I was listening to the Dave Ramsey show on my way to work this morning, and Dave was talking to a caller on his show that had just taken the plunge, pledged to go no further into debt and then cut up his credit cards. He was talking about how it had been extremely hard for him to get out those scissors, and actually cut up the cards, they had just been sitting on his desk for like a week. The problem was that he had become emotionally invested in his credit card. Cutting up that card was like saying goodbye to an old friend.
Why Do We Become So Attached To Our Credit Cards?
There are a lot of reasons why we find it so hard to just get rid of the credit cards, and start living a cash-only lifestyle.
- Credit cards help us to create fun and be spontaneous: It was fun to buy that new big screen TV for the Super Bowl party wasn't it? Of course you had to pay off that TV over a few months at 18% interest, but still!
- Credit cards give us a sense of security: It's nice to know that you have a safety net there in case something were to happen. Engine goes out? Don't worry, credit card to the rescue! Never mind the fact that setting up an emergency fund would fill the exact same purpose, and not put you into so much debt!
- Credit cards reward us for spending our money: Hey, we're going to spend the money anyway, why not get rewarded for all that spending we do? Problem is, a 2006 survey by GMAC Mortgage and Harris Interactive found that more than 41 percent of reward cardholders either rarely or never even bother to use their rewards. Add to that the fact that people who use credit cards actually spend up to 18% more than those who use cash, you're probably spending 12-18% more to get a 1% cash back check! Does that make sense?
- The credit card company is helping me: You've probably seen all those commercials lately where the credit card companies talk about how they're helping you to “spend responsibly” and how their credit card bills are just as good as setting up a budget. The thing is, they never discourage spending – they just help you figure out where you're spending so you can spend it in other areas. Remember, the credit card companies are not your friend, and they didn't become huge multi-billion dollar companies by being “helping” people.
- Credit cards help us be nostalgic: For some of the cards that you've had for the longest amount of time, just taking it out of the wallet can remind you of a simpler time – when you were in college going out with friends. Or going out on that first date with your spouse – paying with this credit card. Don't worry – you won't lose those memories just by cutting up your old friend – the credit card!
Becoming Emotionally Invested In A Credit Card Is Silly
Instead of becoming all emotionally invested in your credit card because of the things it can provide, try changing things up and living cash only. You'll find it much more emotionally satisfying than your relationship with your credit card. Think of it this way. The credit card is the one night stand that gives you an STD. It might be fun for that one night, but you'll be paying the consequences for a long time. Saving up and paying cash is much more rewarding. It's like an emotionally satisfying relationship with a loved one that always pays dividends, even when times are tough.
So how can you replace your credit card without feeling that sense of loss?
- Set up an emergency fund: Set up an emergency fund of 3-6 months of expenses, and you'll have an even better sense of security than a credit card can give you.
- Set up a fun money category in your budget: You can be fun and spontaneous without a credit card! Set up a category in your budget of discretionary money that you can blow or spend at the drop of a hat. Fun money that you won't have to pay 18% interest on!
- Reward yourself for NOT spending: Set up your first budget and reward yourself reaching savings goals. No need to spend 12-18% more to get those rewards!
- Help yourself: Instead of relying on the credit card bill to show you where you're spending money, set up your own budget and figure it out on your own!
- Reminisce on your own: You don't need an inanimate object like a credit card to remind you of the good times. Just call up a loved one and they'll be happy to reminisce with you!
Just Say Goodbye To Your Credit Card
Don't become emotionally invested in that credit card. While it may seem like it's hard to say goodbye, destroying that card and cancelling that account will be more fun that you could have realized.
Check out this video of how one creative guy destroyed his credit card!
Have you ever found yourself emotionally invested in your credit card – finding it hard to say goodbye? Tell us about it in the comments?