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    ,803.77 in a year. This is a lot of interest.

    Let compare the average savings account, $1000 at 0.50% interest for one year is $1,005.01. Keep this in mind when the banks encourage you to keep a few thousand in your savings account. Their cred

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    Why are the interest rates on credit cards important? The average family has over $5000 of credit card debt. I can tell you I have a zero balance so who has my share? If you owe $5K to a card company you are giving them about $800 a year in interest. Let’s look a little closer at how this affects us.

    In the news the average savings account gets 0.56% to 0.27%. The average rates on credit cards are 14.75% to 21.5%. The banks win on both ends.

    Do you understand how interest is calculated on your card balance? As an example you owe $1000 and the interest rate is 15%. In one month you owe them, $1012.50. You pay them $12.50 for the privilege of using their money for only one month. Now an interesting thing happens, it is called compounding.

    Take the $1000 for a month. The interest is $12.50, but in month two you pay interest on the $12.50 also, $.16. Not a lot of money but it just keeps going and growing to $1,160.75 in a year. If you have the average of $5000 it is $5,803.77 in a year. This is a lot of interest.

    Let compare the average savings account, $1000 at 0.50% interest for one year is $1,005.01. Keep this in mind when the banks encourage you to keep a few thousand in your savings account. Their credi

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    . Let’s look a little closer at how this affects us.

    In the news the average savings account gets 0.56% to 0.27%. The average rates on credit cards are 14.75% to 21.5%. The banks win on both ends.

    Do you understand how interest is calculated on your card balance? As an example you owe $1000 and the interest rate is 15%. In one month you owe them, $1012.50. You pay them $12.50 for the privilege of using their money for only one month. Now an interesting thing happens, it is called compounding.

    Take the $1000 for a month. The interest is $12.50, but in month two you pay interest on the $12.50 also, $.16. Not a lot of money but it just keeps going and growing to $1,160.75 in a year. If you have the average of $5000 it is $5,803.77 in a year. This is a lot of interest.

    Let compare the average savings account, $1000 at 0.50% interest for one year is $1,005.01. Keep this in mind when the banks encourage you to keep a few thousand in your savings account. Their cred

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    ated on your card balance? As an example you owe $1000 and the interest rate is 15%. In one month you owe them, $1012.50. You pay them $12.50 for the privilege of using their money for only one month. Now an interesting thing happens, it is called compounding.

    Take the $1000 for a month. The interest is $12.50, but in month two you pay interest on the $12.50 also, $.16. Not a lot of money but it just keeps going and growing to $1,160.75 in a year. If you have the average of $5000 it is $5,803.77 in a year. This is a lot of interest.

    Let compare the average savings account, $1000 at 0.50% interest for one year is $1,005.01. Keep this in mind when the banks encourage you to keep a few thousand in your savings account. Their cred

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    ompounding.

    Take the $1000 for a month. The interest is $12.50, but in month two you pay interest on the $12.50 also, $.16. Not a lot of money but it just keeps going and growing to $1,160.75 in a year. If you have the average of $5000 it is $5,803.77 in a year. This is a lot of interest.

    Let compare the average savings account, $1000 at 0.50% interest for one year is $1,005.01. Keep this in mind when the banks encourage you to keep a few thousand in your savings account. Their cred

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    ,803.77 in a year. This is a lot of interest.

    Let compare the average savings account, $1000 at 0.50% interest for one year is $1,005.01. Keep this in mind when the banks encourage you to keep a few thousand in your savings account. Their credit cards make them 32 times what they give you in your savings account. I like to call to people’s attention who owns most of the downtown buildings; banks, trust and insurance companies. Now you know why.

    What can you do? The first thing is cut whatever expenses you have to, so you can pay off all your credit cards. You will never become wealthy or even debt free is you are carrying a balance month to month on a credit card. We need to get you to the point where you are investing the money you are currently giving to the credit card companies. Once you understand compound interest, you will want to implement it to become wealthy and debt-free. Be smart to be wealthy.

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