If you have a credit card or several, chances are you have them maxed out and are simply paying the minimum payment. Here is your reality. You are throwing money out the window. If you are using or have used your credit cards for gas, groceries, utility bill payments, etc., you are in BIG TROUBLE. Why? Because you are living beyond your means. And you are adding more debt with interest that you should not be paying. It is a vicious cycle and it does not get easier, with every purchase you add more interest, which compounds and adds up. If you can’t afford to pay cash for something, chances are you cannot afford to pay off the credit card debt to buy it. The credit card companies try to entice you do use your card everyday with their rewards and their incentives…IT IS NOT WORTH IT. They are only giving you back a small fraction of what they are getting from you and unless you are paying the balance off every month, you are not getting any reward. The credit card companies are making a fortune while you are struggling to make ends meet.
If you don’t have credit cards, you will not be tempted to use them. Interest rates are horrible on credit cards and if you can’t afford to save up for something and pay cash for it, you will not be able to afford to pay off that credit card.
Never use your credit cards for daily household purchases like groceries, gas, paying utility bills, etc. If you cannot afford to pay cash for these items, you are spending too much and you certainly will not be able to pay the credit card if you can’t make your daily purchases. I know times are tough and money is tight, but the second you take out that credit card you are making a bad situation worse. GET RID OF THEM.
If you must keep a credit card, keep one with a low balance and a low credit limit. TAKE IT OUT OF YOUR WALLET. Put it in a safe place, like your jewelry box or safe. You need to take away the temptation to use the card, therefore you need to have to work to get to it. The card should be used for emergency purposes only. If you use the card to make an emergency purchase, make sure you can pay off that purchase with the next statement.
NEVER USE A CREDIT CARD TO PAY A LOAN PAYMENT. This is only adding interest and is not helping you at all. Chances are the loan you are paying on has a lower interest rate than your credit card, therefore you are not helping yourself by using the card to pay it.
We have been conditioned to use that plastic, it’s easy to whip it out and think about the cost later isn’t it?
Best advice, if you have credit cards CUT THEM UP. Pay them off, starting with the card with the lowest balance. Doing this will eliminate your credit card debt faster than simply making the minimum payments on all. Yes, it will mess with your credit, but better than throwing money out the window with minimum payments.