Credit Card Debt Help: How to Become
Credit Smart and Enjoy the American Dream
By Jeanette Joy Fisher
Being able to buy things on credit has allowed
Americans to own and enjoy things--often for
years--without having to wait and pay cash
for them. In that way, the concept of credit
has been a boon to experiencing the American
Dream. Unfortunately, there is also a dark
side to credit--one that can turn the American
Dream into a life-destroying nightmare.
The figures are startling. More than 70 percent
of American divorces are caused by the stress
brought on by financial difficulties, and
three out of every four Americans are a mere
three paychecks away from having to face potential
default on their debts.
.
But how can this happen in the richest
country in the world? The answer is simple:
misuse of credit. In order not to become
one of those depressing statistics, it's
important that you become credit smart--long
BEFORE you find yourself in financial
difficulty over your head.
Credit Card Debt Costs
First, let's look at the nuts-and-bolts
of what credit card debt actually costs.
When you buy something using a typical
credit card, you will, on average, end
up paying more than 130 percent above
the actual cost of that item, compared
to what it would have cost if you had
paid cash. No matter how terrific the
sales price may have been, your savings
will be more than offset by the interest
charges you'll end up paying if you pay
by sending the monthly minimum payment
to your credit card company.
If you pay the minimum amount suggested
on your bill each month, you'll normally
be paying 90 percent interest, with only
the remaining ten percent going to the
reduction of the principal on your balance.
It can take years to pay off relatively
high ticket items, and you'll end up paying
many times more for the item than its
original sales price. Yet more than 70
percent of American consumers pay only
the minimum amount on their monthly statement
and never give any thought to how much
interest they'll pay over the life of
the debt.
To avoid potentially devastating financial
difficulty, and to save money (and possibly
your marriage), it's important to become
credit smart.
First, pay cash, if at all possible.
Second, if you can't pay cash at the moment,
ask yourself if you truly NEED whatever
you're contemplating at the moment. Perhaps
you can put it off for awhile, and then
pay cash for it.
If you need the item right away, put
it on your card, but when the bill comes,
always pay a little more than the minimum
amount each month. Even a small amount
can save you hundreds, or even thousands,
of dollars over the life of the loan.
Finally, if you can, pay off your credit
card in full each month. That way, you'll
avoid paying any interest at all.
Credit card debt can ruin your life and
the lives of everyone in your family.
Take time to learn how to use it wisely--to
improve your quality of life without creating
undue amounts of stress.
Copyright © Jeanette J. Fisher.
Jeanette Fisher teaches how to get out
from under credit card debt. Free ebook
"Credit Tips for Mortgage Financing"
http://worryfreecredit.com
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