Credit Card Debt? Bah Humbug

Yearning to See the Light

I read an article, a very interesting article about reducing your card debt.

The article said you should forget about it (pay the bare minimum on it), and focus your energies on earning more income.

Forget your credit card debt…?

Now, I am appalled and alarmed by that suggestion on a lot of levels.

Because that simplistic approach cannot possibly apply to (1) people who cannot handle their money, (2) people do not know how to grow their money, and (3) or who cannot (for the life of them) stop buying.

And they exist – an obscene number, in fact!

Besides, according to Carmen Wong Ulrich’s The Real Cost of Living: Making the Best Choices for You, Your Life, and Your Money, having a credit card debt has an emotional cost.

A huge emotional cost.

She says, “Carrying credit card debt means you can’t do the things you love, enjoy time with friends, spend time with family, move to a better home, or just stop eating your own bad cooking, because you’re working too much to make more money to pay off debt.  The pain and stress of not being able to do things and of not feeling in control of your life leads to a load of personal costs.”

I am with her.

Really, credit cards could be the death of you.  When I do not pay my Citibank credit card in full, for example, Citibank charges me 3.5% interest on the full amount (although, I paid 50%), plus the same usurious rate on my new purchases, and then on top of it all – charges me an interest…  So I am not really sure how not paying the credit card could help – I really could not.  It is more than an irritant, it can make the heart pump itself silly.  How can someone afford not to pay it?

Ulrich’s tip: Rule 1 – don’t carry a balance/pay in full and on time, Rule 2 – don’t use cards with fees, especially ones that penalize you for not carrying a balance or too small a balance,  Rule 3 – don’t use credit cards if you do not have the discipline to follow Rule 1.  If you can comply, she says – use cards for daily expenses to accumulate rewards/points and keep track of points and rewards and/or use them to help pay for travel and/or gifts.

Here’s mine: When calling the credit card company, use the “if you’ve lost your card…” function.  That is sure to get you straight to the operator (the operator does not even know you punched the dial for the lost card).  And then ask nicely (for reversal of fees, waiver of annual fees, cancellation of cards).  Here’s another: Citibank combines the credit limit for all its cards.  Freeze the ones with the bigger interest rates (these are also usually the ones with the higher credit limit) and maintain just one card (one with the lowest interest rate).  You can then enjoy a higher credit limit and a lower interest rate, with the bonus of paying only one annual fee (remember, you can have this waived too – just ask nicely).

But the crux of the matter,  I think, is not to get into debt, or if you cannot avoid it, do not do it with credit cards, but if absolutely impossible, pay the credit card in full every month, or – okay – at the very least, pay more than the minimum.

And then earn more income (you can do this too).

But get out of debt, and get out fast.  It can sink you to the depths of depression.  The world could be a much more beautiful place if the shadow of credit card debt does not cross your thoughts.

Article by Issa. Art by Danvic. Copyright 2009-2011.
Website: www.YouWantToBeRich.com
Email: issa@youwanttoberich.com

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