7 steps toward tackling credit-card debt

NATALIE MORALES, anchor: This morning on TODAY’S MONEY , financial habits to break in 2011 . It’s time to break your New Year’s resolutions . And if saving money is high on your list, well, we have got some expert help for you this morning. Carmen Wong Ulrich is a personal finance expert and author of “The Real Cost of Living.” Carmen , good morning.

MORALES: A lot of us set our resolutions now, and a large one of course is not only your health, but also saving money . And here is there sort of the combination because you state you can save a lot of money , and there is a financial opportunity in kicking some of those bad habits , right?

Ms. ULRICH: Oh, absolutely. There’s a lot of decisions that we make in life, and this is — the book covers all these decisions we make, from going to college, graduate school, staying home to take care of children that have a cost associated with them. But we all want more reward.

Ms. ULRICH: And that goes for bad habits , as well. A lot of the habits that we have actually cost us a lot of money . So not just do we feel it physically in terms of our health, but also it costs us, it really impacts our wallet a lot.

Ms. ULRICH: …of things such as, you know, strokes and hypertension, high blood pressure , colon cancers…

Ms. ULRICH: …all these diseases and complications. Diabetes, incredibly expensive.

Ms. ULRICH: And travel costs . Engineering researchers have found that we spend over 300 million more gallons of gas in terms of transport.

Ms. ULRICH: On your health, exactly.

Ms. ULRICH: Yeah, I had to research this one, too.

Ms. ULRICH: Because it — boy, have times changed.

Ms. ULRICH: You know, looking at the New York City prices, of course, and with a lot of added taxes here, we know that smoking is a large killer. We know that.

Ms. ULRICH: But if that cannot keep you from stop smoking , look at how much money you are spending and wasting on smoking.

Ms. ULRICH: If you just go a pack a day — so that works out over $3,000 of the year, that is a ton of money — look at life insurance premiums. What insurers know is that you have twice the chance of dying young…

Ms. ULRICH: …and you lose 11 minutes of life for every cigarette you smoke. So you are going to pay twice as much in life insurance premiums.

Ms. ULRICH: And also lifestyle costs . For example, my husband and I , we purchased our current home from a smoker. We paid about 10 percent less on the value of the home because it did not show well…

Ms. ULRICH: …your car, the dentist. Add those all up, again, over $6,000 a year.

Ms. ULRICH: Again, this idea of direct and indirect costs and what real costs are are all of those costs . So you really need to look at it that way.

Ms. ULRICH: Let’s state if you carry the average per-person credit card balance of $3700, if you only pay the minimum, it’s about, you know, over — nearly $800 a year in interest that you are paying.

Ms. ULRICH: Now, fees — in general now, fees are through the stratosphere, right? You’ve got annual fees, underbalance fees, low balance fees, monthly fees, and those add up to about $74 a year. Now, what if you had taken the interest that you paid plus the $3700, you had not owed it at all…

Ms. ULRICH: …and you invested it. Over 20 years, averaging around 7 percent, you would have quadrupled your money and you would have earned nearly three times as much in interest. So the real total cost of that credit card debt is tremendous. It’s over $10,000.

MORALES: I mean, it sounds like this is illegal practices going on.

Ms. ULRICH: So it’s really important to realize that there are ways that you are being affected by your habits in terms of how you make your money and terms of credit card debt , as well. Your credit rating , your credit score still can really affect if you can be employed.

More source:

7 steps toward tackling credit-card debt - Money - TODAY.com
7 Steps Toward Tackling Credit-card Debt | NBC Chicago
Credit Card Debt: Polk Makes Progress | TheLedger.com
Laura T. Coffey : 7 steps toward tackling credit-card debt in the new ...

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Submited at Thursday, January 6th, 2011 at 8:00 pm on Finance by samantha
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