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Credit cards are like any other tool; just depends on how you use them. They can be great for itemizing your spending as well as receiving points for splurge products or airline tickets. For the most part, I keep a zero balance on them every month, but could come in hand in case of a dire emergency. Always easier to get gas at the pump (being on the lookout for skimmers) than shuffling cash back and forth.
OP knows what needs to be done. I would suggest removing all CC's from the wallet and hermiting down for a while to get things under control. Then just use the one card for gas, clearing it every month. Just think of it as a temporary insanity from retiring; a one-shot deal that will keep you on the straight and narrow.
I use a credit card to buy gas just because of the skimmers. Even in my small town people have been hit by this
If you use a debit card, your "real" money is taken. Now my bank (USAA) will replace it the same day, but others could take some time. So I just avoid all that by using a credit card.
I'm now in a pay as you go mode on everyday expenses. Nothing goes on the credit card that won't get paid off immediately, and I have imposed a 3 question approach on all durable purchases - will I use/wear it at least 3 times a month?, will it last at least 3 years of use/wear?, do I have a place to store it? You would be surprised how many impulse purchases don't meet these basic criteria.
I think that after working your whole life and finally retiring that there's nothing wrong with splurging. Some of the views of this sound like you should retire, eat only oatmeal and water and don't spend a penny lest something happen. I don't really get that. You have $10k of your savings left and a 401k to tap in an emergency and a pension that will continue to bring in money. That is a lot more than many have.
You don't say how old you are in the OP. An "adequate" pension is not helpful information because of geography, cost of living, etc., but assuming that it covers your monthly necessaries without having to touch your 401 and coupled with the fact that at some point you will get SS, I'm not sure what the problem is. Get a part time job if you want to and throw all that money towards the debt until it's paid off. Then quit and enjoy yourself. If you have to give yourself an allowance, then do that. It's not surprising to me that you went a little crazy. I'd be more concerned if you had no 401k, a minimal pension and blew through your savings but you haven't done that.
You should also keep in mind that some of the stuff you bought (furniture, for example) is not something you switch out every year. They are pretty much one time for a long time things so I wouldn't beat myself up over that either. You are home now. You want to make the place look nice. Go ahead.
I never understood this: why do people use a credit card (and gets "debts") when they actually have the cash (he has $30k savings) to pay for the stuff they buy?
What is the idea or logic behind buying stuff with a credit card if you actually can afford it with your money?
I put everything on my CC, but I pay it all off at the end of the month. I treat the card as cash, and have done so ever since my first card in college. Maybe I'm just weird, I don't spend on a card as if it's free money.
I guess I also don't like big fat wallets stuffed with cash so maybe that's why I just use plastic.
There is no logic to it. It's usually emotional and often irrational. You want that gorgeous new in-ground swimming pool but you also want to keep your $40k in savings. So you buy it on credit and try not to think about the fact that you are now in debt. Which, if you want to keep your savings (and you do) means a monthly payment you hadn't planned for in your retirement budget.
Fortunately, lounging by your sparkling new pool with its natural rock waterfall and classy-looking fire bowls helps you relax and postpone worry for another day. Until your spouse decides he wants an outdoor kitchen with a swim-up bar, because he's always wanted to do that Tom Cruise "Cocktail" thing. That sounds pretty good to you. More relaxation, right? People will be eager to come over. You've already got the pool payment, what's a little more?
Trust me. Having gotten myself into an enormous amount of consumer debt, I know how this works. Besides, there are examples of it all around us. If you ever want to see something chilling, try the David Duchovny/Demi Moore film "The Joneses":
But I have somehow the idea this is a more american thing than european thing (I am from europe) and buying stuff on credit is less common here.
Quote:
Originally Posted by Moonwalkr
I put everything on my CC, but I pay it all off at the end of the month. I treat the card as cash, and have done so ever since my first card in college. Maybe I'm just weird, I don't spend on a card as if it's free money.
I guess I also don't like big fat wallets stuffed with cash so maybe that's why I just use plastic.
This makes no sense at all to me because you can still pay with a regular "bank card" (not sure what the right term is). A bank card that is not a credit card.
