Why you need to get real with yourself and ditch your credit card

Australians have more than $51.5 billion owing on credit and this is why you should consider ditching your card altogether.

Here’s a new year financial challenge for you.

Grab your wallet.

Remove your credit card(s).

Never let your credit card leave your home again.

And stop using it from now.

Right now.

Try it.

Now see if you feel a like naked or suddenly insecure about your finances.

And don’t cheat, if you have your credit card sitting in an app on your phone so you can tap and pay at the checkout with it remove it.

MORE: Why it's tougher to get yourself a credit card

MORE: Four financial things you must do in 2019

Australians have arrived in 2019 rolling in mountains of card debt.

Latest Reserve Bank of Australia figures showed Australians owed a massive $51.5 billion on plastic and $31.7 billion was accruing interest.

We are also threw $1.5 billion down the drain in the 2017/18 financial year by wasting it on credit card fees.

It’s time to get real with yourself.

These are the reasons credit cards are hurting millions of Australians:

— Card rates are often above 20 per cent.

— Customers fail to pay them off in full each month.

— Shoppers make purchases they otherwise wouldn’t if they had to use their own money.

— Rewards points are a farce, in some cases you have to spend more than $50,000 just to get a toaster worth about $100.

It’s time to bite the bullet and look at paying down your debt and then getting rid of the card once and for all.

That ways there’s no temptation to splurge.

Australians have racked up a massive $51.5 billion on credit cards.

I must confess I have a credit card but it’s only for work expenses and nothing else.

I never pay interest or any fees.

But too often I see friends with credit cards buying crap they don’t need to make themselves feel better.

And what does stun me is the number of credit card customers who can puff out their chest and say they having savings yet they are also saddled with a credit card debt.

This makes absolutely no sense.

Why would you carry a card debt attracting an interest rate often around 20 per cent and pay interest every month when you have savings in another account that is probably getting dismal interest returns of around two to three per cent?

This is just plan stupidity.

A friend told me she was doing this — I encouraged her to use her savings to wipe the card debt so she could be free of it once and for all.

She said she couldn’t because the savings gave her “security” knowing she has some cash in the bank.

Gee, I bet her bank loves her.

As our credit card statements start to roll in over the coming weeks for many cardholders they’ll be a rude shock when they see their balance owing.

That festive blowout always catches up with you.
There’s plenty of credit card changes that just kicked in from January 1, making it tougher to get cards.

This includes proving you can pay back a card’s limit within a three-year period.

So get real with yourself and stop using credit once and for all.

@sophieelsworth