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SELECTED NICHE : CREDIT CARDS

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    Be warned Does the credit card work for you or do you
    work for your credit card?

    Most people's answer to that question will depend on
    how they treat their "old plastic" as credit cards are
    known.

    For many with burned fingers will tell you they didn't
    realize that things had gotten so bad until very late,
    because most credit card offers try much to sound like
    they are actually running a charity. Well, they
    aren't.

    And this is not a hate campaign against credit cards.
    Surely they have their benefits - in America if you
    want to rent a car, you got to have a (major) credit
    card.

    But, consider this scenario: You receive an offer in
    your mail that sounds good, maybe it's a new
    generation TV or a fridge. But it costs $2000. Oh, but
    you have a credit card with a $5000 limit, and you
    immediately purchase your merchandise.

    Typically, here is how your repayment schedule will
    play out. Most credit cards charge a minimum of total
    balance (usually 2 percent) of the total per month.

    Assuming the interest rate is 18 percent and you
    choose to repay the minimum amount of $40, $30 of that
    will go towards interest and only 10 percent towards
    the principle.

    As a result, you will take 30 years to repay and end
    up paying over $5000 interest.

    Sounds scary? It doesn?t have to be. The moral of the
    illustration is: Use the credit card the same way
    porcupines make love; very, very carefully.