>use this analogy. What would you rather be doing with your money,
>saving some of it and buying the stuff you'd like to get or spending
>most, if not all of your cash on the minimum payment on your credit
>cards.
Depends on the rate of riskless interest earned vs APR vs Opportunity cost
compared to amount financed. As the numbers get larger and larger it makes
more sense to try to squeeze out that extra .05% interest. Plus you have
to consider what you bought on your credit card too. If for example the
total cost of purchasing a yacht (cost of yacht + financing cost) came out
to the same price as buying a row boat (cost of row boat + time value of
money lost while in savings account + inflation) then I would definitely
say to get the yacht now, enjoy it and pay the minimum.
This still doesn't explain why large deficits are bad.
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