Advice on paying debt or buying silver

As a general rule it makes sense to get out of debt first. As other have pointed out the first rule in treating an illness is to do no harm. It's inherently more difficult to improve your financial situation when you're paying interest to someone else. Or as someone else said, you can't dig your way out of a hole.

I worked on a large project at one of the major banks in their credit card division. While I was there this division was the most profitable "single product" business in the United States. I'm a system architect of analytical applications and I worked on their credit card balance consolidation profitability model. I'm intimately familiar with how this scam works.

Credit card companies offer their lowest interest rates as a "teaser" to new customers or existing customers who transfer money onto their card from another bank. They want to get people to consolidate other credit card balances onto one card. In industry lingo this is called a "balcon" or "balance consolidation." A few years back nearly every person in this country was blanketed with "balcon" offers in the mail. I used to get about 2 or 3 offers in the mail PER DAY! The deal is the banks offers a low interest for a fixed period followed by a return to their "regular rates." For example, 0% for 6 months on newly transferred balances. This is where you'll get the lowest interest rates. Now for the caveats. Unless you actually read the terms of service (TOS) of each offer, which can be 10+ pages of legal fine print, it's best to assume the following: If you accept a balcon offer, DO NOT USE THE CARD to make new purchases. The interest rate charged on new purchases can be much much higher. In the case of the bank I was working at they charged prime+13.5% when prime was 4%. That's a 17.5% annual interest rate. Ouch! Doesn't sound so bad if you only charge a little bit and you pay off more than you charge per month... However, it just doesn't work like that. Your payment is applied to the 0% loan balance FIRST. Only after the entire balance consolidation loan is paid off does any excess payment get applied to the principle being charged 17.5%. In the meantime your balance from new purchases is growing exponentially. This is the viscous truth in many cases (again, read the fine print or assume the worst, your choice).

You're currently paying about 10% which is pretty good. If you want to make the system work for you then consolidate your balance on a low interest teaser rate. When the balcon period ends then transfer it to another bank onto another teaser rate while not making any new charges on the card. People who do this are called "gamers" and they drive the credit card companies nuts. They try to predict this behavior and avoid it by targeting the offers to certain people using data mining techniques (banks share detailed personal information and there's nothing you can do about it) but the predictive models don't work very well.

Bottom line: if you don't want to pay off the $10k all at once and you want your money to work for you in the meantime, then play the balcon game to your advantage.

Just remember, if things go bad quickly you can use that extra available credit to buy gold and silver quickly.

Ethically, morally, and practically, the debt should go first.

WAHOR!!
http://www.dailypaul.com/node/48994

That's what I did.

"Fascism should more properly be called corporatism because it is the merger of state and corporate power." - Benito Mussolini.

Liberate yourself first, they enjoy a little freedom.

"..shall not be infringed."

PAY OFF THE DEBT!

Don't listen to the ones who tell you to buy the silver first! It could still be years before inflation brings silver up to where it will counter the interest you owe on your debt.

I will also assume that being credit card debt that it is a variable interest rate. So PAY IT OFF FIRST!

Pay off your debt. Debt has interest attached, interest = slavery and someone else is making money from your labor. After you pay off the debt, then with the 100 a month you save with interest payments you can buy silver if that is your game.
grant

building true wealth and assets. Always rid yourself of debt first. Silver can always be bought up later when you are in the black.

you pay off your debt. You don't need to buy 10k of silver at a time anyway. A local coin shop can sell you as little as a single dime if you want it. (Though I'd recommend larger purchases as affordable to get the most bang for your buck - but no matter what - DON'T let that stop you from buying it at all just because you can't get it at contract prices - almost no one does.)

The rule of financial stability is PAY DEBT OFF and SAVE AFTER.

It is infinitely easier to save after you have no debt.

The peace of mind, and ability to sleep easier at night is priceless by the way.

And this from someone who's taken this path myself - PAY OFF THE DEBT FIRST.

(in my humble experience)

Credit card debt? Pay it off. Home mortgage at low interest? Not sure.

Do the right thing, not necessarily the easy thing. When you learn to do that, the money will flow. You do not want that monkey on your back. Don't be a debt slave.

Healthnut4freedom

"Trust in the Lord with all thine heart; and lean not unto thine own understanding. In all thy ways acknowledge Him, and He shall direct thy paths." Proverbs 3:5,6

So many of my friends are asking me the same thing since I distribute silver.

First of all, the most important single thing is I would ask myself is this. "What service can I provide or product can I produce that others will need in the coming economic conditions?"

Ultimately, wealth will move towards production if it isn't stolen. If you need some extra cash to get producing, don't spend all your cash on silver.

So, do whatever it takes to get producing, and then pay off your debt. After that, start saving gold and silver.

Just my humble opinion