“A FICO [credit] score is an, I love debt score.” Dave Ramsey, syndicated radio talk show host, author, and TV personality.

This may not be the most popular saying Mr. Ramsey speaks repeatedly, but it certainly makes more sense than most people care to admit. (I was most definitely one of them just a short time ago until some dramatic circumstances in my life changed my way of thinking.)

Your FICO (Fair Isaac Corporation) score is your credit worthiness, and there’s not much that’s fair about it. Not because there a nefarious plot behind how your FICO score is compromised but how you from credit needy to credit worthy to over extended.

The system is based on several factors and most know, the basics: keep your credit card balances under 30%, pay your bills on time and keep your debt-to-income ratio in proportion. The problem for most Americans is to meet even these three basics. Having to pay a mortgage or rent, car payment(s), utilities, grocery, and cell phone other monthly bills leaves little for revolving credit but minimum payments.

As you probably are aware, that’s precisely where credit card companies prefer their card members to be, and remain; paying only the interest and not the principle.

Okay, so you say you’ve heard all this before; you know all this and why waste time posting something you already know?

Because it’s something we all need to be made aware of, to hear again and be reminded. Here’s an interesting exercise: add up your monthly credit card payments then take a quick inventory of the items you bought on those cards by consulting your statements. Chances are excellent you’ll see charges you would normally pay cash for or use your debit card. Chances are likely excellent you’ll see charges that make you cringe as in hindsight; you wouldn’t have bought for a variety of reasons:

You don’t use it as much as you thought you would

You didn’t really need it

You could have waited and saved the cash to buy it

You wouldn’t have bought it if you hadn’t the credit available

Now the most stomach churning part of the exercise…ask yourself, “What in the name of the Love of Pete was I thinking?” Follow that up with figuring the interest you’ll pay on those items alone just for the sake of convenience. Is it worth the bill?

There’s a plethora of ways to lower and/or amortize your credit card debt out there a click of the mouse away, but few less ways not to find your way into debt. Moreover, we’re bombarded with media glam selling credit card perks, points, and cash back rewards. But all the bonus miles in the world won’t help in a cash crisis.

There’s really nothing wrong with having credit cards, but there’s something really wrong with credit cards having you.

--Balance for Dads

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