Facts on credit card debt bad credit repair firstcreditfix com
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Dont Save When You Are in Debt.
 Humans are peculiar creatures. We don't always do whats best for us - instead, we do what feels best, and try to blank out any reasons why it may not be the best thing to do. Possibly that's the reason there are so many people who have both savings and debts.
Its an Issue of Psychology.
Sure, it feels better to have savings. Saving feels like you're building a cornerstone for your future, while paying off your debts feels like you're giving your money in to a hole. That money is for the kids education, or for doing up your house, or whatever else - and it's in an account pulling in a valuable rate of interest. What can be wrong with that? A great deal, if you owe money.
Dont Be Fooled.
There are virtually no savings companies that will let you have interest rates as high as the ones credit cards wrest from you. Heres something to consider: if you have $10,000 in a bank account realizing 5% per year and $5,000 on a credit card at an interest rate of 20% per year, how much cash do you have? After just five years, the answer is effectively nada - your owings would have grown to in the area of $12,500, the equal amount that your savings are currently worth.
You might not believe it currently, but it truly is much better to pay off your debt. If you utilized one half of your savings to pay off that debt, youd be in a much better position that it's truly astounding. You avert five years of compound interest on the debt, but you still get to hang on to $5,000 in your bank account, pulling in interest - after five years, that's about $6,380.
If youd still rather keep your savings intact rather than using them to pay off your debts, ask yourself this elementary question: is your pride worth $6,380 of your familys hard cash?
Consider Your Financial Health.
Once you get enough cash to pay off your debt, theres absolutely no logical reason to hang on to it. Debt is for people who don't have the money, and need to borrow it. Debt costs money, and savings make money - you want as much of your financial resources as possible to be savings, not debts. If your savings account and credit card are with the same bank, then youre effectively paying for the privilege of borrowing your own money from them. Why on earth would you do that?
There are additional advantages to getting rid your debt using your own savings. Youll be less distressed about your debts, and your credit statement will show that you were able to pay everything back - getting you a much better interest deal if you ever have to go into debt again.
I know it can be hard. You just need to bear in mind that any cash you've saved hasnt actually been saved at all. Its money you should have been spending rather than making purchases with a credit card. Yes, it feels much worse to spend money thinking that youre spending away your future - but always bear in mind that when you use a credit card to spend that same amount of money, youre spending away your future, plus interest. In any case, if you've got the debt, then that cash in the bank has already been spent - stop denying it to yourself.
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