Ladies and gentlemen, there is a very dangerous term used in personal finance. It’s called income creep.
Income creep is when your consumption increases with your income.
You get a raise, for instance, and buy a more expensive car.
The reason this can be very dangerous is that one day, you can wake up and find yourself a high earner…but with little to show for it.
Sounds terrible, doesn’t it?
I found something on CNBC that exemplifies what I’m talking about. Check it out here…and please share your thoughts in the comments!
My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.
Click the image of the book at left to be taken to its Amazon page. (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)
One of the main reasons people have a low net worth, and/or are unable to invest in stocks, is credit card debt.
I acknowledge that it’s not the only reason, but it is definitely among the top two or three among many people.
Here’s a Q & A with a person who is carrying some credit card balances and looking to pay them down.
Q: My credit card balances have high interest rates. Is there anything I can do?
A: The first thing you could do is call the credit card company and ask if they would lower your interest rate.
The next best step is to transfer your credit card balance to a card with more favorable terms. If you can find one that will not charge you interest for up to 28 months, that’s all the better. No interest payments will allow you to pay off the principal much sooner.
Q: How do I find the best offer?
A: It depends on your credit score. The higher your score, the easier it will be to find a card with better terms. If you have a low score, unfortunately you might be stuck with the card you have.
Q: Will the balance transfer affect my credit score?
Since the new company will have to run your credit, your score will take a slight hit. However, a deal that allows you to pay down your principal for a year or more is well worth the five points it will cost you!
Remember, a balance transfer will not erase any derogatory information from the prior credit card. Any late payments will unfortunately remain.
All in all, a balance transfer is a very smart move if you can find a good deal. Let’s say you are paying $100 a month in credit card payments. Once you pay that off, you’ve freed up $1200 a year – to invest in stocks!
My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.
Click the image of the book at left to be taken to its Amazon page. (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)
