On Take It To The Bank,
00:00:01.36\00:00:02.70
you will find ways
to get out of debt...
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solve your credit card problems,
00:00:09.47\00:00:14.51
how to make and
stick with a budget...
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simple ways to save,
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buying or selling a home
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and many more financial matters,
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on Take It To The Bank.
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Hi. My name is Cordell Thomas.
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And welcome back to
Take It To The Bank.
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I look forward to
chat with you today
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about a specific issue
that's I think very important.
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It is about credit.
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Credit, how you evaluate
the use of a credit card,
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and how important it
is in our daily lives.
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Do we need credit?
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Some of the important questions
that we can typically ask
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about these issues.
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One of the things
we'll talk about today
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will be the 20/10 rule.
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How much debt
should you take on?
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The other issues
would be how can we talk to
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and teach our
kids, our young people,
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our college students
about the use of credit.
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What's the best age to
start teaching your child
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about credit cards?
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Is a credit card a necessity
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for young person
that goes into school?
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So we start this conversation.
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I think it's gonna
be quite interesting
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as we go through this
process for the next few minutes
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and discuss this
issue called credit.
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I have a couple of questions
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that I'd like to ask you
upfront to see where we are at.
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The first question
I have has to do with
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what a credit report is.
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Is it A,
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a list of your financial
assets and liabilities?
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Is it B, your monthly
credit card statement?
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Is it C, your loan and
bill repayment history?
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Or is it D, your credit line
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with your financial institution?
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If you've answered
C, you are correct.
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A credit report is a loan
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and bill payment history report.
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Basically, it is kept
by your credit bureaus.
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And it's used by
financial institutions
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and other potential creditors
to determine how likely it is
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that you will repay your debts,
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an assessment of your character.
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Information in
your credit report
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can affect your
ability sometimes to get a job,
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to get a loan, to
get another credit card
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and of course, possibly
in some cases insurance.
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Okay. Question number two.
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The terms--
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In terms of credit,
what does APR stand for.
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Is it A, annual percentage rate?
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Is it B, annual penalty rate?
Is it C, annual payment rate?
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Or is it D, annual payoff rate?
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If you've
answered A, you're correct.
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APR stands for your
annual percentage rate.
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The APR is a measure
of the cost of credit.
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What you are willing to pay
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to access the
use of that credit.
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Usually the lower the
APR, the better it is for you.
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Let's go to several
statistics that are going--
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that are out there right
now in reference to credit.
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The average credit
card debt per household
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as of January 2010 is $14,750,
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$14,000 worth of
credit card debt.
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In average there
are approximately
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609.8 million credit cards
in circulation by US consumers.
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The average
number of credit cards
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held by card holders
is about 3.5 card holder.
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That was as of year end 2008.
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In total, US consumer
debt is 2.4 trillion dollars
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as of June 2010.
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That is a significant number.
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And of course, one
of the basic measures
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of what's going on in
our in our society right now
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is a context of delinquency.
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What do I mean by delinquency?
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Well, delinquency
very basically means
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that I am delinquent.
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Or I am late.
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Or I haven't made my
payment on a timely basis
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on this credit card.
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And they're saying that
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where the rate is approximately
3.23 percent of consumers
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are actually running
delinquent as of January 2011
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of 60 days or more, 60
days delinquent and or more.
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Of course, we went through
a financial meant meltdown.
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People are now lacking the money
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that they used to have
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in reference to
equity in their homes,
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they can't
leverage that anymore.
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And it's interesting as we talk
about this issue called credit.
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And I'll tell you why.
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There was a story that's out
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about the
generational differences
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and how the generations approach
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the use of money and credit.
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The story is told over
of a 55 year old gentleman
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who's the baby boomer
and he had a young, a child,
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a daughter who was
millennial individual
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or still is for that matter.
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And they had a
conversation with both.
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The conversation
with the dad was,
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"Yeah, we lived
through the 60s, 70s and 80s
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and we had homes
appreciating the value.
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We could leverage the
debt, we could get credit cards
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and quite frankly get
into a whole lot of debt."
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His daughter in the
meantime has come on scene
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as a 23 year old millennial.
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She basically says you
know, "I open a checking account
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and as I use the
checking account,
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I bounced my check.
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And once I bounced the check,
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I realized the importance
of watching my finances.
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And she said I've
never bounced another check.
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In fact, I now watch my
money in a real time basis.
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I don't use credit cards,
I don't have credit cards.
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And that which I use
is a cash based basis.
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But I do use
technology to maintain
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and manage the use
of the money I have.
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So I can tell you at
any specific time of day
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where my money is going
and what my money's doing."
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It was an interesting
article to take a look
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at the generational differences
of how we perceive finance,
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and how we perceive debt,
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and how we have handled
debt within our lifestyle.
