Credit Cards and how I escaped

Credit Cards are probably the best and worst invention of the financial world.

So one fine day a genius decides to create a never ending cycle by tapping on the human race's most vulnerable sin - GREED. He starts to tell his people to start advertising big houses, fast cars and vacations around the world. All these can been easily obtained just by the swift stroke of a pen on a dotted line. As the consumers tasted luxury for the first time, they go for it again and again and again and trap themselves in a never ending cycle of debt. Little do these consumers know that they just traded their future for instant gratification and they will spend their lives slogging off to repay their credit card debts.

Sounds scarier than a loan shark? Not at all, at least the banks won't spray O$P$ at your corridor or hang pig heads at your doors. You'll probably find your house being taken away by the bank along with all your other assets.

I got my first credit card when I was 18 years old and foolish. (Yes that's me when I was 18)

The credit limit was only $500 at that point of time because I was only a student and was deemed incapable of earning my keep. Initially when I first got my credit card, it was for all the free perks that came along like the free entry to Zouk and some other privileges that I've hardly utilized. 

Subsequently as I got more comfortable with the credit card, it started to have its adverse effects on me because I started to spend more and chalk up more debts on my credit card. Even though I was juggling several part time jobs alongside my monthly allowance, it didn't seem enough because my expenditure was just way too high. 

Most of the months I could only pay the bare minimum because my financial planning as you'd already guessed sucked to the core. 

It only dawned upon me that I was paying so much on interest because the effective rate is 24%. However I've never really noticed the interest I was paying until this particular day when my credit limit was maxed out and I started to flip my previous bills and add up the interest I've paid. It totaled up to a good few hundred dollars just for the interest alone just because I don't pay my bills entirely. 

The fortunate thing was that I enlisted in the army and started to reduce my expenses because most of the time I'm stuck with free food and free lodging and free exercise that I have no chance to whip out my credit card. This also came with consequences as my monthly income dropped to an all time low because my parents thought the NS allowance was enough and I had no time for part time jobs. 

That was when I started to clear my bills slowly and it was really excruciating because all the joy of instant gratification just disappeared when I forbade myself to pay on credit. That was also the time I started reading up on financial books and how to change your lifestyle to spend within your means. So after 4 painful years since 2010. I am finally debt free in early 2014 clear of all the debts and well living within my means. 

It took my 4 years to get out of recurring debt and I hope this post gets out to people who are thinking of getting a credit card, think twice.

Of course credit cards are not that badass, they provide a interest free loan period of about 1 month, you just have to pay everything off when the bill comes. If you can't, be prepared to chalk up a debt that will grow faster than you imagine. They also provide a free expense tracker in the form of the bill that comes every month. 

So don't wait anymore, start clearing your debts and you could potentially be looking at financial freedom next!