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WOW! It’s Christmas Already!

WOW!  I can’t believe it’s that time of year again.  Christmas is coming earlier and earlier.   The music has already started playing on the radio.  Does anybody remember when the Christmas season started after Thanksgiving?  I mean really, Santa comes down from the North Pole and shows up in the Macy’s Thanksgiving Day parade and then it’s officially Christmas time.

The stores are filled with decorations and displays of gifts even before Halloween!  Most of the displays and advertisements are aimed at our children.  They promise hours of fun and of course the kids have to have one.  My grandchildren watch TV and each time an ad comes on they are so excited about each toy.  The marketing departments do a great job.  Unfortunately most of the toys don’t ever live up to the promises made on TV.   I can remember one year our daughter really loved He Man and we bought her every imaginable character.  We spent a fortune we couldn’t afford on our credit cards. Guess what, she only played with the two main characters.  The rest of them she left in the toy box.  Don’t go overboard.

We watch our grandchildren open their gifts every year.  By the time the four of them are finished it looks like a toy store.  Through the years I have noticed that they really don’t play with them all.  There are one or two favorites and the rest just sit in a pile in the playroom.

These marketing strategies put so much stress on parents to spend money they can’t afford.  This is the time of year we start panicking about where to get the money to buy Christmas gifts.  Many of us look to high interest credit cards intending to pay them off after Christmas.  This rarely works because if you couldn’t afford the money to buy the gifts you probably don’t have the money to pay off the credit card.  The payment becomes what you pay not the balance.  It doesn’t take too many Christmases to accumulate a mass of cards that becomes too much weight to carry.

I asked my children, who are 28 and 32 what their favorite Christmas present was when they were growing up.  They could only name two out of all those gifts!  What they did start talking about were the times we spent together and things we did as a family.  My point to this is that you don’t have to break the bank buying Christmas gifts. Make cookies together, shop for a needy family, playing a game, going to the park, making Christmas ornaments, going to a movie, cooking, planting a garden, or whatever it is you both like to do.  .  Give the gift of your time; it’s what they’ll remember!

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I forgot all I needed to do was stand up!

Many people have a fear of drowning.  They get near water and all they can think about is going under.  I was at the beach recently and saw the tide come in on a person who was sleeping. Why a person who has an irrational fear of drowning would sleep close to the water I have yet to understand.  Perhaps it was a suggestion by his therapist.  When the water washed over him he panicked and started to flail.  Someone close to him grabbed him and helped him to his feet.  It seems like the solution should have been a simple task he could figure out for himself, right?  The problem was that he was paralyzed with fear and couldn’t move.

So what does this have to do with credit?  I thought you’d never ask!  When you feel overwhelmed with your credit issues, it can feel like drowning.  The weight keeps you from standing up and taking charge of the problem.    It paralyzes you with fear.    The first thing I’d like to point out is that debtor’s prisons do not exist in the United States.  If you haven’t committed fraud you aren’t going to be deep sixed into Davy Jones’ locker.

All the great movies on irrational fears tell you to face them.   This is harder than it looks, especially if you have a trash bag full of unopened mail from creditors or a folder with every bill you haven’t paid.   The first step to curing this fear is to sort the bills by creditor and then throw out all but the most recent one.  This same rule applies to the letters from collectors.  Thinning the pile down is the first step toward standing up.  The next step is to look at your income.  Is your income sufficient to pay the bills or do you need a budget?  Have you lost income and don’t know what to do next?  In either case a good credit consultant can help you create a budget and give you all the options available.  Once you have the information, together you can create a strategy for going forward.   When you have a plan for what to do, your fear of drowning lessens and you will be able to stand up!

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Title Loans or Swimming with the Sharks

Can sharks live out of water?  No you say?  Well I am here to tell you the answer is yes!  Just ask anyone that needs some extra cash quickly.  The sharks started swimming in the deserts of Arizona around 2000 when payday loan companies invaded Arizona.  Payday loans offered quick cash to those who could afford it the least.  Payday loan companies would lend consumers money against their next paycheck.  When you live paycheck to paycheck how can you afford to pay off the loan?  You can’t and that’s what makes these loans so dangerous to consumers.    Just like sharks, the loan would continue to feed upon the consumer’s paychecks as the high interest rates compounded.  They were allowed, by law, to charge more than the 36% annual cap that banks and other lenders had to follow.  In 2010 this feeding frenzy came to a sudden halt for those companies offering payday loan.