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So baby boomers come
from a different generation
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but they have
taught their young people
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in a specific way
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that we are
result of our parents.
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When we look at
the context of credit,
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there are several
things we have to discuss.
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One is, do we
need a credit card?
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The statistics show
that in circulation today
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there's approximately
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49 million American
Express cards out there.
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MasterCards,
there are approximately
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171 million
MasterCard credit cards.
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In reference to debit cards,
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there are 123
MasterCard debit cards.
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Visa has 269
million credit cards
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that are out there.
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And then of course,
MasterCard, Visa Debit cards
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are approximately
397 million cards.
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Now there's a
resurgence or a growth
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in the number of debit
cards that are being used
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which is a good thing.
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But there are many
things we have to discuss
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about even debit cards.
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It gives a really money.
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It comes
directly from your account
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and you're not
borrowing the money.
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So the issue of credit is
beginning to take a change
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as our millennial
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and our urban
mindset demographics
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are changing the
way we think of things.
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But they are
still consumer driven
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as some of the
research shows us.
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So if we look at that
and how credit is being used,
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it's important to understand
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that if we become
delinquent in our payment
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on a credit card,
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it tells us that the
banks now have control
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to say that we could
raise the interest rate
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if you miss a payment.
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So if you take a
look at the use of credit,
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you can see that, for example,
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the national average in
APR is actually 14.65 percent.
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If you have bad credit or
you missed several payments
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or that type of thing,
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the interest rate can actually
go up to near 25 percent,
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25 percent
annual percentage rate
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which is very interesting
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because that's a lot of money
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to pay out for
that use of the credit,
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when we can think
about how we value the things
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we want to purchase.
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If we want to purchase
it, as I talked about my son,
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he is now saving
based on a goal in mind.
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Secondarily.
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We all have to discuss the issue
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of what kind of
budget do we have.
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What kind of revenue
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and or money coming
into our bank accounts.
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And how is the money
going out of our bank accounts.
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How do we measure
the amount of credit
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that we do have.
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My recommendation is zero.
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But it's saying the 20/10 rule
says you should maximum have
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20 percent of
your annual income,
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net income going to credit
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and in reference
to paying it back,
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they say that the
reference point is
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approximately ten percent
of your net monthly income
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should go back to the
repayment of that debt.
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We're looking at a
lot of different areas
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but I want to take
you to a quick commercial
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or interview of several
people we saw on the street
00:09:17.42\00:09:19.99
and we asked them that
question regarding your credit.
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"Are you likely to carry a
balance on your credit cards
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or do you pay
them off each month?"
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Let's take a look at
these select interviews.
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I try to pay
them off each month.
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I try, currently at this moment
I don't have any credit cards
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because I've had a
problem in the past.
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So I am doing just
debit cards and cash only
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to help my, help myself
mature financially a little bit.
00:09:44.68\00:09:47.75
But when I did
have credit cards,
00:09:47.78\00:09:49.12
I tried to make sure that
were paid off on a monthly,
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on a monthly basis.
00:09:51.79\00:09:54.32
I carry a balance
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because that's the only way
you can increase your credit.
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But the problem is
00:09:59.43\00:10:00.76
you normally
fall back like I have.
00:10:00.80\00:10:03.16
But it's only
because of economy.
00:10:03.20\00:10:06.20
With my credit cards,
00:10:06.23\00:10:07.57
I actually
carry a small balance.
00:10:07.60\00:10:09.37
I think it's essential for us
00:10:12.84\00:10:14.64
that it to understand
what credit is actually about
00:10:14.68\00:10:17.28
and how it impacts
each one of our lives.
00:10:17.31\00:10:18.88
The total
credit card delinquency
00:10:18.91\00:10:21.08
that's been paid
out over the past year
00:10:21.12\00:10:23.18
was approximately
20.5 billion dollars
00:10:23.22\00:10:26.86
in reference to penalties.
00:10:26.89\00:10:28.46
And there are many
other things we can talk about
00:10:28.49\00:10:30.03
but I like to bring it
back to what we started with.
00:10:30.06\00:10:34.30
And it's a matter of looking
from a biblical perspective.
00:10:34.33\00:10:37.27
And I told you about a
verse in 1 Corinthians 4:2.
00:10:37.30\00:10:41.60
1 Corinthians is a
book in the New Testament.
00:10:41.64\00:10:45.27
And if you look
after the Gospels,
00:10:45.31\00:10:46.78
Matthew, Mark, Luke and
John, you have Acts, Romans
00:10:46.81\00:10:49.94
and there is 1 Corinthians.
00:10:49.98\00:10:51.75
1 Corinthians chapter four,
the chapter is 4 and verse 2.
00:10:51.78\00:10:55.78
And it says
basically a steward is one
00:10:55.82\00:10:59.82
that is faithful.
