Retiring the Credit Card

I hate credit card debt. Nothing good comes from it, and I have tons of regret whenever I dig myself into a hole. For every dollar of debt I’ve added to my credit card, and for every dollar of interest laid on top of that, I am throwing money down the drain, and I can think of many other things I’d rather put those dollars toward than the decisions I regret making in the past. Imagine what I could buy now (or save toward) if the $500 I have budgeted for my credit card payments could be used for something else! Like being able to visit my long-distance family and friends for the holidays, or to save toward a down payment on a house.

It doesn’t matter to me that my debt-accrual is less than the national average. What matters is that whatever debt I cannot pay off, it pulls me deeper into an unhealthy dependency and servitude to the credit card company, and it limits my financial options in the present and future.

The most recent time I accumulated thousands of dollars of credit card debt, one of the first steps I took to get out of it was to retire my credit card. That meant two things:

  1. Putting it in a lock box and refusing to take it out to use it. If that’s still too accessible and tempting, some people actually cut up their credit card, and others freeze it in water so at the very least they have to wait for it to thaw so they don’t make impulsive in-store purchases. I’m not sure if the freezing affects the future usability of the credit card strip or chip, though.
  2. Removing it from all automatic bill payments and from payment options for any online vendors. Instead, pay all your bills and expenses from your actual income. This will probably mean making hard decisions to cut spending so you can live within your means (and cut wastefulness).

All credit card retirement does by itself is semi-stabilize your debt-accrual (I say “semi” because if you don’t make your minimum payments you will still accumulate more debt through interest-accrual). Semi-stabilization is good and worth congratulating, but it’s only the first step. In a future post I will discuss how I chipped away at the balance, slowly climbing out of credit card debt and toward financial freedom.