Costco Connection - July 2008

When the going
gets tough
inside
costco
Two smart money moves
during uncertain times
By Tim Talevich

RISING GAS PRICES, a troubled housing market, increasing costs for groceries, volatility in the stock market—these all spell tough economic times. In response, you can stretch your dollar with commonsense moves such as carpooling or taking public transit and reducing spending on nonessentials.

Other smart money moves are improving your credit scores and optimizing your savings account—areas where Costco provides tools that can help. Here’s a look.

columnist specializing in second homes ( www.tomkelly.com). “Borrowers are being more scrutinized than before,” says Kelly. “Lenders want to know the value of the home and that the borrower is solid.”

Costco offers the Credit Reports, Scores & Monitoring program through IdentityGuard® to help members understand their credit. With this program, you can receive a monthly credit report showing data from the big three credit bureaus: Equifax, Experian and TransUnion.

Keeping on top of your credit reports is important for two reasons: You can find and correct mistakes (which aren’t uncommon), and you can detect unauthorized transactions that might suggest fraud.

Even small improvements in your credit score can have a huge financial impact, says Joe Vacca of Intersections Inc., the provider of IdentityGuard. For example, a difference of a quarter or a half percent on an interest rate could equate to $50,000 or $80,000 over the life of a typical 30-year loan.

Another helpful feature in the program is the Credit Analyzer tool. It enables you to create “what if” scenarios to see how decisions could affect your credit.

“When you’re looking at making payments or making decisions in a tough market, the Credit Analyzer can tell you the best way to apply those payments, as well as what things on your credit report to review to help you manage your credit score,” says Vacca.

The Credit Reports, Scores & Monitoring program features other tools to fight identity theft, including an insurance policy to reimburse victims for certain expenses (see “The Costco Connection”).

Earning higher interest on savings

In times of volatility in the stock and bond market, a smart move is to find some shelter from the storm.

One option worth considering in these times is a money market account (MMA). These accounts earn interest that usually outperforms the typical bank savings account. And they are FDIC insured, so you can rest assured your money is secure.

PHOTODISC/CHRIS A RUSNAK

Costco offers an MMA through Capital One at an exclusive rate (see chart). Here’s how the account works.

s It’s easy to open an MMA at costco.com or by phone (see “Connecting” at lower left).

You can get started with as little as $1,000.
s You can add to it at any time, and making
a withdrawal is as easy as writing a check,
transferring money to an existing bank
account or taking money out of an ATM. As
with most MMAs, there are limits to how
many withdrawals you can make in a month.

s Unlike some investments, the Capital One MMA is FDIC insured to at least $100,000 per depositor.

“With no fees, a superior exclusive rate for Costco members and flexible options to access your money, the Capital One MMA is a great place to save your money,” says Capital One Direct Banking representative Carl Lonnberg. “Especially at times when returns from the stock market are so unpredictable.”

Regardless of the economic climate, MMAs represent a safe place to stash your cash with excellent interest and easy access. C

Smarter savings

Monitoring your credit score

The best possible credit score is especially important in tight economic times. A high score can help you get a better rate on a loan—or qualify for certain loans that aren’t available to consumers with lower scores. In fact, in terms of a home loan, a good credit score may be necessary to even begin discussions with a lender.

In the wake of the home credit crisis, easy loans are a thing of the past, advises Costco member Tom Kelly, an author and syndicated

Capital One
MMA
3.20%
Annual
Percentage
Yield
(APY)*

U.S. Bank^®MMA
0.20%
APY

Wells Fargo^®MMA
0.10%
APY

Wachovia^®High
Performance
MMA
0.10%
APY

The Costco Connection

The Credit Reports, Scores & Monitoring program through IdentityGuard^® enables members to review their credit reports and provides protection against identity theft. Enrolling in the program is easy: Just go to costco.com, enter “credit reports” in the search box and fill out the online application.

To open a money market account through Capital One, go to costco.com, enter “money market” in the search box and fill out the online application, or call toll-free 1-866-654-4712.

Competitor comparison information pulled from www. wellsfargo.com, www.usbank.com and www.wachovia. com as of 05/21/08 using New York MMA rates. Rates assume $5,000 account balance. The above non–Capital One service marks are owned by each respective entity. All rights reserved. Capital One Direct Banking MMAs are offered by Capital One (USA), N.A., and Capital One, N.A., members FDIC.

*As of 05/21/08, if the daily balance of the Capital One MMA was $100 or more, the APY was 3. 20 percent; if not, the APY was 0.00 percent. Minimum initial deposit amount is $1,000. Terms and conditions of this offer may change at any time. Rates are variable and may change at any time. Withdrawal limits apply. © 2008 Capital One. Capital One is a federally registered service mark. All rights reserved.