Ever been sold on the payment instead of the price? Yeah, me too and so has everyone. Salespeople make it quite simple to get you in that new car, help you get the new bedroom suite, purchase a new boat, and even get you into a new wardrobe.
It’s a Big Problem
Millions of Americans don’t even need a salesperson because they do this to themselves. They’ve bought into MASTERCARD’s tagline.
There are some things money can’t buy. For everything else, there’s MASTERCARD.
Are you the master of your Mastercard or are you enslaved to it like some Americans who are part of the 828–billion-dollar pile of credit card debt?
This is the amount of credit card and other revolving plans debt that Americans had at the end of August 2019.
The number alone stirs up many questions for me, but one question persists – how?
After much thought, my conclusion is: Minimum. Minimum. Minimum.
Here’s what happens when you only pay the MINIMUM on your credit card:
Example: Nancy purchases a $500 wardrobe on her Mastercard. It has a 17% APR. Her minimum payment is 4%, which equates to $20 per a month. After she pays the minimum for 42 months, Nancy’s $500 wardrobe will cost $659.75.
Breaking Free from the Plastic Prison
To get out of debt, intensify your payment strategy. Sacrifice right now in other spending areas to make it happen. No, it’s not easy and yes it can be painful, but it will be worth it. Be intentional and stay focused.
Once out of debt, begin taking steps to stay out of debt. Delay your gratification until you have intentionally saved for a specific purchase. Self-impose a credit limit on your cards. Take Dave Ramsey’s approach – CUT UP your cards and progress to a cash only budget. In addition, always pay off the balance at the end of the month. We saw a horrendous example of what happens if you don’t in the video above.
In the wise words of a colleague, “we don’t have an income problem, we have a spending problem.” We must continually check ourselves and our motives regarding our purchases.