Facts on credit card debt fact bad credit card debt 2aneyeondebtcom
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Dont Save When You Are in Debt.
 People are peculiar creatures. We don't always do whats best for us - instead, we do what feels best, and try to wipe out any reasons why it may not be the soundest thing to do. Possibly that's how come there are so many people who have both savings and debts.
Its an Issue of Psychology.
Sure, it makes you feel better to have savings. Saving feels like you're building a foundation for your future, while paying off what you owe feels like you're throwing your hard cash in to a hole. That money is for the kids education, or for improving your house, or whatever else - and it's in an bank account pulling in a good rate of interest. What could be unreasonable about that? Lots, if you owe money.
Dont Be Fooled.
There are about no savings accounts that will let you have interest rates anywhere near as high as the ones credit cards wrest from you. Heres something to consider: if you have $10,000 in a bank account pulling in 5% a year and $5,000 on a credit card at an interest rate of 20% per year, how much cash do you have? After only five years, the answer is effectively $0 - what you owe would have grown to about $12,500, the equivalent sum that your savings are now worth.
You might not believe it currently, but it actually is much better to pay off your owings. If you utilized one half of your savings to pay off that debt, youd be in such a better spot that it's truly astonishing. You avert five years of compound interest on the debt, but you still get to keep $5,000 in your bank account, making interest - after five years, that's about $6,380.
If youd still rather keep your savings intact instead of using them to pay off your debts, ask yourself this simple question: is your pride worth $6,380 of your familys money?
Consider Your Financial Health.
Once you have enough cash to pay off your debt, theres absolutely no reason to keep 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 would you do that?
There are additional advantages to paying off your debt with your own money. Youll be less strained about your debts, and your credit statement will show that you were able to pay everything back - getting you a much smaller interest deal if you ever need to go into debt again.
I know it's never easy. You just need to bear in mind that any cash you've saved hasnt actually been saved at all. Its money you ought to have been spending rather than buying things with a credit card. Yes, it feels much worse to spend money thinking that youre spending away your nest egg - but always remember that when you use a credit card to spend that same money, youre spending away your future, plus interest. In any case, if you've got the debt, then those savings have already been spent - stop denying it to yourself.
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