Archive for January, 2009

American 1’s response to the Heartland data breach

[Update: After careful consideration and account monitoring, we have decided that, for now, a mass reissue of the compromised cards is not necessary. We compare any claims of fraud against the compromised card list on a daily basis and will continue to do so. There has been no increased fraud claims since this compromise came to light. If you would like to know if your card number is on the compromised list, please give us a call or e-mail and we will be happy to check for you. If your card is on the list, and you would like to have your card replaced, we will do so for you.]

The Jackson Citizen Patriot posted an article about two local credit unions that were affected by the data breach, and we’ve had many members ask us if American 1 has been affected.

First, some background: Heartland Payment Systems, a company that helps businesses process debit and credit card transactions, was hit by malicious hackers. The hack put millions of credit card customers at risk in what may be the biggest data breach ever.

Heartland handles data from credit card merchants. So say you pay for a fill-up at a gas station with your American 1 Visa. That data gets sent to Heartland, who parses the info for Visa, and sends the payment back to the gas station. In effect, this data breach isn’t the fault of you, the gas station, or even Visa. It goes back to Heartland. And because it stems from a processor, and Heartland deals with upwards of 200,000 merchants (like gas stations), the breach may affect lots of people.

Heartland has taken responsibility for the breach, and offers tips to consumers who may be affected. Robert Carr, Heatland’s chairman/CEO, puts it this way:

As a cardholder, you will not be held financially responsible for any unauthorized transactions that are timely reported to your card issuer. You should regularly monitor your card and bank statements and report all suspicious activity to your card issuer (in the case of Visa and MasterCard cardholders, that would be the bank that issued the card, not the card brand).

Heartland says they’ve closed the security hole, but they still haven’t reported how many people may be affected.

Here at American 1, we are monitoring our members’ accounts closely to safeguard against any fraudulent activity. We won’t block anyone’s cards, meaning you can continue to use your American 1 Visa and debit cards as normal, and – if something does happen – you are not liable for any fradulent charges.

If we do find something suspicious, we will contact you directly. American 1 has dedicated employees that handle all our card transactions. If you have a problem with your American 1 Visa or MasterCard debit card, you will talk to a real, live person at our branch.

We’ll offer a tip: sign up for home banking to keep a close eye on your accounts. If you do spot something suspicious, please let us know. You can direct your questions to a Member Services Specialist at any branch location.

Receive a text message? It’s a scam

We’ve had several members tell us that they have received text messages, supposedly from a local bank, asking for personal information.

As always, ignore these text messages – or report them to the police. Our security officers says “the text messages are a scam and [members] should not call the number that the text is prompting them to call.”

Keep in mind: never give personal information to someone that calls you and asks for it. When you call our branch, we’ll ask you confirmation questions just to make sure it’s you. That’s for your security. But when someone calls or texts and asks for your information, don’t give it to them. When we call, we already have your information.


Economy: taking the long view

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Here’s a little something we came across while cleaning out some old newsletters. It’s an article in our January 1982 newsletter about the Jackson Co-Op Federal Credit Union lending when no one else would.

Sound familiar?

Jackson Co-Op is now American 1, but we find ourselves in a similar situation. When many banks are restricting their lending practices, American 1 is still providing loans to those who need them.

In 1982, prime lending rates were at 16%, compared to 3.25% today. The economy was in a recession then, too.

But even with the economic weirdness, we were lending to our members. Just like today.

Nice to know some things don’t change.


Retirement: the power of compound interest



The Get Rich Slowly blog posted a video (above) about the power of compound interest, along with some visuals to help understand why compound interest is so cool.

Why is it so cool?

Because when you’re earning 3% or 4% on your money, it adds money to the pile, and then that pile earns 3% or 4%, and so on. It’s like a money-earning snowball running downhill.

You can try it yourself with the Money Chimp’s compound interest calculator.

Kids: start saving now, and you could get a great head-start on life!

The best home-heating tips from around the web



This past weekend, we hit some major lows: high of 4 degrees on Friday, wind chills that take your breath away, and home heating bills that make your holiday spending look like a flea market trip.

Here are some of the best frugal heating tips we found from around the web. Above all? There’s no such thing as “too many layers” in the winter.

MSN Money: “Opening curtains and shades on south-facing windows during the day allows solar radiation to warm a living space; closing all curtains at night helps retard the escape of that heat.”

Motley Fool: “Ceiling fans can be effective at circulating warm air that normally collects by your ceiling, where you can’t enjoy it.”

Yahoo! Green: “Using door snakes. Less scary than they sound, door snakes can block air from traveling under your doorjambs. Try the traditional fabric-filled kind or rubber versions sold in hardware stores throughout the country.”

Lifehacker: “If you use a humidifier and keep your home’s humidity level around 45%, you should see that the temperature that your thermostat displays is also the ‘feels like’ temperature.” [reader tip]

eHow.com: “Close off some rooms that aren’t used often. Instead of family members spending evenings in their individual rooms, get together in one room and heat that room. Shut off the heating vents to unused rooms.”

