FINANCE: THINGS THAT MAKE YOU POORER

Lets continue from where we stopped last week on the topic; things that make you poorer. These items are mostly necessities, but usage without the right discipline can cause a strain on our finances. Here we go again .................

Credit cards

Like smartphones, credit cards offer convenience. You get some great perks, including fraud protection and a third party to help with any merchant disputes. Most cards offer rewards programs that can give you free travel or cash back in return for your spending.

But like smartphones, credit cards can cost you big time if you're not careful.... More

Failing to pay your balances in full every month is the biggest mistake, because the average credit card interest rate hovers around 16%, according to Bankrate.com. You'll likely pay more if your credit scores aren't great.

Even worse than carrying a balance is paying only the minimum required. If your minimum is around 2%, you could wind up paying more than $6,000 in interest on a $5,000 debt -- and it would take you more than 22 years to pay it off.

If you have credit card debt and take comfort in the idea that everyone else does, too, think again. Fewer households carry credit card debt these days. In 2010, only 39% of U.S. households carried a credit card balance, and the median amount owed was $2,600, according to the Federal Reserve. That's down from 45% of households that owed a balance in 2007, with a median amount owed of $3,500. The Fed said the decrease in credit card debt between 2007 and 2010 "was widespread and noticeable across most of the demographic groups," the exceptions being households headed by people ages 75 and older and those headed by someone with no high school diploma.

Rent-to-own anything

Rent-to-own outfits ranked fourth in the my column "5 businesses that rip off the poor" because of their egregiously high costs. If you truly do rent to own and make every payment, whatever you buy will cost you two to four times what you would have paid in a regular store.... More

Of course, most rent-to-own customers can't buy what they want in regular stores, because they don't have the cash or the credit. Still, if you want nice things, you have other, better options. With a little persistence and patience, you can find similar, barely used items for a fraction of their cost new on eBay or Craigslist, or at garage sales.

Join me me again for more......................