2. DEBT and Pinoys
Farmers to employees and even
businessmen, will reveal that
way too many of us have debt.
Even Filipino working overseas
are not spared from debt.
15-20% of Filipinos are in
default of their debts.
Just how bad is our debt situation?
3. DEBT and your
behavior
Like many things in personal
finance, debt is one that is
first about behavior and
secondly abouth knowledge.
Many borrow instinctively
without much consideration
for the consequences.
PURPOSE
THINGS TO
CONSIDER IN
BUYING ON
CREDIT
INTEREST
COST
4. Are you ready for
a Credit Card?
YOU'RE READY IF.....
You spend less than you
earn.
YOU'RE READY IF.....
You can say 'no' to impulse
shopping.
5. Are you ready for
a Credit Card?
YOU'RE NOT READY IF.....
You view credit cards as
free money.
YOU'RE NOT READY IF.....
You need card to pay back
a debt or buy a 'necessity'.
6. 3 Steps to Shop for
the Perfect Credit
Card for you
Identify your
needs. (interest
rates, credit
limit & penalties)
Hone in on the
benefits.
Apply fo the
credit card
with the best
value.
7. CREDIT CARD: DO'S
Pay your balance in
full to avoid interest.
Pay your bill on
time to avoid
charges.
Protect yourself
from credit card
fraud.
Review your credit
card statements
regularly.
Reduce your credit
limit if you are
tempted to
overspend.
Take advantage of
perks and rewards
programs.
8. CREDIT CARD: DONT'S
Don't depend on
credit cards to make
ends meet.
Don't own too many
credit cards at one
time.
Avoid paying the
minimum due
only.
Avoid big-item
purchases with your
credit card (unless
you can actually pay
the balance in full
with cash)
Don't pick the first
credit card you
see without
checking other
options.
Don't treat your
credit card as free
money.
9. What's in a CREDIT
SCORE?
Credit scores are not the same as
credit reports. Your credit score is a
number that lets creditor know - at
a glance - how likely you are to pay
your debts. While your credit report
holds the detailed story of your
entire credit history and your
current situation.
10. 5 Factors Set the
Score
Payment History
Total outstanding debt
Credit types
Length of credit history
Credit applications history
1.
2.
3.
4.
5.
11. How to establish
CREDIT?
Don't go into
debt to build
your credit.
An "excellent"
credit rating takes
up to seven years to
build. An "average"
or "good" rating can
be built in one or
two years.
A credit report
details the
past. A credit
score predicts
your future
credit behavior.
12. Solutions to build
credit history:
Secured credit cards.
Credit-builder loans.
Authorized user status.
13. How to repair
BAD Credit
Get a free copy of your
credit report.
Fix mistakes.
Pay down big credit card
balances.
Pay every bill on time, every
time.
1.
2.
3.
4.
14. Debt-To-Income
Ratio
It is a percentage calculated by
dividing your total recurring
monthly debt by your monthly
gross income. Your DTI reveals
how well you manage your debt.
15. When it comes to DTI,
the lower the better.
Below 20% ---------------- EXCELLENT
20% to 40% --------------- AVERAGE
40% to 50% --------------- STRESSED
Over 50% ------------------ DANGER
16. Figure out your
DTI with this
FORMULA:
[Monthly Debt]/[Monthly Gross
Income] = DTI%
For Example:
Monthly gross income ------4,500
Food Expense ----------------1,000
Student loan payment -------240
Transportation Expense -----500
Total monthly debt payment 1,740
DTI (1,740/4,500) ------------ 38.7%
17. 5 Ideas to get you out of
Credit Card Debt
Use Snow Ball Method.
Track your Expenses.
Automate Payments.
Transfer Balances.
Use a part of your
Savings.
18. The Move
Towards Debt
Freedom
If you are already in debt and
you feel that the burden of
debt is already too much for
you to bear, then it's time to
be angry - angry at your
situation and angry enough
for you to take action to get
out of such a situation.
AVALANCE
EFFECT
DEBT
FREEDOM
SNOWBALL
EFFECT
DEBT
INVENTORY