00:10:59.85\00:11:01.46
We are stewards. We
need to be faithful.
00:11:01.49\00:11:03.83
What do I mean by
steward? One that is trusted.
00:11:03.86\00:11:07.83
We go back to the
parable of the talent.
00:11:07.86\00:11:11.50
And we talk about wealth.
00:11:11.53\00:11:13.34
Wealth doesn't have
to do just with money.
00:11:13.37\00:11:16.30
Wealth has to do with
the skills and talents
00:11:16.34\00:11:18.94
that Christ has given you.
00:11:18.97\00:11:20.64
There are those
that are talented
00:11:20.68\00:11:22.34
in the skill of managing money
00:11:22.38\00:11:24.65
and there are
those that are talented
00:11:24.68\00:11:26.38
with the skill of repairs,
00:11:26.41\00:11:29.48
mechanics, faith as
we discussed in James.
00:11:29.52\00:11:33.79
James 2: 5-9.
00:11:33.82\00:11:36.16
And the context of wealth means
00:11:36.19\00:11:37.63
that we are no longer
looking at stereotypes
00:11:37.66\00:11:40.50
and we treat one
better than the other.
00:11:40.53\00:11:42.60
There are no favorites here.
Christ treats us all the same.
00:11:42.63\00:11:45.73
We should treat others the same.
00:11:45.77\00:11:47.90
In fact, the
more wealth you have,
00:11:47.94\00:11:49.50
the humbler you should be.
00:11:49.54\00:11:51.81
When you took a look at the way
00:11:51.84\00:11:53.61
someone used the
finances in this case,
00:11:53.64\00:11:56.24
the money that God
gave them as He went away,
00:11:56.28\00:11:59.35
He says I'm coming back.
00:11:59.38\00:12:00.72
I'm going to
hold you accountable.
00:12:00.75\00:12:02.55
Debt is now a unique
thing because we are now
00:12:02.58\00:12:06.45
no longer working for
something that we want,
00:12:06.49\00:12:09.62
we are using
credit to obtain something
00:12:09.66\00:12:12.69
and taking our
time to pay it off.
00:12:12.73\00:12:14.60
And that's not
good use of God's money
00:12:14.63\00:12:17.17
because we're
taking a lot of money
00:12:17.20\00:12:19.57
to actually cover the
interest on that debt.
00:12:19.60\00:12:25.14
Biblically it's sound.
00:12:26.64\00:12:28.44
When you take a look at
the numbers, it's critical
00:12:28.48\00:12:31.31
because there are
00:12:31.35\00:12:32.68
many different
types of credit cards,
00:12:32.71\00:12:34.05
credit card accounts.
00:12:34.08\00:12:36.69
Let's take a
look at a few of them.
00:12:36.72\00:12:39.45
There are bank
cards, Visa and MasterCard,
00:12:39.49\00:12:43.16
come from the major banks,
00:12:43.19\00:12:44.59
which is where you can
get these type of cards.
00:12:44.63\00:12:46.86
But there are also department
store cards, gas cards
00:12:46.90\00:12:50.70
that can be really only
used at that specific location,
00:12:50.73\00:12:55.37
wherever that might be.
00:12:55.40\00:12:56.87
And then, of
course, there are travel
00:12:56.91\00:12:58.61
and entertainment
cards which require
00:12:58.64\00:13:00.81
that you pay off the
debt within that 30 days
00:13:00.84\00:13:04.88
which are actually pretty good.
00:13:04.91\00:13:06.25
We use the money.
00:13:06.28\00:13:07.62
And then you are make sure
you're able to cover that debt
00:13:07.65\00:13:10.89
within 30 days.
00:13:10.92\00:13:12.42
That's not a bad thing.
00:13:12.45\00:13:14.06
The overall context
of credit now is to know
00:13:14.09\00:13:17.56
that there are
different forms of cards
00:13:17.59\00:13:19.93
that can come your way.
00:13:19.96\00:13:22.46
Now when you shop
for a credit card,
00:13:22.50\00:13:24.20
there's seven basic
things I ask you to look for.
00:13:24.23\00:13:28.07
I think it's critical
00:13:28.10\00:13:29.44
as we take this
journey together.
00:13:29.47\00:13:30.81
One is, determine the
best use of that card.
00:13:30.84\00:13:35.04
I talked about our young people
00:13:35.08\00:13:37.11
and our kids as
they're growing up.
00:13:37.15\00:13:38.88
What's the best time to
teach them about credit.
00:13:38.91\00:13:41.15
I think any time is a good time
00:13:41.18\00:13:43.22
to talk to your
young person about Credit.
00:13:43.25\00:13:45.92
What that time
is, I can't tell you.
00:13:45.95\00:13:48.12
You know the
personality that child has.
