Breaking the Credit Addiction

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I’ve been hearing from retailers who are struggling with how to live with less credit.

Credit seems like such a wonderful thing at first. It's like it gives us freedom - freedom to buy something now rather than wait. However, once you've bought the item credit creates bondage. Payments have to been made until the debt is retired. Our present economy is bringing home the hard lessons of being in debt, and it's not pretty.

The major source of credit problems for most people is credit cards. The payments are set very low and the interest rates are - in my opinion - usury, i.e. immorally high.

The first rule of living within your means is to not have any credit card debt. If you are going to use credit cards, pay them off in full every month. Then you pay no interest and get the benefits that go along with the card - like airline miles.

However, if you want to live more frugally, don't use your credit cards at all. Put them away for those times when you have to use them - like buying an airline ticket. Go to a cash system where you buy everything with cash. Of course you could also negotiate with your large suppliers a small discount for using cash instead of credit cards.

When your cash is gone, you stop buying. It is true of everyone that it is easier to spend money when all you do is put down a piece of plastic rather than forking over greenbacks. I guarantee you will spend less if you put your credit cards away.

Comments

Mary Angela

Thank youI wish more people would start using cash again/barter we as soceity would be in a better place.
And this rewards business we the merchant pay for the rewards. Hello people smell the roses / coffee.

Thursday 16 July 2009, 10:24

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