In the UK alone, there are more credit cards than people and around the world, people in developed nations are all too familiar with paying on plastic

Personal debt certainly isn’t a stranger. In the UK alone, there are more credit cards than people and around the world, people in developed nations are all too familiar with paying on plastic. ‘Buy now, pay later,’ is almost the consumer slogan these days! So being in debt isn’t as rare as it once was. Here’s how not to manage your debts.

Ignore Your Creditors

Ignoring your creditors when they call or write is a sure fire way to irritate them. They want their money and if you’re not making your payments on time, they won’t give up trying to get it. If you have a lot of creditors, it can be difficult to deal with and some form of debt consolidation or formal restructuring might mean you have far fewer creditors, thus fewer calls to handle. But don’t blank them. If you are struggling to balance the books, try talking to your creditors. Contrary to popular misconception, they’re human too!

Take a Payday Shopping Spree!

Want to ensure that your debts are going to haunt you for your entire life? Then hit the shops the moment that your monthly wage lands in your bank account. Go wild, buy things you really don’t need but just want! That really will keep you in the red. However, if you want to take a more sensible approach and look at getting back in the black, you might want to hold off on the splashy expenses. Ask yourself, before you make a purchase, ‘do I need this?’ Maybe switch a luxury purchase for an extra payment towards your credit card bill. Admittedly, paying off your debts is a lot less fun than splashing out, but you’ll feel all the better for it when you see those debts slowly disappearing.

Take a Payday Loan

Payday loans are incredibly high interest loans of relatively small amounts designed just to keep you afloat until your next payday. However, you will end up paying back far more than you borrowed. This is one of the most expensive ways to borrow money and if you want to fight back against your debts, is a real no-go!

Sneak into ‘Unauthorised Overdraft’ Territory

Overdrafts really aren’t a bad way to borrow. They’re often much lower in terms of interest rates and charges than credit cards or other forms of lending and, with most banks, providing you don’t step over the agreed overdraft limit, you won’t incur any additional charges. However, the second you go over your agreed limit, you will start racking up bank penalty charges which really can add up and before you know it, you’ve incurred more in fees than you even took in the form of unauthorised overdraft spend. Running short? Try agreeing a higher overdraft limit with your bank where possible. They’d much rather you enquired about extending the overdraft than just taking more. The worst they can do is say no.

If you’re serious about dealing with your debts, it really comes down to a sensible approach.
• Write a budget.
• Stick to the budget.
• Cut back on luxuries and treats.

Of course, if your monthly repayments exceed your income, you will need to seek professional debt advice to deal with your problems. However, such advice is available freely from a number of companies and charities.

Popularity: 14% [?]

The current financial climate means people are constantly on the lookout for ways that they can save money.

How to best control your personal income is often a topic of discussion. Through years of controlling my own finances, I have come across ‘rules’ or ‘guidelines’ that work wonders and others that simply don’t.

The current financial climate means people are constantly on the lookout for ways that they can save money. I’ve put together my top financial tips that I hope will prove useful for you all.

Budget! - Never spend more than you earn

Probably the simplest tip I can give you but budgeting is something that we all should do. Take a pen and write down your expenses for the month and work out how much you can afford to spend. By doing this, when you come to the end of the month you won’t have to worry about struggling to make payments.

Once you have noted down all your expenses, including your phone bill and any direct debits, think about the amount of money you would like to put aside for the month, it doesn’t have to be a lot, a little can go a long way. Then after deducting your expenses and how much you would like to put aside from your monthly income, you should try and not go over that amount. Budgeting works wonders because it gives you something to aim towards and helps keep you motivated.

Review Your Expenses – You could be paying too much

There are certain things, whether it is gas or electricity that we have to buy to survive. These necessities are the things that people often pay too much for. The easy way to avoid paying too much on the things we have to buy is to use price comparison websites. These websites do all the hard work for you as they compare all the market leaders for the likes of, insurance, money, utilities and even phone bills. These websites are a quick fire way to start you saving a lot of money.

