Accounts receivable funding firm:

We will help you if your business is…..Fast Growth, Startup, Financial Loss, Seasonal.   (sounds like companies with a solid future to me!)

We offer unlimited A/R funding, No Financial Covents, Advances Up To 90%, Free Credit Checks

Our approval process has NO financial statements needs, NO dependency on personal credit, NO normal three years of tax records, NO lengthy approval process, NO denial for IRS problems, NO denial for tax liens.  (sounds like they don’t say NO to anybody!)

Now, of course they paint traditonal banks as the enemies of small businesses with all of their requirements, paperwork, risk assessment, yada yada yada.  

So, let me summarize:  Accounts receivable funding firms apparently will loan money to anyone who claims to own a business.  A quote from Wikipedia’s definition of this practice (called factoring) says this:

Factoring is a method used by a firm to obtain Cash when the available Cash Balance held by the firm is insufficient to meet current obligations and accommodate its other cash needs.

A method to obtain cash when the cash balance is insufficient to meet current obligations.  Well, yeah.  That’s pretty much what a loan is, no?  A loan is what you get when you have no money.  Duh.  But here’s the rub with the firms that offer this “factoring” or accounts receivable loans.  The fee structure is exorbitant.  They take 10% (or more) right off the top of your outstanding accounts receivable.  Then they pay you back the the remaining 10% based on how much they collect from your debtors.  Less any of their fees, of course.  Now, what’s the incentive for the factoring company to lower that 10% to 8% or 5%?  If I’m the owner of that factoring company, I’m thinking “um, we tried to collect from your clients but they were down on hard times.  We weren’t able to collect back that 10%.”  These folks get a 10% return on their loan to you nearly right off the bat.  

But wait, it gets better.  The Wikipedia article goes on to say that the risks of this industry include fake invoices (by the loan applicant), direct payments to the loan applicant from his customers (without telling the factor company) and clients being billed twice (once by factor company and once by original debtee).  This sounds like a recipe for disaster to your business.  

What is the solution to this need for cash by small businesses?  It’s the exact same one I’ve preached to you on this blog for years – keep large amounts of cash in the bank.  If you want to stack the odds of business success in your favor, pay cash for as much as possible and stay away from these awful loans.

The more transactions you put on your card per month (and especially the more dollars on the card per month) the more likely the store is to make extra profits when and if you don’t pay off the balance each month.  Now, hopefully most readers of this blog pay off the cards each month or, better yet, don’t use cards at all.   But if you are in the majority of consumers who do not pay their cards off each month, happy days for Kohl’s!  They also know the age-old Las Vegas secret that not seeing your actual green money leave your wallet drastically increases your odds of spending it.  Kohl’s isn’t stupid, folks.  I have not even read Kohl’s annual report to shareholders, but I guarantee the credit card division is among the most lucrative division of the whole company if not more profitable than the whole company itself.

So, the next time you consider opening a charge account just for the initial 10% off your first purchase remember….if you play with snakes, eventually you’ll get bitten.

Well I’m here to tell you that that college loan debt is crippling your ability to accumulate wealth.  One of the best financial advice quotes I have ever heard is “it’s not how much you save, it’s how long you save.”  The 22-year-old can begin saving $100 a month and stop at age 30 whereas the 30-yr-old can start at age 30 saving that same $100 a month and NEVER catch the 21-year-old’s snowball growing into a avalanche of cash by retirement.  

Other money moves that a recent college graduate should not do include:

• buying a brand new car (this will absorb a decent portion of your precious new income from your first job)
• financing new furniture or electronics for your apartment
• charging up big clothing bills

Many students take the attitude that “I worked so hard in college I deserve this purchase.”  Well, guess what?  You don’t deserve that purchase.  Is there really a time when you are allowed to make bad money decisions?  Going into debt right when you are starting out in life is not a good time to go into debt.    Frankly, I cannot think of any good time to go into debt.

Develop a game plan to pay off the typical ten-year student loan in half the time or even sooner.  You’ll get a huge jump on accumulating wealth very early in life.

• had more credit cards (we have none)
• had more balances on those credit cards (no cards = no balances)
• had any other consumer loans over the past recent years (we have none)
• had borrowed money more regularly

I completely understand how a FICO credit score works.  The lender needs to see some kind of track record showing how good you are paying back your loans.  Who wants to take a risk on an unknown quantity, right?  I guess what really sunk in for me was how completely obsessed society is with debt.  This credit score would have been higher had we swam with the sharks more often.  This in itself is almost a paradox.  Put more risk to your credit score by financing more purchases and it will go up assuming you pay them in full all the time.  However, if you put more spending on credit your actual risk of paying it back is higher.  So, by risking your credit score more it could go up…or down!  Sounds like gambling to me and that’s why I continue to strive to reach a FICO score of zero.

