Capital Gains is a thing right? Oh and Credit too.

Honestly USAA or NFCU... and why?

  • USAA

  • NFCU

  • Niether, I got a better place for you!

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TexMex2022

TexMex2022

Member
Joined
Nov 2, 2017
Messages
80
Hello all! As my 18th, and the PRT packet, looms around the corner I was wanting some advice from current mids and alumni on my current financial plan and namely how it translates into USNA life. Also when I qualify for membership with the two "Military banks" is kind of fuzzy and I didn't get a good response from calling either; if someone could elaborate that would be fantastic! I wish to get all this funny money business over before I'm in the Academy because I got free time now... I may not later.

Step 1. Transfer my current USAA Checking to my name come 18
Step 2. Open USAA Secured Credit Card ($250 CD as collateral) to build credit
I chose USAA over NFCU because NFCU has a $500 minimum on the CD​
Step 3. Await PTR / List Car for sale ~$3250
Step 4. Oh god it's actually here
Step 5. Open NFCU Student Checking Acct (Use that as Primary Deposit Account)
Step 6. Sell Car (If anyone will buy that expensive beater)
Step 7. Buy into an Aggressive Growth Mutual Fund with car cash (Make your money work for you)
Step 8. Academy
Step 9. Cash out AGMF in Texas--No Capital Gains Tax under $10k, sorry Tax-Central Maryland :)
Step 10. Use cash in AGMF to either supplement or replace commissioning loan / Serve our Nation!

Thoughts or considerations?
 
Just to answer one of your questions that applies to everyone accepted:

You have an option to open a NFCU account with the form in your PTR package arriving next month. NFCU is the biggest credit union and has branches all over the country and overseas where our military is located. There is one in Bancroft Hall, across from the Midstore. You do not need to have a collateral to get a NFCU credit card as a Midshipman, and they give you credit limit increases from $1000 as a Plebe to $5000 as a Firstie.
 
Zeus said:
Just to answer one of your questions that applies to everyone accepted:

You have an option to open a NFCU account with the form in your PTR package arriving next month. NFCU is the biggest credit union and has branches all over the country and overseas where our military is located. There is one in Bancroft Hall, across from the Midstore. You do not need to have a collateral to get a NFCU credit card as a Midshipman, and they give you credit limit increases from $1000 as a Plebe to $5000 as a Firstie.
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Thank you! I will look into that NFCU card when I get the PTR Packet.
 
Wow....I'm impressed with a High School Senior thinking ahead about finances like that. I still remember a roommate looking at the credit limits on his three Visa accounts the week before Spring Break and figuring that he had $750 to spend on a road trip to Ft Lauderdale. He had a great time, made it back, and graduated with a lot of debt. I had to laugh when his first job out of the Navy was in the financial planning world !

The fact that you are thinking about it is better than having a plan. The best plans in the world don't withstand initial contact with the enemy, and in this case, the enemy is the twists and turns that life brings. If you stick to a couple basic rules -- don't spend more than you make, save for a rainy day, don't dip into your principal, and pay off your credit card bills monthly, you will do fine. Watch interest rates -- it's fine to borrow money when the interest rate is lower than what you can make investing (in other words, don't be in a hurry to pay off the Commissioning Loan if its a good deal).

With respect to NFCU v. USAA. Both are good organizations. My experience long ago, and mentioned here recently, is that NFCU has branches at most Naval Bases. (They used to have a branch in Bancroft Hall ..which was pretty convenient before you could find an automatic teller on every corner). USAA is more of a full service financial institution, including insurance, investments, etc. Personally, I cut ties with USAA 30 years ago when they denied my application for a credit card --granted I was a law student at the time, with no source of income, but I did have very good credit, savings, and strong earning potential as a lawyer. I thought their decision was pretty short sighted, so I pulled all of my accounts and insurance, and haven't looked back at them.
 
Great question. Would someone mind expounding on the commissioning loan? Amount and purpose?
 
Ditto on what Old Navy BGO said about your planning. Good on you!
TexMex2022 said:
Thank you! I will look into that NFCU card when I get the PTR Packet.
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The form in PTR is NFCU checking account application and direct deposit form. You apply a NFCU credit card AFTER you sworn in as a Midshipman and have time to do it - earliest is during Plebe Parent Weekend in August, and you will also have your mailbox number by then. It’s a great tool to build credit history and I can already tell you are having a great one in the making!
 
