Why Credit Cards ruin your Personal Finance Goals

Credit card, plastic, visa, master card or what every you want to call them are the #1 debt trap in the world. To say financial institution make a killing off the fees they charge is the
ultimate understatement. According to what I read on USAtoday.com some of these fees are going up and new fees are being added by many of the nations leading credit lenders. These are to supplement their already $60 billions in annual income.

I believe credit cards are a great way to build credit, but should not be used for anything else. I’ve only had one credit card since 1999 and only use it twice a year to buy socks. I leave it at home and sometimes forget I have it until I get my statement in the mail (I recently changed to paperless statements as my way of helping mother earth). Most personal financial manager and personal finance bloggers will tell you to keep one credit card to build your credit. I say if you are having a hard time leaving the house without it then CUT IT UP NOW!

The First step in getting rid of your debt is to stop acquiring more debt and if you are using your credit card on a regular basis your are not following the first step in achieving your goal. When I told my friend this the first thing he said to me was “I don’t think I can live with out my plastic” I wanted to slap him into next week. If you have debts that you are trying to pay off, adding more
debt is counter productive and will definitely delay your progress. The $60 in fees you acquire each month can be put towards your debt or savings. Here are 4 facts regarding credit cards

• If you leave your cards at home, you are forced to spend the cash you have on you and studies have shown it is much harder to part with cash.
• 90% of self made millionaires only have two credit cards. One for business use, one for personal use and they only use the latter for small purchases.
• Out of the 350,000,000+ credits held in the US 65% have debt attached to them. That is 227,500,000 cards that people are indebted to the credit card companies for.
• US is has the highest debt in regards to credit cards. I could fill a book with these facts (I think I might do that).

This is only expected to get worse in the future as we are not educated about personal financial planning, but are forced upon with excessive amounts of credit card offers from the moment

we enter college.

I have always said that the best thing we can do for our future generation is to teach them about finance, it should start at home and continue in High School and College. It should be called personal Finance for dummies and should be paid for by taxes collected from Financial institution that lend individuals money. That is just my opinion.

This is a guest post by J.Scott over at jinij.com the personal finance for dummies blog. His blog is filled with great and realistic information geared towards the basics of money management.