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Article #365: Credit Cards - a Powerful Wealth Tool

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






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