Old Navy BGO said:
Wow....I'm impressed with a High School Senior thinking ahead about finances like that. I still remember a roommate looking at the credit limits on his three Visa accounts the week before Spring Break and figuring that he had $750 to spend on a road trip to Ft Lauderdale. He had a great time, made it back, and graduated with a lot of debt. I had to laugh when his first job out of the Navy was in the financial planning world !

The fact that you are thinking about it is better than having a plan. The best plans in the world don't withstand initial contact with the enemy, and in this case, the enemy is the twists and turns that life brings. If you stick to a couple basic rules -- don't spend more than you make, save for a rainy day, don't dip into your principal, and pay off your credit card bills monthly, you will do fine. Watch interest rates -- it's fine to borrow money when the interest rate is lower than what you can make investing (in other words, don't be in a hurry to pay off the Commissioning Loan if its a good deal).

With respect to NFCU v. USAA. Both are good organizations. My experience long ago, and mentioned here recently, is that NFCU has branches at most Naval Bases. (They used to have a branch in Bancroft Hall ..which was pretty convenient before you could find an automatic teller on every corner). USAA is more of a full service financial institution, including insurance, investments, etc. Personally, I cut ties with USAA 30 years ago when they denied my application for a credit card --granted I was a law student at the time, with no source of income, but I did have very good credit, savings, and strong earning potential as a lawyer. I thought their decision was pretty short sighted, so I pulled all of my accounts and insurance, and haven't looked back at them.
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As plans go I see the best plans are those that leave a lot of gray area on the details. I'm trying to keep it strict but open to change if need be, especially in investments. If I have to end up paying my own phone bill (most likely will be next May) that will eat up a good chunk of my pay, therefore the options for continued savings is lesser.
I was looking to NFCU for checking and loans but USAA for credit and investments. So far I've had great customer service from both and am sorry to hear your bad time. I was planning on USAA Mutual Funds because of their proximity to the Yard and to build ties with a bank early on.
 
Zeus said:
It allows you to set up at your first duty station. It’s a great way to defer the cost of the Marines uniform, and pay back later after Commissioning.
Here is a great thread if you never read it before:
https://www.serviceacademyforums.co...-retirement-stats-and-food-for-thought.56277/
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Greatest thread I have read in a while. Very informative about how to make the Commissioning loan work for you! I was thinking now about using my lump car cash for an aggressive fund for the experience and to use for a career starter as I would put aside every month and eventually the CommLoan into a more conservative growth fund for retirement.
 
I've used both NFCU and USAA and currently just use USAA for my banking and some of my investments. All of my kids (grown and gone) use USAA as well. NFCU does have its own branches and ATMS in a lot of military areas while USAA has few of them BUT USAA refunds/reimburses ATM fees so just find an ATM (even an NFCU ATM) and use that. For investments, I was much more impressed with USAA. When my daughter was trying to move an inherited IRA into her name, the USAA investment adviser helped her greatly.
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The "Career Starter" Loan is currently (i think) up to $50K and most mids use that to buy a car during 2/c year. Putting some away to help set up initial apartment, etc is a good idea.
 
TexMex2022 said:
So far I've had great customer service from both and am sorry to hear your bad time
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> Wouldn't call it a bad time.... USAA is a good firm and I have nothing against them. Frankly, I didn't even need the credit card at the time, but felt that a financial institution that built its reputation on supporting veterans but wouldn't take the chance on me didn't deserve my business. I thought that a USNA grad and law student with promising career ahead would be a good bet, and I've done fine without them.
 
OldRetSWO said:
The "Career Starter" Loan is currently (i think) up to $50K and most mids use that to buy a car during 2/c year
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Wow... $50K "career starter.." I need to run the perimeter the next time to see what kind of cars the Mids are buying now ! I think mine was to $10k, $5K from Navy Mutual Aid (including a life insurance policy that I still have) and $5K from another lender (I don't recall, and either didn't take it or paid it off as soon as interest started accruing).
 
OldRetSWO said:
USAA refunds/reimburses ATM fees so just find an ATM (even an NFCU ATM)
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With an Active Duty checking account with NFCU, they reimburse up to $20 ATM fee a month. With all the paying your peer apps out there, and presumably you will use your credit card and pay off the balance each month, who would rake up $20 ATM fees in a month these days?

https://www.navyfederal.org/branches-atms/visa-plus-atms.php

Also, I recommend declining your debit card and only use the credit card. In the case it falls victim and be hacked, you don’t need to worry about your bank account drained even it may be just temporarily, in the case of a debit card.
 
