I recently had lunch with a friend and we were catching up on the usual—work, family, our dreams and goals. She begin to share how they were struggling with budgeting and paying off their debt.
“I think we are going to cancel all of our credit cards. We were doing so well with paying them off until a family party. I pulled one out and now we are over the limit. I didn’t mean for it to happen but it was so easy.”
Credit cards, and our quick reflex to swipe them, is one of the biggest barriers to financial security. As we pay interest on things purchased months and sometimes years ago, we limit the full potential of our income.
In essence, if you are always making payments on a credit card, your income has less value because it’s paying for things from your past. We all know it’s hard to move forward while looking back.
Our Choice Not to Own Credit Cards
We don’t own credit cards.
I remember (with a click of my heels and a leap in the air) paying off the last one—our Discover card. I also remember when we opened the account. I told myself, “If our cash gets low, we will use this card just in case.”
Those “just in case” moments totaled to $8000 in credit card debt.
Lessons learned because today’s “just in case” includes prayer, wisdom and a savings account.
We have not used a credit card to purchase anything in over 5 years. Honestly, the one challenge has been when we needed to rent a car during a trip earlier this year. Most of the major car rental companies would not accept a debit card.
I was confused by the whole thing but I also had Google, and after some searching, I discovered that Budget car rental accepted debit cards! Oh joy! Needless to say, they have a friend in me. We rented the car without any issues and enjoyed our trip.
Smart People Use Credit Cards & Pay-off the Balance Each Month
I’m sorry but I know a lot of smart people who use credit cards and never pay off their balance each month. That theory is very strategic marketing by creditors to play on our emotions and intelligence.
They know most people have the intention of being responsible with credit cards but they also know we over-extend ourselves and take months and even years to payoff our balances. This results in faithful customers paying tons of interest overtime.
Credit card debt and financial freedom don’t go together. They are opposing forces.
Real Smart People Use Cash & Pay Themselves Each Month
It’s an incredible feeling not to focus on payments anymore.
It’s an amazing feeling to save money each month.
It’s a great feeling to contribute to my retirement each month.
It’s an incredible feeling and I want you to experience the same.
How to Get Off the Ferris Wheel
I wish that I could say baby steps are appropriate here, but they’re not. This has to be handled big-girl style!
If you are serious about improving your financial future, the credit cards have to go!
They have to go like with scissors-and-a-break-up call-have to go. That’s right, you have to call the credit card company and tell them you are ending the relationship.
You are no longer dating.
Why? Because without the official declaration of the end, in a weak moment you could call them back and ask for a new card!
You have found a new way that represents true freedom.
Here are 3 Thoughts to Help You Take the Leap:
- Ending the affair with credit will require that all credit cards go, even the one with the small balance that you plan to use in the event of an emergency or a major sale.
- Know that God’s provision isn’t bound to currency and credit. He can and will use anything and anyone to help you. Pray for faith that starves your fears as you grow in this season.
- Begin immediately to payoff all credit cards starting with the smallest debt first using a Debt Snowball. Throw all that you can to the smallest debt until it is paid off. Then move to the next debt putting all that you can towards it until it is paid off. Each month, your momentum will grow and the balances will decrease! If you receive a lump sum of money unexpectedly, use all of it towards the balance you are currently paying off. Keep going and don’t let anything stop you!
I know that you can do this, so Go and Get Started!