Friday, August 13, 2010
"I can get no remedy against this consumption of the purse: borrowing only lingers and lingers it out, but the disease is incurable." -Shakespeare, William (1564 - 1616)
How thick is your billfold these days? Is it full of cash or credit cards?
One of the critical keys to investing is only to use money that is free of other obligations. The quick way to increase the power of your money is common sense:
Pay for everything in cash and don't incur any debt.
That's easily said if you have a high income. But not everyone has that luxury, and even those of you who do, find it hard to resist the temptation to borrow. Formulate a debt reduction plan today and follow through on it. Paying off your credit cards is your best single investment.
Where else can you get a risk free, guaranteed rate of return, of up to 20%?
It is the old story of a penny saved is a penny earned.
In looking at your financial position, until you pay off your existing debt, your investment returns will be offset by the interest you are paying on your debt service.
Credit cards are a great convenience that millions of us use all the time for dozens of reasons. Plastic money is also a great source of financial pain and suffering. People get caught up in the really low minimum payment schedules and the easy ways that they can get cards.
And what has happened?
Record numbers of people find themselves in financial troubles!
So what's the answer?
Have only one card! Use it to guarantee hotel rooms, get rental cars and to make purchases when there is a really good sale on something you absolutely want or need. Pay all the balance every time you get a statement.
If you want to reduce the number of your credit cards, then you have a few options:
A. Pay them off as fast as you can!
B. Pay the one with the smallest balance, then take that payment and add it to the next one, and so on until you're done.
C. Pay more than the minimums where possible. It can take years to pay off a balance by paying minimums only.
If you still have a card with a high interest rate, and are carrying a balance, get a new card with a lower rate and transfer the balance. Call the credit card companies and tell them you want the accounts canceled.
Avoid Plastic Money & Save High Interest Rates