Wednesday, January 4, 2012

The Perils of Credit Card Debt


Dave Ramsey wrote an article about credit card debt, and how the interest paid on these can be so high. In his example, the monthly interest payments added up to $306. The thing that people do not think about is the fact that money spent to cover that interest cannot be spent on anything else. Your debts hold you prisoner until they are paid off. If the $306 monthly was invested in a growth mutual fund over the period of 35 years, you would end up with $1,967,873! That is why Ramsey is so opposed to debt. It robs you of chances to build wealth. Money not spent to cover credit card debt, car payments, student loan payments, medical debts, and the like can be invested, securing your retirement nest egg. Plus, who says you need to retire at 65? Smart choices can move up that retirement date to 60 or 55, or even earlier, with the right decisions. Each Friday on Ramsey's radio show, he has people call and declare they are debt free. They tell him how much debt they had and how long it took them to pay it off. For the whole article on the credit card debt issue, check this out:

https://www.mytotalmoneymakeover.com/article/how-credit-card-debt-adds-up?ectid=bitlyified010420120952

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