Updated: Mar 6
When I help people get out of debt, one of the most common forms of debt is money owed on Credit Cards. I have seen and heard of people owing six figures on various credit cards. How is that possible? One thing you should know is that banks aren’t your friend. They are in a for-profit business and you are the “cow” they milk for profits! After all, most people worship at the altar of FICO. You don’t think so? Read this: The Altar of FICO.
However, to the majority of Americans credit cards are a way of life. They are addicted. For some there is no going back. When Larie and I were getting out of debt, we didn’t have a credit card. In fact we didn’t have a credit card for 10 plus years. You can’t expect to get out of debt while carrying a card that has the sole purpose of getting you into debt.
So if you are in debt, you should cut them up and get yourself out of debt. Why leave something around that serves as a temptation to spend more money? It is like leaving alcohol around the house of a recovering alcoholic. It is not good or prudent to do.
Now I can imagine some of you are thinking, but I pay mine off at the end of the month. However, if you have other debt, like student loan, or have cell phones on payment, you are prolonging your debt in other areas. How is that? Because we tend to spend more on credit then we do on debit, and even more than if we use cash. The stats don’t lie. You can read it here: Do People Really Spend More With Credit Cards?
To your own self be true! You know your habits, but having an accountability partner is even better. Be honest with your own spending habits.
But you still may decide you aren't giving up your credit card. Ok then, here are a few guidelines to help you be responsible.
Do not spend money on a credit card that is not with your bank. The moment you do that, you are on “irresponsible ground.” Should you lose employment and the money is not in your bank, it will be debt you carry and will pay interest on.
Pay your credit card off twice a month so that you can see the money as it comes out of your account on a regular basis. It will show you how much you are actually spending. If you wait until the end of the month, the number could seem overwhelming.
If your bank has the option, use the feature for automatic payments. This way if you forget to pay, they can draft the entire statement balance automatically. This will allow you to avoid paying interest. Upon reading this you immediately thought, “I can’t have them automatically take the money out. What if there isn’t enough?” Then you shouldn’t be using a credit card.
If you find yourself carrying a balance, it is time to shut them down and cut them up. Avoid debt like the plague!
If you have questions don’t hesitate to ask here. Take charge of your money!
Your biggest cheerleader on social media,
P.S. Day 301 please pray for the 7.2 million goal for 2020