00:13:48.16\00:13:50.59
You know what type of
learning capacity they have.
00:13:50.63\00:13:52.99
And you know the right time
to give them that education,
00:13:53.03\00:13:55.56
where the education is key.
00:13:55.60\00:13:59.57
Now when you use the
card, what are your plans?
00:13:59.60\00:14:03.24
The first thing
you should think of is,
00:14:03.27\00:14:05.27
this card should
probably only used
00:14:05.31\00:14:06.94
in an emergency setting
00:14:06.98\00:14:08.31
or it can only be used
if I need to book travel,
00:14:08.34\00:14:11.35
or to use it to
book a hotel room
00:14:11.38\00:14:13.18
and or rent a car
00:14:13.21\00:14:14.55
which is necessary
from that standpoint.
00:14:14.58\00:14:18.09
The other issue that you
need to also keep in mind
00:14:18.12\00:14:22.42
in reference to the card is,
00:14:22.46\00:14:25.09
make sure you begin
the thought process of.
00:14:25.13\00:14:27.83
The use of the
card, will I be using it
00:14:27.86\00:14:30.00
to repay the bill over time.
00:14:30.03\00:14:31.67
If that's your--
if that's your excuse,
00:14:31.70\00:14:34.10
I'd say get away from it.
00:14:34.14\00:14:35.67
If you can't pay for something
in full at the time you wanted,
00:14:35.70\00:14:39.11
there's no need
to put it on credit.
00:14:39.14\00:14:41.01
You should earn that
00:14:41.04\00:14:42.38
and put value in the
thing that you're purchasing.
00:14:42.41\00:14:44.98
Number two, take
a look at the costs
00:14:45.01\00:14:48.38
and features of a credit card.
00:14:48.42\00:14:50.59
There are several. What is APR?
00:14:50.62\00:14:53.56
And we talked about
APR. What does it mean?
00:14:53.59\00:14:55.66
Annual Percentage Rate.
00:14:55.69\00:14:57.79
What is a grace period?
They offer a grace period.
00:14:57.83\00:15:00.63
After you miss that
30-day time frame to pay back
00:15:00.66\00:15:03.97
or pay on the debt,
will they charge you a fee
00:15:04.00\00:15:07.97
or will they give you
a specific grace period
00:15:08.00\00:15:10.04
that you can help
you to cover that--
00:15:10.07\00:15:12.01
cover that payment.
00:15:12.04\00:15:13.54
Is there an annual fee?
Some offer an annual fee.
00:15:13.58\00:15:18.08
There are several
cards that charge you a fee
00:15:18.11\00:15:20.38
to use the card on
a on a yearly basis.
00:15:20.42\00:15:23.28
Take a look at that.
00:15:23.32\00:15:24.65
You want that,
00:15:24.69\00:15:26.02
maybe that's a part of
your decision making process.
00:15:26.05\00:15:29.32
Over the limit fee,
00:15:29.36\00:15:31.79
balancing all of these
issues with finance charges
00:15:31.83\00:15:36.26
that can accumulate
on your credit card.
00:15:36.30\00:15:39.17
What is the credit
limit? Is that important to you?
00:15:39.20\00:15:41.64
You need just a $100
limit, you need a $5000 limit,
00:15:41.67\00:15:44.64
those are issues to look at.
00:15:44.67\00:15:46.37
Credit is
credit. Demand is there.
00:15:46.41\00:15:49.71
And then the last
thing I talk about is,
00:15:49.74\00:15:51.65
what are the
features and the services
00:15:51.68\00:15:53.65
that are available
with our credit card.
00:15:53.68\00:15:55.05
These are all things
that you should take a look at
00:15:55.08\00:15:57.05
when you dialoguing
about, talking with your spouse
00:15:57.09\00:16:00.89
and or you're
making a personal decision
00:16:00.92\00:16:02.99
about accessing your credit.
00:16:03.02\00:16:06.33
Calculate,
00:16:06.36\00:16:07.70
determining what APR
is very important as it,
00:16:07.73\00:16:10.27
as it applies to your
average daily balances,
00:16:10.30\00:16:12.77
as it applies to
the adjusted balance,
00:16:12.80\00:16:14.24
the previous
balance, of the account.
00:16:14.27\00:16:17.04
So it's important that you know
00:16:17.07\00:16:21.74
what your credit
card balance looks like,
00:16:21.78\00:16:23.18
your card statement looks like.
00:16:23.21\00:16:24.58
Take a look at it if
you do have credit cards
00:16:24.61\00:16:27.35
and ensure you understand
every element of the card
00:16:27.38\00:16:31.45
that you are using.
00:16:31.49\00:16:33.49
Number four, or
number five, excuse me,
00:16:33.52\00:16:35.99
read the credit
card application.
