Letter - Credit card adviceI applaud the Echo Press in sponsoring different ideas on how people can escape from having too much debt.
To the editor:
I applaud the Echo Press in sponsoring different ideas on how people can escape from having too much debt.
As a financial planner for over 35 years, I can attest that many people have problems regarding credit card debt. The formula that I have used both personally and for my clients is very simple. This will be especially important once the new Federal Credit Card Act of 2009 is implemented in February 2010.
The formula is as follows: Never charge anything on your credit card if you can’t pay 10 percent of the original purchase price for a consecutive 10 months. For example, if you want to buy a couch for $2,000, you must commit yourself to paying $200 per month.
If you can’t do that, either you have to buy a less expensive couch or wait until you are able to afford it. If you do this on every purchase, and then commit yourself to making those monthly payments, you will never be more than 10 months away from having all credits cards paid.
Of course this does not include larger purchases like cars or homes but it certainly works wonderfully with credit card debt as it creates automatic controls on spending.