In 1977, I wrote my first book, Your Money: Frustration or Freedom? In the book I told the story of Walter Cavanagh, a pharmacist from California who owned about 800 credit cards! But according to a recent ABC story, Mr. Cavanagh was just starting. The 73-year-old now has amassed 1,479 cards, and Guinness World Records recognizes him as the man with the most credit cards on the planet.
He also has what must be the world’s largest wallet. It stretches 250 feet, weighs 38 pounds with space for 800 cards, but he keeps most of them in a safe. No wonder his nickname is “Mr. Plastic Fantastic”.
Mr. Cavanagh’s cards come from a wide variety of places including banks, airlines, gas stations, and about every merchant imaginable, with limits from $50 to $15,000.
To his credit, no pun intended, his score is nearly perfect. Mr. Cavangh shares his secret: “I only use one card and I pay it off in full at the end of the month. But you should see the length of my credit report!”
I want to encourage you to follow his example. No, not in the number of his credit cards or the size of his massive wallet, but in the simple way he uses only one credit card and pays it off in full at the end of the month.
My recommendation: Have one or two credit cards and use them for convenience not credit. Pay it off in full at the end of every month.
To better help you accomplish this head over to Compass1.org to download one of our free spending plans/budgets.
Surveys found that half of American households report having trouble making even the minimum payments on their credit cards. What’s going on?
A lot of people are using credit cards for credit and not just for convenience, and they find themselves living beyond their means. So, here are 4 simple rules for using credit cards and if you can’t follow all of them, you need to perform some plastic surgery as soon as possible and stop using the cards.
- Use a credit card only for budgeted purchases. Oh yeah . . . that means you have to be living on a budget (spending plan). If you’re not, it’s going to be tough to stay out of credit card debt. If you need help with starting a budget, visit www.compass1.org and click on “Connect with a Coach.” One of our volunteer Compass Coaches will contact you online to assist you.
- Pay credit cards off on time and in full every month. This way there’s no interest charges, no late payment fees, and no debt.
- The very first month you can’t pay a credit card bill in full, take out the scissors, and destroy the card.
- Just because you can afford to buy something doesn’t mean you should. Force yourself to wait a couple of days and pray about the decision. More often than not, if it’s an impulsive decision, the impulse will go away, and you will save money.
If you are in serious credit card debt, remember what Proverbs 22:7 says, “The borrower is slave to the lender.” The Lord wants us free to serve Him and not our creditors.
So, begin to “snowball” your plastic by making the minimum payments on all the cards, and focus on paying off the one with the smallest balance. If you need help from a debt repayment company, we recommend checking out www.repaydebt.org (ClearPoint). They used to be named Consumer Credit Counseling Service of Atlanta and for decades have worked with consumers helping them pay off their cards.
People are starting to file their 2014 taxes, and Uncle Sam will soon send out millions of checks. It’s astounding that the average federal tax refund is around $3,000. Why do folks give interest free loans to the government in the form of over-withholding?
There are several reasons: Some folks are afraid of the IRS and don’t want to owe them anything. Others look at a big refund as “free” money, or a windfall. While some realize that they’re not good savers, and they view this as an effective way to force themselves to save.
Using the refund as a means of forcing yourself to save is a legitimate reason to over-withhold. But if you’re afraid to owe the IRS even a penny or you’re wanting to blow a windfall, it’s actually poor stewardship. You can put that money to better use than the government by using the withholding throughout the year to pay down those high interest rate credit cards or to beef up your saving or give to the work of Christ.
Ideally, you want to get back very little from the IRS, and now’s the time to make changes to accomplish this. First, adjust your withholding so that the minimum necessary amount is taken out to cover your tax liability. The IRS has an excellent Website. Go to www.irs.gov and download Publication 919 for help on calculating the right amount to withhold.
Then, plan ahead. Are there things that will lower your tax liability next year by providing more credits and deductions? Having a child, buying a house with a mortgage, investing in a retirement account, and giving more to your church and ministries may all reduce your tax bite.
Or are there things that will increase your tax bill, such as, withdrawing money from a tax-deferred retirement plan or one of your children leaving the nest to become self-supporting. You’ll need more withheld from your paycheck if any of those things happen.
Listen to the Compass radio programs MoneyWise and HeyHoward to learn what God says about handling money.