Beware Of Easy Money

By
Real Estate Agent with Keller Williams Realty 0575737

Credit TroubleA lot of successful business people think the use of credit cards is something far back in their rear view mirror like after their college days. They are financially comfortable now. But whoa Nelly. Don't think so fast like that. Things in life change in a flash. Jobs are lost, you wrack up family medical bills with your co-pay or all of it negotiated with a hospital with no insurance coverage, your business goes south, divorces happen and you divide everything, you want to start a new business franchise and you need some immediate cash on hand. Life continues to evolve. And you THINK how about putting a little of what you need on.... A CREDIT CARD. Some posts have been written on financial common sense and I wanted to issue a clarion call to

         Beware Of Easy Money

The banks make it so CONVENIENT for you too. Offers of new cards arrive in the mail, bonus points, cash back rebates, and even CHECKS to write to whomever with that large $18,000 credit limit they gave you cause YOU are so credit worthy. There is no free lunch. READ the fine print. They do try to bury that from you. 3% to 4% Cash Advance or Balance transfer fees even if an initial 0% for 6 months payments. Late fees to $30 a month. And the worst, miss a payment BY A DAY and your monthly interest rate goes to 29.9%!!!! WOW.

 

One good thing they do with this "easy money" is they say if you keep making the minimum payment it will take you like 48 years to pay it off, but if you pay the RECOMMENDED rather than the minimum payment you can pay it off in 36 months, something a little more reasonable.

Be VERY careful with credit cards and remember the DEBTOR is the SLAVE to the LENDER. It ALWAYS has been that way. Freedom is a very good thing.

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Rainmaker
361,971
Paula Hathaway, REALTOR, Sr. LBA,
Douglas Elliman Real Estate - Southampton, NY
...Finding Your Place In The sun!

Gary: Well said! I think that unless we are wise about knowing how indebtedness really works, we as a culture will fall victim to the credit scam again! There should be an effort on the part of educators to teach this as a basic part of life---we all are faced with a choice about credit at some point in our lives--it could be likened to marriage by the way it lasts into the forseeable future! And, by the way, our President and his cabinet cuold have benefited from a course in basic economics before they got hired to rule this country!

Apr 03, 2011 12:59 PM #4
Rainmaker
346,643
Pam Miller
Realty Associates - Friendswood, TX
Broker Associate - Pearland/Friendswood

Gary, this is great post for young and not-so-young.  Credit card debt is a terrible trap! 

Apr 03, 2011 01:11 PM #5
Rainmaker
1,776,979
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Gary, if it was truely easy money, you wouldn't have to be told about it.  Everyone would already know how.

Apr 03, 2011 01:54 PM #6
Ambassador
1,551,455
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

SaraMana Properties: You are welcome.

Wanda: Good luck with the debt free, and the pay later everyone seems to forget.

Peggy: I wonder what happened to usury laws maxing at like 21% too!

Paula: Smile, our country is in PERMANENT debt unfortunately with no end in sight with that budget.

Pam: The word 'trap' is an excellent choice describing what happens to so many people.

William: Easy money is deceptively COSTLY money. Anything too easy you have to raise your eyebrow toward.

Apr 03, 2011 02:12 PM #7
Rainmaker
863,011
Steve Loynd
Alpine Lakes Real Estate Inc., - Lincoln, NH
800-926-5653, White Mountains NH

I receive half a dozen credit card offers a week, they never make it out of the post office. But what really scares me is my 17 year old son is starting to get these come -on offers.

Apr 03, 2011 02:14 PM #8
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Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Steve: Keep that trash can nearby and have your 17 yr old cozy up to the trash can too. The younger people really get sucked into that easy money with like wanting to get iPods, iPads, and big screen TVs.

Apr 03, 2011 02:30 PM #9
Rainmaker
349,156
Sondra Meyer
Star View Real Estate - Colorado Springs, CO
Colorado Horse Property Specialist

Excellent advise.  Bettter yet....stop using credit cards and pay them off.  Pay cash.   Nothing good comes from credit card debt.   