Zeus said:
With all the paying your peer apps out there, and presumably you will use your credit card and pay off the balance each month, who would rake up $20 ATM fees in a month these days
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:sadwavey: Me...... Of course, I don't even know what "pay your peer apps" are .... there are still a lot of dinosaur's out here.
 
TexMex2022 said:
Greatest thread I have read in a while. Very informative about how to make the Commissioning loan work for you! I was thinking now about using my lump car cash for an aggressive fund for the experience and to use for a career starter as I would put aside every month and eventually the CommLoan into a more conservative growth fund for retirement.
Click to expand...

Search the SA individual forums with these terms, for multiple threads:
Career starter loan
USAA loan
NFCU loan

It is essentially a signature (no collateral) loan made available to 2/c, at a very low interest rate. Payments start a few months after graduation by automatic funds transfer. Term of the loan is usually 5 years. The interest rate is tiny compared to a usual signature loan rate. It’s based on the expectation of 5 years obligated service at known income rates. There are pros and cons to this, as well as various perspectives. The default rate is usually 18%, a standard rate, if the terms of the loan contract are not met. One of the terms is remaining a midshipman in good standing and commissioning.
If the loan is used as intended - pay off higher interest consumer debt (credit card, student loans for college applicants, auto loan, etc.), establish an emergency fund, fully fund a foundation in IRA and other long-term investments, set aside cash for new officer expenses (Marines pony up a big chunk of cash for their beautiful uniforms in senior year), do smart things with the money, it can be a productive path. There are always those who blow it on consumables or goods that quickly lose value.
 
Zeus said:
I don’t know where that $50K guess is coming from.
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That is what SonOfOldRetSWO and his classmates got (class of 2011) so its more experience than guess.
 
Capt MJ said:
Search the SA individual forums with these terms, for multiple threads:
Career starter loan
USAA loan
NFCU loan

It is essentially a signature (no collateral) loan made available to 2/c, at a very low interest rate. Payments start a few months after graduation by automatic funds transfer. Term of the loan is usually 5 years. The interest rate is tiny compared to a usual signature loan rate. It’s based on the expectation of 5 years obligated service at known income rates. There are pros and cons to this, as well as various perspectives. The default rate is usually 18%, a standard rate, if the terms of the loan contract are not met. One of the terms is remaining a midshipman in good standing and commissioning.
If the loan is used as intended - pay off higher interest consumer debt (credit card, student loans for college applicants, auto loan, etc.), establish an emergency fund, fully fund a foundation in IRA and other long-term investments, set aside cash for new officer expenses (Marines pony up a big chunk of cash for their beautiful uniforms in senior year), do smart things with the money, it can be a productive path. There are always those who blow it on consumables or goods that quickly lose value.
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A lot of good info thanks again Capt MJ. But could you elaborate on what this extra cash need for Marine uniforms is?
 
TexMex2022 said:
But could you elaborate on what this extra cash need for Marine uniforms is?
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All officers pay for their uniforms, in the case of USNA grads who go Navy, some but not all of their USNA uniforms are usable in the Navy career with just insignia changes. In the case of USNA grads who go Marine Corps, they need to purchase virtually all of their "seabag" of USMC uniforms and the cost is not low.
 
TexMex2022 said:
A lot of good info thanks again Capt MJ. But could you elaborate on what this extra cash need for Marine uniforms is?
Click to expand...

I am sure current USNA mids or recent Marine grads can chime in with more accuracy, but those midshipmen going Marine purchase a specified set of types and numbers of uniform items, including the Mameluke sword, which must be paid for before graduation. A team comes up from Quantico to measure and fit, and the uniforms are custom-made of top-quality materials. There is a reason they look so sharp! Since none of their USNA mid uniforms make the transition, they are starting from scratch.

The number $3500 is sticking in my head for the Marine uniform buy.

In contrast, Navy officers are told what uniforms they must have by Uniform Regulations. It’s up to them how many, and they are purchased off the rack and tailored at the Uniform Store. The SDBs are Brooks Brothers, as I recall. Some of their USNA SDBs and mess dress will be in good enough shape to be re-striped with Ensign rank insignia. The Navy officer sword is not required until the rank of Lieutenant Commander. The individual officer determines how many of each Uniform he or she needs to look routinely squared away. New Ensigns will be buying uniforms appropriate for their first duty station and replacing worn items.

When I had duty at USNA as a Battalion Officer, during summer white season, depending on the activities of the day, I might go through 2 sets of SW in a day. I had 3 pairs of spare white shoes in my Bancroft Hall office, more at home. The more senior I became, the more attention I paid to uniform appearance.
 
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