Credit Cards Overloaded, how to get more for less

Friday, February 8, 2008 Wall Street Journal (headline) "With Cards Overloaded, Consumers May Rein In Spending"

“Plastic has pushed into every corner of American life, making new inroads that worry some economists and card issuers.”

Make no mistake about it this article focuses on consumers’ use of credit cards and how they are being used for everything from food, gas, Starbucks, and fast food places, to the big ticket stuff.

Debt Free Living is the best way to reduce your costs of purchases. By that I mean every time you use a credit card to purchase anything (even the small items) you pay a cost for that item. The average American carries credit card debt every month. If you don’t pay it off you’ll pay interest for the item resulting in paying more not less.

A close family member of mine once had a credit card that exceeded the limit. Every month the card was being charged an extra $35 dollars a month for being over the limit. This went on for three months before it was discovered the minimum payment didn’t cover the over limit amount. Every month more debt added through a $35 dollar penalty and next month interest on the $35 dollar penalty.

“Many Americans don’t realize the direct correlation between the need to change their behavior and their income, “said Bill Druliner, a credit counselor for GreePath Inc. “The longer somebody maintains that lifestyle, the bigger the crash is when it finally comes down to earth.”

Look at the previous two posts on behavior and how to change it. Most people are not disciplined enough to make changes in their life. The changes in your mindset are easy to do. But you must CHANGE yourself. No one will do it for you.

As you read my posts you’ll begin to get the point of it all. In order to get out of the hole you’ve dug for yourself you must first stop digging. Second, do not use anymore plastic, and third, utilize my $15 dollar a day rule to get out of debt paying off the lower balances first.

Don’t be the 80% crowd. Remember if you follow what 80% are doing you’ll become a part of the hopelessly depressed folks that cannot understand why they are unhappy and stressed all of the time.

Be a part of the 20% crowd. Those are the folks that are Renegades. Those are the folks that are debt free and can spend money as they want. It’s the 20% crowd that has the freedom to find the good deals. It is the 20% crowd that can afford to pay cash and get the best deal.

“Indeed, many Americans are so dependent on their credit cards for basic needs that about 25% of the clients walking into Margo Mitchell’s credit-counseling office in Tulsa, Oklahoma, have opted to pay their monthly credit cards bills before their mortgages.”

“The credit card is a means for them to supplement their income and becomes a cushion to buy groceries.”

Don’t be like the 80%, be like the 20% and get more for less.

David…