Credit Cards – Reward Yourself

Many people often give credit cards a bad name. However, if used properly they can be a quick fire way to earning some decent rewards. There are so many credit cards on the market that they all offer something for everyone. If you’re a shopaholic then look for credit cards that will reward you with money off your next purchase, or if you’re a frequent jetsetter, take a look at airline credit cards, where you can build air miles depending on how much you spend on your card.

If you have the money to make a purchase and you look after your finances well, then you could always fund a big purchase on a reward card, so that you can reap the benefits, then just pay off the card straight away so you don’t pay any interest.

A few important things to remember if you use a credit card are, keep an eye on your finances, don’t overspend and always try and pay more than the minimum payment every month; doing these three things when using your card will help you save money.

Save – Open a savings account

People don’t get the best use out of savings accounts, but they are a sure way to save money. A good way to ensure you save a small amount each month is to set up a standing order. Set a small amount every month to go from your normal account into your designated saving account. By doing this every month your money in your savings account will build and build, and the more the money builds the more interest you will gain.

The Lifetime Savings Account for those of you situated in the US offers fantastic benefits. Whatever you put in your account is not tax-deductible, but any returns you earn from your LSA are tax-free.

If you like me are based in the UK, then using a cash ISA is the best way to save some cash. All interest is tax free and you can save up to £5,100 in the account every year.

I hope my top financial tips prove useful for you and remember, when looking at your finances; small changes can have a big impact.

About the Author:

This article was written by Andreas Nicolaides.

Andreas works as a financial writer for UK based MoneySupermarket.com.

Popularity: 47% [?]

Nobody want to be broke, right? We all want to make sure that we have enough money not only in the present, but also for the future.

For some people who are fortunate enough, this is never a major concern. But for the rest of us we have to struggle with the need to pay bills today and the desire to have a nest egg set aside for the future. Thankfully there are a few things that you can do to save for your future, no matter how tight your budget is.

Follow your budget

There’s a reason you set a budget for your money. It ensures that you don’t overspend and end up not having enough money to pay your bills. Sticking to your budget means that you won’t have to dip into your extra money.

Reevaluate your budget

Do you really need as much spending money as you’ve allotted yourself each month? And is each and every one of those 102 TV channels necessary? Review and tighten your budget and you’ll be surprised by how much money you’ll be able to put away monthly.

The 5-10% rule

As a rule of thumb you should be setting aside 5-10% of your weekly income for your retirement fund. If you are living on an extremely tight budget, try putting 5% into a savings account or RRSP. The more you can put away, the better. And you would be surprised by how little you miss the extra money once you don’t have access to it.

Little things add up

A lot of the time it’s not the large purchases that stop us from saving money, it’s the smaller ones. A dollar here, five dollars there can add up and you would be shocked at the amount of money yearly that slips away. Do you really need a coffee and donut from the local coffee shop every morning? Cutting out the little expenses like this can add up, and quickly.

Be careful with credit

While some forms of credit are inevitable (mortgage, car loan) others should be considered a luxury. And luxuries aren’t necessarily something you need. While it’s a good idea to have a credit card for emergencies, it’s easy to get sucked into the buy now pay later lifestyle. Too many people live off of credit and this is NEVER a good idea. You will end up with all of your money going towards minimum payments rather into your savings account. If you spend more than you can realistically pay you will end up in a vicious cycle of monthly payments that never see your debt go down.

About the author:

Vern Marker is an expert on a variety of topics including budgeting, marketing, and business. Want to ask an expert about something specific? Check out YoExpert.com

Popularity: 16% [?]

Often times we’re so busy in our daily lives that we forget that we can’t live like a rockstar, and need to budget and spend accordingly. Those little things you say like, “ohhhh it’s okay, I’ll make up for it somewhere else” or “I’m too lazy to send in that rebate” are actually hurting you in the long run. Here’s a few things you may want to consider when planning your budget and allotting spending money to yourself or your family.