The shark attacks ended?  Wrong!  The sharks are still here but call themselves by another name.  Queue in the music from Jaws please, the new shark in town is the title loan.  This shark is sneaky.  If you Google title loans you will see a variety of places to choose from.  One ad claims the company only charges half of the allowable rate.  The ad cleverly says the MPR is 5%.  A good rate our consumer says!  Notice it says MPR (Monthly percentage rate) not APR (Annual percentage rate).    So what does that mean?  It means the interest rate is 60% per year, so if you borrow $5001.00 and it takes you a year to pay it off you will be paying approximately $1769.52 in interest charges!  Now just think what that means if you don’t use this company and you go to one that charges the maximum allowed by law for the same $5001.00 loan you will be paying approximately $3805.80 in interest!  You may be thinking that you don’t need that much money.  That you can swim fast so the shark won’t get that big a piece of you?  The less you buy the more they charge.  Arizona law allows these companies to charge:

Loan Amount                     MPR      APR

$1.00 to $500.00             17%     204%

$501.00 to $2500.00      15%     180%

$2501.00 to $5000.00    13%     156%

$5001+                               10%     120%

As an advocate for consumers, I would caution you to try other options before using this kind of loan product.  If you don’t, you may end up as shark bait!

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Ugh – They raised my cable bill!

I received my bill from my cable company and it was almost $30.00 more than my normal bill.  I hate it when I open the bill and out of the blue it has been raised!   Instead of just paying it I studied the bill. I say studied because you almost need a college degree to decipher the charges, credits and final total. To my dismay they raised my internet service $30.00 a month with no warning!  I called the cable company to complain and they said my “special” had ended and offered me $5.00 off this month’s bill.

What most people don’t know is that there is a loyalty department whose sole purpose is to retain customers.  When I said they needed to either lower my bill or I was switching to another carrier they transferred me immediately to this magical place.  I thought my “little problem” would be solved by these mythical people!  Unfortunately I happened to get the one troll in the department that didn’t get the memo on good customer service.

I knew right away he and I didn’t mesh.  Fairly soon into the conversation, about 30 seconds, I asked to speak to a supervisor.   He told me he didn’t have to transfer me and began the inquisition.  I had two choices: to ride it out or hang up.  I decided that I was going to ride it out no matter how long it took; my ultimate goal was to save money.  In all honesty my secondary goal was to create as much frustration for him as he was causing me.

Throughout the conversation I continued to ask for the supervisor, which he said I didn’t need.  In the end he said there were no specials and he couldn’t help me.  I asked again for the supervisor and this time he said he would connect me, although he couldn’t resist telling me that he didn’t understand why I wanted to speak to her as she couldn’t help me either.   I had wasted 20 minutes with him and another 40 minutes waiting for her.   I would suggest you have an activity planned you can do while waiting for assistance otherwise it can get VERY frustrating and boring!  I personally think he kept me on hold and when he discovered I wasn’t going to hang up he transferred me.

The great thing and moral to this story is that the supervisor helped me immediately when she got on the phone.  She stripped all the “specials” that had and were about to expire and I ended up paying $40.00 less a month for the next year.  I not only got back my $30.00 but gained an extra $10.00.  She commented that he (the troll) had the authority to do the same thing but chose not to help.  She indicated that he would receive coaching for that failure.  I couldn’t help but advise her of his other transgressions and suggested she listen to the tape of our conversation.

My point to this lengthy story is that I made $480.00 for the hour I was on the phone and as a side benefit I slew the troll!

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Business Credit

I am part of a great group of networkers called the Absolute Business Builders.  We are part of Business Networking International (BNI), which is comprised of mostly small business owners.  Through the years with BNI, I have had multiple business owners come to me for help because they have been turned down for business loans.

What many small business owners don’t realize is that in many cases it is their personal credit that stops them from obtaining credit.  The banks may want these business owners to guarantee the loans personally.  It used to be that business loans would be based on income from the business, however; with so many companies going under, the criteria has changed.  Banks often use a blend of personal and business credit.  They may think that if you don’t manage your personal finances how will you manage the business?

The first step would be to check your personal credit and see if there is anything on it that would keep the bank from approving you.  If there is, it would be to your benefit to seek a reputable credit consulting company to see what can be done to correct the errors on your credit report, raise your credit scores and provide you with the consumer credit education you deserve.

Secondly you can pull a business credit report that will tell you where your business rates, the scores range from 0-100.  Zero being a high risk and 75 and above being an excellent risk. According to Experian:

Experian® uses standard industry and government guidelines for keeping data on file. Dating data ensures that the information presented in a report is current enough to create an accurate picture of financial health.

