I got into massive credit card debt when I was in my 20s. Offers for credit cards appeared almost every day in my dorm mailbox in college. Although it took me nearly a decade to get out of credit card debt, doing so changed my financial picture.
According to a recent article on Yahoo Finance, the average credit card rates recently rose to 15 percent. I remember having some credit cards with an average annual percentage rate (APR) that was lower than 15 percent as well as some that were higher.
Having too much credit card debt limited my choices and freedom in ways that I didn't expect. After I got out of debt, I was able to move forward.
Having the money to move
Although I wanted to move to another part of the country, I felt stuck until I paid off my credit card debt. I was tied to my job because I needed to make the payments to my credit cards. After I got out of debt, I was able to save money for moving expenses. I also saved up what I needed for a first and last month's rent. After paying off my credit card debt, I was able to make a dream move from the Midwest to sunny Florida.
Being able to purchase a home
After I moved to Florida, I rented an apartment for the first year as I shopped for a home. I had never been able to qualify for a mortgage in the past because of my credit card debt. Now that I had a better debt-to-income ratio, I could easily afford to buy my first home. Buying a home was a major financial goal that would have been difficult to achieve with credit card debt hanging over my head.
Getting married with no baggage
When I had credit card debt, I was reluctant to date. Some of my unmarried girlfriends tell me they are delaying marriage because of massive student loan debt. After getting out of credit card debt I felt more comfortable dating with no financial baggage. My husband and I communicated about our financial goals before we got married. Staying out of credit card debt is still one of our core financial values. We do have mortgage debt at an interest rate of about 4.5 percent, which is far below the national APR on new card offers, which recently hit the 15 percent mark.
Investing for the future
Because I don't have to worry about paying credit card bills, I can focus my attention on investing and saving for the future. After I got out of debt, I immediate started contributing 20 percent of my income into my company-sponsored retirement account. Even though I don't get a 15 percent return on my money, I feel better knowing I'm not paying a credit card company so much in finance charges. I am finally able to get ahead so I have money for the future.
Leaving an inheritance
My hope is that I can leave money for my children and any other loved ones who need a financial boost to get through life. Being out of credit card debt gives me the freedom to be able to help the people I love while I'm alive as well. I don't have to charge holiday gifts or take out cash advances from my credit cards.
Now that I've lived for more than a decade with no credit card debt, I know I don't want to ever backslide into debt. My strategy has been to always spend less money than I made every month. I may not ever become as wealthy as the credit card companies, but won't need to turn to them when I'm a financial pinch.
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