00:16:36.02\00:16:39.46
Make sure you read it through.
00:16:39.49\00:16:40.83
Many of us are
just, you know, okay,
00:16:40.86\00:16:43.03
it's an application, I'm
just signing my name on it
00:16:43.06\00:16:45.33
because I'd like to
get access the credit.
00:16:45.37\00:16:46.74
But what are you
actually signing your name to?
00:16:46.77\00:16:50.31
Interpreting the
features and costs are important
00:16:50.34\00:16:52.84
and as well taking a look
at what the fine print says
00:16:52.87\00:16:57.61
about penalties and
how much they can charge
00:16:57.65\00:16:59.95
and how much they can
raise the interest rates
00:16:59.98\00:17:01.78
if you miss a payment.
00:17:01.82\00:17:03.15
Number six, before
signing, as I mentioned before
00:17:03.18\00:17:06.05
know the
details of the contract.
00:17:06.09\00:17:10.56
And then, of
course, when shopping
00:17:10.59\00:17:12.63
for any type of credit
card, make sure you know
00:17:12.66\00:17:17.07
and compare the
costs and features.
00:17:17.10\00:17:18.90
Credit, credit,
it's an interesting thing
00:17:18.93\00:17:22.04
when you talk about credit.
00:17:22.07\00:17:24.01
And what I like
to chat with you now
00:17:24.04\00:17:25.37
I'll give you a unique story
00:17:25.41\00:17:26.88
about what my
wife and I dealt with
00:17:26.91\00:17:29.78
in reference to
dealing with credit.
00:17:29.81\00:17:32.75
I want to talk to a
little bit about cooling off.
00:17:32.78\00:17:34.52
Cooling off period.
00:17:34.55\00:17:35.88
It's actually
something that's a law
00:17:35.92\00:17:37.69
in reference to
how you can handle
00:17:37.72\00:17:39.82
door to door sales people.
00:17:39.85\00:17:41.36
And any type of
acquisition or purchase
00:17:41.39\00:17:43.83
that you can make from
someone comes to your front door
00:17:43.86\00:17:46.03
of $25 or more,
00:17:46.06\00:17:47.83
you have the right to have
a 72 hour cooling off period
00:17:47.86\00:17:51.70
where you can make a decision
about this actual purchase,
00:17:51.73\00:17:55.27
did you really need to make it,
00:17:55.30\00:17:56.64
was an acquisition or
purchase that you had to make
00:17:56.67\00:18:00.18
or needed or wanted.
00:18:00.21\00:18:02.31
Those things are
critical for your understanding
00:18:02.34\00:18:04.45
so that if you do happen to have
00:18:04.48\00:18:06.95
a door to door
salesperson come to you
00:18:06.98\00:18:09.22
and sell you
something like a vacuum,
00:18:09.25\00:18:11.45
like a widget, like a book,
00:18:11.49\00:18:12.85
you will have that
opportunity to say, no,
00:18:12.89\00:18:16.76
no it's not something
that's important to me
00:18:16.79\00:18:18.99
and it's not
something that helps me
00:18:19.03\00:18:20.46
meet my own budget.
00:18:20.50\00:18:21.83
Okay, it's funny because
that person came to the door,
00:18:21.86\00:18:24.63
those two people
came as a couple.
00:18:24.67\00:18:26.37
And I answer the door my, um,
00:18:26.40\00:18:28.90
they were speaking
a different language
00:18:28.94\00:18:30.71
which is Spanish
00:18:30.74\00:18:32.77
and I couldn't really
understand everything.
00:18:32.81\00:18:34.88
Now, you know, my wife
has been trying to teach me
00:18:34.91\00:18:37.45
Spanish for a while
00:18:37.48\00:18:38.88
and I guess I've
learned a lesson from that.
00:18:38.91\00:18:42.12
They came in
00:18:42.15\00:18:43.49
and I said let me get
my wife to speak to you
00:18:43.52\00:18:45.55
because she can pretty
much understand you more.
00:18:45.59\00:18:48.02
To put it in a short context,
00:18:48.06\00:18:50.16
they were there to sell
us a water treatment system,
00:18:50.19\00:18:54.70
a water treatment system that
we are able to pay it in full,
00:18:54.73\00:18:57.37
it's $4300 and they
really dialogued us.
00:18:57.40\00:19:01.54
They actually came
in and did some testing
00:19:01.57\00:19:03.81
to the water
that we currently have
00:19:03.84\00:19:05.37
and showed us that
we were quite frankly,
00:19:05.41\00:19:07.61
quite frankly drinking something
00:19:07.64\00:19:08.98
that wasn't good for us.
00:19:09.01\00:19:10.51
And so they sold us
on a variety of things.
