Newsletter Issue V: 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 Clear
Path Credit Consultants believes: In this issue: *Clear Path in the Community *Article: "Do Inferior Credit Card Offers Yield Inferior Customers: The Bankruptcy Reform Act" *Being a Knowledgeable Consumer is a Powerful Thing: A compilation of news, views & reviews *Putting it in Perspective: Bankruptcy *A Seminar Worth Your Time: "Money and the Family: Healthy Wealth" *Topic for the next issue of Footsteps Along the Path Clear Path in the Community 8/22/03 Leading Edge Live on TV channel 11: As a panelist for the Phoenix Women's Commission's "Let's Talk Money - Financial Literacy for Women", Deborah Kuehn MBA will discuss why a man is not a financial plan and what college aged women should consider when preparing their monetary futures. Kuehn will be joined by Carol Coles Henry of the Equal Opportunity Department and Sharon Pederson, Resource Development Manager of St. Mary's Food Bank. They will explain the importance of heightening the awareness of women's economic issues. The segment will air between 11:00 and 11:30. 9/1/03 KFNN 1510 AM Financial News Radio: As interviewed by Tom Fraker, Executive Director of the Arizona Small Business Association (ASBA), Deborah Kuehn MBA describes how Clear Path Credit Consultants meets the needs of small business owners and consumers, along with information on her upcoming September 3, 2003 seminar at ASBA, "It is Easier Than You Think: How to Create a Financially Thriving Business." 9/3/03 It is Easier Than You Think: How to Create a Financially Thriving Business: Are you master of your own destiny with visions of business prosperity, but financially struggling? Do you find it difficult to meet your personal expenses while expanding your business? Do you cringe at developing concrete financial goals with a strategy to reach them? Join Deborah Kuehn MBA, owner of Clear Path Credit Consultants, for an interactive workshop which explores how revenue, profit, net income, cash flow and credit intermingle to create the reality of a money making company. This bottom line approach to financial information will increase your bottom line! Workshop time is 8:00 am to 10:00 am. Call ASBA at 602-265-4563 to register or go to www.asba.com. 9/23/03 Let's Talk Money - Financial Literacy for Women: The Phoenix Women's Commission will provide a forum for women to learn about personal economic growth and development. Deborah Kuehn MBA is one of three panelist. The presentation is from 11:30 am to 1:00 pm at Phoenix College. Please RSVP the Equal Opportunity Department at 602-261-8242 by 9/19/03. Audience seating is limited to 110. Do Inferior Credit Card Offers Yield Inferior Customers: The Bankruptcy Reform Act Americans received over a billion credit card solicitations last year and if the Bankruptcy Reform Act of 1998 is passed by Congress, billions of dollars will be added to the profits of credit card companies. For the past five years, the credit industry has lobbied the government to radically change the bankruptcy law in their favor. The stalling debate centers around the responsibility of consumers and creditors. Like the chicken and the egg scenario, what came first to cause record levels of bankruptcy...consumers who mismanaged their finances or the creditors who offer exorbitant interest rates on expansive credit limits. Individuals with poor credit card management habits, as exemplified by tardy payments, high balance to credit limits and over the limit amounts are offered inferior credit terms. Higher interest rates, shorter grace periods and excessive fees constitute terms for a substandard customer. Studies indicate banks that offer inferior terms have higher delinquency rates. However, there is a much weaker link to charge offs (not paying on the account). Therefore, such customers are profitable for financial institutions. The average number of pieces of plastic per individual is 16.9! Due to over saturation, competition among creditors is fierce. While trolling for new customers, including high school students, the credit industry is convincing Washington to tighten the bankruptcy laws. Oh the glory of having your cake and eating it too! The Bankruptcy Reform Act of 1998 will increase the rights of creditors, including credit card companies, finance companies and auto lenders. In essence it will raise the competition for the debtor's limited resources. Revamped mathematical formulas will be applied to income and living expenses to decide whether consumers must repay some unsecured debts in Chapter 13 (reorganization bankruptcy) rather than discharging them in Chapter 7 (liquidation bankruptcy). Someone asserting bankruptcy will be forced to pay unsecured debt (credit card debt) over time instead of having it dissolved through court proceedings. Coming full circle, inferior credit card offers target consumers who are desperate for a shiny piece of plastic to tuck into their wallet. The credit terms are merciless and the overly friendly advertising is misleading. Yet, there are multitudes of reasons why consumers use these cards. One is a lack of education on how to take control of