Debt can be a scary thing, unless you manage it properly. Once you get to the point of only taking on debt that you want to, then you have some luxuries that others do not. What I’m getting at is this – once your current debt load is under control, it’s not necessarily bad to take on more debt, if it makes sense. For example, if you’ve decided to buy a big screen TV and home theater system for your house, you may consider charging it. Woooah there horsey, what? Well, let’s say your purchase totals out at a cool $4000. Now I’m assuming that you’ve done your homework, sat down with your significant other, and decided that this is a good decision for you. Best Buy ( or Circuit City, or whoever your electronics retailer of choice is ) is offering 24 months of 0% financing, if you use their credit card – and that’s the key.
Rather than pay cash for your purchase, consider charging it. The $4,000 that you would’ve paid for the equipment needs to go into a high-yield online savings account, where you can easily earn 5% on your money. Divide your $4,000 by 22 months ( to be on the safe side ), and you get $181.82. Set up an automatic payment plan from your savings account to your credit card, and pay the $181.82 each month. You’ll end up earning the interest on the balance of your account every month. In this case, charging your purchase can actually make you money, rather than cost you money. At the end of the 22 months, your purchase will be paid off, interest free, and you’ll have money left in the account – free money to be exact. And free money is the best kind of all.