Get Out of Debt by Dumping Your Credit Cards
Want to finally get out of debt? The best way to do it is simpler – and easier – than you might think…
To get out of debt, stop putting things on credit. People ask me all the time about a good debt or a bad debt. For me, all debt it is bad debt. I am probably the richest man in America who doesn’t use credit cards or watch television.
Many of my colleagues think this is a bit dramatic. Truthfully, this is the ideal way to go. Some people actually go in debt to get out of debt. We know this is true when we look at the amount of student loans people take out. Think about recent crash of the subprime markets on Wall Street as further proof.
And while I think all debt is a bad idea, probably the nastiest form of debt is credit card debt. Credit cards are a nasty way to get yourself into the never-ending and high-interest cycle of debt. The thing I notice most about people with card debt is that they are overworked and feel a sense of entitlement when they get home to splurge on something they deserve. This is the moment that you want to start cutting up credit cards.
So if you’re already in over your head, what do you do to get out?
Dump those credit cards! Start paying off the credit cards with the highest amount of interest first. This is the best investment that you’ll ever make. Credit cards have some of the highest rates of interest, and credit card companies everywhere are cutting the limits even for people in good standing.
This means that someone who was keeping a credit card debt below 30% on a $1000 credit card could be cut back to $500. Suddenly, their debt is well over 50% of their limit, and their credit starts to drop. This is also a good reason to try to pay your debt in full each month.
Try to live off cash only. Plan a weekly budget for gas, groceries, and everyday living expenses. Once it’s gone, your money is gone. Leave the credit cards at home, so you won’t be tempted by that great sale that you just can’t pass up. Keep only your lowest interest credit card for emergencies only.
Get out of debt and live your life with cash only. So your dishwasher is broke? Wash them by hand until you can save up the money to buy a new one. A used dishwasher may work just as well. T
You don’t “need” a credit card. The life of credit card debt is like a fantasy world. People come under the illusion that they can have anything they need through credit. While many people can manage to “live with” this debt, most of us get in over our heads.
It isn’t worth the pain.
Dump your credit cards today!