Captain Obvious Reports: How not to have more credit card debt

Sometimes I like to get deep into the rabbit role with details. The post I wrote immediately before this detailed the ins and outs of rebalancing your investment portfolio. An important topic to discuss, but it’s hard not to be too wordy about it.

But everyone’s busy and has a short attention span. So I’ve decided to start a series of short, actionable posts. Nothing fancy, just a good tip for you to take with you as you go.

And I’m calling it: Captain Obvious Reports.

The tagline: “But is it really that obvious?”

Today we’re talking about credit card debt.

“I wish I had more credit card debt” said no one ever.

The goal is to get down to zero. Seriously. Stop thinking you need to have a balance or else your credit score will be hurt. People worry too much about their credit score and not enough about their money. Don’t be that way.

I’m not so dramatic that I recommend people cut up their credit cards. But I do think that the best place for a credit card is in your drawer, not in your wallet.

If you have a balance on your credit cards, there is only one way to eventually get to zero:

Step 1: Do not put any more spending on your credit cards.

Let me guess: you are thinking about airline miles or cash back or stuff like that? Well stop. Yes, you can earn a little bit of money if you have cards that offer perks, but you need to be able to handle it. If you carry a balance, the amount you pay in fees will destroy any perks you get. If you’re not at zero, you need to learn to get to zero and then stay there.

Step 2: Pay off your balance over time.

If you’re not putting more spending on your credit cards, then you will necessarily pay it off over time. The slower you pay off your balances, the more money you will be charged in fees.

I like to think of having a credit card balance kind of like your leg being on fire. You could drip water on it and it will eventually go out, or you could get the largest bucket you can find and douse the sucker right then and there.

If you have a balance, you need to make it a priority to get rid of it.

And finally, make sure you open the door before you walk through it. So says Captain Obvious.

But is it really that obvious? Maybe not. You tell me in the comments below.