BE
CREDIT CARD DEBT FREE
(Or
stop punting until you are!)
How does the
prospect of taking 30 years to pay off your credit card
debts appeal to you? Yep - about the same to me.
The credit card
companies would love you to death ( literally)
but that's what could happen if you only make minimum
monthly repayments.
You must understand
that the credit card companies don't allow you to pay
back your debt in small amounts out of the kindness of
their hearts. This is how they make their money. Paying
the minimum payment (usually around 2% of your balance)
each month, guarantees that you will be filling the credit
card company's cash coffers with your hard-earned money
for many years to come.
Refuse to pay
the minimum amount. Demand of yourself that you pay much
more than the minimum amount. Yes - DEMAND it of yourself.
If you can't pay the minimum amount you should NEVER have
bought whatever it was in the first place. The payments
you make in the "minimum monthly amount" includes
both a lot of interest and just a little of the principal
which is why it takes years and years to pay off the original
debt.
Do you really
want to end up paying $7000 for that big screen TV to
watch the races on that was priced at $2000? Well that's
exactly what will happen if you continue to make the minimum
monthly repayments. No wonder it feels like you can never
get ahead.
Here are some
POSITIVE steps you can take:
1. Don't go
punting up big to try and catch up. You won't. If you
do have a modest win on the races, pay it off the credit
card with the highest interest rate.
2. Save the
credit card charging the least in interest and cut the
rest up. Not, not speaking metaphorically - REALLY CUT
the rest up. You don't need them.
3. Shop around
for credit cards offering exceptionally low interest rates
and transfer the amount owing on your high interest rate
cards to them. DO NOT then refill the credit cards you
pay off. CUT THEM UP and throw them away. You are NEVER
going to put together an enjoyable punting bank that you
can have fun with while you are chasing your tail with
credit cards,
4. Put the one
card you kept away in a safe but difficult to get at place
for emergencies
5. Total the
money you spend each month paying off those credit cards
- wow - wouldn't it be great to have that fun amount to
play with every month. Well that's what you will have
once you get rid of that accursed debt. Be single minded
about this. You will never have success with racing until
you are debt free. There are many psychological reasons
why this is the case which I won't bore you with here
but your value judgments do change when you are "chasing".
6. Stop punting
until all your debts are paid off. If you are facing an
odds disadvantage of 14 - 16% betting on the TAB (dividend
deductions) that is hard enough. Add another 18% interest
on debts on TOP of that and the gap between success and
failure suddenly blows out to over 30%. This disadvantage
IS NOT SUSTAINABLE or LIKELY to be overcome. I am happy
getting a ten percent return on investment every month.
If I was paying off a credit card balance equal to my
punting bank, I would in fact be LOSING 8%. In a year
I will have lost my entire punting bank in interest charges.
SO WHAT WOULD BE THE POINT of all the work and form study?
7. WARNING SIGNS
OF TOO MUCH DEBT: (Warning Will Robinson - warning - warning!)
a) You don't
even know how much debt you are in.
b) You have
at least one credit card that is at or over the limit
c) You only
make the minimum payment each month on the credit cards
d) You believe
you are only one good quaddie away from fixing it all
up
e)You use cash
advances to sustain your punting
f) You lie to
friends and family about your debt or, MORE IMPORTANTLY,
you lie to yourself about it.
If this sounds
like you, please consider stopping punting until you have
fixed up a lot of the debt problem. It will feel like
much more fun if you do and you will make better judgement
calls if you are not trying to win today what you have
lost over the previous years.