Why did you pay off the mortgage early?

Chris:  Intuitively, it just felt right.  For a few years there, we were a bit flush with cash, with two of us working and zero to one kids.  Looking forward, I knew eventually the economics would dictate that one of us should stay home.  I like to keep things relaxing, and counting on the market to grow our wealth while carrying debt was calculus that made me uneasy.  Maybe you can boil it down to a low degree of confidence in corporate America, which I knew pretty well.

Marta:  The plan originally was to pay off the mortgage while we still had two incomes, before our first child was born.  That way I could quit and be a stay at home mom and with the loss of income we would also have less debt.  Yes, I grew up with Depression era parents who always encouraged saving, and I’ve never liked any kind of debt hanging over my head.

How long did it take from the time you decided to do it and when it was paid off?

Chris:  It’s a bit hard to remember, but I’d guess about the 5 year mark, we started to see that we could do it if we really wanted to.  I think we had it paid off by the 8 or 9 year mark.

Marta:  I bought our first house in 1992, on just my income, even though we knew we were getting married soon.  We didn’t want to have too much of a house to pay off.  We got married in 1993, and every month put extra on the principal.  Also around that time my mom gave me a sum of money from my late father’s estate that I put on the principal and we refinanced to a 15 yr mortgage.  We continued to pay a good amount on the principal every month and in January 1998 we paid that mortgage off.  John (Marta’s first child) was born in April 1998 and I quit my job.

Did any friends or family members think you were nuts?

Chris:  There were probably people who thought we were nuts.  But if they knew me well, they knew I was nuts already.  I think after the fact when people found out (and we didn’t really advertise the fact) they’d say ‘man, wouldn’t that be nice.’

Marta:  My brother-in-law especially thought we were nuts.  He thought we should invest the money we got from the other house.  But then we would still have had a house payment.  And also he doesn’t have any kids and I tried to explain how my situation was different from theirs, and that the peace of mind from no mortgage was priceless when you want to stay at home with your three kids.  I also told him that if, for some reason, Nick (Marta’s husband) lost his job, it wouldn’t be so devastating financially.  Ultimately he didn’t understand my point of view.  My mother was very supportive, she thinks it’s what everyone should strive for, since they never had a mortgage!

Would you do it again?

Chris:  In my mind, life without debt is a better life.  So yes, we’re always going to be working to lessen or eliminate our debt load.

Marta:  I would definitely do it again.  It made it easier for me to stay at home.  And we were able to save for the kids college and retirement and just in general, because we didn’t have a house payment.  I’m very glad for my parents influence.

Themes From Their Answers

Chris and Marta touched on so many themes with their responses.  I think they’ve covered all the major topics on this blog just in one interview with me!  Debt, paying cash for things, savings, living below your means and more.  Some highlights from Chris and Marta:

“I like to keep things relaxing”  – I interpret this to mean that Chris does not like unexpected, financial disasters.  Neither do I.   By being mortage-free, few emergencies in life could really “rock the boat” too much.

“low degree of confidence in corporate America”  – I interpret this to mean that Chris or his wife could be out of a job at any random point in today’s economy.  By having no house debt, he didn’t have to worry about dragging himself into a job he disliked just to pay the mortgage.  Ultimately,  Chris did quit his job to be at home with the kids, but that’s a whole separate story.

“grew up with Depression era parents” – Marta implies that she knows the importance of living life with no debt, paying cash for purchases and other habits we learned from her parent’s generation.  Today’s youth could learn more from Marta’s parents (and Marta!) than any personal finance book anywhere.

“John was born … and I quit my job” – well how many of you out there *wish* you could do that?  Quit your job to be at home with your kids.  It’s a positive step for nearly all families that do it.  Sadly, most couples think they need two incomes to get by today.  My wife and I took a 50% pay cut for her to stay home with the kids and we never looked back.  Smartest thing we’ve ever done.

“My mother …. never had a mortgage”  – this is totally incredible that Marta’s mother never had a mortgage.  Do you hear what I’m saying!!???  Her parents paid cash for every home they owned.  That is truly remarkable.  And although it may have occurred more  in the 1930s, 40s and 50s it’s still an impressive feat.  I would not say it was a common thing to pay cash for your home then or now.

