Do you remember hearing the clerks at many of the mall stores offer you 10% off your total purchase by opening a department store credit card with them?
Those hard to resist offers were tempting, especially during the holiday rush. But you might be suffering from self-inflicted personal finance injury if you took advantage of too many of those in-store special promotions.
Here’s the problem …
Retailers love to tell you that you can save an extra 10 to 20 percent by opening a store card account. The problem is interest rates are typically very high for these credit cards. So the 25 dollar savings off the $250 leather jacket could quickly turn into a 40 dollar interest payment, if you carry the balance for even one month. And if you opened several of these store accounts, your credit score most certainly suffered as the result of multiple inquiries over a short period of time.
Going a little or a lot overboard during the holidays is not unusual. But don’t make a habit of charging more than you can pay off every month.
For many people, having a credit card is like having ‘crack in your wallet’; you have to keep using and using because you never seem to get enough satisfaction from the stuff you bought.
Remember, a credit card is just a piece of plastic featuring your name, some graphics, an account number embossed in the plastic and a magnetic strip on the back that is encoded with some personal finance information.
The card has no power and it can’t make you happy or give you status like the commercials would have you believe. Only you can elevate your status in life through hard work, goal achievement and being of service to others.
Here are several techniques guaranteed to reduce credit card usage and restore your personal finance health:
1. Fill a Styrofoam cup with water, put the card in the cup and place the cup in the freezer. That way you won’t have immediate access to the card and it will take several hours to thaw giving you time to think about whether you want to buy an item versus whether you need to make the purchase.
2. Put your credit card in the safe deposit box at the bank. Again, this technique denies quick access and gives you time to think about what you want to buy.
3. Cut up your credit card(s). This technique ensures you won’t be using plastic when you should be paying with cash.
Own the power of your personal finances and retire a millionaire!
Marc Woolf
Blog Posts Copyright © Marc S. Woolf 2007 All rights reserved.
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