I went through a TON of starts and stops with debt freedom -all the way up until the point where I got completely fed up once and for all.
Once I did get fed up, to get to the decision of not only getting out of debt but staying out of debt, I found myself stuck at a decision on what to do with my credit cards. Contemplating whether I should keep my newly paid off credit cards open, I simply asked myself “is it worth it”?
The possibility of a relapse?
The probability of a war with the credit card company over an unwarranted late fee? The wasted years of my life thinking I could outsmart a half a trillion dollar financial industry at their own game? The high possibility of finding myself in bankruptcy down the road?
And at that point I figured out what risk vs reward was. A very simple ratio/way of looking at things that can provide you more wealth that you can ever imagine.
See, myself along with all of my”reward point” friends were missing the fundamental concept at play here which chronically kept them from being wealthy.
The question has never been “what if I pay my credit cards off each month”.
The question is “what if I DON’T?”
There is no credit card feature ever created in the history of the credit card industry that has ever outweighed the potential negative effects of carrying that credit card. As of now, the $200 in “spending cash back rewards” I’m forfeiting each year has turned into over $161k in 4 years from not paying the interest on the things I was paying on before I made that commitment.
Credit cards are just the gateway drug for more advanced borrowing. How many times have you heard someone say that you have to raise your credit score by placing credit cards on your report and not closing them?
So yes, I stopped cold turkey from the following:
#1 being fed up/unwilling to live life in debt any longer and
#2 weighing what could happen negatively vs what few positives there may be to keep playing the credit game.
But if I had never figured out what a real risk reward ratio was, I would still be selling myself on the “what ifs”, the “credit card emergency fund” propaganda, the “this debt is good debt” mentality that I was accustomed to.
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