Individual Character

It is really all we have in life that shows who we really are to others.

Dictionary.com defines character in part as: moral or ethical quality. Qualities of honesty, courage, or the like; integrity, reputation.

What does it mean to be of good character? Have you really thought how others view you and your character? Have you thought about the true character of those around you?

I believe that true character is what you do, when no one is looking. If you stand and “preach” about how bad it is to steal, deceive, look at porn, cheat on a spouse, etc, but when you think no one is looking, you choose not to tell a sales clerk they gave you too much change, or you don’t tell your spouse you spending two hours after work each day with a person of the opposite sex, or you wait until the family goes to bed before you go to internet sites that you don’t want them to know you visit, that is when you are showing your true character. Maybe not to those who know you, but to yourself, and to God.

You see even when we think no one is looking, someone is always watching our actions. God is always hearing our thoughts and knows our intentions. Many times, those around you may know what you are doing as well, they may just be to shocked or afraid to let you know they know.

Are we perfect? No. None of us is perfect, we all have character flaws. But what separates an individual of true character from one who “pretends” to have true character is in our ability to admit our flaws and attempt to correct them. To acknowledge we are not perfect.

I once heard a statement, we are only as sick as our secrets. That is so very true. The more you try to “hide” who you really are, the sicker you will become. But when we acknowledge our character flaws openly is when we can begin to overcome them, to heal, to build character. To improve who we are as individuals. It is a never ending process, but one that is essential for inner peace and future success, personally and professionally.

I have known people who on the outside appeared to be an individuals of character. They would say all the right things. Inside, they had many secrets. Only those very close to them, and there were few as they did not let people get too close, saw issues with deception and secretive behavior. Through the years this caused them to have failed marriages, trouble with family members, and more. Their character effected all aspects of their lives and the bad character caught up with them in the end in one form or another.

I write about this today because I think there are many who hide behind an appearance of good character. In order for any of us to be successful personally, financially and professionally we must first focus on our own true personal character and relationship with Christ. Look deep inside of who you really. What your true focus is on, not just who you portray yourself to be.

Are you trustworthy, loyal, a committed spouse and/or friend? Do you have a relationship with God? Can you deep inside know you did not do or think about anything you would be ashamed of if you did it or thought it in front of God? Are you keeping secrets from your spouse or significant other? If you are you must know, deep down inside it is wrong. After all, if what you were doing was right, you wouldn’t be ashamed to admit it to those who love you, would you?

Even I work on building my character everyday, right now, I am listening to the audio book “Become a Better You” by Joel Osteen. I highly recommend it as a great starting place to improve who you are, regardless of where you are starting from.

Today, think about who you are. What is your true character? Who are you when no one is looking? Where can you improve your life, and how would that improve the life around you with your family, friends and career? You and only you make the choice of who you are, and what your character is. What will you choose?

There are various methods of getting out of debt, the one I like best is the Debt Snowball. It is simple, and provides a quicker sense of accomplishment. Dave Ramsey is the primary advocate of the debt snowball.

So what is it? Well, before I get into the details, I first want to encourage you to make sure you have at least $1000 in the back before you start paying down your debt. This should be used as your emergency fund. Always keep that $1000 in the back so if you have an emergency, you won’t create more debt in taking care of the emergency.

Basically, it is paying the lowest balance first.

If you are seriously trying to get out of debt, you’ve already heard of Dave Ramsey, and especially if you are reading this blog.

Dave is a straight forward, no-holds-barred, tell you like it is kinda person when it comes to helping people get out of debt. He was once in debt so he speaks from experience. He has decades of experience mentoring people to get out of debt and live debt free. His background is not just from experience but is also Bible based by stating “The borrower is slave to the lender” Proverbs 22:7.

He hosts a daily radio show as well as a broadcast each weeknight on Fox Business News and encourages listeners who have become debt free to call in and scream “I’m/we’re Debt Free!!” as an inspiration to others who are working toward debt freedom.

Some people love him others hate him, either way he is absolutely determined to get you out of debt, and so am I.

I too have been in debt, and although I did not used the debt snowball to get out of debt (didn’t know about it back then) I am now debt free. I also believe the debt snowball is the best way to getting out of debt.

So as I mentioned earlier, it is the process of placing your smallest debt first and working your way down to the highest debt.

How do you do this?

Take all your bills, not your living expense bills like water, electric, utilities, house, food, etc. and list them, from lowest balance balance to highest balance

Pay the minimums on all the bills except the first, and pay as MUCH as you can on that one until it’s gone. Usually, this smallest debt is $200 to $600 dollars, and once it is paid off, you have an quick sense of success. That is the whole point of this process. Small victories.

Continue to the second bill, adding the amount you paid on the first before it was paid off and pay that one, hence picking up more dollars each time you pay off a bill and placing those dollars on the next bill (snowball effect)

Do this until the last bill is gone. Now keep in mind it is not just about the debt snowball process, you must also be working a budget and cutting back on spending all at the same time, see Money Management aka Cash Flow and How to Get Out Of Debt.

There are some pros and cons of the debt snowball, I find the pros out way the cons but here they are:Pros:

Cons:

With that said, as Dave says, this isn’t about the math, it is about the forming of a habit of paying off debt. It reinforces the habit by giving early positive results.

As with anything you must stay focused, and commit to follow it through to the end. The small victories and success of paying off that first small bill helps early reinforcement that it is working.

