Credit cards are the bane of existence for many people. Once you start it is very difficult to stop, unless of course you miss a couple of payments and then they tend to help you stop! Even a credit card with a good interest rate is still a bad deal! I know, it is for emergencies! You know, like being hungry on the way home from work and seeing a special on pizza or burgers! You run low on gas and don't have any cash on you. Emergencies!
Now days almost every single bank offers you a debit card with a Visa or Mastercard logo. These work everywhere that credit cards are taken. The great thing about them is you can only spend what you have. O.K. Some accounts offer overdraft privileged with their accounts. Let me just say one thing, overdrafting your account is not a privilidge it is stupidity! Last year alone I had over $1700 in overdraft priviledge fees! This year I overdrafted one item in January by a simple math mistake.
Using your debit card instead of a credit card is the way to go, but how do you stop using your credit card(s)? The answer is simple but it may shock you. Take a pair of scissors and cut them into a million pieces! You don't need the card to pay your bill, the credit card companies provide you with a statement eqach month with a bill. Simply write your check and pay the bill. No card needed!
Some people think that if you don't have any credit cards you have horrible credit. Well, credit cards are one of the top 5 reasons people have bad credit. Eliminate paying more for everything you buy! If you buy a $400 item on credit and pay it out you will end up paying much more than $400. Let me share a little story with you.
A few years back after a long struggle getting my credt back on track after a divorce I applied for a Capitol One credit card. The whole resaon for the card was to build credit. I had planned to put around $10 or $20 a month on the card and pay it off each month. Well, my air conditioner went out in the middle of summer. At the time I was living near Houston, TX where the humidity is always around 100% and the summer tempatures reached 105 degrees on a regular basis.
So, I took my new credit card down to Sears. My new shiny, never been used credit card with a limit of $250. Remember I was rebuilding my credit so it was a low limit to begin with. I bought an airconditioner and after tax and all it was $238. Long story short, a few months later the Enron debacle happened and I lost my job. I had a credit card that I could not pay. It went to default.
Six months ago I paid my last payment to the collection agency on that $238 air conditioner. Grand total? $1748.89 with all the fees and penalties and interest. That was the most expensive airconditioner of all times! Cut up your credit cards! Cut up your credit cards! CUT UP YOUR CREDIT CARDS!
Yesterday I mentioned taking a little additional money and adding it to your smallest debt and paying it off. Well, you can see where that would be a good thing now. The economy is bad, yes, we all see that. If you can pay off one credit card you can take the minimum payment that you were paying on it along with the extra money from being frugal and apply it to the next credit card or debt an pay it off! Always pay off the debts in order of amount smallest to largest.
That is it for today. I honestly hope that you can get out from under the thumb of the credit card companies. We'll discuss it more later.
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