I have one of those and use it... I can just use the money I actually have.
To me it makes no sense what so ever to buy stuff on credit that you either can't afford (so you do not have the money) or can afford (because you do have the money) but buy on credit.
Why would people want to pay MORE then necessary for stuff?
This makes no sense at all to me because you can still pay with a regular "bank card" (not sure what the right term is). A bank card that is not a credit card.
I have one of those and use it... I can just use the money I actually have.
To me it makes no sense what so ever to buy stuff on credit that you either can't afford (so you do not have the money) or can afford (because you do have the money) but buy on credit.
Why would people want to pay MORE then necessary for stuff?
I use a credit card for almost everything. I've put well over a quarter million on one card, which translates to well over 250,000 airline miles. And I get a free checked bag every time I fly. I pay the card off each month, so there is no cost to me other than the annual fee, which is much less than just one airline ticket. My other card gives me cash rewards, which comes out to several hundred dollars each year, which is again less than the annual fee. It also gets paid in full each month. So it does make sense to have a card even if you can afford to pay cash.
And if you can't afford to pay cash, a card makes sense for emergencies. Not everyone has enough cash to install a new heater in the dead of winter. But you can charge it and make monthly payments for a year of two.
I put everything on my CC, but I pay it all off at the end of the month. I treat the card as cash, and have done so ever since my first card in college. Maybe I'm just weird, I don't spend on a card as if it's free money.
I guess I also don't like big fat wallets stuffed with cash so maybe that's why I just use plastic.
The points are sweet especially when using Amazon Prime and Costco Citi cards. When shopping at the grocery store or major stores we always use cards also when eating out unless under a certain amount
But I have somehow the idea this is a more american thing than european thing (I am from europe) and buying stuff on credit is less common here.
This makes no sense at all to me because you can still pay with a regular "bank card" (not sure what the right term is). A bank card that is not a credit card.
I have one of those and use it... I can just use the money I actually have.
To me it makes no sense what so ever to buy stuff on credit that you either can't afford (so you do not have the money) or can afford (because you do have the money) but buy on credit.
Why would people want to pay MORE then necessary for stuff?
You aren’t paying more buying with a CC you are paying less with the points or discounts. Even our Target card gives a five percent discount
I retired April, 2017 with a paid off mortgage and over $30k in cash savings, no debt other than a car payment and a 401K account. Apparently and much to my surprise, I have no impulse control Although I have an adequate pension, I am over $15k in credit card debt I still have my 401K, my home is still paid off but I HAVE about $15K in CC debt.
Thanks in advance for any advice.
Odd that you mentioned "no debt other than a car payment and a 401K account".....401K shouldn't be a debt.
15K is no big deal, you caught yourself early enough so learn from it and move on.
I went on a tear nearly 20 years ago after selling a business. Smoked through 100K in about 15 months, I was back working so money was coming in and I just figured it would just get replenished. It was much easier to spend than save! Lesson learned.
I use a credit card for almost everything. I've put well over a quarter million on one card, which translates to well over 250,000 airline miles. And I get a free checked bag every time I fly. I pay the card off each month, so there is no cost to me other than the annual fee, which is much less than just one airline ticket. My other card gives me cash rewards, which comes out to several hundred dollars each year, which is again less than the annual fee. It also gets paid in full each month. So it does make sense to have a card even if you can afford to pay cash.
And if you can't afford to pay cash, a card makes sense for emergencies. Not everyone has enough cash to install a new heater in the dead of winter. But you can charge it and make monthly payments for a year of two.
While this can be sound advice, keep in mind if the bill doesn't get paid in full then the "interest" can easily exceed the benefits.
Cash is definitely becoming rarer, I usually take a couple hundred every few days just to have in my pocket. Small purchases ($5-10-20) are always paid in cash. My buddy left Anguilla last week and they hit you for $20 cash to exit the country (cash only). He laughed telling me about people that couldn't come up with $20 cash per person.
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Although I have an adequate pension, I am over $15k in credit card debt
I still have my 401K, my home is still paid off but I HAVE about $15K in CC debt.
