Today I heard an interesting bit of consumer advice on TV. A guy on the Today Show was urging people not to cut up their credit cards since credit might get increasingly hard to come by.
Now at the same time, he advocated not using credit recklessly and doing everything possible to get spending in check. He said people should live within their means.
I agree with everything in the second part. And his idea about hanging on to your credit cards was based on the idea that we should all have a little credit cushion in reserve.
But what if you can’t stand to have a credit card around you without using it? I can’t stand to have too much chocolate near my desk without eating it. If you’re like that with credit, does it really make sense to hold on to a card that could be your undoing?
I have known people to freeze credit cards by literally placing them in water in the freezer. The idea is that you still have it but it’s such a major hassle to get to it that you won’t use it recklessly.
A less dramatic way to handle a credit card might be to store it in a safe deposit box at a bank (if you have one–or would be willing to get one–they are often pretty cheap and sometimes a bank will throw one in for free when you open a new account). The card stays dry and you preserve your dignity, but it’s still a hassle to get to the card.
The problem with retaining credit cards that tempt you is that the advice is predicated on the alarmist notion that credit won’t be available in the future. Is that true? I don’t know. I’ve never known the MasterCard or Visa people to be stingy about issuing cards, particularly to people with fairly decent credit. It seems unlikely that the problem facing most overextended Americans is that they won’t be able to get credit.
On the other hand, I do know for a fact that many people can’t resist abusing credit cards.
Debt Consolidation Inspiration 