Tuesday, April 20, 2010

Give up your credit cards for one month challenge.

For years, I have respected Dave Ramsey and his get out of debt plan, except for that whole stop using credit card thing. I mean come on, I get 1% cash back, and 3% cash back if I use my credit card at a gas station. oh yeah! I pay my cards in full each month, so yeah I have the system beat. So like twice a year I could get a check for $10-$50, I'm well, on my way to becoming a millionaire. Well maybe not, but that was $50 I was getting for free, I was going to buy that stuff anyways, so I might has well be rewarded for spending.

Then I discovered River Valley Credit Union and their rewards checking account. They pay 4.5% if you make at least 12 debit card purchases a month. Then it occurred to me that I would make more money in interest than in cash back credit card rewards. So I switched to using a debit card. I discovered as a side effect that emotionally, I love having every item I buy be completely paid for. I really like not having a large credit card payment each month, budgeting becomes much simpler and I can look at my account and know exactly how well I'm doing at saving money. It's fun each month to earn more interest than the month before, you can see yourself winning. I'm not going back to credit cards, no way.

My challenge to you is the give up your credit card for one month and use strictly cash or your debit card. Let me know your experience and the freedom of one less bill.

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