It is no secret that most people have too much consumer
debt. It is all too easy to just sign your name on the
dotted line and run that credit card up to the max.
Unfortunately, many users of credit cards seem to forget
that eventually the bill comes due, and they may be in for a
rude surprise when it does. Credit card interest rates are
notoriously high, even for consumers with good credit.
Where a secured loan from your bank or credit union might
cost you 8% or 9%, interest rates on typically unsecured
credit card loans can be 18% or even higher.
At interest rates like
that, it could take you decades to pay off even a
small balance if you only pay the minimum balance due
each month. Add that to the extremely high late fees
and over limit fees that credit card companies often
charge, and you can see how easy it is for many people
to begin drowning in debt.
The most basic tool in getting a handle on your debt
and eventually eliminating it altogether is to make a
monthly budget and stick to it month in and month out.
The family budget is the most basic form of financial
planning, and I am always shocked by the number of
people who do not take the time and the effort
required to create this simple financial document.
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