Well, we finally made it. My wife and I now have more in our emergency savings account our credit limit on our last credit card before we closed the account.
Every year I would call our credit card company to ask them to reduce our APR (8.9%), and they would decline. What they did offer, however, was to increase our credit limit. I would politely decline, because I didn't want to be tempted to spend more than I could afford to pay back.
When my wife and I decided we would no longer borrow money, we burned up our credit cards and closed the accounts. We kept them for "emergency" situations, but as we began to budget and save, we found we could live without them.
As of this week, we now have more money available in our emergency savings account (almost 3 months worth of expenses) than we had available to us as a line of credit.
This is a big deal! When an emergency expense comes up, we will be pulling out the plastic, but it will be our debit card that is tied to our savings account, not a credit card. Just the other day we had to have a plumber stop by and replace our water heater. A credit card company didn't have to act as the middleman for this transaction, we had the money available to pay him. There were no finance charges, no interest payments, and no fighting between my wife and I over how we were going to pay for this service.
How do you pay for expenses? If you had more money available in a savings account, would you stop using and possibly get rid of your credit cards?
1 comment:
I think emergency saving is better than credit card.
Debt Management Company
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