Most Americans have credit card debts – some have thousands of dollars worth of credit card debt. Unless you have amazing willpower, you’ll likely find that your debt total never goes down, no matter how long you have your credit card and how consistently you make your minimum payments!
If you’re looking to take more control over your finances and fix your credit, you may need to cut up your credit cards. Unfortunately, a lot of us view our credit cards as our financial safety blanket; always there for us if we need them. The truth is, paying off your credit card debt fast is a wise decision. Here are 3 reasons you should get rid of your credit cards pronto!
- Credit cards are a vicious cycle
Once you have credit card debt, many find they never break free of the vicious cycle. They find that over the years, the debt is likely to increase without them realising it. What happens is you get your first credit card, enjoy spending what feels like free money, make your minimum payments and put the debt out of your mind. After a few months, your credit card will likely “reward” your good lending history with an increased credit limit. And so, the cycle begins. If this sounds like you, it’s time to consolidate your debt or you’ll find yourself trapped, never being able to afford your own home or needing to downsize to a tiny home, even living in a shipping container. Cutting up your credit card prevents your from making more purchases and increasing your debt total. You can finally free yourself from the cycle of credit card debt.
- Stop paying interest
Have you considered how much more your credit card purchases actually end up costing you? With high interest rates attached to credit cards, you could end up paying much more in interest than the initial cost of the product you purchased. Because the payments are spread over many months, it feels like you are getting a better deal than you actually are. Each month you are effectively giving away money that doesn’t go towards clearing your debts at all. The money goes directly to your lenders with just a small fraction of your minimum payment actually reducing the total of your debt.
When you cut your credit cards up, you’ll stop your debt from rising and, in turn, the amount of interest you have to pay each month. After a while, your debt total will slowly start to reduce and your minimum payments will go down, saving you money each month.
- Nip temptation in the bud
The biggest reason to cut your credit cards up is for the sense of finality. It seems like we all lack time in our lives and this can lead to taking short cuts, such as buying what we really can’t afford. For as long as you keep hold of your credit card “in case of emergencies”, you’ll always have the temptation to use it. Whether it’s spur-of-the-moment holidays or grabbing a pint of milk at the shop, every expenditure on your credit card leads to more debt.
If you have a credit card, you will always feel like you have more money than you do. Remember that your credit card limit is not actually your money! Rid yourself of all temptations and cut your cards up. Take back control of your debts and get your finances in better shape.
Image Credits: Republica