00:19:10.55\00:19:12.55
As a matter of fact,
00:19:12.58\00:19:13.92
they were such convincing
salespeople that they,
00:19:13.95\00:19:17.39
they were willing
to come to our church
00:19:17.42\00:19:19.39
and fellow with us and whatever.
00:19:19.42\00:19:21.69
But the case was
more under the service
00:19:21.72\00:19:24.46
that I didn't realize that
00:19:24.49\00:19:25.96
in trying to get us to
buy this big purchase item,
00:19:25.99\00:19:31.23
what I should've
initially done was say,
00:19:31.27\00:19:34.90
"Can you give us some time?
00:19:34.94\00:19:36.54
My wife and I
need to go and talk
00:19:36.57\00:19:38.97
about how this purchase
will impact our budget."
00:19:39.01\00:19:44.05
But we didn't do that.
00:19:44.08\00:19:45.55
My wife is really a soft voice
00:19:45.58\00:19:47.82
that is my good
conscience over here
00:19:47.85\00:19:50.25
and she said you know,
00:19:50.29\00:19:51.62
"We don't really
need it right now.
00:19:51.65\00:19:54.09
It's not something
that we need to have."
00:19:54.12\00:19:57.19
But of course,
in the conversation
00:19:57.23\00:19:58.56
and the dialogue, they
told us that it was necessary
00:19:58.59\00:20:02.53
and whatever needed to happen.
00:20:02.56\00:20:03.90
Now understand it's door to door
00:20:03.93\00:20:05.33
so we have a cooling off period
but the moment we said okay,
00:20:05.37\00:20:10.44
the next day their
mechanic came into our home
00:20:10.47\00:20:14.24
and actually made
some major changes
00:20:14.28\00:20:16.64
by installing this
water treatment system.
00:20:16.68\00:20:18.48
Now what did that do?
00:20:18.51\00:20:20.52
It took away a major
decision making process
00:20:20.55\00:20:23.82
that we could
have could have made
00:20:23.85\00:20:25.62
because they put the
system in the next day.
00:20:25.65\00:20:29.76
And then of
course, 72 hours later,
00:20:29.79\00:20:32.53
I was thinking, "Man,
do I really need this?
00:20:32.56\00:20:35.03
Is it really that important?
00:20:35.06\00:20:36.67
Let's, let's tell them
we don't really want it."
00:20:36.70\00:20:40.84
And though we go
back to them and say,
00:20:40.87\00:20:42.64
you know, it's not
something we really need to have
00:20:42.67\00:20:44.71
but "Oh, Mr. and Mrs. Thomas,
00:20:44.74\00:20:48.14
we have already
put down all the work
00:20:48.18\00:20:50.51
and put the stuff in your house.
00:20:50.55\00:20:52.35
It's no problem.
00:20:52.38\00:20:53.78
But we can easily
come and take it all back."
00:20:53.82\00:20:57.12
Now understanding
that there's a lot of work
00:20:57.15\00:20:59.85
that was done in
associated their pipes and stuff
00:20:59.89\00:21:03.06
to our pipes and stuff
to help soften the water
00:21:03.09\00:21:05.43
and believe me you know
taking a shower was in fantastic
00:21:05.46\00:21:08.56
because of the
salt in the waters
00:21:08.60\00:21:10.77
was soft and felt so good.
00:21:10.80\00:21:12.90
But every time I
take a shower now,
00:21:12.93\00:21:15.14
I think about how much money
I spent on just this system
00:21:15.17\00:21:19.24
that I don't
think I really needed.
00:21:19.27\00:21:21.81
So I have to switch
my mindset and think,
00:21:21.84\00:21:23.35
"Okay, this is all good.
00:21:23.38\00:21:25.18
There's no problem.
It's in the house now."
00:21:25.21\00:21:27.65
But there's always that
needle in the back of me
00:21:27.68\00:21:30.22
saying, "We really
didn't need to do it."
00:21:30.25\00:21:36.09
What is dramatic about it
is we obtained their credit
00:21:36.12\00:21:40.03
because we weren't
prepared to outlay $4000
00:21:40.06\00:21:42.96
at that point in time.
00:21:43.00\00:21:44.33
And we found that if
we made the payments,
00:21:44.37\00:21:46.27
the minimum
payments on this account,
00:21:46.30\00:21:48.47
it would take about
four years to pay off
00:21:48.50\00:21:51.31
and when we're
finished paying it off,
00:21:51.34\00:21:52.77
we would been paying
absorbent amount in interest
00:21:52.81\00:21:56.04
to get this thing taken care of.
00:21:56.08\00:21:57.75
My wife and I had a
serious chat one evening,
00:21:57.78\00:22:00.08
we prayed about it
00:22:00.12\00:22:01.45
and at the next time
we got our tax returns,
00:22:01.48\00:22:04.05
we just paid the whole thing off
00:22:04.09\00:22:05.45
and took care of
that specific debt.
