, it’s still us on the other end – a neighborhood credit union that puts service for members ahead of profits, so you know we’re not going to cut corners on security.

Destinations Credit Union is also in the process of a major upgrade to our mobile app which will include many more features, including bill payment! 

Sources:

http://www.theverge.com/2015/9/9/9245073/apple-ios-9-download-release-date-iphone-upgrade 
http://www.ibtimes.co.in/ios-9-beta-3-release-hoax-twitter-user-stages-act-catch-fake-apple-employee-638572 
http://money.usnews.com/money/personal-finance/articles/2015/01/13/10-ways-to-keep-your-phone-safe


Check Fraud & Swiss Cheese

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Just about every article you read about fraud, security and identity theft is based on the idea that with increased technology comes increased security.  In fact, we do everything we can to bring as much cutting edge technology to your defense as possible. Unfortunately, some of the greatest vulnerabilities in your security come from low-tech attacks.

Think about it this way: A dedicated criminal wanting to get into your checking account has to spend thousands of dollars on an RFID skimmer, a device to crack your PIN, and other technological marvels out of a “Mission: Impossible” movie, but when they get access, our fraud protection kicks in after only a very small expenditure.  So, why would a criminal spend thousands of dollars when they could get the same benefits from spending $5 on a blunt object with which to threaten you physically? Why steal RFID signals out of the air when you can pick pockets and shop online?  Why go high-tech and hassle with all our security experts when a criminal can go low-tech and wait for you to slip up?

It helps to think of your financial security as a metaphorical block of Swiss cheese.  Every layer of security may have a few holes, just like every step you take to protect yourself has holes.  The idea is that, if we put enough layers of cheese on top of each other, we can make sure that none of the holes go all the way through the cheese, leaving you vulnerable.  In that spirit, we’ve identified a low-tech hole in the cheese, and we’re putting down another layer.  We’d like to make sure you put down some cheese, too.

Check fraud is still a major problem, and it could get worse as EMV chips and software security make ATM and point of sale transactions more secure.  Check fraud is an umbrella term for a variety of strategies scammers use, ranging from creating blank checks on computer software to stealing and using old checkbooks.  Your checkbook is a source of fraud vulnerability for many of these strategies, but the ways to protect yourself are fairly simple. 

1.) Treat your checkbook like cash.  The easiest thing to do is to just not give thieves access to your checks.  You wouldn’t put an envelope of cash in your mailbox with the flag up, would you?  Then don’t do it with a utility check.  If you’re going to mail a check, drop it into a blue USPS box on your way to work.  You can also see what’s available to pay online.  Our online services are really impressive, and if you set up an automatic payment through us or use our online banking, you never have to mail a check again.

 2.) Balance your checkbook every month.  It may seem like a chore, but balancing your checkbook is the easiest way to make sure you’re the only one spending your money.  We have special buttons built into our online account view to make this as easy as possible. If you want a little personal guidance, come talk to us and we’ll walk you through the process.  It’s easier than it looks. If it takes you forever every month, you might not be using all of our features! Call Destinations Credit Union at 410-663-2500 and we’ll help you make the process much easier. 

3.)  Destroy your old checkbooks and order new ones regularly.  For whatever reason, you might have found yourself with old checks lying around.  Maybe you were running low on checks and ordered a new checkbook but decided not to finish the old one  because they came so quickly. Maybe you’ve moved and didn’t bother to finish the set with your old address. If that’s the case, destroy them.  It’s worth the cost of a checkbook or the effort of a few minutes at the office shredder to keep from leaving yourself vulnerable. Also, don’t put your driver’s license number on the checks when you order them.  It might take a few extra minutes at the register, but that inconvenience is a lot worse for a scammer holding your checkbook than it is for you.  If you need to order a new checkbook, you can do it here:  https://orderpoint.deluxe.com/personal-checks/home.htm. 

It’s a different world for your checkbook than it was even a few years ago. Nationally, we’re writing fewer checks in fewer places and many of us don’t carry a checkbook at all.  Across the country, speech teachers are showing “I Have a Dream” to their students and they have to pause the video to explain what a promissory note is and why Dr. King is talking about writing a check for freedom. They may seem old-fashioned, but that’s exactly why they represent such an important vulnerability in your financial security:  They’re just paper and ink.  No chips to crack, no PIN, no online security protocols.  Don’t let your Swiss cheese have holes that go all the way through. Protect yourself from check fraud.
Sources:

http://money.usnews.com/money/personal-finance/articles/2008/05/19/frank-abagnales-tips-on-avoiding-check-fraud
http://www.consumer.ftc.gov/articles/0159-fake-checks#Youandyourbank
http://www.ckfraud.org/ckfraud.html

Your Greatest Strength Might Be Your Greatest Weakness

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We’ve all had that moment when we were shopping on eBay at 3 a.m. and spotted the deal of the century -an Omega Speedmaster Moonwatch for just $100? That’s the watch that’s been on the moon! Then we realize the price is too good to be true when we see that our newest find will ship from the other side of the planet and the listing features mysteriously blurry photos that obscure key details. Maybe that Moonwatch spelled Saturday with a “B,” because some scams are really easy to spot.  We’ve all seen the scam and after catching ourselves, we’ve all asked ourselves the same question:  Who falls for this garbage?

