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Credit Karma recently wrote an article entitled, “The Best Credit Cards of 2015.” Credit Karma received financial compensation for the post, and while there’s nothing wrong with that since it’s the way in which they provide their free services, the article makes it sound like a credit card and credit card debt is good for you, and that’s where I have a problem.
Is There Such A Thing As A Good Credit Card Debt?
Although making regular payments on a credit card will help boost your credit score, credit card debt is a trap.
Here at A Debt Free Mess Free Life, we maintain that if you have a serious problem with overspending and you can’t get your spending habits under control, credit cards are bad for you.
[tweetthis]The only good credit card is NO credit card.[/tweetthis]
As of September 2015, the US debt breaks down in the following way:
- Average credit card debt: $15,355
- Average mortgage debt: $165,892
- Average student loan debt: $47,712
In total, American consumers owe:
- $11.91 trillion in debt
- An increase of 3% from last year
- $712 billion in credit card debt
- $8.12 trillion in mortgages
- $1.2 trillion in student loans
- An increase of 8% from last year
It’s clear from the statistics why credit card debt is a bad thing.
Read: Why Using Cash Only Is Crucial When Getting Out of Debt
The folks over at NerdWallet wrote an excellent article explaining debt statistics, and why even though increased debt might be overall good for the economy, wages and employment are improving at a sluggish rate, and it’s more of an indication that credit cards are being used to make ends meet.
If you’re using credit cards in this way, in a short time you’ll find yourself seriously in trouble.
I know a lot of people are going to say there’s no way around having a credit card. It’s true you might need it for airplane tickets and renting a car, but if you’re that broke, you’re probably not tooling around in a rented car or flying the friendly skies.
When I was drowning in debt, the first thing I did when I got serious about getting out of debt was cut up my credit cards. Most of the credit card companies had cut me off anyhow, but any I remained in good standing with got the scissors.
Read: The 6 Steps To Saving As A Means Of Getting Out Of Debt
I didn’t need to go on a trip, or go shopping, or do anything except focus my attention on creating a plan to get me out of debt fast!
I knew if I didn’t rid myself of credit cards, I’d never find the resolve I needed to get out of debt.
[tweetthis]Most people will never be able to use credit cards responsibly[/tweetthis]
If your situation resembles my paste – a credit card-wielding shopaholic – it may take years to feel responsible enough to use plastic. And, even if you do, it doesn’t mean you should. It took me years to feel like I had the self-control necessary to have a credit card.
But when I need to book a flight, for example, that item is paid for as soon as the flight is scheduled because I use my debit card. I already know I can afford the trip. I’m never tempted to use credit cards recklessly because I don’t use them.
It’s hard to give up credit cards, but not impossible. By purging your wallet of the plastic and replacing it with cash, you’ll get connected to your money. You’ll experience what it feels like to spend money again. You won’t be in a credit card haze.
One of the best ways you can get reconnected with your money is to track your spending. Tracking gives you an eye opening experience because it lays out in black and white all your spending and you get to see clearly where you spend money recklessly.
Read: Does Living On A Budget Mean You’re Broke?
Tracking your money is the number one thing you should start doing.
Click here to get my Expense Tracking Form!
Use it every day for at least a couple of weeks and see if it can help you reign in your spending.
Cutting up the credit cards takes courage. But by doing so, you’ll be in control over where your money goes because you’ll be more conscious of your spending, and it will lead you down the path to becoming debt free.
