Credit cards have a place in your financial life if you use them carefully.

Never use them to supplement your income or to buy anything that you can’t afford to pay for with cash. Don’t think of them as another source of money.  Any amounts you charge on a credit card should be paid off by the end of that month.

How to know if you are in trouble:

  • If you are barely making minimum payments on your credit cards, you need a Reboot.
  • If you have more than one credit card and you do not pay them off each month you need a Reboot.
  • If you have used one credit card to make a payment on another one, you are in desperate need of a Reboot.

Here are 7 steps to Reboot your finances:

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Time to Reboot
  1. Look at the benefits and annual cost of all of the credit cards you have and decide which one is the one you will keep. Cut the rest of them up.  Yes, cut up your credit cards.
  1. Put the card you decided to keep into a container of water and put it in your freezer.
  1. Now you pay them off one by one, while still making the minimum payment on the other ones. Try taking the Cash Challenge.
  1. As you pay off each card, cancel the account.
  1. Continue focusing on paying them off until you are completely caught up, you have only one card and the balance owing is zero.
  1. Leave that credit card in the deep freeze.
  1. Continue to take the Cash Challenge. Use cash for your day to day spending, and put all of your extra money into savings to build an Emergency fund.

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