How do you keep warm during these cold Michigan winters?


December 2008 membership gas card winner

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A big congrats to Travis S., our December membership referral winner. Travis wins $500 worth of gas cards for referring his co-worker, Otis.

Travis told Otis that American 1 would be a great place to get a truck loan.

“American 1 is pretty good,” he told him.

For that piece of advice, Travis wins $500 worth of gas cards.

Our GreenBack group for December was the MacCready Reserve in Liberty Township. We learned about the MacCready Reserve thanks to a Jackson Citizen Patriot article. The reserve is open from dawn to dusk, even in January, for cross-country skiers and hikers – and in the summer for joggers and bikers. We had 175 new members referred to us in December, meaning we donated $350 to the reserve.

And so ends our GreenBack program. Thanks to everyone who referred a new member. Stay tuned for details on our 2009 membership promotion.


With slumping economy, Americans may be saving more

For a while, the national savings rate – how much people save instead of spend – was negative. But that trend may be reversing, says the Washington Post, because of the soured economy.

When people are facing job loss, higher credit bills, and less disposable income, they will seek ways to keep and save their money. Beware the unintended consequences, says the Post:

Ironically, even if consumers are saving more, they could be helping to make the recession worse. The more people save, the less they spend, driving down demand for goods and services, which in turn dampens economic growth. The economist John Maynard Keynes dubbed this “the paradox of thrift.”

Unfortunately for the economy, more Americans are cutting back on frivilous expenses, like hair stylists and dining out, because many fear unemployment and rising medical costs.

What about you? Are you saving more these days, or looking for ways to cut expenses? Let us know in the comments.


How your IRA can grow: an example

As we wrote last week, Individual Retirement Accounts (IRAs) are a safe, steady way to save for retirement. But how much can your money grow when it’s in the IRA?

Here’s an example. Let’s say you rollover $4,500 to an American 1 IRA at our 4.05% APY rate. After that, you contribute $5,000 a year to the account. At the end of the three year term, you will have contributed $15,000 to the IRA, plus the $4,500 you rolled over into the account. That’s $19,500. At 4.05% APY, with dividends paid quarterly, your account would be worth $21,345.99.

You would have earned more than $1,800 in those three years. Pretty cool, huh?

We have longer terms available. Stop in to any branch to learn more about our IRA products.

A1 Teen Idol to appear on Fox’s ‘American Idol’

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We always knew she had what it takes.

Jessika Baier, American 1’s 2006 Teen Idol singing contest winner, will appear on Fox’s “American Idol” program sometime this week – possibly tomorrow night. Jessika won a Moose Lodge singing contest to earn tickets to Puerto Rico to audition.

She was one of 16 to audition in front of the four main “American Idol” judges, says the Jackson Citizen Patriot.

Jessika placed second in American 1’s 2005 Teen Idol contest, and won the competition the next year. We awarded her a trip to audition for “American Idol,” too. She told us she made it to the audition, but wouldn’t appear on TV.

Now she gets her big break.

You can see her performing for the AP news service on this YouTube video – she yodels at the 1:30 mark.

Congratulations, Jessika!

Traditional vs. Roth IRAs: what’s the difference?

As the Motley Fool says, there are actually 11 different kinds of Individual Retirement Accounts (IRA), but we’ll stick with the most popular: Traditional and Roth IRAs.

The main difference we’ll focus on is tax-deferred versus tax-exempt savings.

A Traditional IRA means you pay taxes when you withdraw your funds at retirement, but you will qualify for a tax deduction on the money you contribute to the IRA. So say you make $30,000, and you contribute $2,000 each year to your Traditional IRA. Come tax time, you’ll pay taxes on $28,000. That’s tax-deferred savings.

Roth IRAs, on the other hand, let your savings grow tax-free. You pay taxes on contributions (In our $30,000 income case, you pay taxes on the full $30,000 even though you contributed $2,000 to your Roth IRA each year). But when you start withdrawing funds when you retire, you pay no taxes on them. That’s tax-exempt savings.

Got it? So with a Traditional IRA, you take the tax hit come retirement. With a Roth IRA, you take the tax hit now, but your retirement funds come out tax-free.

Now, you could opt to do both, but check with your tax advisor to see how things stack up.

There are a few other differences between a Traditional and Roth IRA. Investopedia has a good article on the contribution, income, and age limits that IRAs stipulate. The good news is you can start an IRA for just $50, and can contribute up to $5,000 annually ($1,000 more if you’re 50 years old or older – they call those “catch-up contributions”).

Young Money has an IRA calculator, where you can compare the tax rate situation.

As with any retirement decisions, be sure you talk either choice over with your financial advisor. American 1 provides both kinds of IRAs. You can stop in to any branch to find out more.



American 1 Federal Credit Union