Being debt free is a life time commitment, not just a short term solution. Stay focus and you will be successful.

Christmas is over and many of you have most likely spent a bit more than you planned on those gifts.

Much of that spending was done on credit cards, cards with the “promise” of zero interest for so many months, or a low interest rate as long as you make your payments on time. But is it really that cut and dry? No is is not.

Credit card companies play games with you, well, they actually just play dirty. They have tiny small print in this great interest rate promotions that end up costing you thousands of dollars (late fees, over-limit fees, transfer fees, and so on), after all, we all know it is the interest rate that costs you the most….right? Well, the tricks are worse that you may know.

There is a completely legal game credit cards companies are playing, and it could wipe you out financially if you’re not careful.

It’s called “The Default Clause”

If you have a credit card, you know that if you are late with a payment on that specific card, the credit card company will charge you a late fee in addition to raising your interest rate. Now here is the catch, did you know that they can raise your interest rate if you’ve made a late payment on any of your other cards, regardless of what company issued the card?

It gets worse, your interest rates can jump to 25 percent or possibly more if you make a late payment on your car loan, mortgage, or even your phone bill!

“This can’t be legal” you say, Sadly it is. It is in the tiny find print of your credit card agreement, called universal default clause, that you agreed to as soon as you used the credit card. There is not a lot of credit card issuers with this policy but it pays to be aware

Late Payment “Gotchya”

A universal default clause generally states that a creditor reserves the right to penalize you with an increased interest rate if you’re late (in default) of your re-payment terms — of a payment to any other creditor not just that of the issuing company. They justify this because, in theory, if are late with one creditor, you are a greater credit risk and are more likely to pay other debts, including the issuing card late.

Creditors also have the right to routinely monitor your credit file. So a creditor with a universal default clause will be watching, waiting, time is on their side. Remember, credit card companies are not your friend, there are in business to make money….Your money!

So assume your Visa card has a universal default clause. Any late payment — your make, whether it’s your utility bill, home equity loan, or gas credit card — acts as a “default gotchya” allowing the bank that issued the Visa card to double or even triple your interest rate overnight without warning.

The top three default triggers that cause your interest rates to spike are a decline in credit score, paying your mortgage late, and paying your car loan late.

There are other “gotchya’s” to Worry About

Under the universal default clause, your interest rates can be increased for many other reasons, including exceeding your credit limit, bouncing a check, having too much debt, having too much credit, getting a new credit card, applying for a car loan, and applying for a mortgage loan. Once you signed up for a credit card with a universal default clause, you gave the credit card company an unfair advantage over you, and your money.

This effects your financial future in a bad way. Let’s look at this example. You’re an average American household, with $8,000 of credit card debt. Assuming you make no additional purchases on your card, you have a 9 percent interest rate, and you make the minimum monthly payment, it will take you 218 months (18 years) to pay off your debt and you’ll end up paying $3,334 in interest. Who wins here? (credit card company…you loose)

Now let’s assume that for whatever reason you were late one month with your car payment. They gotchya, the late payment triggers the universal default clause with your credit card issuer, and now your penalty rate gets increased to 26 percent. It will now take you 679 months (56 years) to pay off your credit card debt, and get this — you’ll pay $30,813 in interest. Can you see this is a no win situation for you and a win win for the credit card company?

Imagine if you had three other cards with a universal default clause..interest rates go up on all of them due to one late payment on your car.

Beat the Clause

Well if you have been reading my blog for any period of time you know what I am going to say about beating the universal default clause….”Don’t use credit cards!”

However, I know most of you out there already have credit cards, and many have the clause so here is some ideas to protect yourself from the “gotchya” of interest rate increases.

1. Stay away from credit cards with a universal default clause.

If you’re looking to open a new credit card account, be sure to choose one without a universal default clause. This means you have to truly read the fine print. If you’re confused by the fine print, as most of us are, they write it that way to confuse you on purpose, call the credit card company and ask what specific circumstances will affect your interest rate.

Sites like Bankrate.com let you compare credit card offers, so visit them before you apply. But keep in mind, this is a fluid market and changes are made fast. Even if you have a card without a universal default clause, that doesn’t mean that they can’t or won’t change the agreement terms. Read those little bill inserts, or specific letters from your issuing companies, they are sending them out for a reason…something changes and it won’t be to your benefit.

2. Know your current obligations.

Check your current statements and credit card agreements to find out your current interest rates, and to identify which cards have a universal default clause that you weren’t aware of until now. Again, if you’re uncertain after reading the fine print, call your credit card company.

Consider transferring your balance from a card that has the universal default clause to one of your cards that doesn’t. But don’t cancel the card to quickly, it could have a negative effect on your credit score.

3. Run your credit report.

Not only do you need to know exactly what your current interest rates are, you also need to know exactly what’s on your credit report. Visit AnnualCreditReport.com to order your credit report and credit score today. You should make a practice of this every quarter with a different reporting bureau, this way you can make sure what is being reported is accurate.

4. Common sense, Pay your bills on time.

If you can’t pay ontime, chances are you are over extended and are not properly managing your money. Read Dave Ramsey’s Total Money Makeover.

5. Be proactive — call your lender for relief.

Call your lender to see what options they might be able to offer you. They might be able to adjust your monthly payments so that they’re more manageable.

Check today and see if you have the universal default clause on your credit cards.If you do, be careful to stay on top of your credit card agreements. Better yet, make a plan to become debt free and pay cash. — you’ll sleep better at night.