Paper vs. Plastic: Cash vs. Credit Cards
// July 9th, 2009 // No Comments » // Money
It’s the interest that breaks your back.
It’s easy to get bogged down by debt especially when you’ve got an itchy trigger finger on spending and can’t resist making that bargain on a new pair of shoes, the trendy bag or giving in to the lure of that bright shiny new gadget. You may be making that bargain now but if you’re using your credit card to pay for your new pretty toy, you’ll end up paying more than the original price tag. A little common sense towards managing your finances can go a long way, especially with the uncertain economic climate.
Live Within Your Means – Just Cash It! Avoid bad credit by using cash instead of plastic. The debt from high-interest credit cards is one of the leading causes of bad credit problems in the United States. Credit card companies make a lot of money from the over $750 billion dollar debt and it all comes from the over 700 million credit cards currently in use.
Add 20 percent. Whenever you use your credit card to pay $100 dollars for that adorable little purse, $200 for a new iPod or even just a few dollars to indulge your Starbucks coffee addiction, remember that if you don’t pay the entire amount off by the time you get your credit statement, you’ll need to pay for the interest too. For example, if you’re using a credit card with a 20 percent interest rate, you’re really paying approximately $120 for that bag, $240 for the iPod or adding just a couple of more dollars for the coffee. You may shrug off a few dollars for the coffee but add them all together in the long run and you might have used the savings to pay for something else instead. (more…)
