Debt by diamonds

The sparkling way to debt

The common mistakes in relationships are all, in one way or another, related to debt. Debt and lifestyle go hand in hand in American society. When you use debt to fund a consumptive lifestyle, not only do you have the consumptive lifestyle working against you financially, but you also have the additional burden of debt working against you financially. Both should be avoided like the plague! Never get into debt for a diamond ring!

Avoiding the use of debt is incredibly difficult because the promotion of credit card use has made diamonds so easy to obtain and the temptation to use credit or debt so overwhelmingly difficult to resist. Jewelry companies are spending hundreds of billions of dollars to entice each of us to spend and to use credit with cards that make spending "easier", and those amounts are a pittance when compared to additional advertising dollars of retailers.

Are diamond rings a good investment. Depends. The diamond ring you buy may or may not increase in value. If you have to repay your credit ininterest, then certainly not. And if you have to sell that diamond to get back some cash, you're in trouble!

Conclusion

Remember, credit card companies charge 18% to 24% interest on those diamonds annually if its not repaid immediately.

Today's Bottom Line

According to a banker in the banking industry, a person who uses his or her credit card for convenience sake and pays the debt off each month is known as a "deadbeat".

Calculate your credit card loan interest as well as your compounding interest with our calculators.

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