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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.

2. Don't confuse having access to buy with actually affording to buy. Credit only creates access, whereas real money creates real ability.

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.

5. 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.

8. 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 emergencies.

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 debt.

Ask Mr. G
Jim Garnett, The Debt Doctor
AskMrG Consulting, LLC
2216 SW 35th Street
Ankeny, IA 50023

Paul S Richard PhotoICFE eNEWS is available FREE upon request by visiting our Web site and filling out the contact form, and selecting "Yes" for "Add to Mailing List. Please pass this eNEWS on to your peers and interested others and invite them to subscribe for free. Also, visit the ICFE's new Web site: StudentDebtHelp.org

Sent by:

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 Store.

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