00:22:05.49\00:22:07.06
But what am I saying?
00:22:07.09\00:22:08.89
The issue of credit
should be of major concern.
00:22:08.92\00:22:11.16
It should be a topic
00:22:11.19\00:22:12.99
that you talk about all the time
00:22:13.03\00:22:14.83
as it applies to your budget.
00:22:14.86\00:22:17.03
If we would have
taken the simple step
00:22:17.07\00:22:19.83
of assessing the
budget that we have,
00:22:19.87\00:22:22.74
and looking at the costs
00:22:22.77\00:22:24.37
associated with the
annual percentage rate,
00:22:24.41\00:22:27.68
take a look at the
interest of we've been charged,
00:22:27.71\00:22:29.34
take a look at the outlay
00:22:29.38\00:22:30.95
and then even ask
for secondary opinion
00:22:30.98\00:22:34.02
of having somebody coming in
00:22:34.05\00:22:35.38
and taking a look
at our water quality,
00:22:35.42\00:22:37.55
we may have changed our minds
00:22:37.59\00:22:38.95
and never went through the
hassle of that acquisition.
00:22:38.99\00:22:42.12
Now of course, it was day,
a door to door sales person.
00:22:42.16\00:22:44.89
We had the cooling off
period. But you know what.
00:22:44.93\00:22:47.60
I didn't want to
risk an upset manufacturer
00:22:47.63\00:22:51.20
coming back to my home to
rip things out of the wall
00:22:51.23\00:22:54.74
and, and, and take
back what they don't feel
00:22:54.77\00:22:59.87
they needed to take back.
00:22:59.91\00:23:01.24
So I felt it was safer
for us to stay with it.
00:23:01.28\00:23:04.18
The other thing that
was quite interesting
00:23:04.21\00:23:06.78
and something you should know is
00:23:06.82\00:23:08.65
it wasn't just the equipment.
00:23:08.68\00:23:11.12
Think about that when
you're looking at a car
00:23:11.15\00:23:13.09
or any other type of purchase.
00:23:13.12\00:23:15.42
When we bought this system,
00:23:15.46\00:23:17.46
the system ended up costing us
00:23:17.49\00:23:20.36
more so than just the $4300,
00:23:20.40\00:23:23.26
we have to pay at least
$25 every three months for salt
00:23:23.30\00:23:28.07
to pour into the system.
00:23:28.10\00:23:29.44
And every year we have
to pay another $120-$130
00:23:29.47\00:23:32.54
to have them come in
and change all the filters.
00:23:32.57\00:23:35.24
Was it really
worth it? I don't know.
00:23:35.28\00:23:38.18
At this point in
time, yes. It was.
00:23:38.21\00:23:41.45
But for you and me, I
think it gives us the idea
00:23:41.48\00:23:44.52
that we have to take this issue
called credit very seriously.
00:23:44.55\00:23:51.36
So as we are beginning
to wind down in this series
00:23:51.39\00:23:54.76
on credit on this program,
00:23:54.80\00:23:57.20
I ask you to do a
couple of things for me.
00:23:57.23\00:24:02.80
One of the
things I ask you to do
00:24:02.84\00:24:04.17
is there are a lot of
resources available online.
00:24:04.21\00:24:08.01
There are a lot of resources
that are available for you
00:24:08.04\00:24:10.61
to do searches on and
find out about credit and APR.
00:24:10.65\00:24:14.25
Educate yourself on the lingo,
00:24:14.28\00:24:16.15
read through a few things
00:24:16.18\00:24:17.52
and understand what
you are getting into.
00:24:17.55\00:24:20.69
The context is this.
00:24:20.72\00:24:22.99
There are many
things you need to know.
00:24:23.02\00:24:25.29
One is, in reference
to credit, choose wisely.
00:24:25.33\00:24:31.17
You have to stay alert
to many different things
00:24:31.20\00:24:34.30
that are going on
and many of the issues
00:24:34.34\00:24:36.60
that we need to
concern ourselves with
00:24:36.64\00:24:38.47
include the concern with fraud,
00:24:38.51\00:24:41.21
an ID theft and
those type of issues.
00:24:41.24\00:24:44.41
The other thing is to make sure
00:24:44.45\00:24:46.01
you understand the
true cost of the purchases
00:24:46.05\00:24:50.02
that you go through
within reference to credit
00:24:50.05\00:24:52.59
that you are using.
00:24:52.62\00:24:54.02
Understand your rights,
00:24:54.06\00:24:55.72
educate yourself in
reference to the 20/10 rule
00:24:55.76\00:25:00.30
in reference to how
much you should consider
00:25:00.33\00:25:03.60
in reference to what you
afford in credit on a monthly
00:25:03.63\00:25:07.14
and or yearly basis.
