References on credit card debt problem debt problem searchie net
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Dont Save When You Are in Debt.
 Human beings are peculiar animals. We don't always do whats best for us - rather, we do what feels best, and try to wipe out any reasons why it may not be the most effective thing to do. Possibly that's the reason there are so many people who have both savings and debts.
Its an Issue of Psychology.
Yes, it makes you feel better to save. Saving makes you feel like you're constructing a foundation for your future, whilst paying off your debts makes you feel like you're giving your cash in to a hole. That money is for the kids future, or for improving your house, or whatever else - and it's in an account earning a useful rate of interest. What can be wrong with that? Lots, if you owe money.
Dont Be Fooled.
There are just about no savings institutions that offer interest rates as high as the ones credit cards take from you. Heres something to think about: if you have $10,000 in a bank account earning 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 just five years, the answer is effectively $0 - your debt would have grown to as much as $12,500, the same sum that your savings are currently worth.
You might not imagine it at present, but it truly is a good deal better to pay off your owings. If you used one half of your savings to pay off that debt, youd be in a much better spot that it's truly astonishing. 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 approximately $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 hard cash?
Consider Your Financial Health.
Once you get sufficient cash to pay off your debt, theres absolutely no reason on earth to keep it. Debt is for people who don't have the money, and have to borrow it. Debt costs money, and savings make money - you need as much of your financial resources as possible to be savings, not debts. If your savings account and credit card are with the same savings bank, then youre in effect paying for the privilege of borrowing your own cash from them. Why would you do that?
There are more benefit's to getting rid your debt using your own money. Youll be less distressed about your debts, and your credit statement will show that you were able to pay everything back - resulting in getting you a much better interest deal if you ever have to go into debt in the future.
I know it can be hard. You just need to bear in mind that any money you've saved hasnt really been saved at all. Its money you should have been spending as an alternative to 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 whenever 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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