By John Watson
One of the biggest problems facing individuals today is
being able to control their personal finances. The rate of
inflation has leveled off, but individual indebtedness
seems to be going through the ceiling with a record number of
bankruptcies being filed each year.
With more people working and earning more than ever before, this
just doesn't make sense. With all the ads on TV, the radio and in
the newspaper selling everything from home furnishings and
electronics to cars with little or no down payment and small monthly
payments, it is easy to get caught in the credit trap.
The companies and the advertising execs know this, and that is
why they keep those ads on TV, the radio and in the newspapers. Just
looking for another sucker.
Most of the ads are honest and informative, but some are a little on
the shady side. You have to check the small print at the bottom of
the ad to see what they are really doing to you.
One of the biggest gimmicks, or rip-offs, now is the stores, especially
electronics and home furnishings, advertising buy with no down
payment and no payments or interest for one year. WATCH OUT!
Read the fine print!
All of the ones I have checked state that if the
full amount is not paid in that time period, interest will be added
from purchase date. Some that I have checked have interest rates as
high as 22% to 24%.When you start making payments you are already a
year behind in interest payments. With the extra interest added each
month, it could take six months or longer just to get paid down to the
original purchase price.
You can, however, make this work to your advantage. Whenever you
make your purchase, take the number of months until the due date, the date your first payment is due, and divide that into the purchase
price. This will give you the amount you will need to put back each
month so that you can pay the note off by the due date, and not have
to pay any interest.
If you put this amount in a savings account each month you should
earn enough interest for a dinner on the town.
So you are one of the lucky ones that has the money to pay cash. Well, go ahead and buy on the deferred payment plan, keep your
money in the savings and pay when due. That way you
are earning interest and not the store.
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John writes a weekly column for his hometown newspaper.
You may read some of his stories at: http://go.to/backfence
You may contact John direct at: backfence@www.com
