There are two types of credit cards.
1) A card that you pay in full every month. This is so no revolving interest can accumulate. You pay it in full every month with iron clad discipline. American Express is an example. The bill is due in full each month.
2) Any credit card you use and don’t pay in full every month. You allow revolving and compounding interest to accumulate. The balance due gets bigger every month and so does our minimum payment, eventually.
A credit card, most often, is really just an excuse for us to not have the discipline to save money. It’s a crutch and a “just in case” tool. Believe me, I’ve been there. I know exactly what the voice in your head is saying.
When you use credit everything costs more. You pay the retail price, plus interest. This is where you spend your retirement, a little each month/year.
Get rid of the plastic. It’s tough. I know from experience. But if you wanna’ win with money you need to stop spending tomorrow’s prosperity today.
To Your Financial Freedom,
Greg Whitaker
