Think Before You Swipe

We all know it’s important to think before you speak, but what about before you swipe (your credit card, that is!)?  We also can probably all agree that credit cards have their distinct pros and cons.

Credit cards are a great way to build your credit score (which lenders consider in terms of financing) as long as they are managed responsibly.  But, because credit cards are simple to obtain and use, it is easy not to even think of credit card balances as debt.  A good rule to stick with is if you can’t pay for it in cash today, don’t put it on your credit card!  And most importantly, pay off your balance each month to avoid increasing debt and high interest rates.

Here are a few interesting facts about credit card usage:

• In 2011, the United States’ household debt was $793.1 billion – 98% was credit card usage
• 2/3 of Americans have credit cards
• 54% of Americans pay off their credit card balance each month
• The average American has 4 credit cards
• The average credit card interest rate is approximately 19%

It is easy to see how credit cards can be a positive or negative factor when it comes to managing your finances, but just remember to “think before you swipe.”

Go Ahead, Give Yourself Credit!

You are trying to buy a car, a house, or even a farm and the lender has you fill out a credit application to help calculate your credit score.  You know you have one, but like most others, you are still confused over what it is, why it exists, who controls it, and how you can affect it.

 

Over the last decade, consumer and commercial lending decisions have relied heavily on the confusing variable known as a credit score.  Here’s what it is – a numerical value representing your likelihood of paying the loan back as agreed.

Here are five factors that are considered in your credit score and their approximate weight:

Payment history (35%)

• Amounts owed and the amount of credit limits utilized (30%)
• The length of your credit history (15%)
• The types of credit you are utilizing (10%)
• Amount of new credit, and changes to your credit report (10%) 

It's important to know that the higher your credit score, the better.  So how can you improve your score? Here are a few tips: 

• Pay your bills on time, every time
• Don’t use every dollar of available credit on your line or card
• Limit the number of new accounts and credit inquiries
• Credit history length is measured by the age of your oldest card (so keep that one!)
• Be patient – it takes time

Now that you have a better understanding of what makes up your credit score and how to continuously improve it…go ahead and give yourself some credit!

The five Cs of seeking a loan

Are you ready to buy that farm you've been looking at? First, you'll need to apply for a loan. This can be confusing for people who don't have a lot of financial experience, so it's a good idea to break down a banker's expectations into models that are easy to understand. Before you approach a credit union or loan office, use the five Cs to think about your situation - Capital, Capacity, Conditions, Character and Collateral.

Capital
Simply put, this is how much money you have on hand at the moment. This has a big impact on the line of credit that you'll be able to get, so the more cash on hand, the better.

Capacity
This refers to your capacity to repay a loan. It is affected by your loan history and credit rating, so people who have been good with bills in the past will have more luck securing a good farm property loan.

Conditions
Think about the economy in general and the type of farming you're interested in specifically. If there are a lot of farmers working with a certain crop in your area, banks might not think it's a very good investment.

Character
What kind of organization do you want to start? Knowing the basics about how a farm will be run (and proving it to a loan officer) is a good way to appeal to creditors.

Collateral
Unfortunately, banks want to make sure that even if they make bad investments, they'll be able to get some of their money back. Collateral refers to houses, equipment and other items that creditors can reclaim if a farm ends up not working out. Even a sound business plan and good investments need to put up collateral, so think about what assets you have that can serve this purpose.  

Results of Elections announced by MidAtlantic Farm Credit

For more information contact:
Sandy Wieber, VP Marketing
800.333.7950 or swieber@mafc.com


FOR IMMEDIATE RELEASE
May 27, 2010


(Westminster MD) – MidAtlantic Farm Credit, an agricultural lending cooperative, recently announced the results of their annual election of board and nominating committee members.

The following were elected to serve on the cooperative’s board of directors: Ralph L. Robertson, Jr. of Westminster, MD; Walter C. Hopkins of Lewes, DE; Fred N. West of Frankford, DE; Brian L. Boyd, Lebanon, PA; Fred R. Moore, Jr. of Eden, MD; and T. Jeffery Jennings of Luray, VA.

Elected to serve on the 2011 nominating committee were:
Susan B. Arnold, Salisbury, MD; Charles R. Garber, New Market, VA; Guy M. Gochenour, Woodstock, VA; Brian T. Johnson, Westover, MD; Christopher T. Kirk, Laurel, DE; Michael H. Lewis, Rocky Ridge, MD; Alan W. Schmidt, Sudlersville, MD; Jason E. Scott, Cambridge, MD; Jon E. Stutzman, Kutztown, PA; Robert J. VanWingerden, Detour, MD; Joel E. Wharton, Millsboro, DE; and Charles R. Zimmerman, Myerstown, PA.


MidAtlantic Farm Credit is an agricultural lending cooperative owned by its member-borrowers. It provides farm loans for land, equipment, livestock and production; crop insurance; and rural home mortgages. The co-op has over 10,500 members and approximately $2.3 billion in loans outstanding. MidAtlantic has branches serving Delaware, Maryland, Pennsylvania, Virginia and West Virginia. It is part of the national Farm Credit System, a network of financial cooperatives established in 1916 to provide a dependable source of credit to farmers and rural America. For more information, visit mafc.com.