Okay, I know that getting rid of credit card debt is a suggestion that every financial guru makes, and hardly anyone follows those suggestions.  Getting rid of credit card debt is a hard sell, because using a credit card is easy, it’s convenient, and to be honest, it helps a lot of people live in a manner they really can’t afford.  But I’m going to share a little about my current concerns regarding it now, because I want to help anyone who may be affected by the following be as prepared as possible. 

To be open on our credit care usage, I do have and use one credit card – we got one because we were having so much trouble getting a mortgage without one – but we pay it in full every month, and I try to use it as little as possible.  The truth is, I’d rather not use it at all, because it’s too easy for it to be a crutch, and I’m very glad we didn’t have one for the first twelve years of our marriage, because there were times we struggled so much financially that it’s hard for me to look back with confidence and think I wouldn’t have reached for credit to make things a little easier.  

Credit card debt is expensive, because if you’re making your minimum payment, you’ll still be paying for today’s purchases in fifty years.  And there are huge late fees for being even a day late in your payment- prior to online banking this year (which I love and highly recommend!), twice my snail mail payment arrived a day late to the c.c. company and we were charged a $40 fee plus interest for all of that month and the next on the balance.  (And both times I had the fee waived, something they’ll sometimes do when they see you’ve never been late and want to keep you as a customer, but I still had to pay the interest fees for those two mistakes – we were fortunate that our balances were so small that we only had to pay about $10 total.)  But these aren’t new concerns, and many good books have been written about the dangers of credit card debt, as well as the best way to get out of debt (Dave Ramsey is a good starting point), which will give you a lot of specific advice and support.

Since the fact that a significant percentage of the population is grossly overextended on credit isn’t new, why am I bringing it up now?  Because I’ve recently heard of many people across the country, those with problematic credit and those with longstanding perfect credit, having their credit lines suddenly and unexpectedly slashed or totally revoked.  When I think about the connotations of this, it’s of serious concern to me.  If you’re living within your means and your credit cards are paid off every month, it would only be an inconvenience if this happens to you.  But – if you’re depending on your credit card to carry your lifestyle, what will you do if you get sudden notification that you’re one of those whose credit is being shut down?

This is a very real situation a lot of people are encountering, but by being prepared, it doesn’t have to cause you economic distress.  Gas prices are down, food prices are somewhat stable, most people still have jobs – take advantage of this opportunity to pay off your credit cards as fast as possible.  Most of us have areas in our budgets that we think are non-negotiable, expenses that we would insist we can’t minimize, but the truth is that all of us have places were we can cut down (yes, even me!). 

I’ll be open about my expectations of the next few years (which I very much hope turn out to be wrong), even though I try to be a positive person – we’re in for a long, hard haul, and most of us are going to be forced at some point to reevaluate our spending and lifestyle choices.  Changing your priorities and thinking about how and where you spend your money can be challenging, but it’s so much more pleasant to make these changes because you want to, than because you’re forced to.  And by making the changes before you’re forced to, chances are that you won’t find it necessary to make so many adaptations later on, and in any case, you’ll be a lot more mentally prepared for whatever we’re going to encounter. 

Avivah