ICFE eNEWS #17-32 - October 18th 2017
Top 10 List of Credit Don'ts
By Jim Garnett, a/k/a Ask Mr.G, a member of the ICFE's Board of Educational Advisors
Credit is confusing to many people. Here is a list of 10
"Credit Don'ts" that ought to help you through the maze.
1. Don't think of credit cards as money. Using a credit card is
similar to taking out a loan in that you are borrowing money
that must be repaid, sometimes with interest.
confuse having access to buy with actually affording to buy.
Credit only creates access, whereas real money creates real
3. Don't look to the seller to determine what
you can afford to buy or borrow. Determine that yourself.
4. Don't use a secured debt (a home equity loan) to pay off
an unsecured debt (a credit card). Doing so does not lessen your
actual amount of debt. It only changes your debt from an
unsecured debt to a secured debt putting your home at risk. In
such cases, one's credit card debt normally returns after just
30 months because no spending habits were changed.
Don't assume you are financially healthy because you are current
on your monthly bills. Many people use credit each month to pay
their bills on time. Using credit to stay current on our bills
creates the illusion that we have plenty of money when just the
opposite is true. Put your credit cards in a drawer for two
months and see if you are still paying your bills on time.
6. Don't borrow what you can; borrow only what you need.
7. Don't focus on just the monthly minimum payment, but
instead, look at the total debt you are creating.
Don't think of your credit cards as a savings account. Build a
real savings account with a balance of at least a $1000 for
9. Don't use the equity of your home like an
ATM machine and borrow against it every time you need something.
Instead, guard your home's appreciating value for the future.
One day you may want to sell your home and move, and you'll want
as much equity as possible.
10. Don't forget that
although credit is important, good credit just enables us to go
into debt with good terms! Try getting out of and staying out of
© Jim Garnett, The Debt Doctor
AskMrG Consulting, LLC
2216 SW 35th Street
Ankeny, IA 50023
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Paul S. Richard
President - Executive Director
Institute of Consumer Financial Education (ICFE)
About the ICFE:
The Institute of Consumer Financial Education (ICFE) was founded in 1982 by
the late Loren Dunton (creator of the Certified Financial Planner (CFP)
designation and founder of the College for Financial Planning in Denver, CO.)
The ICFE is dedicated to helping consumers of all ages to improve their spending
practices, increase savings and use credit more wisely.
The ICFE is an
award winning, nonprofit, consumer education organization that has helped
millions of people through its financial continuing education courses programs
and resources. In addition to eight Certification courses covering identity
theft, credit files, credit repair and credit scoring, among others, it also
publishes the Do-It-Yourself Credit File correction Guide, which is updated
annually. The ICFE has distributed over one million Credit/Debit Card Warning
Labels and Credit/Debit Card Sleeves world wide.
The ICFE is a partner
with the national Jump$tart Coalition for Financial Literacy and the California
Jump$tart chapter. The ICFE staff is also active with San Diego Saves and
Military Saves, both offshoots of America Saves.
The ICFE is also an
on-line help for consumers who spend too much. ICFE's spending help was featured
in PARADE Magazine in the Intelligence Report section. The money helps and tips
are from the ICFE's Money Instruction Book, our course in personal finance.
The ICFE helps consumers and students with mending spending, learning about
the proper use of credit, budget and expense guidelines, how to set up and
implement a spending-plan and also how to access financial education courses and
how to teach children about money. Other ICFE services include: Ask Mr. G
library, a free eNews service, and an online resource center for students,
parents and educators, plus financial education learning tools in the ICFE Book