This is the second of three columns focusing on savings tips offered by the U.S. Department of Labor’s Employee Benefits Security Administration in its booklet, Savings Fitness: A Guide to Your Money and Your Financial Future (available at www.dol.gov/ebsa ).
The agency emphasizes avoiding expensive loans and interest rates allows for more money to be devoted to savings.
Also, some types of loans are more expensive than others. If you must incur debt, comparison-shop for the best deal.
Pay attention to the total cost of a loan — principal and interest.
The agency stresses: “Don’t just look at the monthly payment, which may be small, but adds up over time.”
Consider your use of credit cards — handle them wisely. Many cards have high interest rates and fees.
The agency notes that the usual number of separate cards maintained by consumers is eight or nine. Try to keep only one or two cards instead.
If possible, do not use credit cards for expensive purchases; try to find less expensive loan alternatives.
When selecting a credit card, comparison-shop for the best interest rates, annual fees, service fees and grace periods.
Pay as much as you can each month on credit card balances — at least pay more than the minimum and the entire balance, if possible, the agency urges.