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Calculate the True Cost of a Credit Transaction
Let’s say that you are planning on taking a trip to Florida this summer. While it may be easier to pay for a hotel, plane ticket and other expenses with a credit card, it could inflate the true cost of your trip. Let’s also say that your total expenses for the trip were $1,500 and you started planning the trip a year in advance.
By paying for the vacation with cash, you would need to set aside $125 per month to fund the excursion. If you put it on a credit card with an average interest rate of 17%, you would pay almost $137 per month over the course of a year. When you see how much more that you have to pay out of pocket when using a credit card, it may provide some motivation to use cash instead.
Create a Budget
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What’s a Structured Settlement?
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While a credit card can be an effective financial tool, it should not be used recklessly. If you a struggling to get out of credit card debt, a financial adviser may be able to provide strategies to eventually become debt-free.