Bye Bye Credit Cards

About three years ago, I was drowning in debt. Like many Americans, I’m a major consumer, in some ways this means I help the economy to keep moving. However, for my personal financial situation, it  was killing me. 90% of my income was going to bills and most of that was credit card interest. While I certianly am responsible for getting into debt, banks do not make it easy for us. If you miss one payment or are late once, at least under the old rules, you risked your interest rate getting much higher. I wish I had known I was bad with credit. In fact, I had always been good with saving as a child. I rationed my Halloween candy and it would usually last several months after.

The fact is, credit can be quite useful in getting things you want when you can’t afford it. A house, for example, is not something most people could afford to buy without credit. The problem is that our society has become obsessed with credit. We don’t know how to use it wisely. Of course, there are other issues, such as wage stagnation and the facts that there is a wealth gap that is increasing. The richest Americans have seen their wages increase largely over the past thirty years while middle and lower class wages have barely seen any increase. But, enough about politics, this is a celebration post!

As of tomorrow, I will be debt free (If you don’t count my student loans, but it will be a long time before I have to start paying those back)! I’m so excited! It’s been three years since I started with my debt settlement program and now I don’t have to worry about major bills. It’s a sense of relief for sure. Of course, I will have a new car lease when the Nissan Leaf comes in, but that will all be paid for by the funds I get for selling my car. By the time the lease ends I should have enough money to buy the car, so technically, I won’t have to worry about big bills for a long time!

I know that credit cards aren’t necessarily bad. It’s responsible to have one card with a low limit and use it for small purchase each month while making sure to pay of the balance quickly. But, unfortunately, it’s too tempting for me and many others to spend more. Credit cards are considered to be unsecured debt, which means that interest rates can change on a dime and the limit can be raised. I don’t plan to have this type of debt ever again, because one little mistake can break you, as I have said before. Secured debt, like a mortgage or a car loan, is much safer. I’m more comfortable with these types of loans. So, for now, I only have my student loans. This means I can save more money each month!

I found that when I started with my debt settlement company, my rate of spending decreased substantially. Having borrowed credit influenced me to spend money. Why did this happen? I did learn about the value of saving money and I was pretty good with that. The problem was that I didn’t learn how to be responsible with credit. It may sound like common sense, but I was a teenager when I got my first credit car and as you know teenagers don’t always use the best judgement. The human brain does not fully develop until the late 20s and the last part to develop is the judgment center of the brain. I think if I had been more open with my parents and had they talked to me about credit more (not to mention a certain family member who was bad with credit) I think I would have faired better.

But, the past is past, and I have learned a lot of important lessons about money. I’m in a much better financial situation now and my credit is slowly healing. In a few years, I should be back to tip top shape. I hope that my experience can help others.

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