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March 15, 2007

HSBC Offers High Interest Savings

I just read that HSBC is offering an interest rate of 6% on new money until the end of April. While this sounds very enticing to move any savings you have over to a higher interest account it might not be worth it for you.

Let's say you carry $5000 balance on your credit card and you happen to have $2000 in a savings account. Then you see the HSBC offer and think to yourself "Hey, look at that savings account! I can earn more if I move my money into that account".

Well, my friend, you won't actually make any money. Your credit card balance is likely incurring an interest rate of anywhere between 17% and 28%. You would be getting much further ahead if you took that $2000 in your savings account and applied it to the balance of your credit card.

Paying off high interest credit cards should take top priority!

Posted by Colin on March 15, 2007 08:21 AM | Permalink | DIGG THIS STORY

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