Did you know the average US household with a credit card has a balance of $14,750 (per Federal Reserve Report 02/2011)? If the minimum required monthly payment is 3%, that’s $442 a month going to the bank! I can think of better ways to spend $442 a month. Keep in mind that credit card bill is probably from stuff you don’t even use or have any more.
– Credit cards are income stealers.
– Einstein said the most powerful force in the universe was Compound Interest
– Compound interest is money the lender earns from you while they sleep.
– Interest paid on borrowed money is RENT.
– The Federal Reserve prints money at will. About $3-4 Billion a day, lately.
– The more money they print, the less your existing dollars are worth.
– That’s inflation and it’s intentional
– Inflation is a tax, plain and simple.
Here’s some credit card perspective. A $2,000 retail purchase @ about 19% interest would take you over 30 years to pay off. That’s assuming you just made minimum monthly payments. That’s exactly what the bank wants you to do.
It’s called the minimum monthly payment trap. Don’t get caught in it. You get robbed of your future potential wealth when you charge your purchases and carry a balance. Before you buy something on credit stop and think, do I really need this item? Most of the time the answer is no.
Here’s a tip. Take the smallest credit card balance you have. Add to the minimum monthly payment as much extra money as you can each month. I recommend 5-10% of your net income. If that’s a stretch, less than 5% is a good place to start. It’s called pre-paying your debts.
Cheap, easy credit is the only reason there’s a middle class in the US. I hate to say it, but it’s true. You can’t borrow your way out of debt. You have to pay it off. Getting rid of those income stealers, credit cards, is a great place to start. Will it happen overnight? No. Will it be worth it? Yes. And YES, you can do it. Take action. It’s the only way anything happens.
To Your Financial Freedom,
Greg Whitaker
www.debtshepherd.com
Copyright © Greg Whitaker, All Rights Reserved