  • Trade data: 36 months
  • Bankruptcies: nine years and nine months
  • Judgments: six years and nine months
  • Tax liens: six years and nine months
  • Uniform Commercial Code filings: five years
  • Collections: six years and nine months
  • Bank, government and leasing data: 36 months

Unlike your personal credit, business credit is NOT covered under the Fair Credit Reporting Act.  There are ways to correct items on your business credit report if you know how.  Once you know where you stand you can ask your bank for a business credit card or loan.   If you have to personally guarantee credit for your business that is okay for now, but ideally you want your business to stand alone and not be part of your personal finances.   Ask the bank what it will take for the business to have its own credit line so you can work toward that.

Another good way to build business credit is through your suppliers.  There are many suppliers out there that will extend credit to business owners once you have established a good working relationship.  Make sure you ask them if they report the business’ credit worthiness to the credit bureaus.

Once you are extended credit it is imperative that you pay on time every month.  Don’t extend yourself to the point that you cannot make the payments.   Having bad credit is worse than having no credit!

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New Year Resolution

Many of us make New Year resolutions with every intention of keeping them.  We are diligent in the first few days almost militant in our quest to keep these resolutions.  Time and life start to happen and our fortitude lessens and the resolutions we made get weaker and weaker.  Don’t feel alone, this happens to a great many people.

We would challenge you to make this year different.  How can we do this?  Make SMART goals.  Successful businesses do this all the time.   What is a S.M.A.R.T. goal?  Well let’s look at each letter individually.  S is for Specific.  Don’t make vague goals, for example; I am going to be better at money management this year.  This is a result not a goal.  A specific goal would be, “I will create a budget and commit to follow it.”  This doesn’t mean that the budget can’t be tweaked as time goes on but it does mean that you will track your money and continue to try to meet your budget goal.  M is for measureable.  You can’t tell if you are successful at meeting your goal if you can’t measure the results.  So in this example of creating a budget part of the goal may be to build savings to $1000.00 in the next year.  As the year goes on you can measure whether or not you are on track to meet this goal.  A is for achievable.  When you set your goals make sure they are attainable.  I would like to go to the moon but it is never going to happen so it is not a S.M.A.R.T. goal.  The same goes with budgeting; you cannot create a budget that is so strict there is no room for fun or emergencies.  We all need recreation and stuff happens.  It is good to make goals you need to work hard to obtain but not ones you can’t reach.  R is for result oriented.  Remember goals need to be measured so look for results not activity. In our budget example you should be able to look at your savings and see the results.  If you are living within your budget it will show in the numbers. Lastly the T. stands for timely.  It is wise to set a time table for the goal to be completed or else it is easy to keep pushing it out farther and farther.  This is a major factor for those goals that are never reached.

Keep in mind it is never too late to start getting your finances in order.  You can start now as a New Year resolution.  Make your plan, create your goals, include all members of your family (it’s more fun and easier to do as a team) and make it a prosperous year!

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Blog Launch

Good Afternoon,

We are excited to launch our new blog along with the redesigned website.  Our theme is simplicity.  The focus of this blog will be to introduce our services and to provide the reader with simple tips on how to regain and sustain their financial health.  Whether you have credit challenges or are just looking for information, we will strive to give you down to earth, common sense solutions for credit and debt issues.  You can find us at:  www.ateamcreditconsulting.com

Who are we? A Team Credit Consulting is a financial wellness company that takes a holistic approach to your financial situation. We are in our 5th year of business with not one single complaint from our customers. We are certified through Simple Solutions Credit Consultant Training, a national company that provides continuing education and has done so for over 27 years. It is imperative for consumers to choose a company that stays current with the laws and climate of the financial industry. We believe in looking at the whole picture. For instance, it doesn’t benefit you to start the credit restoration process when you have outstanding debt that may result in a judgement or garnishment of your wages. In this case, you may need us to help negotiate your debt instead of restoring your credit. In other situations, we may determine it is better for you to file a bankruptcy, in which case, we would refer you to one of our trusted referral partners to help you through the process. Once the bankruptcy is complete, we can begin the credit restoration process. We won’t sell you a service that won’t help you!

Our goal is to help clients understand their credit rights and then develop a plan that best meets their individual needs. We don’t believe in a “cookie cutter” process that dumps everyone into the same category. Your needs are unique to you and should be treated as such. We treat each client as though they were a member of our family. You are important to us! We are not one of those mega companies that doesn’t provide the personal service you deserve!

We follow all state and federal laws and will NEVER violate those laws or ask you to. We believe it is our ethical obligation to give you all the options available and to help you choose the best solution for your situation. Our promise to you is that we will partner with you to help you regain your financial wellness through education, planning and action that will last a lifetime!

We are passionate about helping people regain their financial freedom.  We specialize in creating road maps that lead to healthy credit and higher credit scores.  Our mission is to help make your financial dreams a reality.