It's time to stop credit card debt now.
No one really likes to feel as if they are not in control of their lives. Everyone knows and understands that overspending and credit card debt makes you feel out of control.
"Financial peace isn't the acquisition of stuff.
It's learning to live on less than you make,
so you can give money back and have money to invest.
You can't win until you do this.”
- Dave Ramsey |
So why do we still use credit cards like Monopoly money?
There are deeper psychological reasons behind the huge amount of credit card debt that the average American carries today. Credit cards are a way to create what psychologists call a cognitive disconnect. There is a large gap between what Americans purchase and how much of it they can actually afford.
First of all, when you don't pay for a purchase with cash, it doesn't feel like a real transaction, sort of like buying a green house or a red hotel when you play the board game Monopoly. You don't fully digest the real cost.
Paying with plastic can convince the card holder that it's okay to spend more than they earn. Even as the transaction is being conducted, you don't see the money changing hands and it feels like you are getting something for nothing.
The whole 'buy now pay later' system of credit cards makes you feel as if you can always afford everything. After all, you will be paying for it in 'easy installments'.
So you use credit cards to shop for luxury items and promise yourself to pay it off in two or three months, using the "easy pay" option. What really happens though is that a year later, you are still paying it off and the stuff you bought has cost you as much as 20% more than the price when you add in the credit card interest. This is reason enough to stop credit card debt forever.
Credit cards also satisfy the inner child, hidden in all of us. When we don't have to pay cash and actually see the money leaving our hands, it is a lot easier to indulge the inner kid. With the credit card, we can have pretty much anything we want and worry about actually having to pay for it much later.
When you think about it, this is an amazingly immature way of dealing with finances. Although some people do pay their total outstanding balances monthly, they are few and far between. In fact, these responsible consumers make up only a very small percentage of the total number of credit card users.
Typically, it is only a matter of time before the little balances compound, becoming larger and larger, until you no longer have any control over your life. Again we say, stop credit card debt immediately!
The current credit card based economy has also taken away the traditional notion of saving an emergency fund or buffer to cover the costs of unexpected expenses. Most people no longer put away anything for a rainy day, whipping out their credit cards whenever emergency arises, whether medical or otherwise.
More than half the people having problems with debt, not surprisingly, experience symptoms of depression. At the same time, people who save, even as little as 5% of their income, are many times happier.
So, take control of your life and get debt under control. Stop credit card debt in it's tracks and reclaim the quality life you were meant to enjoy.
"Some debts are fun when you are acquiring them,
but none are fun when you set about retiring them."
- Ogden Nash, American Writer |
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Debt is NOT your friend. It's not a wonderful "tool" for building wealth. That's a myth.
