Information Related to "Avoiding Financial Black Holes"
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You've probably heard the humorous definition of a boat. It is a hole in the water into which one pours money.
Of course, we could cite many pertinent examples to describe drains on our financial resources. The prophet Haggai described such drains as putting one's money in a bag with holes in it (Haggai 1:6). Similarly, astronomers speak of "black holes" in outer space that suck up matter, and even light, from nearby areas of the universe.
In this chapter we identify financial black holes that can undermine your financial planning and help you consider ways to avoid them.
Credit cards are a wonderful convenience. Besides eliminating the need to carry cash, they make it possible to buy goods and services at distant locations by means of the phone and Internet.
If one pays off all his credit-card charges each month, he incurs no additional cost. The charge for the service comes from fees assessed to merchants who accept the card in lieu of cash or a bank check. When a cardholder does not completely pay off his balance each month, however, these cards quickly turn from practical conveniences into financial black holes.
Improper use of credit cards costs many people dearly. According to a recent report, the average American consumer owes $7,000 in credit-card debt-an amount sometimes referred to as "revolving credit" because consumers typically pay only the interest and a bare-minimum amount of principal and in some cases never fully repay the owed amount.
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