Never, ever pay credit-card interest.
Paying credit card interest is like taking third of your take-home pay, arranging it in a neat stack and setting it on fire. Every month. Forever.
If you’re an average recent college graduate, you have $20,000 in credit card debt. It will be paid off when you’re 63, and you’ll have paid $32,246 in interest.
Take a look at my credit card bill. I’m not rich, but every month it says “$0.00 Interest”. It says this because I pay it in full, every single month. And I’m nothing special. I’m just a guy who decided he didn’t like being fleeced.
Before the card comes out of my wallet, I make sure that I have money in the bank to cover the purchase. This isn’t some sort of “future money” like “I’ll get paid next week and the bill comes in 4 days later.” This is actual money that’s been in the bank for months.
And this is the dance: Bank of America desperately hopes I won’t be able to pay. If I don’t pay, they get 10% interest. Or 18%. Or if I’m late, 30% plus “late fees” (“Late Fee” is “bank-speak” for “you’re down, so now we’re kicking you.”)
However this will never happen because I know how they work and won’t let it happen.
Now, take a look at your credit card statement. If you’re like most US citizens, you’re paying interest. Probably a lot. And I’ll bet that you’re still paying for meals that came and went ages ago and electronics that have already been sent to a landfill.
About 12 years ago, I was just like you. Then one day, I looked at my credit card statement and realized that I was paying interest on stuff I didn’t even remember buying. So I made a choice:
I didn’t charge anything.
My car had rust holes the size of my hand and looked like hell, but I didn’t care. If I couldn’t live in it or cook it, I didn’t buy it. Every spare nickel went to the credit card company. In less than three years, I was completely debt free.
A little delayed gratification will set you free.
English Translation: “Stop buying crap and pay off your cards. You’ll be much happier.”
You need food, water, shelter, clothing.
You don’t need an iPhone, an iPad, a Kindle, a big flat-screen TV, cell phone that browses the internet, a 4-wheeler, snowmobile, jet-ski, boat or anything sold on television. The purpose of advertising is you sell you stuff you don’t need. Generally speaking, if they need to advertise it, you don’t need it.
You can’t begin to imagine how much actual cash suddenly becomes available when you’re not giving the bank piles of money for absolutely nothing. Try it, you’ll be amazed.
Now on to the really cool part. The bank will pay you!
Still Reading? This is most impressive part. I will now read your mind!
Using my highly tuned Internet Extrasensory Perception, I can hear your thoughts:
Q: “But what about unexpected expenses?”
A: You may not know what is going to happen, but as sure as God made little green apples, something is going to happen and you’re going to need to pay for it. Keep cash in the bank so the next time an “Unexpected Expense” comes up, it won’t be “unexpected,”you can cover it and won’t be in debt again.
“I need my credit cards to live.” No you don’t. You need income to live. If you can’t afford your current lifestyle, you sure as hell can’t afford it while handing 30% of your take-home pay to the bank. In fact, the bank is probably why you can’t afford anything now.
Pay them off. Never go into debt again, and then you can start reaping the benifits of free, legal, no-work-required money from the bank.