From behind a computer screen, spotting a scam is as easy as a stroll in the park on a beautiful Saturbay afternoon.  What investigators have realized is that it gets much tougher when fraud happens in person.  In person, all of those skills we’ve developed online go away and we become easy marks.  

The IRL problem

It’s easy to act differently online.  No one knows us there, so we can make up the life we want to live or act without repercussions. Otherwise calm and decent people can become maniacs online if certain topics come up – from vaccinations to the recent play of the local professional quarterback.  For others, the digital world is a place of exploration and indulgence in hobbies that are unavailable offline, as players of World of Warcraft or the thousands of people who left reviews on Food.com’s recipe for ice cubes can attest.  However we change behind the computer, it’s easy to see that we think of ourselves and others differently while online.  Offline, you wouldn’t constantly harass your friends about a farming game, would you?

The same is true when it comes to scams.  When we sympathize with people, we lose the critical distance we need to spot scammers.  If we can connect with a person, we are far more likely to fall for a scam, and talking to them away from the computer increases that personal connection.  

Think about it this way:  The FTC says the most common forms of scams all involve human interaction, not computers.  The most common form of online identity theft isn’t breaking into your credit union — we’re really good at security — it’s phishing, where scammers convince victims to willingly give up their credit card information.  The most common phone scam is the grandparent scam, in which the bad guys use our natural concern for our family to get money out of us. The most common scam ever might be the basis for the modern home improvement scam: using a hard-luck story or the victim’s greed to convince them to pay up front, then never actually do the work.

How to avoid in-person scams

1.) Be wary of surprises and secrets.  Two things that should tip you off right away are really big surprises and really private secrets.  If you won money in a contest you don’t remember entering, you probably didn’t enter it.  If you’re getting a big payday, but you can’t tell anyone about it, you’re probably not getting a big payday at all.  If a company runs a contest, they want to get publicity. If you’ve got contest winnings coming, that company probably made you put down your email address and a bunch more info.  It probably took a while for them to get all of your data.  You’d remember.  Even in old TV shows they understood that surprises and secrets were a bad sign – if a 1960s sitcom hero inherits a mansion from an uncle they’ve never met, you better believe it’s going to be haunted.

2.) Take your time.  If someone needs you to act quickly, that’s often a clear sign of a scam, particularly if the sudden rush is coupled with a surprise as described above.  Scammers understand the power of groupthink – which is what psychologists call that trend among humans to make worse decisions in groups than by themselves – largely stems from an impending time deadline. By denying you time to catch your breath, scammers are trying to rush you into a bad decision and keep you from getting advice from someone with distance and perspective.

3.)  Try to be a robot.  NPR’s “Planet Money” podcast aired an episode covering the danger of our humanity very well.  In it, a banker named Toby convinced dozens of people to help him perpetrate a large-scale fraud simply by telling them his hard-luck story.  He claims that not one of them turned him down.  The case made in the episode is that for each person who heard the story, the ethical decision to commit a fraud and the rational decision to trust a scammer was completely overwhelmed by our sense of sympathy and injustice. Don’t let that be you.  

Hopefully, you’re not going to have to deal with in-person scammers very often. If you do, be sure to contact the FTC here: https://www.ftccomplaintassistant.gov/#crnt&panel1-1 and the FBI here: http://www.ic3.gov/default.aspx 

If you think you may have been the victim of a scam, identity theft, phishing, or any other security threat, let us know immediately.  The sooner we know, the safer your accounts at the credit union.  You can email us at info@destinationscu.org or call us at 410-663-0859.

Sources:
http://www.food.com/recipe/ice-cubes-420398 
https://www.citizensadvice.org.uk/consumer/protection-for-the-consumer/scams/spotting-and-reporting-scams/how-to-spot-a-scam/ 
https://www.fbi.gov/scams-safety/fraud 
http://tvtropes.org/pmwiki/pmwiki.php/Main/OnOneCondition 

http://www.npr.org/sections/money/2012/04/17/150815268/why-people-do-bad-things