1. Use online services like Mint

I’m saying this one in particular because I’m using it, and I absolutely love it. They just released a mobile phone app too, so you can track your budget and money on the road. You can separate your expenses, and Mint will automatically know what you are spending where. It will then alert you when you go over, as well as alert you when bills and credit card bills are due.

This will save you from 

• going over your budget and being more aware of your spending
• you’ll save because you won’t be wasting money on ridiculous late fees or overage fees

2. Being proactive with your car insurance companies

Actively seek our better insurance companies on both ends. There’s a TON of options out there and you want to make sure you aren’t losing out when you could be saving. For instance, some car insurance companies give you money back when you DON’T have an accident. Some health insurance companies give you a savings program with what you’re paying in. Do the research; you can actually end up saving a ton of money on these necessities.

3. Buying off Ebay/Etsy

Some people are afraid to use online auction websites for privacy reasons. That’s understandable, but when you can get a brand new TV for hundreds of dollars cheaper- I would say it’s time to take the dive and start using them. There are plenty of ways to track your auctions in Ebay, especially, to make sure you are only spending what you want to spend.

4. Get a credit card

This might sound like really dumb advice, especially if you’re trying to save money, but it’s probably the smartest thing you can do. When you don’t have revolving open credit accounts, it can actually hurt your credit. Put gas and groceries on your card (when you have the money) and pay it off at the end of the month, every month. This will keep revolving credit open as well as earn you rewards on certain cards. These rewards can be in the form of cash, gift certificates, travel etc.

5. Shop in bulk

Places like Sam’s Club and BJ’s Wholesale may cost more in the beginning, but they actually save you more in the long run. As you probably know, when you buy in bulk, prices go down. While you may not “need” a ton of beef, you’ll pay less for it up front and use it through-out the month.

6. Send in your rebates

 Many people will be too lazy to send in a rebate right away and then they miss the date. Rebates are sketchy enough to begin with (although they’ve gotten better with the issuance of debit cards for your rebate rather than waiting for a rebate check) but they’re technically money you’ve spent; you may as well get it back.

These are just a few small tips to make sure you are living frugally and saving money. Pretty much common sense, but not things that people think of everyday.

What are some budgeting/spending tips that you have?

Popularity: 9% [?]

While it can be tempting when you receive a new credit card in the post to take for a quick spin at the mall when the new balance transfer credit card arrives it is best to lock it up and throw away the key

Taking control of your credit card debt is about more than just finding a balance transfer credit card offer. You also need to know how to make the most out of your balance transfer credit card and how to avoid getting into the same situation with your new card. Therefore following are several important practices you should follow with the new balance transfer credit card to get the best out of your offer.

1. Don’t spend on your balance transfer credit card

While it can be tempting when you receive a new credit card in the post to take for a quick spin at the mall when the new balance transfer credit card arrives it is best to lock it up and throw away the key. A balance transfer credit cards sole purpose is to help you control your credit card debt therefore spending on your balance transfer credit card is not only reiterating a bad habit it is also getting you into a worse debt. Most credit cards will have what is known as a payment hierarchy, this is where the oldest balances will be repaid first. This means that if you spend on a balance transfer credit card your monthly repayments will continue to go towards your transfer balance while your new purchases will start to accrue the standard purchase interest-rate. This is negates all the effort you have put into finding the best balance transfer credit card because the interest on your new purchases will need to be paid.

2. Don’t use your balance transfer credit card for cash advances

While a cash advance is a bad idea on any credit card because the interest rate on a cash advance is usually around 5% higher than the standard purchase interest-rate it is an especially bad idea on a balance transfer credit card. Just as you should make purchases on your balance transfer credit card you certainly shouldn’t make cash advances because your high cash advance interest-rate will be charged until you have repaid your transferred balance so rather than your balance transfer credit card helping you control your credit card debt it has actually become one of the most expensive cards in your wallet.

