How to Break Up With Your Credit Cards For Good

We are so excited to talk to you today about why you should break up with your credit cards. Oh, this is an icky topic. Sometimes it’s taboo, but listen, this is just something that I don’t want to pat us on the back and say that we win the conversation every time but when we talk to people about it, especially our clients, and we really explain the why behind it and how we see things in a different point of view they really are receptive to it and they they understand it and they really try it and they actually do enjoy not using their credit card. Now we’re calling it breaking up because there’s some weird, like attachment that people have to their credit cards.

They’re very fiercely loyal to them. And so that’s why we know breaking up is hard to do, but today we’re just going to talk to you about why we think it’s the best thing you can do for your finances and why your future self will thank you for doing it. Yeah, absolutely. Because listen, like credit cards can feel like a lifeline.

Really it’s a toxic relationship. Okay. I had a client yesterday and she said what do you mean? I need to have two debit cards in my wallet. And I said, girl, how many credit cards do you have in your wallet right now? And she’s okay, fair point. Fine. So yeah. So today the goal is just to help you see credit cards differently and give you the tools to break up with them for good.

And so that’s what we want to talk to you about today.

Okay, so we really want you guys to gain control of your money. That is the whole point. When you are using a credit card, you really are not in control of your money. So we want to put that control back on you. Yeah, that’s like the number one benefit of getting rid of your, breaking up with your credit cards, is that you’re going to be the one telling your money what to do, not just subservient to a credit card.

And There’s a lot of high interest a lot of our clients, unfortunately, Vanessa, we’re working with them to pay these down, but a lot of them are high interest. And it’s just, it’s a trap. It feels it’s more difficult to pay down that than to do any of it. Your other money goals, right?

Like saving money is just. Let me just stack and stack. But as you have some of these, even if it’s low interest, but also definitely the high interest, it’s, it feels like you’re stuck because you can’t get ahead because the interest piles up as fast as you can put extra on it. Yeah. And then the balance never seems to decrease because you’re not getting anywhere.

And honestly, what we want you to do is an embrace. We want you to embrace a simpler debt free life. It is so much easier to make a budget without all these minimum payments that you have to make towards debt because you’re trying to reduce that, and even the ones that are. Even if you are paying them off each month what we want you to do is just be able to use the cash that you have coming in every day as your lifeline instead of this credit limit.

Yeah. Just I love the simpler debt free life. We know when when you’re going through your, we want you to declutter your finances anyway, right? That’s why we have the bills account, but if you don’t have any debts coming out of there, that’s even fewer transactions that you’re trying to plan slash account for.

It’s just a simpler life and we’re going to, with our system, we want you to move to using cash, your own cash for all the things that you would have used a credit card. And it just makes it very clear and more simple to do. What is the problem? So the problem is that there’s an illusion when you use these credit cards that it’s like free money, right?

So people are thinking there’s money coming into my bank account, but I have this credit limit that I can use. So if you think you’re going to pay it off each month, what normally happens though is that you’re racking up your credit cards. And you’re also using your debit card. So one’s decreasing, one’s increasing, but it’s quote unquote free money.

It’s not really mine, right? Yeah. It’s not actually coming out of my bank account so I can use it. . It’s like that whole concept of girl math, which we want to redefine that term by the way.

But it’s free money, because it’s just on this card and I don’t have to, I don’t have to deal with it now. Really. That’s what it is. I’ll have my future self is going to have to deal with this bad decision, but I don’t have to right now. And so the other thing that we know for sure is credit cards are enabling, a lot of us, a lot of you come to us and you say, if I could just stop spending on Amazon or just stop, Facebook scrolling and buying all the deals on Facebook, but Most of the time that’s not happening on a debit card.

That’s happening on your credit card because there’s less consequence and more, free money, quote unquote. And so credit cards specifically are enabling that impulsive buying and emotional spending and all that. And they’re an encouraging overspending, right? So the idea that you know that your credit card is attached to all these places and it’s quote unquote free, you’re just swiping and you’re clicking buy now add to cart and you’re thinking, Oh, I’ll just take care of that later.

When later comes, it really puts a burden. on your situation. And so we want to remove that. Yeah. And it comes back to that simpler life. We don’t want you playing this game of if I spend more, I get more back. And then if I use that to do this, and then if I just make that minimum payment or whatever, like all of that, you don’t need that in your life.

