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TechnoratiIt would take 61 years to pay off a $5,000 credit card balance if you make only the minimum monthly payment. You would pay almost $16,000* in interest! * Assuming a 14% interest rate and minimum payment of 1.5% of the outstanding balance.
Action #5: Protect Your Credit Rating
Lenders use credit reports to decide whether to loan money. Insurance companies, landlords and employers also check credit reports. A report that shows defaults or late payments- even 30 days late-can mean not getting a loan or paying a higher interest rate.
TRY THIS: Find out your credit rating. Call a credit bureau for a copy of your report.
• Pay all bills on time.
• If you're having trouble paying bills, get advice from a reputable nonprofit organization before you become delinquent.
• Check your credit report every year.
• Alert the credit bureau if you see errors in your report.
TIP: CREDIT BUREAUS
Equifax 1-800-685-1111
Experian 1-888-397-3742
Trans Union 1-800-888-4213
Action #6: Get the Best Deal
When you borrow money, you have a right and a responsibility to know all the loan's terms and conditions. Ask questions and compare interest rates and fees. Know what's at stake if you don't make your payments.
TRY THIS: Before you borrow money, ask these questions:
• What is the interest rate?
• What are all the fees?
• How much will I have paid in interest when the loan is paid off?
• Can I pay it off early without penalty?
AND THIS: Shop around and compare. Don't get taken.
• Question an offer that makes borrowing sound too good to be true.
• Always read and understand the fine print.
• Seek help if you need it.
TIP: SAVE MONEY WITH THE RIGHT LOAN
Get the Lowest Rate
$15,000 Car Loan for 5 Years
Lender Interest rate Total interest
Pixley Bank 6.5% $ 2,609.53
ABC Car loan 7.5% $ 3,034.15
XYZ Finance Company 8.75% $ 3,573.51
Choose the Shortest Term
$15,000 Car Loan at 10 Percent Interest
3-year 4-year 5-year
Number of payments 36 48 60
Payment $ 484 $ 380 $ 318
Total paid $ 17,424 $ 18,261 $ 19,122
Interest saved $ 1,698 $ 861 $0
Action #7: Take Control
Getting the right information can help you gain control of your finances.
TRY THIS: When you need information, make sure the source is reliable.
• Know whom you are dealing with.
• Make sure the resource is credible and properly trained, accredited or certified.
• Ask for references.
• Understand any fees or charges.
• Make sure they're not trying to sell a product or service.
• Avoid resources that charge excessive fees.
• Ask questions.
TIP: Christian Financial Ministries is a reliable source (www.good-steward.org)
Action #8: Learn More About Money
There's a lot to learn about money, and there's plenty of free information available. The Federal Reserve education web site, www.federalreserveeducation.org, offers personal financial education information and links to many useful resources.
TRY THIS: Look for organizations in your community that can help you learn more about setting financial goals, budgeting, saving, using credit wisely and getting the best deal. Here are some possibilities: Nonprofit credit counseling service
• Library
• Community college
• Bank or credit union
• Nonprofit community development corporation
• Nonprofit housing organization
• Religious organization
• Senior citizen center
• Employee assistance program
• Cooperative extension service
TIP: Don’t forget you can find out lots of info and get lots of help from Christian Financial Ministries at www.good-steward.org.
Bob Louder is the Founder and President of Christian Financial Ministries. You can reach Louder and Christian Financial Ministries at www.good-steward.org.
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