Page 63 - Benjamin Franklin\'s The Way to Wealth: A 52 brilliant ideas interpretation - PDFDrive.com

27 THE ART OF THE TART; RATE TART QUICK

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‘The borrower is a slave to the lender’, as Franklin put it and as the
credit crunch starts to kick in, a great many of us are just learning the
real truth of that.

DEFINING IDEA…
Money is just the poor man’s credit card.
~ MARSHALL MCLUHAN

It’s not just that money has been cheap to come by, but it has also been
relatively easy. Cheap, meaning interest rates have been low—not many of
us can remember double-figure interest rates, for example.

Easy, in that credit companies have been all but battering down our doors
in the rush to lend us money whether we need it or not.

Those rates are going up, though. I’m willing to bet you don’t know the
exact rate your lender is charging on your credit card so go and find out—
banks tend to bury the bad news a little, but somewhere on that corporate
website it will say what the current rate is. Found it? More than it used to
be or than you thought it was? Thought so, which means that if you’re not
a rate tart yet then it’s time to pucker up.

‘Rate tart’ is the term for somebody who keeps their borrowing cheap by
constantly moving their credit card balance around to take advantage of 0%
interest deals from new cards. A few years ago this was relatively easy, as
just about every bank was offering 0% for nine months or so, but a couple
of details have now come in to blot that picture.

The first is the story that constantly applying for new cards spoils your
credit rating and makes it harder to get a loan. That appears to be untrue.
While credit ratings do take account of the number of times you apply for
credit, they also treat balance transfers as paying off the old debt. So as