Ivy | Stop creating debt instantly!
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Stop creating debt instantly!

Stop creating debt instantly!

From this day forward, your debt is guaranteed to shrink! How amazing

would that feel? This can be your new reality. Here’s the 10 second solution to stop creating credit card debt forever:  Cut up your credit cards. Be like a Nike commercial and just do it.

Sound scary? For most of my clients it is. They vehemently do not want to do this. The two main objections are: “ I need my credit cards! They keep me protected. What if I need to dispute a transaction?  I can’t buy an airline ticket with cash!” Quickly followed by…“I’m earning points. My credit card makes me money.” Umm guys, Let’s pause and reflect. Who do you think put these “thoughts” in your head? Or more accurately, “Who do you think put this propaganda in your head?” The credit card company, of course!

Let’s do a little experiment. Pretend you own the credit card company. To be successful you need to get people to use your credit card. The more they use your credit card, the richer you will be. What would you want your customers to think? Don’t the list of thoughts below seem ideal?

“ I need my credit cards.”

“ My credit cards keep me protected.”

“I’m earning points. My credit card makes me money.”

“ I can’t buy an airline ticket with cash!”

( Yippie! A big ticket item. Much more likely to create debt and stay on the card. )

 

Does spending on your credit card keep you safer? I have to admit the propaganda is powerful. It does feel safer to spend on a credit card. But does it really keep you safer? I have had the privilege of seeing 1000 of transactions in the last seven years. In that time period I have never seen a stolen debit card or disputed charge, not reversed. The victim has always gotten their money back. (I’m not saying that will always happen. But that’s all I have seen. ) Yet, I have seen credit card balances become crippling. People paying hundreds of dollars in interest every month.

 

Statistically, the more you swipe your card, the greater your debt. The credit card companies want you to use your card for every purchase. It’s like vegas. The longer you play the more you pay. So, they tell you it’s “safer” and you will ”earn free points”. This is technically true,  but it’s only a benefit for a tiny fraction of all credit card users. The handful of people that never carry a balance.

 

The ”free” points can easily cost you $250,000!  Sound outrageous? Check out Sam’s example. Sam has $16,178 on her credit card with 16.9% interest. She has had credit card debt for 10 years. If, instead of paying credit card interest, she invested $148 monthly for 10 years earning 10% she would have $28,304.87. In 30 years she would have $292,141.38!

$148 monthly  finance charge, if invested would be…  in 5 years… $10,842.66
 in 10 years… $28,304.87
 in 30 years …. $292,141.38

“But, I can’t wish away my credit card debt and start investing?” True that! That’s why the first step, is not to get rid of your credit card debt. It’s to stop creating it. Even reducing your debt by $1000 would save you $300 a year in interest. If invested this $300 could turn into almost $50,000.

$300 invested yearly @ 10% ROI in 5 years… $1,831.53
in 10 years… $4,781.23
in 30 years …. $49,348.21

 

 

If you thought this was helpful please share. You never know who’s life you might change. Got questions? Ask away. I answer every one of them.

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