The borrower is slave to the lender.
-Proverbs 22:7 (TNIV)
Below is what John Cummuta says about those Zero Percent Intrest Credit Cards:
If you believe the credit card companies really want to give you something for nothing, I have some beautiful ocean-front property in Kansas that I want to sell you. The only reason credit card companies offer anything is that they've determined it will get them and/or keep them customers, from whom they extract interest or other charges.
Looking at the zero percent intrest myth and using one of the best-known brand name credit cards in the USA as an example. They offer zero percent interest for seversl months, then pops up their "standard" interest rate, currently 13.99%. If you make ONE late payment, that imedit;y jumps tp 19.99%. Cash advances are charged a 20.99% to 22.99% rate, depending on which level of card you hold. There's also a minimum $5 transaction fee for each cash advance, a $15-$35 fee for late payments, and a $29 overlimit fee. So much for zero percent interest!
So you have taken advantage of that 0% offer shell game, get it paid off quickly before they sock you. Also credit card companies are wise, if you think you can jump from one card to another, transfering your balance, they will see that. Once that happens your FICO will plument and you will be socked with higher interest and will no longer receive those 0% offers.
It's paid off. I just can't go along with this post. I do want everyone to understand that it's a treacherous business, but most people in cc debt are already navigating the same treacheries, and 0% can ease the burden. I've helped maybe 5 people do this so far. Nor does the FICO "plument". Strategic xfers can rescue a dire situation and save you a lot of money. It makes a bad minefield a little better. Nor is their any link between the 0% teaser and the ultimate "permanent" rate. Most of mine are under 9%. I can't remember the last penny I paid to a CC company. It was over $15,000 ago.
ReplyDeleteI appreciate your comments and opinion. If you are reading some of my newer posts at DebtFree4ever.net you will see how I compare both John Cummuta and Dave Ramsey and how they differ, yet still get the same end result. I even comment which one I lean towards the most.
ReplyDeleteWhich on is wrong? Whihch one is right? neither, they just have different ideas to get to the same place...though at the same time they really teach the same thing.
in matters of finance sometimes there is a right and wrong answer. as i've said, i've brought people down to 0% from 20%+ and save them a lot of money.
ReplyDelete