In this episode of “Militarily Speaking,” Tom and Jodi discuss all things related to consumer credit. They recollect on their own credit journeys, share tips and tricks to get your credit in good standing, and provide insight on some resources to help you wherever you’re at in your financial journey.
“Militarily Speaking” is a podcast produced by Armed Forces Bank that is dedicated to the military lifestyle and all the things that makes military community who they are.
We — with guests like you — will help the military community not only navigate their finances but also military life. We chat about both good and bad financial practices and provide some insight along the way. We’ll share strategies to help people get ahead, discuss military benefits that members should take advantage of, and more – all working towards the goal of helping people become more financially independent.
On the show, we’ll also preview and talk about how to take advantage of military specific services, such as loans and mortgages, and help members prepare for important milestones such as PCS moves and the transition to civilian life. Finally, at the end of every episode, we have a bit of fun with our Military Minute. That guessing-game segment features military history, hobbies, a bit of pop culture. Correct guesses by listeners could result in a donation to charity of individual’s choice.
Episode 8: A Talk to Learn About Consumer Credit
Show Opening and History of Consumer Credit
Tom opens the episode by telling two banking jokes about credit and loans, and then dive into the rest of the show.
- Tom lists out the many topics they will cover including: consumer credit, responsible ways to obtain and use credit, maintaining good credit history, helpful tips on credit products.
- He notes that when they started the Militarily Speaking Podcast, they promised to deliver some financial education and give the listeners tools to be more successful in your personal and financial lives.
- Tom recalls previous episodes with guests in order to present those resources to listeners.
Tom and Jodi dive into their personal histories of establishing credit, and the history of consumer credit.
- Tom discusses purchasing his first car with a loan, and how the payment history was sent to the credit reporting agencies.
- Jodi regales her start with building credit by signing up for every credit card at the booths they had on her college campus.
- Jodi notes that before opening a line of credit, there are a few things to take into consideration:
- Do you really need the item/service?
- Is it something you need to borrow money for and pay interest on?
- Are there products out there that give you options?
Armed Forces Bank Products and Services
Jodi says that for people looking to develop credit there are a couple of products Armed Forces Bank has that can help.
- The first product is the Credit Builder Credit Card, which is a fully secured credit card, and the payments of which get reported to all 3 credit reporting agencies.
- In order to save the money to deposit into a savings account for the Credit Builder Credit Card, Jodi mentions Armed Forces Bank’s Saving Cents program.
- Jodi also highlights the Access Loan (or Personal Military Loan), which an unsecured loan that allows people to set up a repayment over a period of time.
Good Credit Decisions and Education
Tom says that there are other key concepts that go along with making good credit decisions for yourself.
- Credit Utilization Rates: There is a general rule of thumb that you should not use more than 30% of your line of credit.
- Don’t carry a balance from month to month to avoid paying high interest rates that come with credit cards.
- Credit Monitoring Services and FICO: These are your scores that range from 300-850, with higher scores being better that rank your financial prowess that are based off of 5 factors:
- Payment History (35%)
- Amounts Owed (30%)
- Length of Credit (15%)
- New Credit (10%)
- Types of Credit (10%)
- Tom notes that there are a number of other scores based around your credit as well, but they are all tied back to how you handle your finances.
- There are lots of options for credit monitoring including: Experian, Credit Karma, LifeLock, Identity Guard, I.D. Shield, etc.
- Tom reveals that Armed Forces Bank will be releasing a product later this year that will allow you to monitor your credit score directly
Jodi says that with inflation and the rising cost of everything, people are pinching pennies and get scared if they get in a tight spot.
- She encourages people to call their bankers and lenders, as they are understanding people, and are usually willing to help work through your situation.
- Rather than going dark and making it more difficult to get out of your situation, she says being proactive about communicating with your bank or lender is the smart choice.
Tom adds that there are lots of resources available for education as well.
- There are regulatory bodies that govern banks that put out educational material such as:
Jodi introduces the Military Minute segment of the show, beginning by closing out last episode’s Military Minute.
- Last episode’s Military Minute: What is so special about Dan Bozung’s hair?
- Answer: It does not move in the wind.
- This week’s Military Minute question: What is Lady Gaga’s real name?
- Watch for Facebook and Instagram posts about this episode.
- Answer with the correct answer and you plus a charity of your choice can each win $100.
Tom closes the episode by asking listeners to out to www.afbank.com and subscribe to the show, as well as leave a rating and comment on your favorite podcast platform such as Apple Podcasts or Spotify.
Join us to hear how to better navigate your finances, military life, and the crossroads of the two.