Credit Cards - A Powerful Wealth Tool

In fact, when used properly, credit cards are a very powerful wealth-building tool! I use credit cards for every single possible purchase.

By using credit cards you get...

1) A two-months interest free loan

When you buy a product using your credit card, you will only be billed for it at the end of the month. You are then given another month to make payment. So, if you pay off your total bill, you would have effectively gotten a two-month interest free loan.

2) Bonus points and dollars

Each purchase you make on your credit card(s) will earn you bonus points which you can use to redeem for free products and services like extra flyer -miles and dining vouchers, saving you even more money.

3) A monthly statement that tracks and consolidates all your expenses

At the end of every month, the credit card company will tabulate for you the total expenses for the month, making it easy for you to track your total expenditure. So it becomes a free money management tool.

However, you MUST ALWAYS PAY THE OUTSTANDING BALANCE when you pay the full balance every month. This way, the bank does not earn a cent off you, but you get the three great wealth building services mentioned above. This is what I do and that is why my bankers hate me.

So why do banks go all out, giving freebies and spend millions of dollars in advertising to hook you on using their card? They know that there are many consumers out there who just pay the minimum sum every month (about 3% of the total debt you owe), because it is so tempting. What's worse is that many credit card owners don't even pay their minimum sum on time because of a cash crunch or because they plain forgot.

The moment you pay only the minimum sum and allow your outstanding balance to roll, you become the bank's best friend. This is when they will make a killing off you! Why? This is because banks charge a 2% per month interest on your outstanding sum. This may seem small, but again, that's 24% interest a year. Just how much interest does this add up to? Let's do the sums...

Question: Imagine if you had an outstanding balance of $2,000 on your credit card statement, and you just pay the minimum sum of $60, how long will it take for you to pay off the while balance? (this is only assuming you do not charge a single dollar more).

The shocking answer: It will take you 4.5 years! You would have paid a total of $3,300, that's $1,300 in interest. In other words, you would pay an actual interest rate of 65% off your balance.

So when used properly credit cards can greatly assist you in creating wealth or it can destroy you if abused.

Adam Khoo is an entrepreneur, best-selling author and a self-made millionaire by the age of 26. Discover his million dollar secrets and claim your FREE bonus report 'Get Out Of The Rat Race Now' at Secrets Of Self-Made Millionaires

Baby Furniture Crib
Baby Crib R Us
Farm Yard Baby Crib Bedding By Kimberly Grant
Baby Bjorn Travel Crib Lite
Baby Blues Clues Crib Bedding
Baby Bedding Crib Toile
Big Top Pink Baby Crib Bumper By Banana Fish
Keep Baby In Crib
Baby Crib And Furniture
Baby Soothers Crib
Monterey Baby Crib
Monterey Convertible Crib Or Rails By Bedford Baby
Baby Crib Assembly Instructions
Little Bunny Blue Baby Crib Sets
Baby Looney Tunes Crib Bedding
Concord Baby Crib
Da Vinci Baby Crib
Antique Baby Crib
Baby Toy Town Crib Bedding
Baby Crib Da Emily Vinci
Elegant Baby Nursery Crib Bedding
Baby Crib Toys
Baby Boy Suede Crib Sets
Baby Bedding Disney Crib Set
Graco Travel Lite Baby Crib
Baby Crib Plan
Million Dollar Baby Crib Accessories
Baby Crib Recalls
European Baby Crib
Baby Dream Crib
Baby Nursery Crib
Ambi Baby Sleep Hammock Crib
Baby Boy Nursery Crib Bedding
Baby Crib Bedding Bugs
Cast Iron Baby Crib
Hand Made Baby Crib
Nike Running Shoes
Sitemap
Nike Shox Tw Tailwind Running Shoes