900 N. Kings Highway, Cherry Hill, New Jersey 08034
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Fax: 856.667.3652
The Online Advisor - August 1998
Tips for Borrowing Money
Nearly everyone borrows money at some point, but few borrowers know how to get the best deal when using credit. Here are some pointers to help you use credit wisely and be a smart credit shopper.
Credit cards. If you carry balances on your credit cards, you're using one of the most expensive forms of credit available today. To cut costs, look for the lowest interest rate card you can find, and avoid buying credit life and disability insurance from the lender. Better yet, resolve to pay off credit card debt. If you take money from a savings account earning 5 percent and apply it to credit card debt costing 19.8 percent, the effect is the same as boosting your savings rate to 19.8 percent.
Home loans. If you'll be in your house long enough to recoup refinancing costs, it pays to refinance at a lower interest rate. If you're looking for a home loan, shop for the lowest interest rate, points, and closing fees. Shaving a point off your loan rate can save thousands in interest charges. Know the effect of teaser rates, and avoid loans with rates that are more costly in the long-term.
Auto loans. Separate shopping for a car from shopping for a car loan. To get the best loan rate, spend some time on the telephone with local banks, credit unions, and other lenders. Compare the rates quoted with the terms from the dealer and go with the lowest rate.