Debt is my mortal enemy. It was the cause of so many years of stress and anxiety. I lived for so long with that large weight on my shoulders, never able to see a path towards a better future. Having debt is like when Scooby Doo starts running and he stays in place for that brief moment. I’m stuck in place and can’t move forward. Credit Cards became my crutch for living and resulted in taking away my potential to improve. I was suffocating.
That was quite dramatic, but I stand by my feelings of debt. Credit Cards and I don’t get along. We’re not friends. But does that mean I’m never going to use them? Absolutely not. I will continue to use them, but in a different way.
In the past, every dinner and every online purchase would go through my credit card. Need some new clothes? Put it on the credit card. Vacation? Credit, please. You want a new car for everyone in the TV audience? No problem put it on my credit card, Oprah. It was a never-ending cycle of piling on credit card debt and only able to pay the interest every month.
It started as a stupid way to avoid making my little pile of money in my checking account never go down. I obsessed over sitting on my checking account, never letting it out of my sight. Eventually relying on credit cards became too much and I saw my cash disappear. My little mound of money dissipated into the arms of debt payments and life.
I’ve since learned my lesson and depend on carefully crafted budgets to lead my spending. I’m obsessed with planning out every dollar that comes in and keeping an eye on my accounts daily.
Credit cards can be scary and unless used the right way, they can ultimately lead you astray. I’ve now been following simple rules when using my credit cards:
Only use credit card if I have the money to back up that purchase. If I don’t have the money to pay for that purchase, I’ll wait and save. Using your credit card on purchases you simply can’t afford is a disaster waiting to happen. Believe me, I’ve been there.
Use your credit card when the points make a difference. There are often double points or some other promotional offer that make using your credit card beneficial. You can save quite a bit of money by keeping an eye out for these incentives, as long as you continue to be mindful of how much you are spending.
Keep the number of cards to a minimum. My wife and I have far too many cards. Our credit limits are fairly high because of that, but its’ much more tempting to spend with more cards. The dangerous mentality of “I have some money still available on this card” is the worst. We treated it almost like cash, if it maxed out that meant the spending stopped. It never should have gotten that far.
So I have a plan in place for managing my credit cards and staying away from the hole of credit card debt. However things may be drastically changing very soon. In the midst of the world crisis, unemployment has reached new highs and with that comes difficulties paying off debt.
Credit card forbearance has peaked at 10,000%, causing credit card companies to start to sweat. Many people are without jobs due to the epidemic. This means millions of Americans are unable to make credit payments. The plague of financial hardship claims have sky rocketed.
25% of people have increased their credit card debt during lockdown, struggling to pay bills and continue living by ordering delivery and online shopping. But once the lockdown is over, the debt will remain and jobs are still lacking. Americans won’t be able to pay off the debt they had accrued. Credit cards have become a crutch for us to make it through this hard time.
This will ultimately lead to credit card companies getting stricter over loans and other regulations. Credit limits will be lowered and interest rates may even spike. They are desperately looking for ways to protect themselves going forward. Those struggling to get ahead of their debt will now have more trouble. Hopefully this doesn’t happen, or just lasts a short period of time.
Credit cards are a great tool for leveraging your money if used correctly. However, relying on the extra credit limit as an extension of your monthly income is a big no-no. I will continue to use credit cards however with a more careful approach, properly utilizing the points and promotions they offer.
