Understanding Debt - Using Credit Cards to Buy Food
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The credit crunch has come, and many people are hurting. In the good days the banks marketed their credit facilities ferociously and those marketing campaigns were extremely successful. Now, things have tightened up, the piper has to be paid. It seems the axe has fallen all over society and it is not just the traditional “poor’ who are suffering. The banks, wriggled and blamed the customer for falling for the bait and so it goes on! In actuality many people have over extended themselves and are now coming to feel the jaws of the poverty trap closing in on them. When this happens what do you do?
Prioritize
We prioritize our spending according to our hierarchy of needs. Food is the most important substance we purchase. We need to eat or else we starve. We need to eat healthily to remain fit and well and to insure we do not go without food. Keeping fit and well is paramount. If we are healthy we don’t require medical attention and that avoids another big cost. An increasing number of people buy food with their credit card. That is OK once you are in a position to pay it off as you go. However, people are now buying groceries and let the outstanding debt roll over on their credit cards. Once the debt rolls over, you start paying interest, compound interest! Compound interest is expensive!
Cut back on the grocery bill:
The key to cutting back on groceries is to weigh convenience versus cost. Convenience costs a lot more. If you are struggling to keep down two jobs to pay the bills, then convenience is important. If you are buying microwavable packaged foods so you have more time to watch TV, then convenience is not important. Besides fresh fruit and vegetables cost out a lot cheaper than packaged goods, but cost is not the only factor. Fresh products are additive free, thus they provide a healthier nutritional source. Cook your veggies and add a little protein and you have a healthy and nutritious meal for very little money.
Start Collecting coupons:
Start reading the [papers, particularly The Sunday ones. There are pages of ads telling you what is on offer in your local stores. These will include two for one offers and other promotions. Follow them up and don’t forget to collect the coupons. This tactic will reduce your grocery spend considerably. Oh, some places offer double coupons on their generic brands versus the nationally known icons. Stick with the generic brands and your money will go even further.
Carry a calculator:
Some seeming bargain offers are no bargains at all. For instance you might come across a pack of 4 kitchen rolls for 89c and next door a pack for 99c. However if you look carefully you find the 99c is redeemable by coupon with a 20c saving. Being a careful shopper takes preparation. Be prepared!
If you must use a credit card:
Pay off the groceries at the end of the month. If you can’t do that…..
Rob Peter to pay Paul: Jiggle between credit cards so you avoid paying interest. Use the credit card to withdraw cash, pay off the credit card and keep on jiggling. Using credit cards to withdraw cash is expensive as there is usually a fee for the service, but when needs must it is an option.
Apply for additional credit cards:
Use credit card company offers to transfer existing balances to new accounts with new companies. Look for those that offer you a 0% interest start up phase. Use the facility and then look for another company to transfer to as the six-month honeymoon draws to a close. Be careful, credit is getting tighter and offers like this are beginning to dry up. It’s a bit like musical chairs if you must, play the game but realize the music might stop and you won’t have a chair!
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