With just a few days left until the end of the month, as well as April being Financial Literacy month. I thought it was very ironic to hear a recent radio advertisement announcing that certain individuals should take part in a great program being given by creditors; it’s called “The Credit Amnesty Program”. This advertisement was encouraging people who have credit scores as low as 480, to come and apply for INSTANT CREDIT no one is turned down. Lie!!!!!, this is the biggest gimmick and it’s been around for years it just has a new name, but the financial shackles are the same for individual with bad credit. Why because the people who buy into these tactics are given interest rates as high as 18% or higher, the debt these individuals accumulate is designed for them not to pay if off which in turn many of these people will default on their debt. I recently did a webinar regarding “What impacts Your Credit” during this webinar I showed the cost comparison of a credit worthy consumer and an unworthy credit consumer. Take a look:
Examples of Credit Profiles
Here is an example of the cost of a $20,000 car loan over 5 years:
Prime 680 or higher score - Interest rate 7%, Payment $405, Total Cost after 5 years $24,300
Sub prime 500 - 619 Interest rate 14%, Payment $477, Total Cost after 5 years $28,620
Jilted 500 or below – Interest rate 21%, Payment $557, Total Cost after 5 years $33,420
As you can see in this example there no advantages of being an unworthy credit consumer, you may be able to buy material purchases but the consumer with bad credit pays a big price at the end. Don’t buy into the hype, educate yourself.
Lorillia Brown-Phillips
Building and Preserving Wealth One Generation at Time
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