Credit card companies do mega-business given that the current average annual percentage rate is at 17.9%, which adds up to huge profit margins for these companies! Here is an example of why. Suppose you are 30 years old and have racked up $5,000 of credit card debt. If your annual percentage interest rate was 18% on the card and you made the minimum monthly payments, how long would it take you to pay off the $5,000? Forty-six years!
What is even more shocking is that you would have also paid $18,941 in interest alone, outside of the original principal during that time period. This is one of the big reasons why when it comes to carrying a credit card debt balance, most individuals make it their all-inclusive financial ritual to pay it off.
How do you know if you need to tame the debt dragon within you? If you can”™t pay off your credit card debts today, then you are dancing with the debt dragon, a potentially dangerous dance, which most likely robs you of the ability to focus on wealth-building opportunities like building passive income streams and upgrading your skills and knowledge of how to achieve financial freedom. Most people who carry credit card debt balances focus on their symptom, which is their debt. They obsess over the number, making double payments, finding teaser rates, and ultimately turn the credit card debt balances they carry into their financial identity with money, their future and even their possibilities.
The reality for these individuals is they ultimately just carve themselves out to be someone who has participated in a ritual over time that makes them good at just one thing when it comes to money: paying off credit card debt and accumulating more of it. The problem with this scenario is that no one is becoming prosperous except the credit card company, who is happily cashing checks each month, and no one is acquiring a new skill set that will help them to build additional income streams and particularly passive income streams. Hence, no new financial results and certainly no financial freedom are created.
Most people have not taken the time to invest in themselves by focusing on their financial education. So the majority of what they know about money and building wealth has been passed on to them from what they have heard somewhere in passing or something their parents may have said.
Given that at least 90% of people in the U.S. live paycheck to paycheck, it”™s likely that the snippets or financial knowledge responsible for their current inner financial programming and money management skills are born out of the cultural trance most people live in. This trance is composed of lack, fear, doubt, worry and the assumption that there is not enough, combined with no real knowledge of the powerful action steps and tools that can be used to build wealth in the short- and long-term. More often than not, dancing with the debt dragon always seems to be a part of this picture.
The most effective way to cut out of the dance with the debt dragon is to focus attention away from the debt. When you can truly see that your credit card debt is merely a symptom of underlying issues with money, you will begin to awaken to the wisdom of the debt-free guru within.
When you choose to shift your focus from the credit card debt balances you carry onto how to increase your current income, how to supplement your current income with new income and how to begin building passive income streams, you will automatically start overhauling your financial programming by taking new action steps to support these new desired results.
By focusing the mind away from managing debt, it becomes able to recognize new opportunities that will support creating additional income and wealth-building actions. All of a sudden, you will wake each day with new creative ideas on how to increase your income and be drawn to new individuals who can help you create a powerful plan of action to support achieving your new desired results.
What is truly exciting about this process is that when you begin seeing your renewed focus shifting into new income possibilities and educating yourself on the powerful passive income streams that are available to all of us, there will be an entirely new invigorated self that emerges and your days of stepping onto the debt dragon”™s dance floor will be over. Whatever number you have in outstanding credit card debts will become just that, a number. You will soon begin to realize that the more you focus each day on building new wealth, the amount you carry in credit card balances will begin to seem smaller and smaller.
Plus, the wealth-building knowledge and skill set that you will have acquired along the way will support you in continuously achieving the new desired financial results you commit to for your future. If you focus on your debt, it will never bring you new income or new wealth-building knowledge, so why do it? If you focus on the wealth-building opportunities available to you, your transformation from a debt manager to a wealth builder can begin today.
Vanessa Summers teaches a holistic approach to money in her Wealth & Success Workshops. CNBC refers to her as the ”˜Financial Guru”™. She is also author of Get in the Game ”“ The Girl”™s Guide to Money & Investing and Buying Solo ”“ The Single Woman”™s Guide to Buying Her Own Home.