Have you ever had a habit that you knew you should give up but you weren’t ever able to make yourself? Credit cards are one of those things. You probably know they aren’t good for you, deep down, but they can still be hard to kick. Then again, maybe you don’t know how bad they are. That is partly because we’ve been marketed to and convinced that they are a regular and necessary part of your financial picture. What if we told you there’s an entire world of people out there that not only don’t use credit cards, but they also plan and pay for big, fun and important things with their own cash? Yes, they are their own creditors! They fund all of their own dreams and obligations! This world of folks does not only include wealthy folks. No, this phenomena spans ages, incomes, geographic locations and every other demographic. Let’s talk a wee bit about why you should be one of thees folks who’ve cut up credit cards and divorced them for good!
1. You are wasting money on interest.
The average person pays $1,155 in credit card interest each year. Can you think of anything better you could be doing with $1000 each year other than paying some already rich credit companies?
2. You’re probably not a unicorn.
Most people are not disciplined to pay off their credit card each month. And, according to the stats, you’re most likely one of those that doesn’t do it. In fact, just 29% of folks actually pay their balances off each month. And, what may work one month might get broken a few month down the line. Why risk it? It’s okay that you might not be the kind of person that can maintain this discipline. Just don’t tempt yourself. Cut those cards up and stop using them! The credit card companies have designed their systems, their marketing, their rates and their offers to make them money. As smart as you are, do you think you can compete with folks who have multi-million-dollar budgets to outsmart you? Love you! But, maybe not?
3. Your debt load is heavy enough.
If you’re like most Americans, debt is really weighing you down.
The average American has over $90K in debt when you factor in auto debt, credit cards and student loans. If you want to be able to keep more of your money each month and thereby be able to reach your goals & dreams, something has to give. Better money management and budgeting can absolutely take the place of credit cards. you can be your won bank if you are willing to get out of debt. And, credit cards are usually the easiest step of that journey.
Add to that that your debt payments each month are likely tying up a significant amount of your income and it’s clearly time to say goodbye! The average monthly minimum for credit cards is about $123. The average total amount Americans are paying on debt a month, not including the mortgage, is $1233. EVERY MONTH! What could you do with an extra $15K a year?
4. It could be causing relationship problems.
While money talk in general can be tough inside a relationship, debt makes it worse.
- 41% of people fight with their spouse when they talk about money*
- Money is the number one issue married couples argue about.*
- 86% of couples who got married in the last five years started out in debt.*
- Money fights are the second leading cause of divorce, behind infidelity.*
- 31% of married folks have a credit card or debt their spouse doesn’t know about*
5. You can be a trend setter.
The good news is that credit card debt, overall, decreased 14% from 2019 to 2020. What’s more, the amount of people delinquent by 30 days or more decreased 29%. We are taking that as a sign folks are getting smarter! They are wising up to how to win with money. Credit cards are not that. Interestingly enough, Experian reported average credit card debt generation by generation as follows:
- Generation Z: $1,963
- Millennials: $4,322
- Generation X: $7,155
- Baby boomers: $6,043
- Silent generation: $3,177
6. You will spend more using credit cards.
The science tells us that you will spend more money if you swipe a credit card rather than use your won cash. Why? It’s less painful! The emotional toll in swiping doesn’t register. Meanwhile, you will feel the sting as cash passes from your finger tips to someone else’s. The amounts you’ll pay more vary. From simply paying to supersize your value meal to paying a 64% surcharge just for the privilege of using credit, we are all susceptible. So, cure the credit cards up and close them. Then, use your own natural responses to help you be more responsible!
7. The interest you pay on credit cards replaces money you could be making on investments.
We all know that credit cards come with interest rates. The problem is what the opportunity cost of those rates. Yes, the interest you’re spending (read: wasting) on your credit cards is a far cry from the money you could be earning. Yes, with debt you pay money (interest). With savings and investments you earn money (interest). Which one sounds more wise?
8. You can win with money without credit cards.
You may be int he position where you’ve always had credit cards and you feel weird or unsure about not having them to fall back on. But we believe in you. The process works like this:
- Get on a budget.
- Get out of debt.
- Save money.
- Be your own bank.
9. You can fund the future instead of paying for the past.
It’s pretty demoralizing to think that the work you do today is paying for the choices (purchases) you made last year or several years ago. It’s much more fun to work when you know it’s funding your future. Maybe that’s a vacation, college for your kiddos or even an evening out. When you give up using credit cards, you start living forward instead of being tethered to the past.
Millions of people have divorced credit cards it before you and millions will hopefully do it again. It’s not impossible, but we do admit it takes courage and purpose. But we believe you have bigger things to do in life with your time and money than to waste them away on credit cards!
If you’re interested in paying off your credit cards off we have a great freebie for you! It’s our GOOD Plan! That stands for Get-out-of-debt plan! It’s a free worksheet. You’ll list your debts, balances, payments and how much extra you can put toward that debt each month. There is also a place on there for you to track your overall debt amount as you pay it off. Once you’ve done the numbers, you’ll be able to find out exactly when you get be completely debt free!
If you want help applying these concepts to your daily life, habits and goals then fill out the form linked below and we’ll be in touch. We would love to work together!
Ideal Balance is The Life Coaching Facility in Navarre, Florida that focuses on Fitness, Family & Finance. We help our clients create the discipline & habits they need to strip off what’s holding them back from living the life God created them to live. We work with clients in 1-on-1 sessions in person, virtually and in small groups. We offer life coaching, financial coaching, health coaching. We also offer personal training and home organization locally here in Navarre, Florida. Click the button below if you’re interested in our help and we will contact you.