3. Make the transfer as soon as possible

When you apply for a balance transfer credit card you will often be asked in the application to enter the credit card number and balance you are transferring. If your credit card application does not ask you for your balance transfer details make sure you contact the provider as soon as possible after your account is activated to make the transfer. Some balance transfer credit card offers will begin from the time you are new credit card is activated rather than from the time you transfer your balance. Therefore if you think you are applying for a six-month balance transfer but it takes you a month to get around to transferring your balance to your new card then in some cases you may only have five months of the low or 0% interest rate of your balance transfer offer. The longer you delayed transferring your balance also means more opportunities to be tempted to spend on your new credit card.

4. You will still need to make regular repayments

A balance transfer credit card is just like any other credit card and just because you’re not spending on it doesn’t mean you don’t have to make regular repayments. Always make sure you pay at least the minimum amount each month on your balance transfer credit card because in some cases missing a monthly payment can mean your balance transfer interest-rate becomes void and your transferred balance will and then attract the standard purchase rate of the credit card.

5. Remain aware of the end of the offer

Once the pressure of a higher interest-rate credit card is gone it can be easy to relax into your new routine paying just the minimum required on your balance transfer credit card. However if you only pay the minimum amount you are unlikely to repay your balance in full before the end of the transfer offer — this is how the credit card companies make their money. Instead always remain aware of when your balance transfer offer expires and whether your monthly repayments will pay your balance down to zero in time. If it looks like you’re not going to make it start shopping around for a new balance transfer offer to give you more time.

6. Watch out for the conditions

Before you apply for a balance transfer credit card make sure you read the fine print of the contract. It can be easy to blindly check the box that says I accept without really understanding what you’re signing up for. In some cases a balance transfer offer will require you to make a purchase on your card before the balance transfer interest-rate is activated if you don’t your transferred balance will continue to earn a higher purchase interest-rate; however in this case the purchase you make to activate the balance transfer offer is also earning a purchase interest-rate so this may not be the best type of balance transfer credit card for you. Other balance transfer credit card providers will use their purchase interest-rate as the revert rate at the end of the balance transfer offer while others will revert your balance to be charged a higher cash advance rate so it pays to check what will happen if you don’t repay your balance in full.

7. Don’t spend for the rewards

Using your credit card to gain rewards points could be what got you into trouble in the first place so it is important to remember not to fall into the same trap of being tempted by your balance transfer credit card offering you the chance to take part in an enticing rewards program. As you know by now the bank doesn’t actually want you to repay your balance within the balance transfer period so they may regularly try and tempt you with a promotional deal on purchases or bonus rewards points for shopping with a particular partner and retailer — don’t fall for it.

8. Choose the right balance transfer offer

There are a number of different types of balance transfer offers and an endless number of providers who want you to sign up for their balance transfer credit card. That’s why it’s important to make sure you choose the balance transfer credit card which is right for you and your balance. Choosing a balance transfer credit card with an offer which expires before you will be able to repay your balance for example can see you in even worse credit card debt if the balance transfer offer you have chosen reverts your balance to the cash advance interest-rate.

9 Compare fee free balance transfer credit cards

If you’re looking to apply for a balance transfer credit card to control your finances you don’t want to have to worry about credit card fees. While you won’t be using your credit card and attracting transaction fees many credit cards have an annual fee which can be several hundred dollars. A credit card and you will be is also applied to your account as a purchase which needs to be repaid so you may find yourself paying interest on a credit card fee when you thought you were doing the right thing in choosing a balance transfer credit card offer.

Conclusion

The balance transfer credit card is a great way to control credit card debt which has gone out of hand after the peak spending periods of Christmas and New Year’s example or when you simply get sick of making numerous credit card payments each month and want to be debt free living within your means not owing anyone anything. Therefore find out more about the best balance transfer offer is available, now that you know how to make the most out of a balance transfer credit card.

Popularity: 40% [?]

