recreatingreality.com

If there has ever been a time to recreate reality by eliminating our credit card debt, it is now.  Perhaps, I am one of the lucky ones.  I decided several years ago to get rid of those credit cards… all of them.

Let me say that I am not suggesting that you get rid of all your credit cards.  In fact, that could be a very foolish thing to do.  Why?  Because everyone needs credit sometime, almost everyone.  If you have a credit card now, you have a credit history.  There is no better way to develop a good credit history than by using your credit card sparingly and paying the balance in full each month.

My suggestion to keep one, but no more than two credit cards is based on something that recently happened to a friend of mine.  She is a widow and has never had a credit card.  Her house was paid off about ten years ago.  And, her only bills are those regular monthly utility bills.  I don’t know what made her think she needed a credit card, but one day she decided to complete one of the forms and get her very first credit card.  She was turned down!  She had no credit history and so she was denied a credit card. 

I’m not about to suggest she would have been denied a card with no credit history if she had applied last year.  But, she applied this year just before the economic crisis hit across the nation. 

Is she devestated that she wasn’t approved?  Not hardly.  I think I will be safe in saying that the lady has a net worth of well over a million dollars in liquid assets.  But, most of us are not in that position.  And, most of us at some time will need a credit card for an emergency. 

For that reason and that reason alone, I suggest that if you have several credit cards, you pay off those who are the least user friendly, and keep the two best cards.  Those cards will have a lower interest rate and a higher spending limit.  The cards you keep should not have annual fees or any of the other BS that some of the companies like to add on to make money.

Once you pay down your balances to $ 0.00, then I would suggest that you make a charge once a month on the card… for a necessity… and pay the balance in full the moment the statement hits your mailbox.  That will keep you in good standing and show your credit worthiness.

As you begin paying down your credit card debt, pay careful attention to those cards you have that are most user friendly.  If you have had a late charge on any, did that company remove the fee when you called?  Study the cards you have and select wisely.  As you begin to pay down your debt pay attention to your statements.  See if there are extra fees.  Study, study, study… and choose wisely.

I have heard some people say that without a credit card you cannot rent a car, or any number of other things.  That is not true.  You can rent a car or any number of other things that require a credit card as security if you use a bank check card or a bank debit card.  But, we will go into the use of debit cards in an upcoming post.

For now, I only suggest that you study the credit cards in your possession and pick two that you can pay down and keep for future use.  Choose wisely.