A little tip from Jason Smith

The time has come to say something of value and to give some real advice. Many of us have credit cards. We did not want credit cards. We knew they were a bad idea, but a free sandwich at Subway or 10% off at The Gap was enough to get us to fill out the application. Then a few weeks later; much to our surprise, there it was. A stiff white envelope with some plastic that had Van Gogh’s Starry Night plastered across the front. Some of us went into debt the cool way, buying clothes and laptops, and others, myself included, had to buy textbooks because we could not afford them any other way.

The point of this is to acknowledge that there are those of us who have several credit cards, and they are probably maxed out. Paying the minimums seems okay, and you aren’t going to get any angry phone calls on Sunday mornings for that, but you won’t make any progress at getting rid of your debt.

The big question is: How do I best pay off the debt?

A solution that I like is to go to your credit union and apply for a personal loan that you will use to pay off all of your debt. That way instead of several small payments on cards with sky high interest rates you can make one larger payment on a loan with a lower interest rate. This way you can make more progress towards having a reasonable amount of debt, and begin to use your plastic responsibly.

The important thing to keep in mind is that carrying debt for a long time is not a good thing. It is expensive! A 5 dollar value meal turns into a 20 dollar value meal, and a 20 dollar t-shirt becomes a 80 dollar t-shirt. There is no cheap way to get out of debt, but there are a few less expensive ways to do so. The sooner that you get your debt under control, then the sooner you can start saving (I will save talking about the virtues and wonders of being a saver for another blog post.)

So, what do you think? Have you struggled with your credit cards and getting them under control? Does this sound like the type of solution that could help you take a real concrete step towards financial freedom? Or have you found something else that worked? Let me, and everyone else who stops by here know by leaving a comment below.

Jason

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