How a Credit Card Can Be Your Friend

Written by Jim Hood


How a Credit Card Can Be Your Friend

Copyright 2005, Jim Hood

We have all heard countless stories of people over their heads with credit card debt-maxing out every card they own, then only being able to affordrepparttar minimum monthly payment. High interest payments shackle people to their debt for years, not to mentionrepparttar 112064 significant income drainrepparttar 112065 finance charges have on their families.

It is unfortunate that many Americans must live with this reality, since with some financial discipline, this delimma is avoidable. When a spending plan is developed and followed, a credit card becomes no more dangerous than any other form of payment.

When credit card bills are paid in full each month, credit card fees and finance charges do not accumulate. With a little extra bookkeeping from a spending plan, a credit card is transformed from being a burden to a very rewarding financial partner-since it providesrepparttar 112066 following advantages over other forms of payment:

· Rewards Programs. Many credit card companies offer loyalty programs to reward those customers who use their cards more. Rewards usually come inrepparttar 112067 form of points or cash. Depending onrepparttar 112068 company,repparttar 112069 points can be redeemed for things like restaurant gift certificates, hotel stays, airfare, vacation packages and more. Cash cards typically pay a 1% rebate on your purchases, which makes for an extra $180 a year on monthly spending of $1,500. This level of spending is easily achieved by putting all your purchases on a credit card (including utility bill payments). There are even cards that pay more than 1% for particular types of purchases like groceries or gas, such as Citi's Dividend Platinum Select card.

· Perpetual 0% Loan. When you use a credit card, you are usingrepparttar 112070 bank's money to payrepparttar 112071 store instead of yours-for free. While you're waiting for your statement to arrive, your money can continue to work for you in an interest- bearing account, such as ING Direct's Orange Savings. Unlike a debit card that continually reduces your account balance, using a credit card preserves your entire bank account balance for earning interest until your statement's due date. That's an extra $35.25 a year based on a $1,500 balance at today's rate of 2.35%*.

Why Are So Many Americans Financially Dumb?

Written by Valerie Mills


Yeah, we are a nation of financial dummies.

1. Look at allrepparttar worthless get-rich schemes onrepparttar 112063 Net and TV. These ads exist BECAUSE people are buying.

2. Watchrepparttar 112064 confused look onrepparttar 112065 cashier’s face when you hand over extra coins AFTERrepparttar 112066 register displays your change.

3. Witnessrepparttar 112067 people standing in line overnight forrepparttar 112068 privilege of “25% savings.” Aren’t they waiting to SPEND money?

If you’re a non-believer, read these statistics:

1. According to fool.com, “68% PER CENT of graduating high school seniors surveyed byrepparttar 112069 Jump$tart Coalition for Personal Financial Literacy failed a personal finance test in 2002, compared with 44% who failed in 1997.”

2. The U.S. Public Interest Research Group states that “40 percent of college students are graduating with unmanageable levels of student loan debt, and half of those have an average credit card debt of $3000.”

3. Near retirement age baby boomers have saved only 12% of what they think they will need for retirement.

THE REASONS WHY?

The U.S. Public Interest Research Group attributesrepparttar 112070 debt issue to rising costs.

The deputy assistant secretary for financial education atrepparttar 112071 Treasury department testified beforerepparttar 112072 House, "The downstream, adult problems of rising bankruptcy rates, low savings rates and misuse of credit can all be traced upstream to how our schools FAIL TO adequately prepare children for their financial futures."

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