As the holiday season begins to crank up in earnest this week, many people may feel tis’ the season to rack up credit card debt. In our research on financial issues, we came across this CNBC article (Here's what happens if you don’t pay off your credit card debt) that details what happens as you fall further into default status. According to the Federal Reserve’s report, the United States has more credit card debt than at any time in our country’s history through the 3rd quarter of this year. How is this even possible? Could it be that instead of using a credit card in an emergency only status, many of us have incorporated this mountain of debt into everyday life?
Before folks get happy on Black Friday by putting these retail stores in the Black profit margin, all the while running their Debt into the Red zone, let’s reason this out. Credit cards were created originally as a tool used to make purchases in advance that would be paid back at month end. They were never meant to be used as additional income. We at DNA Financial Services have always advocated a Debt Free lifestyle which includes having an emergency fund to cover the issues of life, but we also realize that sometimes the emergency can exceed the amount of the fund. If you must use a credit card, it must be treated like I.C.E. (In Case of Emergency) and this is where financial education, fundamental debt management and growing your financial intelligence will come in.
Defining what an emergency really is when it comes to finances is the starting point. A financial emergency falls along the lines of personal disasters, car and home repairs, tragedies and the like. Christmas is NOT an emergency! Birthdays, Holidays and Celebrations are NOT an emergency! Vacations are NOT an emergency! The aforementioned examples can be planned for throughout the year and not financed playing debt roulette with ridiculous interest rates. This is how you avoid being trapped by credit card debt. Look at those bills as distractions blocking your path to financial freedom.
By paying these debts timely down to a low or zero balance, you give yourself options where the seal doesn’t have to be broken because you already have funds in the bank with your emergency fund. This is done with discipline and using snowball debt reduction tactics to pay those cards off. You can do this. If you need help and guidance to figure your debt out, DNA Financial is here to help. Enjoy the Holiday season by not having a mountain of debt waiting for you when the New Year begins.
Founded in 2015, DNA Financial Services LLC has pledged to Educate, Empower and Equip the financial DNA of its’ clients now and for generations to come. The company offers a number of financial services designed to bridge the gap in wealth building education while aiding and advocating for the financial literacy of people from all walks of life.
DEBT IS NOT IN YOUR DNA! TM