Why Won’t Taft Financial Help With Credit Card Balances?
Taft Financial is flooding the market with unrealistic debt relief offers to make you believe they will pay off your credit card balances. Patriot Funding, along with Plymouth Associates, Memphis Associates, Safe Path Advisors, Malloy Lending, and Silvertail Associates, and Credit 9, has been aggressively advertising and targeting less-than-perfect credit borrowers and offering them interest rates as low as 3% APR. The problem is that the terms and conditions are at the very least confusing, and possibly even suspect.
The interest rates are so low that you would have to have near-perfect credit to be approved for one of their offers. Best 2020 Reviews, the personal finance review site, has been following Taft Financial and its cooperative of web sites for some time now.
No matter how small it may appear to be, you should pay off your credit card balances as quickly as possible. This important piece of money advice comes from none either than the investment legend Warren Buffet.
Warren Buffet Advises to Pay Off Credit Card Balances Quickly
It was during an annual Berkshire Hathaway shareholder meeting that Warren Buffet dispensed this personal finance tip to a female friend who sought his advice on the matter.
The woman explained to the investment legend that she has come into a fair sum of money and would like his advice on how she should be investing it. Instead of providing any investment advice, Warren Buffet immediately asked whether she carried any credit card balance. To which the woman replied that she indeed did. When asked about the interest rate, she replied that the APR stood at 18%. He then told her to pay off credit card balances immediately while implying that an 18% interest rate is detrimental for personal finance.
The key point to be noted here is that the woman did not even mention anything about her credit card balances. It was the financial wizard himself who quizzed her about any credit card balance that she might be burdened with. The sad truth of the matter is that while many of us have a somewhat cavalier approach towards credit card balances, Warren Buffet is adamant that you must get rid of them on the highest priority. If the Oracle of Omaha himself does not approve of carrying credit card balances, then it is almost certainly unwise to carry a balance for too long.
Warren Buffet said that he knows of no investment scheme that can give you 18%. This shows that making any kind of investment while you are incurring interest on your credit cards is simply unfeasible. That is because any gains that you make on investments are minuscule as compared to the exorbitant APRs of credit cards. Thus, your steep credit card APR will more than offset your comparatively modest gains from investments resulting in a net loss. Thus, any investment made while you still have to pay off credit card balances is unpragmatic as you will end up losing more money than what you are gaining.
Warren Buffet advised people that they should not be using credit cards as a last resort to pay off their financial obligations. This is particularly imperative in today’s hard times since in the wake of the current financial crisis, people are now using credit cards to pay expenses like rent and utilities. The ensuing fiscal crisis has depleted income sources for many people due to which they are falling back on credit cards to make pressing payments as if it were some kind of an emergency fund. Doing so will ultimately do far more harm than good.
Why You Should Pay Off Credit Card Balance as Quickly as Possible
Warren Buffet said that he is oblivious of anything that pays 18% return. Here he is clearly implying the minimum return on investment that is needed to break even with the 18% interest rate that the woman was incurring on her credit cards.
He said that if he had to pay 18% interest on anything, then he would afford it top priority. He remarked that doing so is far better than any investment idea that he can think of.
Warren Buffet warned that you can never be financially well off if you carry balances that incur such steep interest rates. Hence, it is mandatory to pay off credit card balances as soon as possible for a better financial future.
The financial sage further noted that Berkshire Hathaway would never make a deal where it had to pay interest at such high rates. He said that even an interest rate of 12% would put a great strain on the organization’s finances. The sad truth is that most consumers are incurring interest at a far higher rate on their credit cards. Unless they can pay off credit card balances quickly enough financial stability and independence will just be a pipedream.
Warren Buffet’s financial wisdom of debt consolidation should be heeded to by all consumers especially those who have high balances.
Unfortunately, many people use credit card relief as the standard mode of payment for even the most basic items like groceries. People argue in favor of credit card use saying that it is convenient. Unfortunately, it is so convenient that they end up borrowing far in excess of what they can pay for when the month ends.
To make matters worse, many people resort to paying the minimum amounts on their balances. This will do them no good since the interest will keep on piling up. Instead of being satisfied with minimal payments, you should pay of credit card balances as soon as you possibly can.
Pay Off Credit Card Balances Fast to Avert Disaster
The interest rate on certain credit cards can go up to an astronomical 36%. At such rates, it is more likely that unwitting credit cardholders will fall into a credit card debt trap from which they cannot recover. It can feel like a financial scam.
People use credit cards with a high level of confidence thinking that they will be able to pay the principal amount plus high interest later on. However, it is not that easy to pay off credit card balances. This is evident by the untold number of customers who default on their credit card payments.
Besides using credit cards to pay for shopping, many consumers are now using them to pay for high costs like rent. Doing so will only increase the likelihood of falling into a debt trap and need debt forgiveness from where it will be extremely hard if not impossible to extricate yourself.
Instead of seeing credit cards as just another convenient mode of electronic payment, people should see them for what they really are. Taking out a loan that can wreak financial ruin if you fail to pay off credit card balances in full.