Do you need a “Line in the Sand” Moment?
Since the late 1970’s we have lived in a world with abundant credit. Before the credit cards were really limited to the rich and famous – but now, everyone has one.
Since then we have been able to have the things we want sooner simply “putting them on the card”. Our mind justifies this decision by saying that we will simply pay it off over time. But, in reality, we often don’t pay it off at all – we just pay a lot more for it.
Interest in credit and store cards can vary from about 11% to 23% - pretty steep when you compare it to a home loan at about 4%!!!
Maybe it’s time for your “Line in the Sand” moment? What is it – it has but a few simple steps:
- Work out the total outstanding on my credit cards today.
- Arrange to increase your home loan using the equity in your home to pay them off completely.
- Destroy all but one credit card – keep the one that has the lowest approved limit.
There you go – it is as easy as 1-2-3.
If you have 3 credit cards with a combined outstanding balance of say $8,000, the next 12 months are going to cost you about $1,400 in interest. If that money is on you home loan it will cost about $320, every year you are about $1,000 in front and you cannot be tempted to run those cards up again because you simply don’t have the credit limit approval.
Is it time to draw a line in the sand?????