This document discusses financial literacy and debt from a Christian perspective. It warns that families can be destroyed by a lack of financial knowledge and debt. It provides tips for managing credit cards responsibly, such as only charging what you can pay off monthly to avoid interest, fees, and damage to your credit score. It also cautions against refinancing credit card or other unsecured debt onto your home, as this exposes your otherwise protected home equity to creditors.

1. Financial literacyDEBT

2. Terms of useFamilies and lives are destroyed from a lack of knowledge about personal finances. This is one of a series of Microsoft PowerPoint 2007 presentations intended to inform people about financial subjects from a Christian perspective. They are a work in progress created, distributed and Copyright © 2009 By James C. Johnston1364 Cordova Ave, Ft Myers, FL 33901239.332.0028 All Rights ReservedUse is subject to the following limitations:You may try it for free;You may not modify it without the advance written permission of the author;You may give copies to others, as long as there is no charge for doing so;If you find any mistakes or omission, or have suggestions, please share them with the author so that I may make appropriate corrections and additions; and,If you find them useful and feel moved to do so, you can make some financial contribution in recognition of the value of the time and effort that went into their creation and distribution, and to encourage updating and improving them.Be Blessed!

3. CreditCredit is your ability to borrow money or obtain goods by paying little or no money at the time of purchase. Having “credit” is a good thing.

4. debt Debt is your obligation to repay money borrowed or pay for goods obtained previously without paying for them in full. Debt should always be seen in a negative light. Not paying your debt on time and in full may damage your credit.

5. Increase in sales Retailers and manufacturers discovered that they could increase sales by making easy credit available and giving it appealing names that conceal the reality of debt.

6. No matter how you disguise it . . . .Debt by any other name is still “Debt.”Rent-To-OwnAutomobile LeasingHome Equity Loans0% InterestNo Payments Til . . . Pay-Day Advance“Credit” Cards

7. What THE BIBLE says . . .Being in debt is not prohibited.But, the Bible does not have one good thing to say about borrowing. All references speak of debt in a negative context and most are in the form of warnings.

8. why PEOPLE GET burdened by DEBT . . . .THINGS BEYOND OUR CONTROLTHINGS UNDER OUR CONTROL

9. THINGS Beyond OUR CONTROL“Acts of Nature”Hurricane CharlieWild Fires & EarthquakesAccidents - Terri Schiavo SicknessUnemploymentRecession

10. THINGS within our controlKeeping Up With The Jones

11. Unrealistic Expectations

12. Recreational Shopping

13. Makes You Feel In Control

14. Self – Esteem

15. Pick-Me-Up

16. Impulse Spending

17. No such thing as “Good debt” There is debt that may be “Necessary” for most people to acquire things we consider necessary or desirable (“Necessary Debt”). But all debt (even Necessary Debt) should be seen in a negative light.

18. “Good debt” What we consider to be “Good Debt” is debt that returns something of long term value (e.g., a higher education or home).

19. “bad debt”“Bad Debt” is debt incurred to acquire things of a “short-term value.” It “feel good” for a season. Has no long-term value. You really can’t afford it. Don’t really need it.

21. DEBT MENTALITY The Greatest Enemy of faithful stewardship is consumer debt.Raising your standard of living by incurring consumer debt may feel good for a period of time - but the burden of accumulated consumer debt eventually becomes overwhelming.

22. for example . . . .If you accumulate $200 per month on credit cards with a 15% interest rate,In one year you will owe about$ 2,600In two years you will owe about$ 5,600In three years you will owe about$ 9,000In four years you will owe about$13,000

23. PLASTIC MONEY

24. Types of Plastic moneySMART CARDSCHARGE CARDSDEBIT CARDSCREDIT CARDS

25. SMART CARDSA smart card, chip card or integrated circuit card (ICC) has embedded integrated circuits which can process data.

26. They store personal information and are used for identification, authentication and data storage.

27. They are a flexible and secure way to transact business with minimal human involvement.

28. May be “loaded” with a certain dollar value that can then be spent at Point Of Sale terminals.Charge cardsMust be paid in full every month (AMEX).Provide the convenience of not having to pay cash for purchases, but balance may not be carried over month-to-month and must be paid in full each month.

29. Most store cards were originally Charge Cards.Debit cardsAllow access to your checking account at automated teller machines (ATMs) and point of sale (POS) terminals.

30. Amounts are deducted directly from your checking account.

31. Unlike a charge card, you must have the funds on deposit in your account.The ones that causes problems are “Credit Cards.”

32. Revolving loansCredit Cards offer a “revolving loan account” with a credit limit.

33. If not paid-in-full within a “grace period,” interest is charged on the unpaid balance and “rolled over” to the next month.Trap for the unwaryUndisciplined users are apt to accumulate debts which they can’t pay.

34. Young users (with limited credit history and income) are charged higher interest rates.

35. They are expensive if not paid-in-full monthly.Fees, fees and more fees“Interest rate” -- what you pay for using the money - often 17% - 21% (after introductory “teaser rate”).“Over-the-Limit” fees, charged whenever you exceed your credit limit.“Late payment” fees.“Transaction” fees – Cash Advances.Other miscellaneous fees - read the fine print!!!

36. Credit card pointers

37. do’s . . . Consider a debit card or pre-paid card.Look for a card with no annual fee and low interest rates.Know your card’s hidden fees.Pay on time - all the time!Look for cards that offer premiums.Pay-In-Full Monthly.If you can’t pay in full, always pay more than the minimum each month.

38. Interest savings between lowest/highest payment = $1,570;time saved = 75 months or6.25 years!

39. don’ts . . .Don’t get many credit cards.Don’t use them for cash advances.Don’t use them to pay for basics (rent, groceries, etc) unless paid in full monthly.Don’t let issuer increase you credit limit.Don’t charge more than you can pay off in a month. If you do, have and stick to a plan to pay it off quickly.

40. Paying a Credit Card billCredit card bills are not considered paid until the company credits payment to your account. To ensure payment is credited to the account before it is due and that there are no late fees:Mail payments 7-10 days before the due date.Make electronic payment 2-3 days before the due date

41. Credit Card registersMake a credit card register by cutting a receipt to wrap around your credit card.Record each purchase or cash advance to the credit card, just as you would a check in a check register.Keep a running balance of what is charged on your credit card each month. Do not over spend your budget.Check your record against your statement.

42. Selecting and Using a Credit CardShop-around! Study the details of the application before signing. Look for the fees charged including annual fee.Understand the details of the introductory offers and how long they last.Know what constitutes a late payment and the amount of penalties charged.