“Life without debt is a better life”  -  Chris could not have said it any better.

“I would definitely do it again” – Marta knows where she stands in this hyper-materialistic society in which we live and she still would do it again.  But, Marta, what about you driving nicer, newer cars or taking more exotic vacations?  I already know her answer:  this plan works for her – her family and financial future.

Thanks, Chris and Marta, for letting me profile you on MattHutter.com!

He filed for bankruptcy eight years ago and apparently has not learned any lessons from that ordeal.   Filing for bankruptcy is very similar to debt consolidation.  You are basically using your Get Out Jail Free card with little consequence or learning involved.  It’s like a grownup’s version of a “do over” from childhood.  With no pain involved what’s from stopping it from happening again?

On a more day-to-day note, he lives paycheck to paycheck.  Actually he does not quite make it to the next paycheck.  Once he told me how he writes himself a check for cash the day before payday.  He found an ATM that surprisingly allows funds to be withdrawn immediately after a deposit.  When money runs tight, he’ll withdraw the funds from this “deposit” to make ends meet before payday.   It gives him the much-needed cash infusion before he gets his paycheck.  Some of you might have heard another term for this act:  kiting checks.  It is classified as check fraud and playing the “float” between the time of the check being cashed and the deposit of the check itself is illegal.   In some instances, he did not make it in time and had to pay overdraft fees.  He was on the phone complaining with the bank so many times they almost knew him on a first-name basis.  If he just built up an emergency fund none of these cash shortages would have come into play.

Next,  I’ll discuss his car purchase fiasco.  He went to buy a minivan for around $20,000.  Unlike most car purchase stories, negotiating with the dealer does not even come into play here.  When he went to trade-in his old car, he learned that he was $5,000 in over his head on that one.  The dealer also somehow managed to tack on $8,000 more in an extended warranty, underbody rust protection and a bunch of other junk.  Bottom line:  he paid $33,000 for a $20,000 minivan.  This is quite remarkable.  Just on that deal alone he came out $13,000 more in the hole than needed.

If he woke up today and decided to fix his money problems where would he start?

• Make some big lifestyles changes quickly.  Sell both cars and pay cash for very cheap cars.  Or live with one car.  Driving a junker car is only temporary to get him back on the saddle.
• Cease to use credit cards – permanently.
• At each job change or pay raise, bank that money.  Do not change the lifestyle.
• Recognize that these changes today will make for a much happier tomorrow

I’ve oversimplified the remedy for his issues but the above items are great starting points for my friend to begin to enjoy that six-figure salary.

• He was Johnny Carson’s announcer for 30 years (1962-92) on The Tonight Show
• He was host of the talent show Star Search from 1983 – 1995
• He became the well-known pitchman for American Family Publishing arriving at your doorstep to announce your winnings in the sweepstakes
• He has co-hosted the Jerry Lewis Labor Day Telethon
• In the 70s and 80s he helped anchor NBC’s coverage of the Macy’s Thanksgiving Day Parade

So, in essence, he’s had more career success than many folks experience in ten lifetimes. I enjoyed watching Ed on television and I like him as much as any other regular American. However, seeing this recent coverage announcing that he’s $644,000 behind on his mortgage payments on a $4.8 million house made me wonder quite a few things. (He did break his neck 18 months before the home foreclosure problem so that certainly affected his income generating ability.) According to one source, Ed was once worth $200 million in real estate holdings in Malibu, but the same source neglects to mention one key fact: how much did he owe on that real estate? At age 26, financial phenom Dave Ramsey had $4 million worth of real estate but he owed $3.5 million on it and ultimately went bankrupt. OK, back to Ed. He peaked with a potential net worth of several hundred million dollars. He was beamed into our living rooms for over 40 years. He was arguably one of America’s best emcees and announcers and co-hosts. But when you take away all the glitz and glamor and career success he’s experienced, he’s just another Joe Six-pack getting pinched in a foreclosure mess. Although his mistakes have a couple extra zeros on the end of them in size.

Lessons Learned from Ed McMahon’s money problems

• If you have no savings, all your material possessions are useless when your income stops
• Massive financial success in your career does not guarantee financial success managing your money (see M.C. Hammer, Michael Jackson, Mike Tyson, Burt Reynolds, etc.)
• Relying on future income exclusively is not a financial plan (see Ed’s broken neck)
• Having multiple divorces destroys net worth real fast

At the end of his career and life, will Ed wish that he had done things differently? Would any of us trade his life for ours? For some, the cost of a huge income is all of the huge problems that sometimes go along with that huge income.

