Flaunting their Chanel handbags, Prada wardrobes and brand new Porsches, celebrities roll out in style.
Every celebrity shows off the prestigious American Express “Black Card,” even to pay for a Starbucks coffee.
Celebrities bring in cash but may not know how to manage it, as many stars have filed for bankruptcy and turned to credit card debt relief programs. Broke celebrities often flaunt this black AMEX credit card. The sad truth is that this AMEX card carried by many of the rich and famous people, has the most expensive annual fee on the market and awful cash-back options. So, why would anyone want this card?
WHO USES THEM?
Celebrities and millionaires often want it because of the snob appeal this card carries, that only the rich and famous can afford it. When taking out their wallets to pay for something, they want everyone to look upon with envy and some pride at the rich and famous people who own this card. Of the numerous celebrities who went broke, with the highest amount of unsecured debt which includes student loans, credit cards, and medical bills, most have not been properly advised about debt management options. Anyone can get into serious debt if they cannot properly evaluate whether or not they can actually afford something, before flashing a credit card to pay for it. Always do the calculation on what you will be paying over the long-term before sliding your credit card chip into the credit card machine. A simple rule which experts advise people to follow is, “ Never charge something if you can’t afford to pay it off that same month”. By paying your balance in full every month, you avoid 100% of interest.
An American Express card debt worth $300,000 can get settled for about $140,000 using a debt settlement program, but before settlement company fees, making it rather more affordable to pay. Though debt settlement can hurt a person’s credit score, you have an easier time increasing your credit score after paying a debt back rather than filing for bankruptcy and have it noted on your credit report. If looking for a card that gives high cash-back and reward points, do check out the Chase Sapphire card which is the most-preferred option due to its high cash-back and rewards.
THE TRUE COST OF CREDIT CARD INTEREST
Interest is a trap that does not discriminate. Suppose you charged $20,000 on your credit cards to purchase school supplies. Paying minimum amounts on $20,000 debt @ 25%, you pay $480 per month and it would take eight years and three months to repay the entire debt. You actually repay a total amount of $47,149, towards principle and interest. Someone gives you a $20,000 loan, and you pay them $47,149 back; is that fair? Is that even legal? This is the awful truth of credit card debt and most people can’t afford to pay their debt back twice, which is why they continue to fall behind on their monthly payments. If forced to spend money on a credit card, repay the balance in full every month. If you are unable to afford paying your balance in full when the bill arrives, refrain from buying anything! If indebted, contact an IAPDA Certified debt counsellor to help you get out of debt and rebuild your personal finances.