Avoid the Three Biggest Financial PitfallsWritten by Terry Mitchell
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Credit card interest is another item that will erode a person's or family's financial assets very quickly. The interest rates you pay are about 534,457,469 percent! Just kidding, but it does seem that way sometimes. Seriously though, they often run as high as 18 to 21 percent. A $20 meal will end up costing $36 when paid for over a five year period at an 18 percent interest rate! Paying only minimum payment can result in an endless cycle of debt that will eventually be practically impossible to escape, outside of bankruptcy. If you find yourself already in this situation, I suggest you see a professional credit counselor as soon as possible. If you are already paying more than minimum payment, try to gradually increase this payment and suspend all new credit card charges, if possible, until you've paid off balance. Obviously, only sensible way to handle a credit card is to pay off all charges each month as they are accrued and not maintain a balance, thus avoiding all interest. A credit card is a nice convenience tool. However, if you don't have one and you feel that you could not pay off charges each month, then you are far better off not having one. If have one or more cards and have run up balances that you have had to struggle to pay off, you would be better off getting rid of it/them. Short-term loans are also debts to be avoided like plague. These include those "quick refunds" offered by many tax preparers, those "pay day" loans offered by predatory lenders popping up like cancers on seemingly every street corner, and many kinds of unsecured loans. The worst thing about short-term loans is their deceptiveness. Most people don't realize what kind of wild interest rates they are paying. For example, $10 in interest paid to keep $200 for one week results in an annualized interest rate of 260 percent! Allowing a tax preparer to deduct $100 from your $1500 refund so you can get it instantly instead of waiting six weeks for I.R.S. to send it to you will result in an annualized interest rate of 58 percent! I bet someone advertising those kinds of interest rates would have difficulty finding any takers, yet people take on these kinds of loans all time as long as interest rates are disguised. People who are wise financially avoid most, if not all, of these biggest wastes of money. Most people who are financially independent right now got that way in whole or in part by avoiding wasteful spending.
Terry Mitchell is a software engineer, freelance writer, and trivia buff from Hopewell, VA. He also serves as a political columnist for American Daily and operates his own website - http://www.commenterry.com - on which he posts commentaries on various subjects such as politics, technology, religion, health and well-being, personal finance, and sports. His commentaries offer a unique point of view that is not often found in mainstream media.
| | Debt Elimination Fast!Written by Ephram Lucas
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You are probably beginning to get idea! Research from www.nodebtever.com indicates that average US citizen can pay down ALL their debts in as little as 6 years using this method! The important things about this method are as follows:- You want to pay off debt which will clear first. This allows you to 'accelerate' process, using each item's payments on next in chain as method matures. You must resist any temptation to focus on higher interest debts - that is not essential here. If you run into problems (emergency expenditure required, that sort of thing) you can suspend plan for minimum amount of time it takes you to deal with emergency, but then you must resume immediately. Oh, and by way, DO NOT try to use your retuirement 401(k) funds for this - fund it from income and windfalls only.
(c) E Lucas 2005. You may reproduce this article on your website or newsletter as long as you include this byline and link to www.nodebtever.com , the site for free debt articles and tips on elimination of debts
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