Paying Off Credit Cards Intelligently

Over the past fifteen years, various debt professional gurus have risen and attempted to challenge the obvious that, if you have debt, you should attempt to pay off the highest interest rate obligations first.

Some of these professionals have focused on the amount of each debt obligation, and then argued that consumers should pay off each debt obligation with the lowest principal balance first and then address those obligations with higher interest rates.

I appreciate and applaud the nod towards behavior economics that that this advice incorporates. It recognizes that, if someone is receiving five different bill requests each month, it can be daunting to identify progress and therefore there may be a higher likelihood of declaring for bankruptcy or otherwise making one’s financial situation worse.

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Letter Of Intent’s Most Important Requirement

Whether contemplating the purchase of a business or the desire to make a charitable contribution, an underutilized mechanism is the “Letter of Intent.” This document refers to making a solicitation to an offer, rather than an offer itself. This has important legal consequences, as the other party’s response to a “solicitation to offer” places no obligation upon the letter of intent writer, whereas an offer gives the other party the power to legally bind you to your statements in the event that what you see is construed as an offer.

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