Newsletter Issue I: Footsteps Along the Path by Clear Path Credit Consultants
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This
edition of Footsteps Along the Path was initially issued by Clear
Path Financial Education Services which has now become Kuehn
Financial Education Services LLC. For more information about
Kuehn Financial Education Services LLC, please email Footsteps
Along the Path In this issue: *Article: The Debt Divide *Being a Consumer is a Powerful Thing: A compilation of news, views & reviews *Consumer Alert on credit bureau opt out *Clear Path Quiz *Free Upcoming Seminar: "Building a Business on a Plastic Foundation" *Giving Back to the Community: Treats For Troops! Thank you *Topic for the next issue of Footsteps Along the Path The Debt Divide There are two main categories of debt: productive and nonproductive. Student loans, mortgages and business loans are examples of productive debt. They are an investment in the future, aid in wealth accumulation and produce cash flow. Still, the return on productive debt depends on: 1) the cost of the debt including accrued interest and opportunity of not investing the money elsewhere and 2) the actual increase in earnings. Whereas unproductive debt deteriorates financial security. For instance, the vacation to Hawaii funded through a credit card that is still being paid off two years later at eighteen percent interest. Unproductive debt robs future savings to pay off the luxuries of yesteryear. However, productive debt incurred to establish and grow your business does not guarantee success and profitability. Neither does debt acquired to graduate with a college degree guarantee a well paying job. Nor does investing in a beautiful home mean foreclosure will never be a reality. Therefore, productive debt must be entered into wisely. How do you determine the savvy use of debt? It depends on many factors, such as: will the debt help you reach your goals, what is your current debt to income ratio, what is your current cash flow as determined by your budget, what degree of an income change would dramatically alter your ability to handle the debt, in what time frame will the debt be paid, and are other major expenses on the horizon. Americans enjoy a high standard of living thanks to productive debt. On the other hand, as consumers we are the most indebted people in the world. Our nation's revolving debt, predominately credit cards, is near 722.6 billion dollars (source: Fed Reserve stats ending 4/03). Clear Path Credit Consultants is actively committed to educating the public on debt. It strives to ethically empower individuals to lead a (nonproductive) debt free and solvent life. Being a Consumer is a Powerful Thing Many individuals accept what they are given.. not what they want. Clear Path Credit Consultants encourages you to find you voice and request what is in your best interest...not corporate America's. The first step in obtaining what you want is to become knowledgeable. For example, you just noticed your "9% interest, 28 day grace period, average daily balance" credit card no longer exists. Instead your balance is being calculated at 18% interest, 20 day grace period with a two cycle averaging. Do you: A) scratch your head, wonder how this occurred, but reluctantly write the check to cover your monthly payment or B) dig out the "disclosure statement" or "notice of changes to your agreement statement" that you so fastidiously filed under credit cards and actually read it? Depending upon your answer you either respect your hard earned money or not. It is prudent to take the time and read the disclosures that come with billing statements. This will prevent being shocked in an upcoming month by an increase in rates or a change in billing procedures. In the case of credit cards, as the consumer, if you do not agree with the new terms contact your credit card company. Tell the customer service representative (and if need be the manager) your expectations. If you pay on time and have a lengthy history with the company, you have leverage to negotiate. In addition, it is wise to review the terms when issued a credit card that replaces an expired one. The company has no obligation to give you the same terms previously provided. Again, pick up the phone and dial customer service and let your voice be heard if the terms are not favorable. Always get any negotiated changes in writing. Simply tell the business you want a letter confirming the discussed terms. But, do not be fooled into thinking that if your credit card is good for three years the present terms you just negotiated will be applied to the full three years. Constantly read all the disclosure statements. If you receive a change in terms and creditor will not negotiate: 1) contact the company by phone and letter telling them you want to pay off your balance on the old terms 2) do not make any new charges with this creditor while paying off your balance 3) once zero balance is achieved, close the card. A word to the wise, do not initially tell the credit card company you plan on closing the account. This provides no incentive for the creditor. However, the credit card company may state that if you reject the new terms, it will allow you to pay the balance on your more favorable current terms, but it will close your account. If your creditor tells you this, ask how it will report the account closing to the credit bureaus. You always want the credit bureaus to note "account closed by consumer." Please be aware, a disclosure statement is not necessary to up your fixed interest rate. For instance, if your credit card payment arrives late (even by hours), it may trigger an increased interest rate. Also, if you pay late, are over your credit limit, or have high debt to balance limits, credit card companies will not be as eager to embrace your new - found consumer voice! You must be responsible in handling your debt to benefit from better financial terms. *For more information on your rights refer to the FTC's Fair Credit Billing Act Consumer Alert Are you interested in protecting the information about yourself that credit bureaus harvest? Well, your personal credit information goes public with the four major credit bureaus (Equifax, Experian, Trans Union and Innovis) starting July 1, 2003. Your credit info, phone number, mailing address, ect. will be released to anyone who requests it. For information including a phone number to opt out and not permit the credit bureaus to disseminate your info (other than by your permission) please E-mail Clear Path Credit Consultants with "credit opt out" in the subject line.  Clear Path Quiz The first person responding with the correct answer to the following question will receive a gift certificate for four free issues of The Business Journal (Phoenix edition) compliments of Clear Path Credit Consultants. The question and answer with acknowledgement will appear in the next issue. Please type "Clear Path Contest" in the subject line. Question: Three ways to increase savings are: 1) generate money 2) cut expenses and 3)? What is the third way to increase savings? Free Upcoming Seminar: "Building a Business on a Plastic Foundation" August 9th 2:00 P.M. Glendale Public Library (59th & Brown Street, Glendale AZ) RSVP Kathy Hamel, Glendale Business Librarian, at 623-930-3552 "Credit card companies have discovered small business is good business and have tailored their products and services to fit the smallest of ventures. Discover ways to improve your credit, increase cash flow, along with evaluating credit card features. This presentation will aid start up companies as well as growing businesses by addressing: 1) utilization of personal credit during start up 2) development of credit in your business name and 3) procurement of a bank loan." Giving Back to the Community On June 6, 2003 Clear Path Credit Consultants donated the items collected through Treats For Troops! to the Arizona National Guard Family Assistance Center in Glendale, AZ. Thank you to all the small businesses that donated. Your generosity enables spouses of deployed military to send treats and a bit of home to their loved ones in the Middle East. Gretchen Beard, a volunteer at the Arizona National Guard Glendale Family Assistance Center, created a fantastic program to collect needed supplies not only for the deployed troops, but also for their family members. Ms. Beard's ideas and efforts show the immense power of one person to make a difference. Watch for a new drive to collect for Arizona military families in need. Again, thank you from the bottom of my heart for donating, Debi Kuehn, owner of Clear Path Credit Consultants. Upcoming in Footsteps Along the Path Next issue look for information on the difference between being debt free and credit worthy! Deborah A. Kuehn is the sole proprietor of Clear Path Credit Consultants, a debt management education service. Kuehn views herself as a consumer advocate that assists people in leading a debt free and credit worthy lifestyle. She has a MBA with a B.A. in Communications. Clear Path Credit Consultants' services include: spending plan development (budgets), cash flow budgets and forecasting, credit bureau report analysis, money management skills sessions, assistance with interest rate negotiations, along with community and corporate lectures. "Clear Path Credit Consultants: Helping you sleep better at night." PH: 623-580-9293 This first edition is dedicated to Dan and Ms. Ja Vu and in memory of Rianns and Caleab Written by Deborah A. Kuehn MBA All rights reserved Clear Path Credit Consultants is a registered trade name Issue I June 13,2003 |
