The Truth About Credit Card Debt

Like many drugs, credit cards are addictive and expensive. Sure, you may think you’re beating the system by always paying off your balance on time and earning rebates or airline miles. But in reality, paying with a debit card or cash is far less risky—and far less expensive!

When you pay with cash, you actually feel the money leaving you. But paying by credit card is so easy and artificial, you don’t truly experience what’s happening. One study showed that people spent 47% more when using a credit card instead of cash.

You may intend to pay off your balance every month, but very few people actually do it. So they end up paying HUGE interest on thousands of dollars every month. Even if you earn points or rebates on your card, you’re no further ahead—the cost of rewards programs is built into your fees and the prices you pay to merchants who accept such cards.

If you absolutely need the convenience of going cashless, use a debit card. This forces you to spend only what you have available in your bank account, so you avoid crippling interest payments.

Achieving financial security is only possible when you avoid unnecessary debt and exorbitant interest rates. If you’d like more advice on avoiding high-interest consumer debt, please give us a call today!

Kupina MortgageTeam  905.730.4782 – mark@kmortgage.ca