The best way to improve your personal financial situation
and to free up money for investing is by reducing your
debt — especially costly credit card debt. In these days of
easy credit, most people find their mailboxes stuffed daily
with credit card offers from banks and other companies. It’s
temptingly easy to accept the offers, run up a balance with
purchases, and then switch to yet another card.
The unwary person who owns and uses several credit cards
can find himself carrying a total debt equal to half or more
of his yearly income — an uncomfortable, costly, and dangerous
way of life.
If you take the following steps to reduce the debt drain on
your finances, you’ll soon see your investment fund growing:

Pay off credit card balances as soon as you can. At interest
rates of 17%, 18%, or even higher, these are among
the most expensive loans offered anywhere. The longer
you take to repay them, the more each purchase costs.


Start paying your total credit card balance each month
rather than the minimum amount. This will force you
to begin living on your current income instead of mortgaging
your future for present purchases.

If you own a home, consider consolidating and paying
off your credit card balances with a home equity loan.
The interest rates on home equity loans are usually lower,
and the interest may be tax deductible.