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You could listen to Dave Ramsay and Cut Up Your Credit Score, I Mean Cards… Or You Could Do This.

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LOOK. I GET DAVE’S IDEA.

And I’m going to show you why it should remain as just that – an idea.

In case you have been hiding under a financial rock and haven’t heard of financial guru Dave Ramsey, he hates credit cards and thinks you need an all cash system. He’s also helped a lot of people crush their debt and for that – he is awesome.

But for this… it’s truly an extreme.

Just think of the actual prep involved – you have to physically drive to an institution that produces cash every month; eating up my time, adding more vehicle maintenance, and starting my gas budget down $2 already! We’re now a loaf of bread down. Then take envelopes (who has those handy?) and spread the cash out and keep tack of every last penny (which by the way, Canada got rid of a while ago so now it’s every last nickel)

Dare I mention when you have kids in the mix. All of a sudden there is a fear of theft or someone playing hide and seek with my beloved envelope system… seriously, my kids would become my really bad savings plan, where I find cash years later in odd places. No interest made there. No peace of mind either.

And if you’re saying move your envelopes to a “safe place”, you haven’t met my kids… or my short term memory.

I mean…are credit cards really that evil? Or *deep breath*… should we place the blame and the education back to the cardholder? As in, fix the root cause rather than slap handcuffs on the prisoner, only to release them a short time later to recommit the crime of debt.

SURE, HE HAS A POINT.

He’s speaking to the masses and “the masses” have an overuse of credit issue going on right now. To the tune of millions.

If I were speaking to the masses on drinking alcohol, I’d be saying “none at all” for this key reason: there is no downside to NOT drinking. You save money, calories and brain cells, and in the masses – avoid awful addiction.

But.

In the case of credit cards, there is a downside. This affects your credit score. Big time.

Credit cards are one of the easiest ways to build great credit and when used well, your score and free points can soar. Try booking a hotel or flight without one! Sure, you can plead over the phone like a teenager who was cut off from their iPad, but overall they are pretty common place.

They also have buyer protection built in that I’ve personally used from services that weren’t so honest. Extra warranty included. Plus a 21-30 day lead time to borrow the money, a place to easily keep track of my entire life’s history of spending and cash back on occasion. Yes, please!

I won’t shy away from the negatives to card use. In fact, here they are:

  • interest rates are sky rocketing the moment you miss a payment if they so wish. (check the fine print and do not miss a one)
  • on average, you spend 12-18% more using a card over cash if you’re not careful about it
  • they get stolen or swiped, and while insurance kicks in, you could be out your usual funds for a short period of time
  • once you get into debt, it’s WAY harder to get out than you think
  • they could be used an overdraft bank account, instead of a credit tool.
  • people love to pay annual fees (insanity) or go for low interest cards as if choosing to carry debt at 9.99% is a great deal – the psychology can get played out the wrong way as we get more comfortable with them.
  • you can get offered too much credit and more credit cards like they’re lollipops. They are not lollipops.

So yes, you have to use them well but read them again – they are not incredibly horrible cons! They are ALL avoidable. And if you keep reading, I’ll see if I can help you avoid those issues and stick to keeping your credit card as a tool in your back pocket – literally.

THE ROOT CAUSE, DAVE, TO THE ROOT CAUSE.

Just becuase someone offers you margarine muffins, doesn’t mean you actually eat them!

What if we, like, taught people about credit and credit cards in schools? You know.. the place of education before we become adults and have all these money problems… *holds breath*

Ok, seeing as that option is currently held on the moon and not coming down anytime soon, how about just learning what the card is and how simple it can be to use it wisely? You don’t have to overspend, be in debt indefinitely, or wait for unicorns to be a proven fact before CHOOSING to use them in a savvy, simple way.

NO more using them like a revolving bank account of death. It’s 2016 and your retirement fund is calling your name…

Here are your top 3 options to avoid CC debt, and gain all the benefits – that you can use in any mix:

  1. Realistically plan out your months cash flow, and stick to that so you can save money or reach that goal you have set for yourself. It’s called adulting, and it’s actually kind of fun. (if for one second you think you suck at it, decide to get good at it just like every other successful human had to do)
  2. Grab a few simple payments (cell phone bill) and make the payment automatic. Then only use it for trips, hotels – big items that require a memorable one time payment from your bank account. You never go in debt, but you show regular and wise use.
  3. Max out free points. Do you get more at the grocery store or at a certain gas station? Put all of your efforts into spending at the places that matter, and refer back to #1 and #2 as you do it.
  4. BONUS: Put your CC in a sleeve or chastity-spending-belt with some hilarious quote to remind yourself not to use it EXCEPT for things you would buy if you had cash. Never hurts to add a layer of protection from your crappy emotions near the chocolate bar aisle.

The rules of credit card use are simple – it’s not cash, it’s never smart to carry debt and if you are addicted – then ditch it! (Do we need an intervention debt show? I’ll totally host that. HGTV? Where you at?)

HOW DO I PAY ONE OFF BEFORE STARTING FRESH AGAIN?

If you are currently trying to pay off a card and wondering how to fit this all in, then it’s simpler than you think: stop using the card.

Think about it! You can’t efficiently pay off a card you keep adding things to. Hide it, freeze it, duct tape it away, then complete task #1 above (the adulting one!) before proceeding to use it again, with a plan in place.

Plus, after reading this, you’re never going to carry credit card debt. Becuase you have better things to do, like MAKE interest. And work less one day. And spend more time doing things you love, with people who make you feel good inside. <— what!?

So keep a card (one for each human who requires a credit score), and keep it simple! I know how scary and frustrating and stressful setting up cash flow can be…I’ll soon be helping people set up their cash flow/ debt, in a stress-free and custom-created fool proof plan! So stay on the list or in the group to get first dibs. You just never know when you need someone else to find your true potential and close the gaps, so you (and your credit score) can get back on track.

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