“Money often costs too much” – Ralph Waldo Emerson

One of the most frequent reasons that couples argue is money – or at least that is the way in which other underlying problems may be manifested. For a new partnership, or indeed an existing one, it can take a thorough examination of the “real” people within the relationship to get to the root of the problem, and avoid the common financial mistakes that couples make.

Separate Bank Accounts

Nearly all arguments related to money are caused by a conflict in core values, and it is these values which each individual brings to a relationship that influences how they work, rest and play – and spend! Inasmuch as maintaining a level of financial independence may be important to one or both of the partners in a relationship, there will be times when “boring things” have to be accounted for, and a joint pool of money is a necessity to cover these items. Provided that there is an equal and fair distribution of any funds that are left over, joint accounts are a good way to building trust and reinforcing a relationship. By all means keep individual accounts, but only to cover your pocket money rather than the household expenses.

Ignoring Debt Management

It is almost impossible to get through life without acquiring a number of substantial debts and the way to approach these as a couple is as a joint debt. Most people will have acquired a debt of some nature - even before you met them. There is finance on the house, on the car, credit card bills or student loans to pay off. We live in an age when relationships often come with “liabilities” such as a child or pet, and in the same way as you would accommodate a child or pet into your life, you have to do the same with debt. There is no benefit in thinking “Oh, that is their debt. I do not have to deal with it”, because any debt will affect the relationship and the amount of disposable income that is available to you both – so you better both deal with it!

Who Buys What?

Most of us will have grown up in an environment where mom buys the groceries and dad buys cars, audio/visual equipment and computers. We have seen our first role models behave in this way and some of it is still subconsciously with us. Our individualistic tendencies will lead us into situations where we may feel that we should be able to buy this or that, but the way to consider all purchases is as joint purchases, decided together, from the household budget and equally contributed to. There should be no division of “who buys what” and by talking through how you are going to spend your money together, problematic scenarios can be avoided.

Money Secrets

Keeping quiet about how much money you have put aside, or how much debt you have gotten into, can create one of the biggest problems in a relationship. One partner may be completely stressed out about how the bills are going to be paid at the end of the month, whilst the other is picturing foreign holidays, expensive wines and fast cars. There may be a time when one partner has found themselves in debt and is reluctant to tell the other. It could be because they have made a silly mistake or the way that events have unfolded against them, but by keeping money secrets, you not only amplify the problem but damage the relationship. “A problem shared is a problem halved”.

Lack of Flexibility

Remember that you are a team and should be working together. There has to be a certain amount of give and take regarding the finances in a relationship. You may be very compatible with your partner, but no two people are exactly alike and by applying a little flexibility in how you manage your money together, you will get through many of the issues facing couples today. There is an old saying that “when poverty comes through the door, love flies out the window” and if you can combine common sense, honesty and elasticity to your financial situation, then you will avoid the common financial mistakes that couples make.

About the Author

Guest Post by Sarah Harris, representative for Massage Therapy, the premier online resource for those trying to locate massage therapy schools.

Popularity: 21% [?]

The company, feeling that they needed to encourage not only the purchase of diamonds but the purchase of more expensive diamonds, decided on a new marketing strategy.

Not too many years ago, a man had to save up to purchase an engagement ring before he could propose. Now, with the availability of credit cards and store financing he can buy the ring immediately and pay for it later. This can sometimes lead him to wonder, does two months salary on an engagement ring still ring true? To answer that question, it may be helpful to understand where the concept originated.

Up until the eighteenth century, diamonds were so rare and expensive that only royalty or the extremely rich could own them. New deposits in South America, followed by extensive finds in South Africa the following century, finally brought the prices down. By the end of the nineteenth century, thanks in large part to the Industrial Revolution, more people could afford to purchase them.

