Facts on credit card debts in malaysia
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Dont Save When You Have Debt.
 Human beings are funny animals. We don't always do whats right for us - instead, we do what feels best, and try to wipe out any reasons why it may not be the best 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 makes you feel like you're building a base for your future, while paying off debt feels like you're throwing your hard cash down a hole. That money is for the kids education, or for doing up your home, or whatever else - and it's in an account realising a useful rate of interest. What could be wrong with that? A great deal, if you have debts.
Dont Be Fooled.
There are just about no savings companies that offer interest rates as high as the ones credit cards charge. Heres food for thought: if you have $10,000 in a savings account making 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 nada - your owings would have grown to as much as $12,500, the same amount of money that your savings are currently worth.
You may not imagine it at present, but it truly is a great deal better to pay off your debts. If you utilised half your savings to pay off that debt, youd be in a much better position that it's really amazing. You avoid five years of compound interest on the debt, but you still get to hang on to $5,000 in your bank account, earning interest - after five years, that's approximately $6,380.
If youd still prefer to keep your savings intact rather than using them to pay off your debts, ask yourself this simple question: is your pride worth $6,380 of your familys hard cash?
Think of Your Financial Health.
Once you have sufficient 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 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 banking company, then youre effectively paying for the privilege of borrowing your own cash from them. Why on earth would you do that?
There are other benefit's to getting rid your debt with savings. 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 again.
I know it's hard. You just have to bear in mind that any cash you've saved hasnt really been saved at all. Its money you should have been spending as an alternative to buying things 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. Anyway, 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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