Credit cards can be a convenient way to make purchases but they can be costly if they are not used with care.
Fees and Interest
Credit cards often attract a foreign transaction or currency conversion fee when used overseas. Interest rates are another factor to be careful with. If the entire amount is not paid off by the interest-free period, the outstanding amount will attract an interest payment, which can be more than 20% a year.
Living in debt can lead to high interest payments and possibly even insolvency. Symptoms of excessive debt include making only the minimum payments and maxing out credit cards.
Those with excessive debt are often those who make only the minimum payments on their credit cards. Paying only the minimum amount can mean that it takes decades for the cardholder to pay off their credit card debt, instead of months or a couple of years.
Research has demonstrated a link between financial resolve and a variant of a gene associated with self-control. However, studies have also shown that nurture can trump nature when it comes to smart money management.
Here are a few methods to help you become better with your money:
Using basic rules or mantras to guide financial and spending decisions can lead to better outcomes in personal finances. Developing a heuristic process creates a rule and makes a person more conscious of their decisions. For example, basic mantras such as ‘I never shop on impulse’ can guide an individual to better spending decisions.
It has never been easy to get a business off the ground and the current economic climate has only made things more difficult for young entrepreneurs.
But there are options out there if you are looking to finance a business project. The following are a some ways to go about financing your start-up:
The first person you should to for help is yourself. If you believe in the venture, you should put your money where your mouth is. You may be taking more of a risk but you will be getting more of the reward than if you have to start splitting the equity.
Borrowing money against the equity in your home, using personal credit cards and taking out personal loans is another solution that doesn’t require you dividing the equity of your business.
Your family and friends are all potential investors.
If you do not mind dividing the equity of your business, you can always bring someone on board who is business savvy but instead of paying them a salary, offer them a stake in the business.
A lot of people get nervous when discussing debt and that’s not such a bad thing for most consumers and businesses. Debt isn’t a toy for enjoying life’s pleasures; it’s a tool for building financial capacity and growing business operations. Here are some tips for using debt to help develop financial prospects.
Small and medium enterprises (SMEs) operating with a limited cash flow are in need of funding support.
The Organisation for Economic Development and Co-operation conducts an annual report that addresses the availability of financing to SMEs.
The concept of debt is misunderstood and seems to carry with it a sense of apprehension but we as Australians seem to have a love hate relationship with debt.
For small and medium enterprises (SMEs) debt is not always a terrible thing as it allows them to expand their operations.
Lack of capital funding is one of the most significant issues faced by many entrepreneurs. While an entrepreneur may have a great idea and be incredibly passionate, the absence of operating cash means that a business will struggle to remain viable.
It is also a difficult situation when entrepreneurs who have already experienced success choose to devote all of their personal net wealth into their business. In this situation, personal finances are very likely to suffer.
In the wake of banks choosing to only pass on a fraction of the interest rate cuts made by the Reserve Bank, credit card customers are rushing to pay off their credit card debts. People with car loans and personal loans are behaving in a similar way too
Figures recently released by the Reserve Bank show that in the 2013 year to March, the average credit card debt was $3256.70. This marks an average reduction of 2.4%
According to financial commentator David Koch, the Government is likely to announce that the Federal Budget is facing a $12 billion deficit due to weakening revenue from mining and the carbon tax as well as reduced company tax revenue.