Don't Use Credit Cards Period.

So this is just a little info on my situation and it’s not that different than anybody else. When I finished college and got married we came to find out that we had around 6,000 in credit card debt on 5 different cards between us. So we decided to use the debt snowball idea that I got from Dave Ramsey and get rid of them,

We started this in february of 08 and since then have knocked out three credit cards and are working on the other two. The thing that I have learned is to never use your credit card unless it is a super extreme emergency. Since we have stopped using credit cards, it is much easier to manage our money because there are fewer things to focus on. Now when we finish paying off the cards we would let the account set at 0 for a few months and then close it. we are going to leave two open just to show lines of credit available. I know that this could have a small impact on my credit but we knew there was not a major purchase we would be considering for some time and knew it would come back up.

The great thing about the debt snowball is that it works with the money you are already making and just rearranges it like I talked about in the budgeting talks. Getting out of debt is and has helped me tremendously and by doing it together with my spouse has given us an idea. When we finish paying off all of our debt we will have been making monthly payments of a couple hundred dollars at this point. since we are used to not using that money we plan to keep it that way. now keep in mind that we are also saving for retirement concurrently. the money used for paying off debt is going to go straight into a “fun” money market account. about once a year we want to be able to go on a nice vacation and we should have roughly 2500 or so to go on vacation with, AND we’ll be making money off of the money market fund at the same time and we’ll leave what we don’t use for that year for the next. This is another example of rearranging your money. The important thing to do is put things in order of importance and then treat it in that order of importance.