You do not need that in your life. We’re telling you right now. We don’t need to be playing this game to keep up with their game. Like we’re tired of playing their game. So here’s a big surprising number. Maybe not. Maybe it’s not surprising to you, but we know that Americans. have 1.

166 trillion in credit card debt. That was a T y’all. That’s not like just debt, like your cars and your houses and little nice little things like that. That is credit card debt that we as Americans have right now. And it’s been increasing, right? So the overall debt has been increasing. Yeah. I think you, when you pulled this out, it was like since 1997.

Yeah. So I think what to me, which without any actual facts of my interpretation of that is, We always say it’s only a generation ago that credit started, right? And people were more afraid of it. Rightly they were more, maybe more willing, less willing to get into debt, more willing, more wanting to pay it off.

And now that’s slowly easing. We’re easing off of that. And so instead of debt decreasing because consumers are doing, or, you’re doing better or you’re doing better with your money, it’s going up and up. And that trend has not stopped. Whereas it used to go down, at least sometimes.

And and then the other part of that is it’s not only as the total debt that we have as Americans going up, but also our unpaid balances, instead of us paying everything off the number left on the balances and left on the cards is going up as well. Because what happens is that you think you’re going to be able to pay it off and then the end of the month comes and it’s more than your paycheck or more than your husband and like all the combined money coming in.

And you realize you can’t pay it off and now you’re in a lot of trouble. And so now this idea of, oh, I was easy. I was just going to pay off every month. You can’t, you can no longer do that. Yeah. Because a lot of the pushback we get Vanessa is I’ve just paid off every month. That’s, yeah, you can’t.

Yeah. You can’t, you can, but also 50 or 47 percent of you don’t like that’s just the numbers. And we know that for sure. Maybe if you were listening to this podcast you might be one of the ones that just isn’t in the spot right now where you can pay it off. And and 47 percent of all Americans are not paying it off, right?

They’re carrying a balance. So we know that there’s a large number. And what’s even worse than that is the average intro APR is like 21%. And we know that. So we get that pushback, but then we look at your budgets cause we have, all of you lovely clients and. We put it in there. We put the balances, we put the interest and it’s a lot and it’s unfortunate.

And the credit card APR is only going up. We have a handful of clients now that have interest rates in the 30%, which is something we have never seen before. So that is really scary. And for, cards, accruing interest, the average in the fourth quarter of 2024 guys, just a minute ago, was 22. 8 percent interest.

That was probably all the people buying their Christmas presents. Yeah, that’s devastating. Yeah, that’s devastating. And here’s the other thing. A lot of times, so you might think that you’re one, you’re paying it off, right? I’m gonna pay it off. Yeah. Or you get some introductory rate that’s not that bad.

And then by before you know it, like Vanessa said, until you can’t, and then all of a sudden, the APR jumps up. And now I can’t keep up with the interest, let alone the payment. And it’s just this, it’s just not, this is why we want to break up. It’s a toxic relationship, right? It’s not, yeah. It’s not a positive good feeling, a good feeling relationship.

So basically listen, the interest rates and the revolving debt is keeping you financially trapped. We’ve seen it over and over again. We had, we did a podcast with somebody once and he was like why not just use other people’s money and then pay it off? Why do you want to continue to play their game?

It’s you are, you overspend all the time. You think it’s their money. You think it’s free money. You’re spending the credit card and you’re spending on your debit card. So both of them are empty at the end of the month. So it’s just, it’s not something that you want to continue doing. And here, I’m just gonna be real, real right now.

Real real. I appreciate that. We appreciate that you guys listen to us. And we want you to know that we have done this with hundreds. I don’t know, maybe thousands of people by this point. Okay. Is you’re not winning the game and we know that a lot of times it feels like a fun game that you are winning, but you’re not and we don’t want that for you.

We see what happens. It’s not. First of all, it is like we said, it’s just more complex. It’s more to do with your hands that you don’t need to do, but. But you’re just, you’re not winning the game. And it’s not a game that you want to even be playing, right? You want to be playing good, fun wealth building games with your own money.