First of all, does Weight Watchers work over night? Do you just show up for the class and the next day you’re skinny? No, of course not. If I had to sum up Weight Watchers in one phrase it would be a lifestyle change. You are not going to be successful if you go for a “quick hit” to lose 10 lbs and then go back to your old eating habits. Debt consolidation ropes you in by tricking you into thinking “this is just what I need. A clean slate. A fresh start. One lender. One bill. Goodbye complicated life, hello simple one!” It sounds very similar to the feelings people get from filing bankruptcy. However, here’s the big question: What are the odds of you developing (or breaking) the bad habit of overspending in one fell swoop? Do you just wake up the next day and you’re cured? It’s not Nicorette gum for credit cards!

Now, let’s get a bit psychological about this. Why would a (supposed) financial company be able to help you cure your problem hundreds or thousands of miles away without ever seeing you face-to-face, teaching you good money habits or most importantly getting inside your head to fix your root problem – overspending! Your debt problems will not be cured by getting it down to one payment! Yes, they may lower the interest rates. Yes, they may get late fees waived. Yes, they may better at bullying the creditors better than you. But they won’t be getting inside your head to help you make a lifestyle change like Weight Watchers does.

A Lifestyle Change

It’s been said that to form a new habit (both good and bad) it takes approximately 21 days. That’s three weeks of exercising at 6am or reading pages from a good book daily or quitting smoking or controlling your sweet tooth daily or practicing disciplined financial habits or whatever your new habit you wish to form. A debt consolidator only helps with the debt, not the problems with the person in your mirror. Your problems with credit card debt will be gone when proper spending and saving habits have become part of your subconscious mind. You don’t even need to think NOT to buy that new, expensive electronic item at Circuit City.

Bottom line: attacking your debts, one by one, in snowball fashion, smallest to largest will accomplish far more psychologically than any debt consolidator who hasn’t even met you or seen you in person.

The Dave Ramsey Show is a three-hour, self-syndicated radio program and podcast that airs Monday through Friday from 2-5 EST. It is primarily broadcast from Brentwood, Tennessee, though often during the summer it is broadcast via remote from Ramsey’s lake house.[2]

Ramsey takes numerous live calls on the theme of finance and, occasionally, money-related Christian philosophy as it pertains to tithing, etc. During the show, Ramsey discusses various life and money-related issues with callers. One notable difference between his and other financial shows was that Ramsey attempts to go beyond the mathematical mechanics and reach his callers through an emotional and spiritual level.

Dave is also a New York Times bestselling author and has his hand in many other financial endeavors including a 13-week course called Financial Peace University. Rather than have you listen to him for over 18 months like I have and read all of his books I will summarize each of his key points in this blog post.