personal finances to create a better credit history. Therefore, already bruised credit takes another hit by high interest rates and fees, making repayment of balances seem impossible. Being debt free appears futile and bankruptcy is viewed as welcome relief. Wow, debt free = futile and bankruptcy = relief! Consumers' psychological state supports the statistics of Arizona being on mark to record over 30,000 personal bankruptcies for 2003. Yes, the decision to extend credit lines to people not in control of their finances is lucrative and show cases the greed of the credit industry. However, unless true financial hardship occurs, taking on debt without reasonable expectation or ability to pay indicates irresponsibility on the consumer's part. In conclusion, accepting inferior credit terms molds and propagates inferior consumers and financial institutions will once again benefit if the Bankruptcy Reform Act of 1998 is passed. A vicious circle is created. Break the cycle through financial management education. If you are dealing with unmanageable debt, Clear Path Credit Consultants urges you to take a close look at what put you in this financial situation and then chart a course of action to repay your debts. Develop a budget, cut variable expenses, talk to creditors, negotiate on interest rates...these are actions that will put you in control and restore self respect. Clear Path Credit Consultants can assist. (Note: For information on steps to take to avoid home foreclosure prior to bankruptcy, contact Clear Path Credit Consultants at 623-580-9293. Clear Path realizes bad things happen to good people and as a consumer advocate support is offered through this organization.) Being a Knowledgeable Consumer is a Powerful Thing The credit opt out is hitting a nerve with the credit card companies and credit bureaus. Financial institutions declare, "the inconvenience of not getting unsolicited credit card offers denies a person instant access to credit." Yes, you read it correctly...these companies actually believe it is inconvenient for consumers not to find five credit card offers stuffed daily into their mailboxes. In regard to credit bureaus, their discontent wells from not being able to sell your personal information to credit card companies and banks in which you are not currently a customer. In Footsteps Along the Path's first edition (June 13, 2003), the following was published: 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.  In clarification and effort to broaden consumer understanding, Clear Path Credit Consultants wants you to realize this credit opt out only pertains to unsolicited offers from companies in which you are not a customer. Creditors that you do business with are able to view your credit report and send promotional mail. In addition, potential lenders that you give permission to will be able to access your credit history. Finally, you may call anytime to opt out. Putting it in Perspective: Bankruptcy Warning signs of impending bankruptcy: a) unable to make minimum required payments b) taking out cash advances from one credit card to pay another c) using credit cards to pay for items typically purchased previously with cash. Women declare bankruptcy at the highest rate, more than men and couples. Chapter 13 bankruptcy will be noted on your credit bureau report for seven years and Chapter 7 bankruptcy for ten years. To re-establish credit after a bankruptcy wisely comparison shop for a secured credit card. But, remember credit cards may be what aided in filing for bankruptcy. Therefore, only charge small purchases that you are able to pay off in full the following month. The key here is to re-establish your credit not create debt! Money is emotional. Truly analyze what personal feelings and tendencies created unmanageable debt initially. If the bankruptcy was brought about by economic misfortune (unemployment, divorce, illness) provide the credit bureaus with a 100 word or less explanation, which will become part of your credit file. Some future lenders may take this into consideration. Money and the Family: Healthy Wealth Clear Path Credit Consultants recommends the following seminar: "Money and the Family: Healthy Wealth" presented by experts in their fields, Charles C. Scott, Sharon Cottor, M.S.W. and Robert Cottor, M.D. The workshop will address: Family psychology of wealth, meaning of money in our culture, impact of wealth and money on relationships, money and divorce, and life/financial planning. The presentation will be held Friday, September 26, 2003 at Sunburst Resort 4925 N. Scottsdale Rd, Scottsdale from 8:00 am to noon. $40 in advance (9/19) & $45 after 9/19, includes continental breakfast. Contact Cheryl Beard at 480-755-7922 to register. Upcoming in Footsteps Along the Path Next issue look for information on "Twenty Something and a Mountain of Debt: The Economic Impact on Youth and America's Future" Deborah A. Kuehn is the sole proprietor of Clear Path Credit Consultants, a financial 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 Written by Deborah A. Kuehn MBA All rights reserved Clear Path Credit Consultants is a registered trade name Issue V August 21, 2003 |