And it does keep you trapped. Even if you think that you’re using it as a tool, when we list it out in that debt tracker, then we, or even when you list it in your budgets and you see what your minimums are, that is what you can’t use. You cannot use that for anything in your future, any wealth building, any fun things you have to pay.

The Piper every month and it robs your budget and we don’t want that for you. Do you remember Shaina? I sent you, I think it was a couple of years ago. It was somebody on some credit card, Facebook groups. It was basically trying to play the game, right? They’re playing the points game and they had, do you remember it was like 20 different credit cards that the, in order for this whole process to be worth it, to actually work out, right?

They had 20 different cards that they were trying to add money to and then pay balances and they were trying to transfer balances and it was exhausting. And I was like, but there are people out there that think that is winning. There are people. So Chris had that when he went, when he deployed, he had this this officer that was working with him and he did that.

And he was winning, but he also had no other, like no kids, no wife, like other than he was deployed. And so if you play, if you want it to be a full time job, remember we’ve talked about it feeling like extreme couponing. Maybe you can win, but why do you want to win that game? Win the game with your own money.

Win your own game. Yeah. And also the psychological toll of paying a balance. It feels like a monkey on your back. I was just listening to Dave Ramsey yesterday, and you know that you owe that. No matter what, if it’s business or personal, you have to meet that before you can do anything for yourself.

That piper has to be paid every month, and that, it takes a toll, right? And the other thing that I heard him say, was look in the Bible, where we we encourage you to look in the Bible and see if you can find any good thing about that. You can’t, it’s just not there. It’s not there guys.

Nope. So what we really want you to do is we’re going to think about what are the benefits if you’re like, okay, you got me. I want to listen. I’m on board. What are the benefits of going credit card free? Yeah. First of all, it’s financial freedom. Like just in general, you are free because it’s your money and you get to decide what to do with it.

You’re not. having immediate amount of your money taken from your every paycheck. You’ll get to spend your own money and live debt free. Yeah. And the idea here, and you guys have heard us say it over and over again, is that you get to become your own bank. This is when you have money in the bank, you have tangible cash that you get to decide what you want to do with it.

Not a credit card limit that you’re having to constantly look up to see if you’ve, you’re almost there or how much more you’ve got to go. No, you’ve got the cash. And one of the things, especially when we start coaching with clients, Usually the husband is like, Hey, I want to keep one card.

I want to keep one card just for an emergency. So we’re like, great, that’s fine. We’ll meet you in the middle here. However, when you have more money in the bank than your credit card limit allows, that card now becomes obsolete and then you have to cancel it. And they’re like, Oh, fair. Yeah, it is fair.

And we say it all the time is there are so many different things.

In our culture that are trying to keep you trapped in a cycle and we say all the time you don’t know what you don’t Know so this is the time that we’re telling you what you should know, right? You don’t know we I compare credit cards to hamburger helper Like our parents were feeding us that because somebody told him it was good and then we realized later Oh, it’s not so good for you, right?

It’s the same with credit cards. We just all thought oh, what a great new invention Yeah, it’s not and it’s keeping you stuck. There’s a lot of different things between food and Even I think social security we can get to that another that are keeping you in someone else’s money game instead of you learning to be your own bank to be in charge of your money to tell your money what To do and to build a build it toward the future that you desire and that’s what we want for you here I see it as like independence, right?

But also like we want you to improve your money habits we want you to remove this crutch of using a credit card or having to use a credit card or thinking that you need it or thinking that you have to play the game and we want you to be free More intentional. We want you to budget smarter. That’s what removing the credit card is going to allow you to do You’re gonna see things in a whole new light a whole new way And so that way you can just be better about managing your own money Yeah, I was thinking like a lot of times once they come to us and they start budgeting It’s almost like the first time that they’ve actually taken a hard look at what they’re spending at what their total bills are Because if you’re just paying a credit card or using a credit card, you’re not actually looking at it.

So this allows you to look at your money, to be intentional, to start start a budget and start doing with your money on purpose instead of just, flying by the seat of your pants every month. I think one of the things that the response that we get back from a lot of our people are, I am way more aware now than I’ve ever been.

And that is good. That’s what we want for you. Yeah.

