Saturday, August 31, 2013

Be a Smarter Borrower

Debt has been part of the total human breathing system in one form or another. Except for rare exceptions, almost all of us have financial debt from someone and most often than not it is usually in the form of credit card debt.

Credit cards are heaven's sent.  It is the easiest way to shop and to buy something without bringing cash with you and credit card companies also offer various payment scheme that you do not have to pay how much you owe in one drop. 

Looking at credit cards as some blessings, it has both advantage and disadvantages. As long as you pay it regularly and more than the minimum amount required, you can lower down interests and other fees. But oftentimes, you only pay the minimum and that's how these institutions make money. 

Reality is, if you have credit card debts, you should be paying the principal loan to avoid high charges from the interests that come with it. If you choose the loner payment scheme for lower cash outs you only subscribe to higher interest rates. You will only be tying our money to pay off the debt instead of enjoying the fruit of your labor to your benefit.

As mentioned, you should be aggressive enough to pay up more than the minimum amount required.  Think of a way to free up your income and lower your debt. Challenge yourself to pay additional amount than the minimum to slash on the principal amount due and to minimize accumulation of interests and other charges.

Since, you think credit card is heaven's sent, it should benefit you and always to your advantage. Surely, it will lower your debt pretty drastically since you are paying more of it. It shortens the duration of payment and finally, it lessens the interest you have to pay because you are paying not just the minimum thus lowering the total principal amount.

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