One excuse many people give for being in debt is that they have never been good with money. Personal finance has a lot more to do with discipline than how much money you have. There are some cases that even smart people can get into trouble with debt and become insolvent.
At most retail stores, you will likely be asked if you have a store credit card,
or if you want to apply for one if you don’t have one. You need to
consider if the discount offered is worth it in the end. If you do apply
for a store credit card and charge your purchases to it, then you need
to be sure to pay the bill on time. Store credit cards typically have a
higher interest rates than other credit cards. If you don’t pay off your
balance in full the first month or so, then you may end up paying more
than you would have without the discount. If you open several cards like
this, it could have an affect on your credit score. Part of your credit
score is figured by taking into consideration the total amount of
credit you have available and how much you have charged.
another example of this, many people may charge more on their credit
cards than they normally would to receive reward points or dividends.
Again, if you are not able to pay off your balance within a month or
two, you may negate the value of the rewards you received.
A home equity loan
or second mortgage is one way to use the equity in your home to pay for
expenses such as home improvements, college expenses and other
expenses. People may get into trouble with these financial vehicles if
the value of their home decreases significantly, in turn reducing the
amount of equity in your home. Also, if you experience a job loss or
decrease in income, you may be unable to make the additional payments on
Many purchases such as cars, electronics,
furniture and appliances can be made with a certain amount down and
monthly payments for a specific amount of time. You need to keep track
of how much these payments add up to each month. It may be easy to spend
more than you can afford to pay each month. This is because the
payments may not seem very large, but a number of them do add up.
you make purchases on a 60 or 90 days same as cash program or interest
free program, make sure you pay the balance before the time period is
over. If the balance is not paid in full by the end of the period, the
interest that was waived will be charged from the beginning of the
agreement and continue to grow until the balance is paid in full. It may
seem like a good deal to get a certain amount of time of not having to
make payments, but if you incur the interest payments,then you may pay
many times of the original price of the items.