00:25:07.17\00:25:09.20
And then of
course, if you are in debt,
00:25:09.24\00:25:11.71
if you are in credit card debt,
00:25:11.74\00:25:13.27
and you want to
get out of that debt,
00:25:13.31\00:25:15.21
understand that a realistic goal
00:25:15.24\00:25:17.61
in paying off credit card debt
00:25:17.65\00:25:19.68
is approximately
to two to three years.
00:25:19.71\00:25:22.48
It typically takes
that amount of time
00:25:22.52\00:25:25.99
to reduce debt.
00:25:26.02\00:25:27.36
It's like losing weight.
00:25:27.39\00:25:28.72
You can't just run into the gym
00:25:28.76\00:25:30.09
and expect to lose
ten pounds overnight.
00:25:30.13\00:25:33.93
It takes time to reduce
the debt that you may have
00:25:33.96\00:25:37.97
when you are
looking at credit cards.
00:25:38.00\00:25:40.20
And then of
course, cut the spending.
00:25:40.24\00:25:43.77
It does a lot to
heal and a lot to do,
00:25:43.81\00:25:47.74
a lot of things
for your actual family.
00:25:47.78\00:25:50.55
There are things
you should look at
00:25:50.58\00:25:51.91
and I mentioned several things
that are of critical concern
00:25:51.95\00:25:55.48
and I want to
bring them up to you in
00:25:55.52\00:25:57.55
is reference to kids in credit
00:25:57.59\00:25:59.32
as we go towards
closing into this.
00:25:59.35\00:26:01.62
How young is too
young for credit?
00:26:01.66\00:26:04.79
What's the appropriate age?
00:26:04.83\00:26:07.53
Given your child a card
00:26:07.56\00:26:10.17
around age 16 may be appropriate
00:26:10.20\00:26:12.13
but it may not be
appropriate for all kids.
00:26:12.17\00:26:15.14
How do you
prepare them for college?
00:26:15.17\00:26:16.71
These are questions you
may need to start asking
00:26:16.74\00:26:18.77
and talking to them about.
00:26:18.81\00:26:20.34
I would tend to think
that the bottom line is this.
00:26:20.38\00:26:23.65
They don't need credit cards,
00:26:23.68\00:26:25.25
maybe associate their
debit card to your account.
00:26:25.28\00:26:29.28
Don't give them
overdraft protection.
00:26:29.32\00:26:31.52
Make sure that
whatever they use it,
00:26:31.55\00:26:33.32
whatever is allocated to them
00:26:33.36\00:26:34.69
that they have the
budget that wisely.
00:26:34.72\00:26:37.23
But in reference to
credit, also make sure
00:26:37.26\00:26:39.43
that they understand that
there's overall thing called
00:26:39.46\00:26:42.33
credit is a privilege.
00:26:42.36\00:26:45.23
It is a privilege.
00:26:45.27\00:26:48.07
These cards that are out there
00:26:48.10\00:26:50.54
are putting many people in debt.
00:26:50.57\00:26:52.57
Did you know that there
is a growing demographic
00:26:52.61\00:26:57.25
in our United States
and even of United, UK
00:26:57.28\00:27:01.18
and it's this,
18 and 19 year olds
00:27:01.22\00:27:03.62
are now going
for credit Counseling
00:27:03.65\00:27:05.52
because they're upwards of
$26,000 to $30,000 in debt.
00:27:05.55\00:27:09.79
They're second only
to 40 to 44 year olds
00:27:09.82\00:27:13.19
who are also obtaining
that same credit counseling
00:27:13.23\00:27:15.93
for the same purposes involved.
00:27:15.96\00:27:17.87
And that being, we owe
too much in credit cards
00:27:17.90\00:27:20.80
and we need to get
help in getting out.
00:27:20.84\00:27:23.77
There are
privileges to using credit,
00:27:23.81\00:27:25.77
you as a consumer
need to understand
00:27:25.81\00:27:28.41
that these rights
that you have to use credit
00:27:28.44\00:27:31.45
is not really a right.
00:27:31.48\00:27:32.81
It's something
that puts you in debt
00:27:32.85\00:27:34.42
and personally I think,
credit is not necessary.
00:27:34.45\00:27:38.32
It's something that we
should try to keep away from,
00:27:38.35\00:27:41.72
we should keep in mind
that the real use of money
00:27:41.76\00:27:45.06
and the value in
money is to pay as you go,
00:27:45.09\00:27:49.53
to earn what you need.
00:27:49.56\00:27:51.20
And pay for it as you need it.
00:27:51.23\00:27:54.77
Credit is key.
00:27:54.80\00:27:56.97
Take It To The Bank and save.
00:27:57.01\00:27:59.77
God bless.
00:27:59.81\00:28:01.24