Apr 03, 2011 02:30 PM #10
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Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Sondra: Or what was like step one from the Dave Ramsey or Suze Orman folks? Cut the credit cards up! Can you imagine paying 29.9% annual interest? Ludicrous, yet many young people don't even understand math.

Apr 03, 2011 02:36 PM #11
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515,290
Cindy Marchant
Keller Williams Indy NE 317-290-7775 www.marchantteam.com - Carmel, IN
"Cindy in Indy" , Realtor, Fishers Real Estate

Good advice Gary...I watch numerous agents spend money like crazy last year from March - June of 10 and then their business went cold.  The Hummer isn't worth as much three weeks after you bought it...it was sad....

Apr 03, 2011 03:25 PM #12
Ambassador
782,081
Hannah Williams
Re/Max Eastern inc. - Philadelphia, PA
Expertise in NE Philadelphia & Bucks County

Gary..You are such a WISE MAN

HelpfulHannah

Apr 03, 2011 05:20 PM #13
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Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Cindy: How soon that Hummer drops in value driving it off the lot too. I love your Butler Bulldogs spirit!!!

Hannah: Ha Ha..... call me Obe Wan Kenobe. Right LOL.

Apr 03, 2011 06:13 PM #14
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Tammy Lankford
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Your Lake Sinclair Expert (706-485-9668)

My daughter got sucked in at college.  She knew better.  Unlike Steve I don't throw my offers away in the post office, I bring them home and throw them away in the fireplace.  Once upon a time, I traveled down that road.  No desire to go back.

Apr 03, 2011 07:26 PM #15
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Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Tammy: That's a real good point you make there of been there done that, not going back. When you have felt that monthly payment pressure of credit card debt you want to steer clear of it. I did like Steve's idea too of having the trash can nearby with the incoming mail.

Apr 03, 2011 07:35 PM #16
Rainmaker
217,417
Patricia Beck
RE/MAX Properties, Inc., GRI, CDPE - Colorado Springs, CO
Colorado Springs Realty

Credit is dangerous!  If you don't have the money to buy it, don't charge it.  Great advice Gary, especially in with all of the uncertainty today.

Apr 03, 2011 09:21 PM #17
Rainmaker
1,661,183
Dorie Dillard
Coldwell Banker United Realtors - Austin, TX
Realtor-Canyon Creek- NW, Austin TX Homes For Sale

Good evening Gary,

Freedom is a good thing. There is nothing worse than getting caught in the credit squeeze. I see so many ads buy now pay next year..not a good idea!! Great advice for us all to keep in mind when we get bombarded with Easy Money!!

Apr 03, 2011 09:48 PM #18
Rainmaker
695,373
Sharon Paxson
HÔM Sotheby's International Realty, BRE License 01501912 - Newport Beach, CA
Newport Beach Real Estate - HOM Sotheby's Int'l Re

HI Gary - great post, and it is correct about how these credit card companies attempt to rope you in! Cash advances typically have the highest interest rate, and at the end of the day, who can afford to pay that amount in interest charges. It can be an incredibly dangerous trap!

Apr 04, 2011 12:04 PM #19
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Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Patricia Beck: A healthy understanding of how credit can get you in a trap is a very good thing to know.

Dorie: I don't understand why people miss the freedom thing other than they want something now and won't save for it.

Sharon Paxson: The cash advances seem so easy to do and yet you get whacked with a big fee still.

Apr 04, 2011 02:36 PM #20
Rainmaker
451,192
Allison Stewart
St.Cloud Homes - Saint Cloud, FL
St. Cloud Fl Realtor, Osceola County Real Estate 407-616-9904

Gary- I quit using credit cards several years ago when i saw the terms of use change and as you pointed a late payment is now measured in HOURS not days and that interest rate is usary! The key word is budgeting. If you don't have the money now...wait it out until you do.  And always, always always build a buffer for emergencies.

Apr 05, 2011 10:11 AM #21
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Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Allison: Good for you focusing on cash, it will keep you out of traps in the long run.

Apr 05, 2011 04:57 PM #22
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Selling Daytona paradise for heavenly good prices

Gary,

Yes, in tis country it is unbelievably easy to create debt, and it is very diffidult to deal with it if you went beyond your means

Apr 05, 2011 10:05 PM #23
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