It’s also going to reduce how much stress you’re feeling. A lot of your money stress is come is one coming from not looking at it. So we’re going to do that anyway. But then also from carrying this load of debt, it is like a heavy load. And even if you, a lot of times you might not think that it’s bothering you, but it is, it’s in the back of your brain all the time and it’s stressful and it’s worry, it’s worrisome.

If I lose my job, it’s not, okay, how am I going to worry about feeding my kids? It’s going to be, how am I going to pay this debt? Because I have a debt payments, right? So it’s just. Not having debt gives you some peace of mind and and it’s just better. And you have less bills. It’s one less thing you have to do.

A lot of people were like I’ll just, put it on the card and then I’ll pay it off. That’s an extra step that you are not required to do during the month. We don’t want to do that. Peace of mind like Shana said, is 100 percent priceless. Nobody can take that away from you and that’s what we want.

We want you to feel that. Yeah. And if you’re, if you use our simplified budget system, you can see we have the debt column, very we have it separate from bills, very specifically, very much on purpose because it adds up at the bottom, how much you’re paying on debt every month. And think about what your life is going to be like when you don’t have that, like not being in debt, frees up your budget.

You’re able to assign all of these dollars, like we said before, to anything in the future, rather than everything that you’ve Accumulated in the past. Yeah. So how do you break up with your credit cards? Okay, so what’s the first step that, we are very actionable in our podcast. We want you to listen, understand, and then take action.

So this is that part of the podcast. So the first thing we want you to do is to make a budget. I know it’s the B word. I don’t want to do a budget, blah, blah, blah. We get it. However, you’ve got to look at your numbers. You have to be more intentional. You have to know where you’re at. So make a budget. See what’s coming in minus what’s going out.

Okay. So that way you can see, can I actually, what if this is the first month? What if in month one I can go without using my credit card? Yeah. Yeah. So you have to make a budget because you need to see if you can what you cost to live. And also, like we said before, you’re pulling stuff from that credit card statement and actually for the first time, probably seeing everything on one piece of paper.

And that’s a big. That’s a big moment for everybody, right? To see, like we said, what bills they actually have, how much it costs to live, and then how much they’re spending and all of that. It’s a great first step. The next step, like Vanessa said, the budget’s going to really inform this, but you have to stop using debt.

Even if you can’t Do it completely, but you know the first rule of getting out of debt is to borrow no more, to use no more. So as much as possible, we’re going to start maybe month one. We are spending, we don’t get to pay off the credit card debt or the credit card in full like we usually do, which is frustrating, but instead.

It’ll be hard. You’re able to pay for everything in cash that month and just pay the minimum. That’s like the first step. We want you to stop using it for spending, stop using it for bills, stop using it for whatever quote unquote things pop up. Let’s use your budget and fund those things on purpose with your income.

And if you realize look, I’m actually over max, I have to use my card this month because that’s just the situation that I’m in. We’ve seen it. That’s okay. What we would advise you to do is. only use it for reoccurring bills, like the smaller things the ones that you absolutely have to use it for, but groceries, gas spending, pocket money, all that, we are now going to encourage you to use your actual tangible cash in your account for that.

It’s going to start breaking that habit of just swiping the card all the time. Yeah. So then step three to how to break up with your credit card is going to be our good plan, which you can wait a couple of weeks. And we have that very much in detail coming out on the podcast. But it’s to get out of debt plan.

And as you’ve heard us say before, there’s no cookie cutter way to do this. What you want to do is list everything down and figure out your plan on how you want to attack it. Do we want to the snowball way, which is lowest balance to highest balance. We want to attack it in the interest rate interest way because we have a lot of money coming in so we can get these bigger balances taken care of and get rid of the interest, right?

Or do I have a high minimum? I have a client right now. They have they have a, one of their payments is really high, but the balance is low, right? So they’re just going to pay that balance off first and then they’ll go back to their debt snowball. So it really depends on when you get it all on one piece of paper, what makes the most sense for you, but either way you have to make a plan.

And so we have, we normally recommend starting off with the debt snowball. Just because it’s the easiest way. And then there are the three other, the two other ways. So the minimum payment way. Which is which minimum payment is the highest in the avalanche way is the interest rate. Now.

If we have two balances that are about the same, but one has a 0 percent interest and one has 20%, we’re going to tell you to tackle the one with the 20%. So it just really depends on the same thing goes with the payments. If you have two balances that are similar, but one of the payments is three or 400 and it’s eating up your budget, pay that one off first.

