Tuesday, September 4, 2012

Debt free from the magical & most evil cards!

Whether you care to know or not, credit card debt is the worst debt to have.
A very experienced finance person spoke to us and explained, that it's better to have no savings now and clear your credit card debt, then try to pay a small amount to credit cards and also keep aside for savings. We used to do the latter. Yes, no doubt debts like car loans can't be settled instantly but credit card debt is the worst debt to have, he explained. We took his advice, and sold our unit trusts & some gold and took out whatever little savings we had (since we had used up almost all in building our home) and started to clear whatever we could on the cards. We also started to dump almost RM2500 a month on the cards.

When you are young & irresponsible and you think having a credit card is a cool 'in' thing, you are surely in for a lesson of your life! Unless of course you are a spoil brat!

I owned my first credit card at the age of 21. Yes, it was cool and awesome to own a Citibank credit card. But when the bills kept coming and the amount kept hiking, I was in for trouble. I was working and studying at the same time and I definitely couldn't pay my debts. The bank started to call me asking for payment, and I kept paying the minimum amount, not knowing that it didn't make a difference due to the interest and late payment charges. I owe it to my parents for helping me settle my debt. Yes, I was ashamed. Told myself never again.

But that never again didn't last too long. After I got married, our credit card debt started to accumulate again. Spending on home stuff, renovations, buying stuff we didn't need and things that could have waited for the cash to come in, and then the never ending doctor's appointments, medical tests etc etc the list just goes on and on.

I used to have 2 credit cards, one from Maybank and another from HSBC. Both of which were basic cards. We cleared my Maybank credit card which was totaling to more than RM15,000 and I chose to cancel the card. Boy oh boy did the bank kept pestering me to retain my card. They even told me they will upgrade my card and give me a larger amount of credit just for me to retain. No, I wasn't flattered at all. I made it clear that I want to cancel my card and not wanting to take up their offer. You see, we learnt the hard way about having credit cards. 

Oh by the way, I stopped carrying my credit card with me now and I feel more in power of my daily/monthly expenses. I am keeping my HSBC for traveling purposes. Hubby on the other hand, doesn't use his Amex any longer, and he has his Platinum card with him all the time. But never used now for any of our "wants". By next month, we will be totally credit card debt free. It feels GREAT.

Imagine paying every month a total of RM2000 to credit cards, when you can actually be saving that every month and at the end of 10 months, you would have RM20,000!!! Duh!


  1. So much truth in that! I am guilty as well for using my cc and am working at getting rid of the debt slowly but surely I hope. Thanks for this very honest post :) Not many ppl will openly talk about this.

    1. It's definitely possible for you to clear your cc debt babe. Trust me, once you have cleared it, the feeling is awesome! No prob! The best part of being "anonymous" is that I can truly share my thoughts :)


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