…of fake cash.

One of the things I found as I have been going through and reducing the clutter around my life is a massive stack of old credit cards we no longer use.

Many of these were various store specific cards we had accumulated over the years taking advantage of this or that “special” deal.

If you have a drawer somewhere with the same, I highly suggest that you go through them and get rid of them all!

We really only use a few credit cards, and mostly only for gas or my business expense. These, for the most part, get paid off each month. A lesson we learned the hard way after keeping too much debt on them for years. I am happy to say that today I keep very little debt on revolving credit and what I do tends to cover larger emergency purchases.

If you were not aware, keeping a credit card with no balance has a bearing on your credit score regardless. Most people think that it is only the ones that have a balance that impacts their credit. However, if you have an available credit limit of $5,000 the credit companies assume that as possible debt. Thus, keeping those credit limits low and canceling sedimentary cards is a good practice.

However, let’s look at the credit situation as a whole.

Yes, most of us will have a mortgage and a car or two against our credit. This is to be expected to some extent. Although, buying a used car for cash is still a great (preferable) option. Regardless of what you might be told, cash still talks when it comes to negotiation.

Credit has been around almost from the dawn of man. Back in the day, the general store would provide you a bit of credit until pay day. Then send a couple of pistol packing collectors if you did not show up the day after pay day.

No one comes to your door packing a pistol any more, but they do the next best thing. They have telemarketers contact you to see if you need more credit to extend your already overextended credit in a self-deluding trick.

The government has also succumbed to debt over-extension. Except for them it seems that they were given no credit limit and they have continued to buy on credit terms that seem overly flexible in terms of repayment.

My dad had a phrase for this; “Having champagne taste and a beer pocket-book.”

As my kids got older I encouraged them to get and manage a single credit card. Making very sure they could pay it off each month. I think, especially with many of the cash back or other reward programs if one can discipline themselves to pay in full every month, there is a great advantage. There is value in building credit history, learning to manage credit and getting something back based on your spending.

Thus, like with money being the root of all kinds of evil, credit can be a very good thing or a very bad thing.

Like I said, for many years we held far too much credit card debt. Getting rid of it all felt really good and taking the time (read delayed gratification) to save up for a purchase that is not an emergency has made our financial life much better.

This is doubly true during this period when I am not working.

The freeing feeling of shredding all of the ones we had held on to after calling to cancel them today was quite freeing.

Much like everything else, simplification in your financial dealings makes life at the end of each month so much more manageable. I no longer have that feeling of having too much month remaining at the end of my money.

So, if you find you have “fat stacks” of plastic, it might be time to do a little melting….you will find the feeling is quite exhilarating!