Yeah. Because what we want you to do is we want you to get the act of tangible cash back in your pocket. So look at your debt tracker. If you have our simplified budget system and go, okay, this is where I’m at. This is like the order of debt that I want to pay off and look at the minimum payments.

And look, if I pay this off, this is the amount of cash that I’m going to have back in my budget to be able to use. And that’s, what’s going to free up. And that’s really fun to be able to see that with our clients. So step three, we’re going to replace the behavior. And this is when you’re going to get on our budget system.

You’re going to use our digital envelopes, all of the the savings buckets, everything that we teach, because when you are able to use, you’re going to have debit cards that you’re going to use to pay for groceries and gas with things that you might’ve been swiping the card for. And then you’re going to set up.

So you’re going to set up your spending accounts and your savings buckets, because a lot of times. Oh, we had to go to the doctor or oh this or that or whatever stuff quote unquote came up that I didn’t know how it was going to pay so that’s when I swiped. So instead, we’re going to fund those things, plan for those things on purpose so we can use our money, our cash to pay for them instead of credit cards.

And you’re also going to build an emergency fund. So start building that emergency fund. So that way you can replace the this crutch of using a credit for things that pop up, especially like things like pets and birthdays, by the way, those come up. If car tires and things like that, we want to be able to have cash in the bank to, and even if you deplete that, that’s fine.

You’re depleting your own cash versus building up a credit card. Okay. All right. So step four. Cancel or freeze your cards. We understand that in some situations, if you’re buying a house or you’re buying a car or whatever, you may not want to quote unquote, close your cards right now. We get that, but freeze them.

If you cannot close them, freeze the cards. So that way you cannot use them. Shana said before, The only way to get out of debt is to stop using that. So we have to put a barrier in between to make us not use it. Yeah. And so like Vanessa said, you might feel like you want to keep one card for emergencies.

Fine. Do the system, get to the point where you believe in yourself, where you see all the money stacking up in your bank and then close that one. But. In the meantime, close all the other ones. Shana and Vanessa, what about my credit score? What about your credit score? No, just kidding. Just kidding.

We love you. But one, we want to make sure that you understand what we believe is you’re going to build wealth, not your credit score. We’re going to work on that instead. But you usually have your mortgage or even maybe a car payment that is going to be better, quote, unquote, better debt, right? For for mortgage purposes, for credit score purposes.

Anyway, we have yet to meet somebody who has absolutely zero debt. I think perhaps. And so you you don’t necessarily need to worry about that because you already have revolving debt that’s contributing to your score. Yeah. And if we’re looking at debt and like order and rank here, right? So we have your mortgage and maybe your student loans and your vehicle payments up here.

And then all that tangible personal loans, 401k loans, credit card debt, all that, like we need to clean all that up. So like Shana said, most of the time. We have people that have a mortgage, maybe some student loans, maybe a vehicle loan. You’re consistently paying on that all the time. So your credit score is always going up.

So fine. You close those cards in one month. You take a hit. It’s going to go right back up the next couple of months. So it’s really not a big deal. We do understand, like we said, in a certain situation where you may be buying something big, so that is going to actually affect you. Great. That’s fine.

Freeze them, wait a couple of months, and then you’ll close them. Yep. Okay. So to recap, what we’ve told you is to break up your credit cards. You believe us as to why we want you to. And then we also try to tell you how, like the five, the four steps to breaking up with them. Yeah. And remember borrower is slave to the lender.

That’s Proverbs 22, seven. Like just remember when you are always owing somebody money, you are a slave to them and we want you to break free of that. Yeah. And it’s going to ease stress. It’s going to Stop the overspending. It’s going to help you be more intentional, right? And then help you hopefully you achieve financial freedom and to be your own bank.

And really, like we said, what we want you to focus on rather than your credit score is to build your net worth, build your wealth. That’s what we’re here for. Nobody ever got wealthy off of credit card points. Okay. So we want you to remember that nobody became a millionaire because of the measly one to 3 percent points that they own a credit card.

So think bigger. You should have bigger and better vision and dreams for yourself. Yeah, we do. We have those for you. Yes, we do. Bye.