1. Dave is very, very averse to debt. He has become a multi-millionaire twice. He built up a portfolio of real estate in the 1980s worth several million only to be crashed and burned literally by an act of Congress. The Tax Reform Act of 1986 began to negative affect the real estate business and he had to file for bankruptcy. He then vowed never to borrow money again. He began consuming as much information on consumer finances as he could until he eventually offered to do a radio show for free in Nashville for a near-bankrupt station. Throughout the 90s his show became popular and his books sold very well. He now preaches on the many perils of borrowing small amounts of money and large amounts. He is very opinionated, but like most successful radio hosts that stubbornness has garnered him over three million listeners. Some highlights of his views on debt:
   1. When buying a house get a 15-year mortgage with 20% down. Few Americans do this, but as Dave likes to say “why be normal? Normal is broke! We like to be weird around here!” A basic financial calculator will tell you that regardless of how much you borrow on a 30-year loan you will pay back 150% of the borrowed amount (plus the borrowed amount) over 30 years. On a 15-year loan you will pay back 66% of the borrowed amount (plus the borrowed amount).
   2. Do not use credit cards. Period. I have heard just about every single excuse you could imagine from callers on his show on why they use credit cards. They build up your credit score – nonsense! Use them as an emergency fund – nonsense! – have cash saved up instead. They are safer than debit cards online – nonsense! – what bank in their right mind would let you be on the hook for a criminal cleaning out an account run by their company! More convenient than cash – nonsense! – see my experiment with cash article.
   3. Don’t borrow from family or friends. The fastest way to ruin a friendship or relationship with a family member is to borrow money from them. The list of reasons why not to do it endless, but let’s just say you don’t want to spoil Thanksgiving dinner for the next 20 years.
2. Dave doesn’t care one iota about what you think of him. He is a guy who is comfortable in his own skin. How many times have you bought clothes, a car or any other status symbol to look “cool” for your friends? Just further re-enforce this point Dave once had a show where white-collar workers called in who took a second job as a pizza deliverer just to pay off some debt. Now, those are some folks who don’t give two hoots about what their colleagues think of them.
3. Follow his “baby steps” to get your financial life in order. They are
   1. Build up a $1,000 emergency fund.
   2. Pay off your debts smallest to largest using a “debt snowball.” Throw out conventional wisdom that says to pay off the highest interest rate first. Personal finances is 80% behavior and 20% head knowledge. Having some “small wins” paying off the little debts will build up some momentum for the larger ones.
   3. Build up 3 – 6 months of expenses in an emergency fund. This will get you through the majority of life’s emergencies.
   4. Maximize your retirement savings at 15% of your pay in 401ks, retirement plans and Roth IRAs.
   5. Invest in a college savings plan like an Educational Savings Account (ESA) or a 529 plan.
   6. Pay off your home early.
   7. Build wealth, have fun and give some of your money away
4. Pay cash for everything. This may take some convincing for many of you. As I said above, he’s heard every excuse in the book on why using credit cards is better. He de-bunks every single one of them. Dave claims (and I agree) that there is something different about the way you behave when you are debt free. When you are debt-free you make different decisions with your family, your career and your future. How many fights over money have you had with your spouse? When you pay cash, you owe no one anything. There is never a late fee, a penalty or a type on your statement when you pay with cash.
5. Dave strongly encourages personal responsibility. He gets plenty of callers asking if they should file bankruptcy. I have never heard him recommend filing for bankruptcy. He is a big promoter of “cleaning up your own mess” and “acting like a grown up” at all times. If the behavior does not change, a person who files for bankruptcy will be back in the same situation within years due to not having learned anything from the last bankruptcy. Sometimes Dave gets female callers worried that the payments on their husband’s boats or motorcycles are wrecking the family budget. He’ll mention that the man should “step up and act like a man” or “quit acting like a four-year-old in the cereal aisle” having a fit over keeping the boat/motorcycle even though it’s decimating the family finances.
6. No one ever got rich on “reward points” with their credit card. Occasionally Dave will get a caller who thinks he can beat the system and continue to charge thousands a month on a credit card, pay it off each month and reap the benefits of the points accrued. Dave’s answer consistently is that “if you play with snakes, eventually you will get bitten.” This means that there may come a time when you cannot pay off the monthly balance, the credit card company screws up or some other disaster occurs on your credit card. He often cites a Dun and Bradstreet study that claims people spend 12% to 18% more when using plastic.

Dave’s Famous Expressions

• The Stupid Tax – learning something after the fact on why it was a bad financial decision
• If you live like no one else eventually you’ll live like no one else – this essentially means that if you continue to live below your means for a long period of time you will financially “outlive” the Jones and their status artifacts like BMWs, Caribbean vacations and designer clothing. While you live below your means it is a test of your discipline, but after years of doing it you will reap the monetary fruits of your labor.
• Winning with money is 80% behavior and 20% head knowledge – this is arguably the most used line he says to callers who think they can beat the system by investing large sums of cash rather than paying off their mortgage debt. He’ll turn the tables to these callers and say “if your house was paid for would you borrow against it to invest in stocks? Of course not, but it’s the same thing.” He also uses this 80%-20% line on callers who think paying off their credit card debt by paying the highest interest cards first, then the lower interest ones is smart because the math works in favor of paying the higher interest cards off first. Consistently his answer to this is “if you were following math principles you wouldn’t have gotten into to this debt in the first place!”
• We act the same way your grandmother would….only we keep our teeth in! This advice refers to the fact that the Greatest Generation (those in the U.S. born between 1901 – 1924) worked long hours, never complained, paid cash for everything (including houses and cars!) and kept life simple with spending and saving.

Dave Ramsey is among the top tier of personal finance gurus and will continue to positively influence the financial lives of millions of people everyday.

