Is Your Credit Card Debt Worth the Cost?

I remember the day like it was yesterday, I was looking at my four credit card statements and saw that I was just north of $20,000 in credit card debt. I asked myself, how did I get there? It did not help that I had just come back from the music store having purchased four or five CD’s that I had no business buying, yet I still did not see the issue. My problem was that I was using credit cards to fund a lifestyle that I wanted, and felt that I deserved but was doing it at the expense of my future. It would be one thing if the credit card debt was due to me losing a job or something like that, but sadly it was largely spent on junk that I did not need. One question kept running through my mind – was all that stuff worth the cost?

What is the Underlying Issue?

Sadly, I am not the only one who has ever dealt with credit card debt like this as it plagues many families today. There are various numbers thrown around as “averages,” but the average credit card debt (of those that have it) is nearly $16,000. As I look back to my own personal experience the underlying issue was a lack of contentment, as well as discipline. We live in a society that preaches commercialism and having what we want right now. However, little is said of how we can attain these “things” without sacrifice. In my personal experience, it wasn’t until I learned what the true cost of what this credit card debt would be.

Are You Willing to Sacrifice Years for Your Credit Card Debt?

While it can seem a bit on the scary side, I love that credit cards now show on their statements how long it’ll take to repay the debt if you only pay the minimum each month. What I soon learned as I began my credit card debt repayment was that my foolishness cost me five years of my life. I had to sacrifice and not do things I wanted because of the noose I had around my neck. If you’re in the middle of a credit card mess, are you willing to sacrifice that time? If you’re not, then look for ways to cut your expenses, earn more income and begin on that debt repayment. There are various philosophies out there towards repaying debt, such as the Debt Avalanche or the Snowball Method. What method you use is of no issue, the issue is to stop sacrificing your time and begin repaying the credit card debt today.

Credit Cards Can Be Good, If Used Wisely

After going through debt consolidation and five hard years of work I quickly learned the importance of discipline when it comes to finances. I have also learned, over time, that credit cards can be a great tool to help stretch your budget and possibly even make a little extra money on the side if you have a credit card that allows you to earn rewards. The main point is to not view the credit card as “free money” like I used to, but simply as another tool in your financial toolbox. Just like any tool, if used wisely, credit cards can do a number of good things for you, but if not used wisely they can harm you in the long run.

Are you currently in credit card debt? If you were in the past, how did you climb out from it?

Image by wyn ♥ lok / flickr

Comments

    • John S @ Frugal Rules says

      That’s the way to at it Glen. If you can get rewards off of it too, then you’re doing pretty good in my book.

  1. HappySimpleLiving says

    Great article. Thanks for so eloquently driving home the point that a bunch of frivolous, impulse purchases can add up to years of sacrifice.

    • John S @ Frugal Rules says

      Thanks! For many, I fear, it comes down to just that a lot of times. I love buying something fun, but I’d much rather save for it so it does not throw other more important goals out the window.