Consumers Looking for Debt Relief Need to Stop Being Lazy
Consumers and laziness
Many consumers today are looking for debt relief. Without knowing it, they do have tools to solve a lot of their problems right at hand. Due to the recession, now is not the time to be lazy about change or being proactive. Here are some things that ought to get addressed, because ignoring them will cost you over time.
Optimizing savings rates
Many people are not proactive with where they put their money. It’s more convenient to put money into one bank and leave it there, even if there are higher interest-returning 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 rate earns an additional $ 8,000 more than the 0.75 percent rate. Prichard added: “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 opens an IRA and saves $ 5,000 annually at 6 percent, that person will have about $ 291,000 by the age of 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 those who don’t take advantage look like they aren’t exactly the brightest bulbs in the box, as they are geared to save money. Your employer might match it and, hey – it’s TAX FREE. People should take advantage as early as possible. You only can compound interest with time.
Take advantage of department stores’ rebates
A great way to find extra money is to take advantage of department stores’ rebates. A lot of people won’t take the time to cut off the barcode, fill out the application and send the darn thing in. Rebates can save people 10 percent off big purchases. When those items are dishwashers, refrigerators and computers, the savings are substantial. The method to finding debt relief is small ways of cutting back over time. 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 instance, P.C.Richard and Sons sell TVs for $ 3,200, at 0 percent interest for 18 months. After the 18-month period, the interest rate is 22 percent. Say a consumer pays $ 3,100 prior to the 18-month period and has a remaining balance of $ 100. If he or she waits one day after the offer expires, that person will owe $ 800. The first $ 100 was the outstanding balance, but they owe interest of $ 700 for the entire $ 3,200.
Savings are available
In the end, savings are available but consumers have to be actively involved in their management. It may seem like a lot to remember deadlines and rules, but if one action brings savings to apply toward debt relief, then it’s worth it.
Tags: debt relief, interest rates, IRA, proactive, saving rates