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Technology Program at MDRC.
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How to Evaluate the Real Cost and
Avoid the Pitfalls
November 10, 2011
Glenn Ashley, UCP Michigan
Kenneth Ashley, Free Agent
Don’t throw it
Located in low income neighborhoods. Why??
Easy for people to find the “store”.
Borrow $100, fee is $15 for 2 weeks
Interest rate? 15%
Annual Interest Rate
• 15 X 26 = 391% APR
Source: Michigan Attorney General
Roll the $100 loan
every 2 weeks, until you
reach the maximum
allowed by law.
How much will you
(Not a wise use
of your money!)
How many times more does it cost
to buy from Rent to Own?
Pay $1,000 for a $300 computer?
Just $15 per week for 18
• How much did his $300
computer cost him?
• $15 X 18 = $270?
Pay for 18 months, not
• 18 months is 78
• $1,170 for the $300
Please use the
public chat area to
type your answers
Michigan Assistive Technology Loan Fund
4970 Northwind Drive, Suite 102
East Lansing, MI 48823
Ask for Michele
At $10 per week, 7% interest,
• Pay it off in 7 months
• Costs you $309
have saved $861!
(Note – not all computer
purchases are eligible for loans
have research to back it up
• Suze Orman
• Dave Ramsey
• Larry Burkett
Difference between safe
Advertisers on TV - Run
An expert who is selling
you a product? On
Finda local organization
through the National
Foundation for Credit
• Phone: 1-800-388-2227
• Website: www.nfcc.org
Paying someone else to do what you
can do yourself.
Paying to remove accurate info from
your credit report. (It’s a scam.)
Even worse idea:
Lying to remove accurate information
It’s a federal crime.
We have an astounding power to wipe out
thousands of dollars of your debt.
Most accounts have a one-time settlement rate
that’s preapproved (typically 15 to 35 percent on
credit card debt).
-from Reader's Digest magazine October 2011 , p 44.
A lot of agencies buy debt for pennies on
the dollar, so always start your settlement offer
low, maybe 25 cents on the dollar.
Say something like “I have $200 that I can
apply toward this debt. Will you accept that as
payment in full?”
If I say no, ask what I’m willing to accept as a
settlement and negotiate from there.
-from Reader's Digest magazine October 2011, p 44.
Debt is the symptom
Over-spending and under-saving is the
Lower payment for longer term =
More money for the Debt Con. Company
AmeriDebt – founded by Andrus Pukke
Hidden fees and deceptive practices took
$170 million out of customers’ pockets.
It is now out of business. (similar ones pop
up and disappear)
Place to check:
Attorney General’s Office
If I threaten to have you arrested, use
profanity, or call before 8 a.m. or after 9 p.m.
Those are violations of the Fair Debt Collection
Report me to your state attorney general's office
(naag.org) and the Federal Trade Commission
-from Reader's Digest magazine October 2011, p 45.
Ramsey says that “Consumer Credit”
is the best.
Your credit is still trash.
To benefit from Debt Consolidation
Must change your spending habits
Who can teach you to do that?
• Suze Orman
• Dave Ramsey
• Larry Burkett books
Maxing out credit cards
The Big One:
• Buying things you don’t need
or can’t afford.
How to turn them off
• Go to: OptOutPrescreen.com
Costs you how much?
What do you get for it?
Yes, I would like to protect my account by enrolling in
Payment Aid. By providing my initials, I have received the
Payment Aid Program Summary on the enclosed insert
and I want to purchase this optional program. Bill my
account $0.87 per $100 of my New Balance until I cancel.
If you cancel this within the first 30 days, you will not be
If you owe $1000, you
pay $8.70 for the
Your minimum payment
You have almost
for no good reason.
Ways companies get around it
• Promoting business credit cards
Insurance from bank
to cover a loan
• Same as Credit
• Buy term life
What is the
• A tax on people
who can’t do math.
Infomercials: “Secrets to Get
Guess who gets rich?
Better Idea: Get Rich Slowly
Buy a brand new car
• New $28,000 car will lose
about $17,000 of value
in the first 4 years.
• A $100 bill once a week for 4
Do business with a local bank or
Check people out
Optout of Credit Card offers
Never open junk mail or spam
From: Credit Cards <StartupBusinesses@T.info>
Sent: Thu, November 3, 2011 1:12:39 PM
Subject: Why are you waiting? Make life easier with a credit card
Less than your income!!!
Pay your bills.
Pay off your debt.
Clean up your own credit bureau
Michigan Attorney General Scam Alerts:
- choose “Your Money”
“The art is not in making
money, but in keeping it.”
“It's not your salary that
makes you rich, it's your
- Charles A. Jaffe