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5 Finance Tips You Should Not Follow

submitted on March 10, 2011 by pablos17 in "Member's Lounge"
Have you heard the one about houses being a sure-fire investment? Or the tip that you should close all your credit card accounts? Bad financial advice can circle the web faster than the latest e-mail scam from Nigeria, and some of it originates from personal finance gurus themselves (although their words are often twisted). Here are five popular financial tips you should ignore:

1. A house is always a good investment.
2. Avoid credit cards.
3. All student loan debt is good debt.
4. Never take out a 401(k) loan.
5. Use home equity loans to pay off credit card debt.

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    Posted by HouTex on March 10, 2011 [reply] 0 0
    Credit cards can be good if you use them in moderation. Choose those with no annual fee and some sort of bonus (cashback, flyer miles, extra warranty coverage) that will benefit you when you use them. We were able to get a percentage of the cost back when we charged a large A/C repair on our Discover card. You can build a good credit record this way so that you'll be able to borrow some money if you ever need it later. You can also avoid carrying around too much cash.

    One thing I would advise is NEVER use overdraft protection on your checking account, the fees are too high and you are being encouraged to use money you don't have. That's a really bad idea.
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    Posted by CouponNut on March 10, 2011 [reply] 0 0
    Back in the day when interest rates were paid at a higher rate on 401K's, we use to borrow cash on a short term loan and ended up only paying 2% above the amount of interest earned. At the time that was a pretty good deal borrowing against your own money. Not sure how it works in today's economy.

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