| In fact, when used properly, credit | | | | freebies and spend millions of dollars |
| cards are a very powerful | | | | in advertising to hook you on using |
| wealth-building tool! I use credit cards | | | | their card? They know that there are |
| for every single possible purchase. | | | | many consumers out there who just pay |
| By using credit cards you get... | | | | the minimum sum every month (about 3% of |
| 1) A two-months interest free loan | | | | the total debt you owe), because it is |
| When you buy a product using your credit | | | | so tempting. What's worse is that many |
| card, you will only be billed for it at | | | | credit card owners don't even pay their |
| the end of the month. You are then given | | | | minimum sum on time because of a cash |
| another month to make payment. So, if | | | | crunch or because they plain forgot. |
| you pay off your total bill, you would | | | | The moment you pay only the minimum sum |
| have effectively gotten a two-month | | | | and allow your outstanding balance to |
| interest free loan. | | | | roll, you become the bank's best friend. |
| 2) Bonus points and dollars | | | | This is when they will make a killing |
| Each purchase you make on your credit | | | | off you! Why? This is because banks |
| card(s) will earn you bonus points which | | | | charge a 2% per month interest on your |
| you can use to redeem for free products | | | | outstanding sum. This may seem small, |
| and services like extra flyer -miles and | | | | but again, that's 24% interest a year. |
| dining vouchers, saving you even more | | | | Just how much interest does this add up |
| money. | | | | to? Let's do the sums... |
| 3) A monthly statement that tracks and | | | | Question: Imagine if you had an |
| consolidates all your expenses | | | | outstanding balance of $2,000 on your |
| At the end of every month, the credit | | | | credit card statement, and you just pay |
| card company will tabulate for you the | | | | the minimum sum of $60, how long will it |
| total expenses for the month, making it | | | | take for you to pay off the while |
| easy for you to track your total | | | | balance? (this is only assuming you do |
| expenditure. So it becomes a free money | | | | not charge a single dollar more). |
| management tool. | | | | The shocking answer: It will take you |
| However, you MUST ALWAYS PAY THE | | | | 4.5 years! You would have paid a total |
| OUTSTANDING BALANCE when you pay the | | | | of $3,300, that's $1,300 in interest. In |
| full balance every month. This way, the | | | | other words, you would pay an actual |
| bank does not earn a cent off you, but | | | | interest rate of 65% off your balance. |
| you get the three great wealth building | | | | So when used properly credit cards can |
| services mentioned above. This is what I | | | | greatly assist you in creating wealth or |
| do and that is why my bankers hate me. | | | | it can destroy you if abused. |
| So why do banks go all out, giving | | | | |