When I was younger, I believed that credit cards were a part of life. I fell for the line: "you need a credit card in case of emergency." At first I rarely used it, I maintained a zero balance for several years. Then I needed a little extra one month, so I used the card. I intended to pay it off just as soon as I had extra. But the next month I was a little short as well. I did not have enough income and I had no emergency fund. Eventually, I stopped using the card, but I still had a large balance. Some months I had to decide if I was going to pay my car payment or my credit card payment. I needed my car, so the interest and penalties soared. For the past couple of years I have cut costs, found a better paying job, and payed extra on my two cards. About two years ago I paid off my Discover card, and now the visa is finally gone.
Never again! I am prepared now. If an emergency were to happen today I do not need a credit card. I have an emergency fund for that. I will never again be under the thumb of a credit card company. I can now handle emergencies without them. Neither do I have to worry about my credit score, for I no longer intend to borrow money from anyone. If I don't have the cash, I won't buy it. And if I'm sort on money again, I have one less bill to pay each month.
Now to work on the car payments.
We said goodbye to credit cards a year ago (i.e. we stopped using them). I have never regretted it. While we have only been able to pay off one so far, we hope to have the remaining debt taken care of in the next year. It's a great feeling to know that we aren't getting deeper in debt and that there is light at the end of the tunnel. As you said, if we don't have the cash for it, we just don't buy it. Thanks to you and other friends, I have learned to coupon. We have always lived simply.
ReplyDelete