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The Descent Into Credit Card Debt Hell...and crawling your way out
Thursday, 2 July 2009
Credit cards are NASTY.
Here's a great link that I really recommend taking a look at before signing up for that next credit card that looks too good to be true: The Descent Into Credit Card Debt Hell.
It's a graphic, and easy to follow. No tricky technical terms.
I've just had a look at it, and I'm seriously considering cutting up the cards we have even though we're not in debt. They're just too evil.
Check it out: The Descent Into Credit Card Debt Hell.
And for great ideas on how to crawl out of that pit of debt, consider signing up for the free online newsletter, Simple Savings. It's an Australian newsletter, but the advice is just as valid, no matter where in the world you live. Here's the link to financial "redemption": Simple Savings.
4 comments:
Credit card companies set up these conditions on purpose; it brings in more profits. The best way, in my opinion, to deal with credit cards is to treat them as a one month loan that must be paid back each month. If you can't pay the full amount, you're spending too much.
If already in debt, stop spending and get out of debt as fast as possible. If not in debt, don't go there.
I put as many expenses as I can on our credit card - the expenses we know we can pay back when the bill comes. The reason I do this is to maximize the payback with the card. I get a 1-2% payback on all charges at a camping goods store. I used this credit to stock our bug-out bags and now use it to "buy" dehydrated food for emergency storage. Would I do this if we carried debt? Absolutely not! The way I do it earns us free goods each year, but it takes careful budgeting and management to avoid debt.
Hi Chile - What you say is right. Credit cards can be a useful tool - if used thoughtfully and sensibly.
But credit cards just scare me. I know of people who have got into trouble with them, and things can get nasty.
But that aside, I don't like the whole idea of credit on principle. Although it can be useful, it encourages a whole lifestyle of a) keeping up with the Joneses b) consumerism c) spending instead of saving, and undermining the habit of saving for what we cannot afford.
When I was growing up, my parents bought things once they'd saved for them. They knew what they could afford, and if they couldn't afford it, they didn't buy it.
These days, it's all too easy to misjudge what you can afford, because those "buy now, pay later" schemes, combined with easy credit, make it all look a lot cheaper than it really is.
I won't even go into the impact and REAL cost on the environment!
I know I come across as a boring old conservative saying these things, buy you can't buy happiness, even though credit card ads make it look like you can. I'm concerned that that a whole generation is now growing up with no training in how to budget and save, and how to plan for their financial future and wellbeing.
Maybe the credit crunch is a blessing in disguise, forcing people to face reality, albeit in a really harsh way.
Then again, it's easy for me to say that. We're in good financial standing (touch wood!). I feel strongly for the people I see who are doing it tough. But I don't see any alternative. We had to come down from the spending craze, sooner or later.
Thanks for commenting.
I became a simple savings member last year. I followed it for a while and when they had a special on the membership fee I joined. I feel like I have earnt the fee back in the first few months.
probaly could get even more out of it if I had more time to sit at the computer searching their site.
Cheers Caroline
Simple Savings is excellent. The tools are out there for people who want to make use of them. My most useful tips I've learned are to not go to the shops, not shop when hungry, and to not watch TV, so I don't see ads for stuff I don't need!
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