Comment Re:60% of accounts carry balances month-to-month! (Score 2) 127
but I did get things I needed
And many people have to use credit cards to afford the things they need, such as paying medical bills, purchasing food, or paying the gas / electric bill.
And no doubt carrying a credit card balance is a quick route to bankruptcy because, at 27% interest, they are really difficult to pay off. But count yourself lucky that a credit card is not the only choice you have to make it through the month - you are the exception, not the rule in the U.S. today.
First, a credit card is a vehicle for purchasing things you don't need at prices you can't afford with money you don't have. I know that some people use cards responsible (there have been several examples in this thread), but most do not. It is too easy to use.
Second, most people confuse needs and wants. They want things and think that they need them. I know from experience. At one time, I was over $40,00 in consumer debt, not including car or housing. It took a long time, and there were many things I did not buy that helped me get out of debt.
I teach a personal finance class and have taught it for over two years. There are people that need help to get out of debt, but 99% of the people I taught could get out of debt on their own. All they had to do was to want to get out of debt more than they wanted some of the things they used to buy.
The idea that people have to use credit cards and stay in debt is either ignorance because they don't know how to get out of debt, or an out right lie told by people that have an "interest" in collecting interest.
I will share a couple of principles and steps anyone can take to get out of debt.
1. You can't fix your finances until you REALLY know what your finances are.
For one month, write down EVERYTHING you spend. You don't need to show it to anyone, but keep track of every single cent. If you buy a drink, write it down. You will be very surprised at where some of your money goes.
2. If you don't plan where your money will go, it will still go somewhere. Just not where you want it to go.
Make a budget. Stick to the budget.
There are more principles and actions that can be taken. These principles are not secret. I have seen this work for people making less that $20,000 per year. And I have seen it work for people making over $100,000. If someone wants to stop losing money to high interest from credit cards, they can. It is not easy. I have also seen people that wouldn't put the effort into it, or couldn't give up the $4 drink three times a day. But it CAN be done.
And it is NOT luck. It is work.