Nine Ways To Crush, Kill And Destroy Your Credit Card

Here are the ways you can really get your credit card out of your life. Of course at Mr Home Budget we are trying to get you to live life credit card free. However if you just cannot get by without one, here are some tips to control it.

1. Cut the card in half: OK we are not talking about cancelling the card. However, if you cut the card in half you are really limiting your spending. This is because you can no longer swipe the card at EFTPOS machines. You can no longer walk past your favourite store, grab an impulse item, and ring it up. However due to having the numbers you can still pay for bills and things over the internet where you do not swipe the card. This really limits the places you can use the card. Plus it limits your spending on credit. Perhaps even by 50%, no pun intended.
   
   
2. Do the maths on the points:  Ah, yes the so-called free loyalty points. You know the deal, every dollar you spend you get one point. Our advice is to find out how much a point is worth. For example with one particular credit card point system, you get a $50 Coles voucher for every 8200 points. Therefore, for each dollar you spend you receive back 0.006 cents. Just over half a cent. This same credit card has a $200 a year annual fee. So just to pay for your annual fee you would need to spend $32,800 a year. They really are not reward points.
   
   
3. Give 10% to charity: Make a pact with yourself. For every $1.00 you spend on your credit card you will donate 0.10 cents to charity. At the end of each month add up the total amount and write a cheque to your favourite charity. Good for a charity but bad for your bank balance. Sure 10 cents is not much. However if you are looking to purchase a $2000 TV, just add on $200. Now the easy way to save money is to just pay cash. Then and only then, can you avoid this self-imposed charity GST.
   
   
4. A personal message to yourself: Some people do this when dieting. They write an inspirational message on the fridge or cupboard. For example “Think of your waistline?” or “You have come so far”. However, it really does apply to your home finances as well. Take a small bit of paper and write your inspirational message to yourself. Take a see through piece of sticky tape and put it on the front and back of your card. Now each time you reach for the card, this message is the last line of defence to stop you going through with your purchase.
   
   
5. Read the terms and conditions on the card: You know that big book of t and c's when you signed up. It is about 30 pages long and in a really small font. Trust me, there is so much gobbledegook in this booklet it will turn you off credit cards for life. Your head will be spinning. But the bottom line is, the credit card company can do what they please and they don't have to ask your permission. Any sane person reading this for the first time would steer well clear of credit cards.
   
   
6. Freeze the card: No, do not ring up the bank and ask to put it on hold. Physically grab a Tupperware container and put the card at the bottom. Fill it with water and put in the freezer. Now whenever you want to use the card you will have to wait 2 to 3 hours to defrost it. This is a major turnoff when having to use it. It gives you time to reflect on the purchase you are looking to make and ask if is 100% necessary. Nine times out of ten, you will reconsider the purchase and not buy anything.
   
   
7. Google bad luck stories on credit cards: Go to the internet and type in “I am in debt” or “personal stories about debt”. You will find hundreds if not thousands of stories of people who are struggling with credit card debt. People just like you, who for one reason or another entered the slippery slope of using their credit card beyond what they could afford. Now they are drowning in debt. Some of these people are desperate and are having to change their whole lives. Some stories are extremely sad, including partners who have committed suicide because of their debt problems. Fifteen minutes of reading this will change your mind about reaching for the plastic.
   
   
8. Month on month off: How about to help wean yourself off the card you only use it for half the year. Every odd month e.g. 1st January, 3rd March, 5th May etc. the card stays locked up at home. However, every even month, it is yours to use. This will allow you to go at least 30 days without access to your card. Six months without your card is a real step in keeping your costs under control.
   
   
9. Buy a wastepaper bin: Any $2.00 shop or reject shop should carry them. Make up some fake money. Just cut some cardboard in the shape of notes and write $5, $10, $20, $50 and $100 on there. Plus cut out some coins 5c, 10c, 50c, $1 and $2. When you get your credit card statement, look at the monthly interest. If the interest for the month is $91.66, throw this amount in the wastepaper bin. Do not empty the bin! After 3 or 4 months, total up the amount you have lost in interest. This can be an eye-opener. Especially as the cardboard is shaped like real money. This will give you an incentive to get rid of, or reduce your credit card use. Remember to include your annual credit card fee when it comes in, as this is costing you money too.