CategoriesActionFinancialThink About It

Credit Card Debt

Ideally you will never pay more than 4% per year on any credit card debt.

This means you pay it off in full, and on time, every month. Or you have done a Balance Transfer or Money Transfer deal. This usually means you’re paying 0% interest for 9, 15 or even 36 months! And the fee they charge for this is often 2.9%, which is incredibly low, especially when spread across 3 years!

If you currently pay more than £25 per month in interest payments on any one card, or combined across several cards, you can save that money if you learn a few key concepts.

Let me know if you would like any help.

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CategoriesActionObserveThink About ItTime

Play Cards

It’s great for relaxing, pattern recognition and mental acuity. There’s a great social element too. Even with solitaire (who hasn’t had someone lean over and help them out…)

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CategoriesActionFinancialReframe your thoughts

Credit Cards Are Brilliant

I have always loved credit cards. They are so useful. They can be brilliant if you use them with the right intent. Credit cards are brilliant when you are sensible. However, like fire, if not used properly, you can get badly burned.

There are two features of credit cards that I think are great. The first is called a Balance Transfer. This is the option to shift one credit card balance on one card over to another card. On the surface, it may sound like a bad idea that has no benefit. However, if you get curious and look a little deeper, you’ll see some great benefits.

Let’s say you have a $5,000 balance left on one of your cards. And it’s attracting a 20% rate of interest. That would equate to $1,000 annually of interest. Now you could transfer that balance to a new or current card you hold. Find a good deal and you could pay 0% interest for up to 24 months right now.

In addition, you will usually have to pay a fee as well, but if you’re getting a new card, sometimes this is waived. Let’s say you pay an upfront fee of 4%. That would be $200. But no other cost for two years. That’s like a 2% per annum rate. Now you have some breathing room to pay the balance off over two years and it will only cost one tenth of your current card.

The other option is a Money Transfer. Similar idea, but the card company simply places the funds in your bank account. You don’t need to be paying off another account balance. Similar terms can apply.

Like I said, credit cards are brilliant. (Use sensibly and pay down the balance so you clear it when the 0% period ends.)

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