At the turn of the twentieth century, about ninety percent of the worldwide diamond market was controlled by De Beers. The company was founded in 1888 and at one time had total control over all South African diamond production. To protect their interests, De Beers tightly regulated the availability and therefore the price of diamonds. These controls kept prices fairly stable, and despite the fact that more people could afford them, diamonds were still considered a luxury beyond the means of many.

The company, feeling that they needed to encourage not only the purchase of diamonds but the purchase of more expensive diamonds, decided on a new marketing strategy. They promoted the idea that an engagement ring should cost two to three times what the prospective groom earned in a month. The campaign was so successful that it soon became fixed in the public mind as a long standing and immutable tradition.

This concept is no longer valid for a number of reasons. For one thing, it is rare today for the prospective groom to make the decision alone. For another, most newlyweds are both employed. They may already be pooling funds and making financial commitments together. But perhaps the most important reason this practice is outdated is that not all brides want a traditional engagement ring. They may prefer an antique ring, which may or may not be set with diamonds. Or they may prefer an engagement ring set with their birthstones. Many brides even design their own rings to incorporate the groom’s birthstone as well.

Couples may also decide that there are more pressing needs at the moment than an expensive engagement ring. Often, a costly anniversary ring is given at a later date when it can be more easily afforded. There is certainly nothing wrong with purchasing a ring in the price range De Beers suggested. However, adhering to an outdated rule of thumb merely because a century old advertising campaign was so widely believed does not, in and of itself, justify the purchase.

About The Author

Sarah Harris is the Marketing Manager for Adiamor, a diamond jewelry website. Adiamor offers a large selection of engagement rings, loose diamonds, and other fine diamond jewelry at affordable prices.

Popularity: 36% [?]

Many people are struggling with debt at the moment – some know it and others are doing their best to bury their head in the sand and ignore their problems. The following list of warning signs will help you identify a debt problem before it gets too unmanageable.

1. You are making the absolute minimum payments on your debt each month

Paying off the minimum owed on your credit cards each month is going to get you nowhere. You have to get rid of that debt as fast as you can otherwise your interest charges could add up to thousands and thousands of dollars.

For example, if you have $5000 worth of debt and your interest rate is set at 19% with a minimum payment of $200/ month – it will take you almost 13 years to pay off that credit card. So get rid of the credit card debt as fast as you can.

2. Your credit line has been decreased or you’ve been turned down for credit

Creditors will often look at a few sources when they’re deciding to lend you money. They will base that on your FICO score so if you’ve been declined or had your credit limit decreased it will show that you’re a risk to lenders. Pay attention to these warnings otherwise it could take you years to be able to borrow money again.

3. Your savings are gone and you need to use cash advances

If you’ve been overspending each month it might put you in desperate position to take a cash advance to pay your bills. Things are bad enough that you’ve used up your savings but now you’ve taken out a cash advance, which will have a high interest rate on it too.

Your incomings have to be more than your outgoings… it’s that simple.

4. You’re starting to live paycheck-to-paycheck

If you’ve living paycheck-to-paycheck that means that you would be in serious trouble if something were to happen with your job.

Unemployment insurance doesn’t come right away so what would happen if you lost your job? There are way too many variables and possibilities in life so you should be prepared by at least having a few months worth of your salary saved up. It’s that simple.

5. You’re starting to get calls from your creditors

This means serious trouble. If you’re getting endless calls from collections agencies and other creditors it’s time to come up with a solution fast. By ignoring creditors you can be taken to court or even have your bank account seized.

Getting phone calls from your creditors is the most obvious clue that your finances are in trouble but all five of these warning signs should be looked at so that you can avoid serious repercussions like bankruptcy or debt management.

About the Author

This article was contributed by the website DebtManagement.org.uk.

Popularity: 17% [?]

Consolidation of debt is one of the best alternatives, especially if you have multiple debts and in a pandemonium about repaying them. Many debtors may have heard of debt consolidation but may not know what it is and what needs to be known about it before availing it.

