James d. Gwartney

Two Ways to Get More out of Your
Money
Most of us would like to have more in the future without having to give up much today. Many,
including those with incomes well above average, do two things that undermine this objective.
First, they go into debt to buy things before they can afford them. Second, they insist on
buying new items even when used ones would be just as serviceable and far more economical.
Imprudent use of credit cards
(?)
can be a huge stumbling block to financial success.
Although many people are careful with cards, others act as if an unused balance on a credit
card is like money in the bank. This is blatantly false and dangerous thinking. An unused
balance on your credit card merely means that you have some additional borrowing power. If
you have funds in your checking account
(?)
, you can use your credit card to access those funds
—if you pay off the bill every month. If you don’t have sufficient funds in your account, don’t
make the purchase.
While credit cards and their electronic counterparts (such as PayPal, or Yandex Money)
are convenient to use, they are also both seductive and a costly method of borrowing. Because
credit cards make it easy to run up debt, they are potentially dangerous. Some people seem
unable to control the impulse to spend when there is an unused balance on their cards.
(103)
 If
you have this problem you need to take immediate action! You need to get your hands on a pair
of scissors and cut up all of your credit cards. If you do not, they will lead to financial
misfortune.
Making purchases on your credit card makes it look as though you are buying more
with your money, but the bill invariably comes at the end of the month. This presents another
temptation: the option to send in a small payment to cover the interest and a tiny percentage of
the balance and keep most of your money to spend on more things. If you choose this option
and continue to run up your balance, however, you will quickly confront a major problem—the