If you want to get out of debt and stay out of debt, credit cards are extremely dangerous. It's all too easy to say yes to everything that you like the look of in the shops, and end up sticking it on your card.

Why? Because it doesnt feel like spending money!

You dont have to cross the psychological barrier of handing over a thick wad of notes every time you make a purchase. Instead you hand your card over, the assistant swipes it and then hands it back to you. Youve not actually parted with anything.

And whats more, credit cards give you the opportunity to get the goods home and use them long before you have to start paying for them. This can be up to eight weeks later. So by the time you realise you cant really afford these items, its too late to take them back.

Plastic Money

Its promoted on the grounds that its convenient to use and safer to carry than cash.

I agree!

Convenient in the sense that it will help to boost shopkeepers profits with money that isnt yours! And safe in the sense that instead of being mugged by the criminals, youll be mugged by the allure of snappy advertising and cool merchandise.

Going shopping with a credit card (or a storecard for that matter) is just like walking around with a few thousand dollars in your pocket. A few thousand dollars I may add, thats not yours!

High Interest

And thats before we consider the amount of interest that most credit card providers charge. Almost every credit card will charge you between one and two percent interest per month on any outstanding balance (another attractive sounding words for debt!) So for every thousand you owe on credit cards, youll be charged somewhere between $10 and $20 per month in interest!

Now that may not seem like much, but what if you owe $5000, $10000, or even more? And remember, thats before you start to repay the money you owe. Its easy to see how you could be paying two or three hundred dollars a month on credit card interest alone.

Low Interest

Okay, Ill admit that there are always a number of attractive looking credit card offers available. You know, the type that promise 0% interest on all balance transfers for 6 months, or an extra low rate of 1.9% per annum on all new purchases for 12 months, blah, blah, blah!

But theres a downside to these offers. Because surprise, surprise, all that these deals will encourage you to do is to spend more!

First, your debts will become much easier to service. Instead of costing $300 a month to avoid repossession, it will cost you perhaps $50. All of sudden you feel rich. Now what do you think your first thought would be? Using that money to pay off your debts? I dont think so!

Second, when youre out shopping and see another must have item, six months interest free credit seems like an eternity. And before you know it, youre at the counter whipping out your credit card.

And what happens when the low, low rate ends six months later?

Unless you move your debt to take advantage of another tempting deal, the interest rate on your debt will suddenly go through the roof. Lets face it, the card company has to recoup the money that it lost on your special low rate deal somehow!

It takes a lot of willpower to benefit from these low rates of interest. But how much financial discipline do most people have? If they were financially disciplined they wouldnt have got to the stage where they have to juggle large debts between credit cards!

Remove The Danger

So my message is simple. If you want to clear your debts then you must cut up ALL of your credit cards TODAY! While theyre burning a hole in your pocket, theyll be a constant source of temptation. Despite all your intentions about keeping them for convenience or dire emergencies, its too easy to slip back to your old ways and destroy any progress that youve made. I know that from bitter experience.

If you dont cut them up then all I can take from that is the fact that you dont really want to become debt free. Taking the scissors to your plastic is a sign of commitment.

But if you just cant bring yourself to get rid of your plastic cards, and are tempted to keep them just for emergencies then Ill have to be blunt. If you dont cut them up, two things could happen:

One

If you keep your cards intact, and put them in the back of a drawer rather than carrying them with you, they become a ticking time bomb! Let me explain. You take steps to reduce your spending. You try really hard. Through gritty determination, you might even be getting somewhere. Your debts might be shrinking.

Then one day it happens. Financial Armageddon! You might be feeling in a low mood, or perhaps you just open the drawer and see them peeping out at you, saying go on, you deserve a treat, youve done so well for so long, give yourself a reward.

Kaboom! All that hard work and sacrifice undone in one moment of retail madness! Its just another temptation that you could do without. Reducing your spending is difficult at the best of times, even if you dont have a weakness for buying unnecessary things. Dont even give yourself that option. CUT THEM UP!

Two

If your debts get out of control and you become bankrupt, you wont be allowed to have a credit card or a storecard. Youll have all the financial capacity of a five year old child! Is that what you want!

When you become bankrupt, your plastic cards are sent to jail for a number of years. It will be an offence to obtain or use credit of any type. Are you still as reluctant to cut up your plastic cards?

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