Cryptocurrency? Like gambling, only invest what you can afford to lose
Media Contact: Barbara Fornasiero; EAFocus Communications; firstname.lastname@example.org; 248.260.8466
Wyandotte, Mich. — March 14, 2022 — As financial institutions and credit providers respond to the changing consumer demands for payment options, it’s important to understand how those options may – or may not – impact your credit score. Carma Peters, president and CEO of Michigan Legacy Credit Union, offers a quick overview, as well as reminders of how to achieve and maintain a strong credit score.
- Paying for relatively inexpensive items in installments
“Paying for a pair of shoes or a new dress over the course of several payments won’t automatically hurt your credit score, although credit agencies are now tracking such payments. The bigger issue may be that if you are purchasing items that you can’t pay for in one payment, it may be beyond your current budget,” Peters said. “For that reason alone, buy now pay later purchases should be kept to a minimum or avoided entirely if there’s any question as to future ability to complete the payments.”
- Investing in cryptocurrency
“Although President Biden signed an executive order on March 9 that urges review of the risks and benefits of digital currency, cryptocurrency is currently unregulated and does not have the protections of traditional currency or investments. That’s why it’s much riskier than keeping one’s money in a certificate of deposit, savings account, 401 (k) or other investment vehicles. While owning cryptocurrency has no impact on your credit score, the fallout from losing your investment without federal protection may,” Peters said. “You should use the same philosophy as gambling – only play what you can afford to lose.”
- Payday lending
“Credit unions have for the most part always offered alternatives to payday lending advances with significant savings. Getting your paycheck a few days in advance will not ding your credit score – unless you continue to come up short and are then faced with turning to payday lending or check cashing services from non-financial institutions that charge exorbitant interest rates that are difficult to pay off,” Peters said.
The best practices for maintaining a strong credit score are to pay off debt in full by the due date and to not exceed more than 50% of your allotted credit allowance,” Peters said. “It’s also good practice to have a personal relationship with your credit union or bank so that lending decisions made by the financial institution, such as granting a mortgage or auto loan, take into consideration your personal history with them. There’s a reason it’s called relationship banking!”
Peters also reminds those seeking to use the most current savings and payment apps, as well as other fintech options, to take a look at the many modern services offered by credit unions, including:
- Remote deposit capture
- Video branching from a smart phone or digital device
- Person-to-person pay anyone, anytime, anywhere safely and securely alternatives to cash apps like Venmo or Zelle
- Convenient online bill pay that handles all of your bills in one place – with one password – where you control the payment amount
“Credit unions are well-positioned to help modern banking consumers handle the majority of their financial needs online,” Peters said. “We know we are not only competing with banks, but with an array of consumer fintech apps, too – and now we have the tools to do so.”
About Michigan Legacy Credit Union
Michigan Legacy Credit Union (MLCU) is a member-owned, not-for-profit financial cooperative serving members who live, work, worship, attend school, or own a business in the state of Michigan. Michigan Legacy Credit Union is committed to providing quality financial services at a competitive price, delivered professionally and efficiently while keeping member/owners and their needs first. For additional information on MLCU, visit: www.michiganlegacycu.org.