Don t carry a balance on credit cards
Below is a MRR and PLR article in category Finance -> subcategory Credit.
Avoid Carrying a Credit Card Balance
Summary
Recent surveys reveal that half of credit cardholders fail to pay their bills in full or on time, and over 40% are unaware of their card's interest rate. If you carry a $1,000 balance monthly, an 18% interest rate with no annual fee results in $180 of interest annually. Many cards, especially reward-rich gold cards, come with additional fees that can be surprisingly costly.Article
Surveys indicate that 50% of credit cardholders don't pay their bills in full or on time. Alarmingly, over 40% are clueless about their card's interest rate. Consider this: maintaining a $1,000 balance each month means you'll pay $180 in annual interest with an 18% interest rate and no annual fee. But remember, many cards, particularly those offering enticing travel rewards, come with annual fees. The total expense can be astounding once fees are included.Spreading debt across several credit cards is a trap. Consolidating your debt onto one card makes it easier to track and manage your financial obligations, preventing things from spiraling out of control.
Signs of Credit Card Trouble:
1. Making only minimum payments.2. Missing payments or due dates.
3. Approaching your credit limit on most cards.
4. Using one card to pay off another.
5. Being unsure of your total debt.
6. Constantly worrying about money.
7. Using cards to cover everyday living expenses.
8. Regularly transferring balances between low-rate cards just before promotional periods end.
If these scenarios sound familiar, it’s time to tackle your financial issues. Here’s a six-step program to regain control:
Six Steps to Financial Recovery:
1. Self-Assessment: Honestly analyze all debts, interest rates, and terms.2. Budgeting: Determine how much you can afford to pay off each month.
3. Consolidation: If you're short, consider a consolidation loan or a lower rate line of credit.
4. Asset Liquidation: Sell investments if needed, or consider increasing your mortgage when renewing.
5. Strategic Payments: Pay the minimum on each card but focus extra funds on the highest interest one.
6. Discontinue Use: Stop using credit cards. Destroy them or store them away.
Switching to cash, checks, or non-overdraft debit cards forces you to face reality: if you can't afford it, you don't buy it. The illusion of affordability disappears without a credit card.
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