Tools on credit card debt laws in california
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Dont Save When You Have Debt.
 Humans are funny animals. We don't always do whats best for us - instead, we do what feels best, and try to blot out any reasons why it may not be the right thing to do. Possibly that's why 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 base for your future, while paying off what you owe feels like you're giving your money into a hole. That money is for the kids future, or for improving your home, or whatever else - and it's in an savings account realizing a valuable rate of interest. What could be wrong with that? A great deal, if you are in debt.
Dont Be Fooled.
There are about no savings institutions that will offer you interest rates as high as the ones credit cards charge. Heres food for thought: if you have $10,000 in a savings account bringing in 5% a year and $5,000 on a credit card at an interest rate of 20% per year, how much money do you have? After only five years, the answer is effectively nada - your owings would have grown to about $12,500, the same amount that your savings are currently worth.
You may not imagine it currently, but it truly is a great deal better to pay off your debt. If you used half your savings to pay off that debt, youd be in such a better position that it's really astounding. You avert five years of compound interest on the debt, but you still get to hang on to $5,000 in your savings account, making interest - after five years, that's around $6,380.
If youd still prefer to 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 cash?
Consider Your Financial Health.
Once you have enough money to pay off your debt, theres absolutely no earthly reason to hang on to it. Debt is for people who don't have the money, and have 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 financial institution, then youre in effect paying for the privilege of borrowing your own cash from them. Why would you do that?
There are additional advantages to paying off your debt using your own money. Youll be less stressed about your debts, and your credit report will show that you were able to pay everything back - getting you a much better interest deal if you should have to go into debt again.
I know it's never easy. You just need to be mindful that any cash you've saved hasnt actually been saved at all. Its money you should have been spending instead of making purchases with a credit card. Yes, it feels much worse to spend money thinking that youre spending away your children's education - but always remember 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 those savings have already been spent - stop denying it to yourself.
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