Debt consolidation for many novices is just substitution of multiple debts by a single debt. What most of the people do not know is that debt consolidation offered by Debt consolidation co. includes debt reduction too whereas this is not included in debt consolidation services offered by most other companies.

Among different advantages of the free debt consolidation help offered by are reduction in the applicable rate of interest, reduction in the monthly payment and finally reduction in the mental stress to service single debt instead of multiple debts. The debtor should realize that it is always better to have a single payment rather than remember a number of details to service multiple debts.

The majority of people indebted to multiple debts are in financial crisis just because of scurrilous use of the credit cards. Most of the people, upon expire of one credit card start using the other credit cards. This is like transferring from frying pan to the fire. Many credit card users do not know that the applicable rate of interest for credit cards is on the higher side. Hardly does a part of the monthly payment done by the credit card user go to service the principal amount, whereas, most of it goes to service the interest. When the credit card user realizes this, it is usually too late and availing consumer credit consolation becomes inevitable.

We can help you at availing free non profit credit counseling. One you register for availing the debt consolidation services the representatives of We negotiate with your lenders or creditors to reduce the overall debt and reduction or elimination of penalties linked with late payments.

A non profit credit counseling and advice may help you to consolidate credit card debts.

Popularity: 15% [?]

Of all the no-no’s for credit card – this is the biggest no-no of all. If you check out the internet, you’ll find that most people when they talk about the  don’ts about credit card – this topic would normally be high on the list.

You should never pay the minimum amount, but instead you should pay more than that. Would be best if you settle in full every month.

Why we shouldn’t pay the minimum amount? The number one reason is because the interest rate charged for credit cards is high. And if you pay only the minimum amount, it will take a long time to settle your debt AND you’ll end up paying a bomb on the total interest charge. If you want to fix credit, this surely is something you must consider seriously.

I’ve put up a table of values below and explanation for it. It can get quite technical – but if you need more info, please feel free to ask me in the “comments” section of this post.

Ok, here we go.

For example, let’s say there’s this guy name Mike who have 10,000 dollars of credit card debt. Let’s assume that the credit card interest is 15% per annum. and his monthly payment must at least be 50 dollars.

This example is typical to a lot of credit card schemes out there.

He can choose to pay a minimum amount of 2%, 5%, 10%, 20%, 50% and 100% of his credit card debt balance every month.

For example, if he chooses 2%, his first payment is 200 dollars (=10,000 x 2%). If 5%, his first payment is 500 dollars (=10,000 x 5%)

WHAT DOES ALL THIS MEAN?

Ok, don’t panic.

Let’s look at no 1. Mike has 10,000 in credit card debt and he will be paying 2% of his outstanding debt every month. It will take him 22 years (!) to clear off the debt. In paying his debt, he would have paid 13,993 dollars in interest, which is 140% of his original loan. The interest for his debt is greater than the original debt itself!

So on and so forth for No 2 to No 6.

Compare No 1 with No 3. The only difference is that instead of paying 2% of total debt every month, Mike will pay 10% of total debt. But look at the the time he needs to settle his debt – 22 years as compared 3 years 8 months! There’s also a big difference in the interest charged – from 13,993 dollars to 1,395 dollars.

What the table tries to show is  – always try to pay more and try your best to NOT pay the minimum. As there is BIG difference in how long it takes to settle the debt and the total interest charged.

So, the moral of the story is  - “the more I pay, the more I save – time & money”

And of course, by doing this, you can credit repair your debt in no time!

Other posts on Credit Card:

• Powerful methods to get you out of your credit card debt

Other posts that you may be interested in:

• How debt management programs can help you get rid of debt
• Debt management programs - 3 misleading myths
• The secret to having money
• Simple tips to trim down you monthly expenses
• 10 powerful steps to have a financial sound retirement

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• Carnival of everything about personal finance - 9th Edition
• Carnival of everything about personal finance - 8th Edition
• Carnival of everything about personal finance - 7th Edition
• Carnival of everything about personal finance - 6th Edition
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Popularity: 31% [?]