Some arguments stand the test of time. “What came first, the chicken or the egg?”. “Paper or plastic?”. “Do you prefer cats or dog?”. I know these have zero to do with personal finances but you can add one more argument to the list. The point I’m trying to get across is I believe the question of paying down debt versus building savings will become a long-standing debate.
Have you ever thought about the true cost of items purchased with debts instruments such as credit cards and/or loans? The reality is that most people never give it a single thought. Two things that have the biggest impact on the true costs of these items are interest rates and APR or the annual percentage rate. First let’s define the two terms.