Consumers In Search of Debt Relief Need to Stop Being Lazy
Consumers and laziness
Many consumers today are looking for debt relief. Without knowing it, however, they have the solutions to many of their problems right in front of them. We’re in a recession, and now isn’t the time to be lax about being proactive or change. Here are some things that need to be addressed because if they aren’t, the will cost dearly in the long run.
Optimizing savings rates
Many people are not proactive with where they put their money. It’s convenient to put all your funds in one bank and leave it, though there are higher interest accounts available. Justin Prichard, bank expert at About.com, said, “The best annual percentage rate consumers will get at traditional banks is about 0.75 percent APY. Internet banks can easily offer up to 2.25 percent.”
Though it seems like a small difference, over time it adds up. For instance, a $ 100,000 account which compounds monthly for five years, the 2.25 percent interest earns about $ 8,000 more than 0.75 percent rate. Prichard also said: “People are creatures of habit. If their money is somewhere, and they’re busy doing other things, they don’t necessarily try to do better. But if people have a decent chunk of change, it’s worth it.”
Having an IRA set up
Despite their perks, many people are putting off starting their IRAs. If a 40 year old person opens an IRA and can save $ 5000 annually at 6 percent, they will have $ 291,000 by age 65. Whereas, if a person had started an account at age 25, with the same deposit and interest rates, the account would have $ 821,000.
The benefits of an IRA make it hard to believe that every consumer isn’t proactively using the tool as a way to save money. It’s tax-free money and matched by many employers. People should take advantage as early as possible. Time is the key to compound interest.
Take advantage of department stores’ rebates
A great way to find extra money is to take advantage of department stores’ rebates. A lot of customers are lax when it comes to cutting off the barcode, filling out the application and sending it in. Rebates, however, can save customers up to 10 percent of their big-ticket purchase. When those items are dishwashers, refrigerators and computers, the savings are substantial. The key to finding debt relief is looking at small ways to cut back. Rebates are a good way to find some extra money.
0 percent financing deadlines
Consumers also don’t normally pay attention to when their great 0 percent financing deal ends. A lot of stores are offering 0 percent for a defined time period. Consumers want to take advantage, but they need to bear in mind that they need to pay it off before interest charges start.
For example, P.C.Richard & Sons sells $ 3,200 televisions with a 0 percent financing rate for 18 months. After the 18 months are up, the interest rate becomes 22 percent. Say a consumer pays $ 3,100 prior to the 18-month period and has a remaining balance of $ 100. If a person waits even a DAY after the offer expires, that person now owes $ 800. The first $ 100 was the remaining balance, but $ 700 is the interest owed on the entire $ 3,200.
Savings are available
In the end, savings are available but consumers have to be actively involved in their management. It might seem like a lot to remember rules and deadlines, but if the actions bring savings to use towards things like debt relief, it’s worth it.
Filed under: Financial Advice