Facts on credit card debt problem help with debt problem searchie net
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Dont Save When You Have Debt.
 People are funny creatures. We don't always do whats right for us - instead, we do what feels best, and try to blank out any reasons why it might not be the right thing to do. Perhaps that's why there are so many people who have both savings and debts.
Its a Matter of Psychology.
Sure, it feels better to have savings. Saving feels like you're building a cornerstone for your future, while paying off debt feels like you're throwing your money into a hole. That money is for the kids education, or for doing up your home, or whatever else - and it's in an savings account realising a valuable rate of interest. What could be unreasonable about that? A great deal, if you are in debt.
Dont Be Fooled.
There are about no savings institutions that will let you have interest rates anywhere near as high as the ones credit cards wrest from you. 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 nothing - your debt would have grown to in the area of $12,500, the equivalent amount of money that your savings are currently worth.
You might not believe it now, but it really is much better to pay off your debt. If you utilised half your savings to pay off that debt, youd be in a much better situation that it's really amazing. You avoid five years of compound interest on the debt, but you still get to keep $5,000 in your bank account, earning interest - after five years, that's more or less $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 Well-being.
When you get enough money to pay off your debt, theres absolutely no reason 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 finances 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 money from them. Why would you do that?
There are additional advantages to paying off your debt with your own money. Youll be less stressed about your debts, and your credit statement will show that you were able to pay everything back - resulting in getting you a much smaller interest rate if you ever need to go into debt in the future.
I know it can be hard. You just have to bear in mind that any money you've saved hasnt actually been saved at all. Its money you ought to 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 future - 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 that money has already been spent - stop denying it to yourself.
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