Credit card debt is a pile of crap. It stinks. It’s not pretty to look at. Go ahead and flush it already. You know you want to. You’re tired of seeing the stupid commercials about how people’s lives are suddenly changed for the better – once they’ve got their fancy new credit card with a picture of some fluffy puppy on it. According to the T.V., credit cards are capable of defeating hordes of armed barbarians and have something to do with genuinely wonderful and funny moments in our lives. They don’t. So cut up your cards. What are you waiting for? Need more? Ok.
Do you know how much profit is made by the credit card companies? Around 30 billion dollars a year and growing, in the U.S. alone. The credit card industry is the most profitable in the U.S. The top credit card companies make more money than the likes of McDonald’s, Microsoft and WalMart. How? Penalties and interest rates, in that order, and if you’ve got a credit card with a balance, you’re paying them. Let’s put into perspective how much money 30 billion dollars is…it’s enough money to hand every man, woman and child in the U.S. a hundred dollar bill.
If you carry a balance, pay the minimum payment, and occasionally make a late payment (which is becoming easier due to the sleaze-ball tactics of most credit card lenders) – you can easily be in a situation where you will never pay off the balance. For every thousand dollar balance maintained this way, 20 percent means you’re paying the entire amount of your balance to the card company every 5 years. Even without late fees, exceeding a 20 percent interest rate on your credit card debt is easy. With the late fees ($29+ for missing your payment or exceeding your maximum), the money you can pay out then progresses into loan shark territory. Do you want to line their pockets or yours with cash?
Are you ready to flush your credit card debt now? Go ahead and cut your cards up and flush’em, burn’em or whatever suits your fancy. But wait till you pay them off before you call the credit card company and cancel them officially and don’t tell them what you’re planning either…they may raise the interest rate on you. Why? To squeeze every last drop of blood they can from you before you slip away from their slimy grasp.
Brad Homer is focused on helping others achieve their personal and financial goals. His website hosts personal finance articles like this one and his free-to-try software, Millionaire 2020™, which can help get you on the path to good budgeting fast. |
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