Time to Ditch Your Credit Cards?

Your credit limit might be a fond memory in the not to distant future…

Credit was granted freely over the past 15 years, and now as a result, the economy is being strained. According to Whitney, the solution that has been chosen is to “take credit away from the people who have the ability to pay their bills.” Available lines were reduced by $500 billion in the fourth quarter of 2008 and it’s estimated that over $2 trillion of credit-card lines will be cut down during 2009. Moreover, it is speculated that a further $2.7 trillion will be eliminated by the end of 2010. There is approximately $5 trillion in credit-card lines outstanding in the U.S. Too many consumers have used credit cards as a cash-flow management tool and thus have incurred a dependency. In fact, most credit card holders revolve a balance at least once a year, and 45 percent revolve every month.

…this might be a good time to start paying with cash and cut up some of those credit cards.