Many hardworking people are caught in the credit card trap — with more and more falling into it every day. But, there is a way out. You just have to get wise to their games. By the end of this article, you will be able to identify, escape, and avoid this financial pitfall for the rest of your life…
4 Signs You’re in the Credit Card Trap
To begin with, don’t worry if you discover that you are in this vicious cycle after reading this. You’re not the only one. In fact…
IN MY EARLY 20S, IT HAPPENED TO ME TOO.
Now, I am not saying that you shouldn’t use credit cards. Most of us just learned the wrong things about money growing up.
Misusing our cards is just a symptom of this. Look at some of the data…
As of the writing of this article, the average interest rate for a new piece of plastic is 22.4%. On top of that, Americans have amassed over $1 TRILLION in this form of debt.
It is called the credit card “trap” for a reason. The first step is to know the condition of your finances.
If you answer yes to any of these questions, you are using credit cards the wrong way…
Need to Charge Necessities
Sign numero uno that you are caught in the credit card trap is pretty simple…
YOU CANNOT GO THIRTY DAYS WITHOUT BANGING THE CARD FOR THINGS LIKE FOOD, RENT, OR UTILITIES.
You already know that you shouldn’t be reaching into credit for the basics of living. If this is you, we have some work to do.
Can Barely Make Your Monthly Payments
The second indicator that you use too much plastic money is you struggle to make the minimum payment per month.
As a result, you end up with a couple of problems:
- Inability to afford unexpected financial burdens
- Ending up paying more in interest than principal
Now is the time to make changes, so you don’t feel the effect of your obligations.
Using Plastic to Buy What You Otherwise Wouldn’t
This next one is where the credit card trap gets especially tricky and dangerous…
THEY LURE YOU WITH PERKS AND REWARDS TO MAKE PURCHASES YOU DON’T NEED.
Cashback…
Points…
Miles…
Whatever it is, you feel less guilt buying more. Pay attention to your statements and see if you are making this money mistake.
Hitting the Card Limit CONSTANTLY
Are you always maxing out your limit, then have to reach for the next gold card in your wallet?
In that case, you are definitely digging yourself a deeper hole.
Using debt to pay other debt is going to get you nowhere. However, this is the exact situation that so many people slip into before they realize it…
Although this is a slippery slope, I promise you that it’s not too late.
Credit Card Trap Escape Plan
As I mentioned before, there is a road out of the credit card trap. It’s not easy or fast by any means…
But it is the way to escape for sure. There is enough currency circulating on this planet that everyone could be multimillionaires.
Not only that…
This is the path if you’re ready.
Commit to Getting Your Money Right
Everything you do in life begins with a decision and commitment. The road to financial freedom is no different.
The only difference between how you’ve gone about this in the past and now is one thing. I want you to commit to more than “just enough.”
Otherwise, you’ll slide back when times get tough.
All decided? Good. Because that was the easy part…
Quit ALL Swiping for 180 Days
That’s right. You need to not use any of your credit cards for six months.
YOU NEED AT LEAST THAT LONG TO GET THE DEBT UNDER CONTROL AND TO STOP RELYING ON THEM.
The credit card trap is like an addiction. It takes discipline and time to get clean. But in the meantime, you will repay debts that actually matter.
Pay PEOPLE Back First
Eventually, the goal is to rid yourself of all personal debt. Nonetheless, I want you to just focus on repaying human beings — not establishments.
For now, prioritize making good with family and friends. They are the ones who will be there with you in the future.
These steps will alleviate your issues with credit cards dramatically. Next, I will show you how to stay out of trouble…
How to Avoid the Credit Card Trap FOREVER
After six months without using any plastic, you have to learn the correct way to use them going forward.
#1 Pay off your balance every month. From here on out, whatever you use your credit card for you will pay off immediately. If you can’t afford to do that, don’t do it.
#2 Review your statements. When that bill comes in, see what you’re buying before you pay it each month. This keeps you aware of your spending and shows you where you could tighten discipline.
Put all of these elements together and you have the tools to escape the credit card trap — and achieve financial freedom.
Let me know when you get there. And, be great.
— Grant Cardone
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