1. When you pay cash for things, the chances of identity theft are zero. Now, I mean actual cold, hard, green cash not a debit card. If you are worried about a problem with your purchase be sure and keep the receipt. I’ve never once heard of a merchant basing the return policy on the method of purchase. All purchases by reputable retailers allows returns regardless of the purchase method.
2. Reward or loyalty points are a great deal from all the products I get from using my card. Wow, let me walk through all of the flaws in this arguement. First, if you are a person who carries a balance, those reward items are free! Your interest charges are paying for those “free” products. If you are someone who never carries a balance you may think the rewards are still a sweet deal. What if an Act of God happens one month and a bill does not get paid on time? Wham! Finance charge on that card with the “free” reward points. Also, what if the bank makes an error on your account? If you don’t have an account you won’t EVER get a bill or an error on that bill!
3. A credit card is good for emergencies. Well, I see two ways out of emergencies; your main checking account and a savings account/emergency fund. Do you want to know another saying for emergency credit card purchase? Poor planning. If you have a big enough emergency fund, how bad is the emergency that it will wipe out the account? A simple rule is that the bigger the emergency fund, the lower the chances of it being wiped out by any emergency.
   1. Home repair – maybe $2000 – $4000 if it’s really bad. Hopefully insurance covers something which is not your fault. Any other repair bigger than that may have been looming since you bought the house or you ignored the repair for too long.
   2. Car repair – maybe $2000 or so. Any more than that and it should be covered by insurance due to an accident or it’s time to look for another car.
   3. Health problem – maybe $500 – $30,000 for serious health problems. Any $30,000 medical bill may have been caused by no medical insurance or experimental treatment. These are certainly possible, but rare for most people.

   If you are like me, a credit card creates a false sense of security to help you out of financial jams. However, when paying that emergency expense with a credit card you now essentially created another emergency (albeit a long-term one) with a new, large, unexpected debt. An emergency fund can solve many emergency financial problems. Living without one is like an acrobat flying without a net.

4. I’m young and I want to build up my credit rating. As I detailed in The FICO Score Flaw a credit rating is basically a loser’s game. All it shows is how well you manage the revolving door of debt. A young person just entering the workforce likely has two major purchases on the horizon. A car and a house. Ideally you’d pay for both with cash, but that’s not in the cards for all of us. For the car purchase, most lenders will recognize that you have a steady income and approve you for a loan. For the home purchase, I’d strongly recommend the following: 20% down payment on a 15-year traditional (not adjustable rate or interest-only loans) mortgage. This shows the bank that you are a conservative borrower who takes this loan very seriously. Building up a 20% down payment and choosing a higher payment (the 15-year loan is a higher payment than the 30-year loan, but it’s paid off twice as fast) shows that you have commitment. If the bank balks at your loan application with no credit rating ask that the loan be manually underwritten.
5. Credit cards are safer online that debit cards. First of all, if your bank tries to pin the unauthorized charges on you for either kind of online fraud, credit or debit, mention to them that they are violating federal law. The Electronic Funds Transfer Act (EFTA), which applies to debit cards, specifies your liability for fraudulent transactions is $50 if you notify the bank within two days of a lost of stolen card and up to $500 if you notify after two days. The Fair Credit Billing Act, which applies to credit cards, specifies your liability for fraudulent charges is no liability if the unauthorized use involved just the credit card number, and only $50 in the case of a lost or stolen card. So, it literally would take an Act of Congress to occur before your bank rightfully holds you responsible for unauthorized charges.
6. I like paying only bill per month. I have many friends who put everything on the credit card and (claim) to write only one check for all their bills per month. Many times these are the same folks who use rewards loyalty points on their card. First of all, if you pay cash for all face-to-face transactions you pay no bills per month. For online purchases use a debit card only and either keep the receipt or record it in your checkbook. Now, back to the paying only one bill per month. Dunn and Bradstreet did a study that shows consumers spend 12-18% using credit cards than paying with cash. Exactly like poker chips, no emotional involvement occurs when swiping a plastic card. However, when you are pulling out ten $10 bills to pay for something, you feel the pain.
7. I travel and hotels/rental cars won’t take debit cards. Um, time to change hotels. Ask to speak to the manager on why this policy exists. If you are traveling with a company credit card, keep in mind this is affecting your credit rating, not your employers. Even if the card is in their name.
8. Credit cards are more convenient than cash. Smart personal finances are rarely about convenience. Convenience is what gets most people into debt over their heads. Impulse buys, payday loans, cash advances and credit cards are like everything else convenient….they’re expensive. It would be convenient for a limo driver to bring me to work everyday, but very expensive. It would be convenient to eat out for every meal, but expensive. You get my point.

The bottom line is that eliminating all of your credit cards is a trade-off. You may give up some convenience, but the peace of mind and better sleeping at night will make the trade far worth the effort.