In theory, if you are earning a percentage back on everything you spend, you will be helping yourself pay off credit card debt.
For example, let's say you have $1,000 in credit card debt, your minimum monthly payment is $30, and you can earn 2% cash back on all your purchases.
You make the minimum payment every month and you charge $700 to your card every month.
In this case you are paying off $30 a month plus putting back in 2% of $700, $14, for a total of $44 dollars a month.
You should be paying it off quicker, right? Not at all.
If you are only paying off the minimum, then you are still adding to it the $700 a month that you aren't paying off.
This continues to earn interest raising your debt even more.
Even if you did pay back the $700 a month, would it still be worth it? Is it worth that $14? Probably not.
The reason why is because it's so easy to overspend on the card and not be able to pay it off.
It is so easy to whip out the plastic and pay for whatever you need and whatever you want.
When you go to the store with $50 in hand you only spend $50.
Why? Because if you go to the checkout counter with $100 of merchandise and try to pay for it, they won't let you keep more than $50 worth.
If you go to the mall with a debt card and $500 in your checking account, you'll still be careful because you see it as your money.
When you go to the store with a credit card and a $10,000 limit, you don't even think about how much you are spending.
Maybe you'll look for deals because you feel you can get more, but you don't really think about how much you spend.
It is your money.
You got it on credit, not for free.
You will have to pay for it eventually.
You do have to pay it back.
This is why you shouldn't depend on rewards.
You say it will help you get more money and that you won't spend too much, but you'll probably spend too much without even realizing.
If you really want to pay off your debt as fast as possible, stop using the credit cards.
Work on sending as much money to pay off the cards as possible.
For example, let's say you have $1,000 in credit card debt, your minimum monthly payment is $30, and you can earn 2% cash back on all your purchases.
You make the minimum payment every month and you charge $700 to your card every month.
In this case you are paying off $30 a month plus putting back in 2% of $700, $14, for a total of $44 dollars a month.
You should be paying it off quicker, right? Not at all.
If you are only paying off the minimum, then you are still adding to it the $700 a month that you aren't paying off.
This continues to earn interest raising your debt even more.
Even if you did pay back the $700 a month, would it still be worth it? Is it worth that $14? Probably not.
The reason why is because it's so easy to overspend on the card and not be able to pay it off.
It is so easy to whip out the plastic and pay for whatever you need and whatever you want.
When you go to the store with $50 in hand you only spend $50.
Why? Because if you go to the checkout counter with $100 of merchandise and try to pay for it, they won't let you keep more than $50 worth.
If you go to the mall with a debt card and $500 in your checking account, you'll still be careful because you see it as your money.
When you go to the store with a credit card and a $10,000 limit, you don't even think about how much you are spending.
Maybe you'll look for deals because you feel you can get more, but you don't really think about how much you spend.
It is your money.
You got it on credit, not for free.
You will have to pay for it eventually.
You do have to pay it back.
This is why you shouldn't depend on rewards.
You say it will help you get more money and that you won't spend too much, but you'll probably spend too much without even realizing.
If you really want to pay off your debt as fast as possible, stop using the credit cards.
Work on sending as much money to pay off the cards as possible.
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