Maybe you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. But if you are part of the majority of Americans who owe $9300.00 or more on credit cards, it may be time to cut up your credit cards. Here are five reasons why you should cut up your credit cards today and take charge of your money.

1.    You will never get out of debt.

Let’s face it, without self control when it comes to your card, you are faced with a life full of debt. When you use your credit card to buy something you cannot afford, it can feel like you are getting something for free.  There are no immediate consequences, no money is deducted from your checking account, and you get to take home that purchase you can’t live without.  The truth is, credit cards are not free money; the interest you end up paying over the life of your card is astronomical.

2.    You may be setting a bad example to your children.

Only you know your spending patterns and whether you are modeling bad spending to your children.  Do they hear you make comments about how great it is to be able to use credit to buy something you can’t afford? If so, think about what you are teaching them.  As parents, we want the best for our children and this includes living a debt free life.  So the next time you go to swipe your Visa, think about the message you may be giving your kids.

3.    The credit card companies make money off of you.

How often do you get blank checks in the mail from credit card companies?  They make it very easy for you to get a cash advance on your card.  It is just one more way the credit card companies use to get you to spend more money.  The truth is, the more you spend, the more money they make.  Many cards have policies in place where if you make a certain number of late payments, they will raise your interest rate to an extremely high rate. And that’s in addition to the fee you pay for a late payment.  The credit card industry takes in over $11 billion per year in late fees alone.

4.    Credit cards are a temptation.

When you originally applied for your credit card, what was the reason?  Was it so you could purchase something you wouldn’t normally be able to afford?  Was it because they offered you 18 months same as cash?  Or maybe they offered you 15% off your purchase that day if you applied for their store card.  Whatever the reason, the credit card companies are smart.  They know that the majority of people will not pay off their balance in 18 months and the interest will all be retroactive.  They also know that if you are carrying their credit card around in your wallet, you will most likely use it again in the future.

5.    You do not need to have a credit card.

One reason many people give for why they need their credit cards is for booking flights, hotel rooms, and renting cars.  While it is true that you need a card for these activities, a debit card with a Visa logo works just as well as a credit card.  Another alternative to a credit card is from PayPal.  PayPal offers a secured MasterCard that is linked to your PayPal account and you can use it anywhere MasterCard is accepted.  If you charge more on your PayPal card than you have in your PayPal account, the extra money is deducted from your back-up funding source (which is normally your checking account).

While applying for a credit card may have seemed like a good idea at one time, the statistics do not lie.  According to Dave Ramsey’s Financial Peace University, American households spend over $412 billion in credit card charges each year, and 45% of cardholders make only a minimum payment.  Rather than becoming part of the alarming statistics, cut up your credit cards today and take a step towards financial freedom.