Credit cards are everywhere all the time. Everyone has one, every company is trying to give you a new one.
Our world has arranged itself so that if you want to listen to music, rent movies, staying a hotel or use a parking space on a travel ferry you need to have a credit card.
They seduce you with promise of cash back, low interest rates or the ability to use travel miles to fly to the hotel you just booked with your super duper magic visa.
The thing is they can be super and magical but only when they are used perfectly with perfect discipline. Credit cards can be an amazing tool and very financially rewarding. But if you lack that perfect discipline there is a little thing that happens 21 days after purchase called interest, In Canada most of the time that means about 19.99%.
Suddenly your 15.00 ferry ride just cost 17.85. To put that in larger terms, the 1000.00 Laptop you just had to have ( even though the old one still works ) just cost you 1010.93 and will continue to charge you that 10.93 each month until it is paid back. In a year 1 ferry and 1 computer cost 1393.00because credit cards charge interest plus 10.00 per month as minimum payment. Just in case you were checking my math.
What could you have done with an extra 400.00 in our pocket?
The solution is easy but takes a little self control. Simplicity 1,2,3, applies here. If it is not in your wallet, do not spend it.
For Consumer use of credit you need to be able to go home after your day and pay back what yu used to earn your points or cash back, it will make you think as well as plan how you use your cards. it will also force you to stay within the 50/50 rule as you are not spending what is not in your budget.
Try it for 30 days, forget what your balance is now, work with what you have and see how it goes to pay for each purchase that goes on credit right away? Is it harder, do you think more before you bring out the card?
Send me your feedback in the comments and let me know how you are doing.
Cheers and happy responsible swiping!
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