September 2015

Inside this Issue:

New EMV Debit Cards

We are happy to announce that this fall we will be rolling out new debit cards for our customers. The new cards will have an added security feature known as EMV Chip technology. When your card is used or "dipped" at a merchant with a chip card reader the chip produces a single-use code that can only be used for that transaction. This makes it very difficult to duplicate or defraud your card. Your card will still have a magnetic stripe that can be swiped when a chip-enabled terminal is not available.

What's New:

  • When a chip card reader is available at the point of sale you will be asked to "dip" your card. This will require that you insert the card into the reader and leave it in place until the transaction is complete.
  • Joint accounts will have two separate card numbers. The first name on the account will retain the current card number and pin, while the second name will be assigned a new card number and pin.
  • Your new cards may be referred to by vendors as a "Smart Card" or an "EMV Chip Card".
  • The expiration on your new card will be three years on top of your current expiration date.
    • For example, if your current card expires 1/2016, your new card will be set to expire 1/2019.

New Statement Look

In October you will notice a slightly different look to your bank statements. We have adopted a graphical format for displaying account information. The goal was to create a more organized statement that allows our customers to easily find the information that they need.

You may notice the following additional changes:

  • Improved layout regarding CD's, Savings, and Overdraft/Returned Items
  • HELOC statements with customers that don't have a HELOC checking account will have a perforated section on their statement that lists the payment due.  This section should be brought in when the customer comes in for payment.

Traveling Abroad? We Can Help!

Vacationing abroad can be the adventure of a lifetime. Visiting historic sites, taking in beautiful landscapes, and enjoying different cultures are all part of the fun. Preparing for this type of trip can be challenging, but it doesn't have to be. One of the many items on your pre-trip checklist is likely obtaining foreign currency. In as little as three days we can have your currency delivered to the bank ready for you to pick up. All you need to do is stop in at one of our six locations or call a Personal Banker to place your order.

Credit Cards: A College Student's Best Friend?

Many college freshmen have moved into their dorms and started classes, eager to enjoy the new freedoms life away from home has to offer. Many college students are also managing their finances alone for the first time, and this phase of life is when many people obtain their first credit cards. The convenient access to credit that these cards offer comes with potential pitfalls, but can also be the key to establishing a solid foundation for a bright financial future. Check out some of the pros and cons of credit cards for college students:

Pro: Establishing a Credit History

Credit cards aren't evil and they don't automatically trap the people that use them under a mountain of debt. In fact, it's a good idea for students to use a credit card regularly in order to help build a credit history. Without that evidence of on-time payments and available credit on their credit report, students may have a difficult time renting once they leave student housing.

Con: Establishing a Bad Credit History

However, this strategy only works in your favor if you pay off the full balance each month and never use the credit card to buy something you couldn't buy that same day with cash. That approach will keep you from using credit to live beyond your means, while still helping you establish a good credit score. Using a credit card like it's free money can quickly land you in financial hot water.

Pro: Emergency Fund

Credit cards can also provide parents and their college-bound students with peace of mind. The cards provide quick access to emergency funds almost anywhere, so car repairs and other unexpected expenses won't disrupt their studies.

Con: Using the Emergency Fund for Non-Emergencies

That easy access to cash comes with the temptation to use the card for non-emergencies as well. Students can fight that temptation by establishing an iron-clad monthly budget and discussing with their parents what constitutes a credit card-worthy emergency. A professor added a $250 book to the syllabus at the last minute? That's a possible credit card emergency. It snowed and your only winter coat is from last season? It may be a fashion emergency, but that's not a credit card emergency.

Pro: Easy Monitoring

Credit cards also offer slick balance and purchase monitoring tools that appeal to today's college students far more than the traditional check ledger. Online banking and mobile apps that allow you to pay with your phone, monitor your balance, and categorize your spending are all very helpful budgeting tools and can help prevent the overspending and debt accumulation that sometimes comes from credit card use.

Con: Risk of Fraud

As with any payment technology, credit cards are vulnerable to fraud. The good news is, consumers are protected against most losses. If students monitor their account and notify their card company and bank promptly of any suspicious or fraudulent purchases, they're protected against losing money due to the criminal's activity. The key is to closely monitor all accounts.

A credit card can provide peace of mind for you and your child when they are away at school. Starting a credit history and paying off the credit card every month are greats way to start on the path to financial independence. Have your student fill out an application on our website or stop in and speak with one of our Personal Bankers about a Visa Cash Back or Rewards Credit Card today. 

Interest Rates on the Rise: What Does That Mean for Consumers?

If you've been keeping up with news stories about the economy, you may have heard that the Federal Reserve (Fed) is considering raising rates later this year. What does that mean and how will it affect you? The Fed is the central bank of the United States, which means it is owned by private banks and operates independently of the U.S. government, though its Board of Governors are appointed by the President.

Why will rates go up?

The Fed has a franchise to manage the country's economy and fulfill its three mandates: maximize employment, stabilize prices and moderate long-term interest rates. The main way the Fed impacts the economy is by setting the Federal Funds Interest Rate, which is the basis for every other interest rate out there. The Fed manages these rates through the Federal Open Market Committee (FOMC), which meets eight times each year and has indicated after recent meetings that the economy is strong enough now to require raising interest rates.

Impact on Borrowing

Even though consumers do not directly borrow money from the Fed, the financial institutions that provide their car loans and mortgages do. Since the Fed Funds rate is the basis for other rates (by being the cost of what your bank has to pay in order to get money) raising and lowering it affects the rates you, the consumer, can get from your bank. The Fed has kept its base interest rate near zero since the recession, and when it rises it will go up gradually so as to avoid a shock to the economy. As the rates go up, you'll notice higher interest rates on car loans, mortgages, and similar products. However, it's important to note that the rising rates will only affect new loans and loans with adjustable rate terms. If you have a traditional mortgage and don't plan on buying a new car for a while, you probably won't see the rate jump.

Impact on Saving

On the plus side, a higher Federal Funds Interest Rate means that consumers earn more interest on deposits kept at financial institutions. Accounts such as CDs will also see rates rise, meaning consumers who save will earn more. The extra money at the end of the year can be a great motivator if you're trying to establish an emergency fund.