The last couple of weeks has not been good for the economy of the United States or the citizens who reside here like myself. During these times everyone is trying to save more and spend less but what ends up happening is spending slowing increases before you are even able to realize your credit card balances have grown to unmanageable limits. Solution: cut up your credit cards.
You think I am joking but I am not. Having plastic can be and is the downfall for many Americans struggling with debt. So pull out the scissors and start cutting.
You can be the most disciplined manager of your finances by paying your bills in full each month but if you have credit cards you could be spending much more than you ever intended to. Studies have shown that by using credit cards when shopping you can become less worried or price sensitive when you do not have to worry about the bill for 30 days. You see an extravagant outfit or a plasma TV and you think, hey why not, I can pay for it later. This is how spending increases.
Not only paying with cash or with debit card will curb your spending it will relieve you of your worries that you will be late on the next payment. This will only save you those $39 late fees and 25% penalty interest rates. With the extinction of you plastic you can become more focused on keeping a sharper eye on your bank balances. With this focus you can retire early or go on more vacations. This radical proposal seems to be the obvious thing to do.
Reasons to dump you plastic
1. Lenders are getting stricter. You can be considered a deadbeat if you pay balance in full every month which leads to lower grace periods subjecting you to late fees.
2. Using credit can increase your spending without even realizing it. You buy more stuff and you are willing to pay a higher price for these goods.
3. You get to switch to using debit cards. This will give you the incentive to check your bank account balances more often. Monitoring your money is always a good thing.
Giving up credit cards takes effort
Giving up your credit cards will be an inconvenience at first. You will need to go dig though that pile of papers piled up in home and find your bank account number. Stopping at the ATM will now become a regular occurrence (this annoys me the most). You will need to become a planner. This will take discipline and a little time. With this self control who knows, you might be able to muster up the energy and funds to actually take on an activity that is fun to you.
There is no doubt that giving up credit cards with help you live a happier more stress free life.
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