The ‘3 Es’ of Credit Card Debt

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credit card debt



Why do people have credit card debt? There are many answers to that question. But in the 17 years I have spent studying this topic, I have noticed that the reasons fall within three primary categories, which I call “The 3 Es”: Emergencies, Ease, and Entitlement. I have also learned that while some circumstances are unavoidable, others are created by choice and that there are ways to prevent these situations, with a basic sense of awareness and a change of mindset and habit.


In short, “life happens.” People get sick. Jobs are lost. Cars break down. Kids break bones. All too frequently, we do not have enough money in savings to cover these unexpected occurrences. How can we? A large percentage of people live paycheck to paycheck and struggle just to cover their monthly expenses. So, emergencies “throw them for a loop.” With seemingly nowhere else to turn, they whip out one of their credit cards and breathe a sigh of relief…until the bill comes in. Depending upon the magnitude and cost of the emergency, people could carry this debt for many months…even years.

Alternative – An effective way to prepare oneself for the unexpected is to build an Emergency Fund. Many financial planners suggest having an account that can cover three to six months of expenses, when fully funded, depending upon the number of people in your family, your monthly bills, etc. While this is the ultimate goal, I believe that simply having something, no matter how small, in an emergency fund is essential, so when the unexpected happens, we don’t have to pay for it entirely, if at all, with credit cards. Also, replenish the emergency fund as soon as possible And yes, build it to the three to six month range, if possible, so you are ready for the next emergency.


“That will be eighty dollars and sixty-five cents, please.” “OK,” you say to yourself. “Hmm. I think I’ll use my Visa today.” Whip. Swipe. And Return. You have made your purchase. Easy, right? It sure is! It is easy to reach into your wallet, grab the card, use it, and put it back…It is also easy to run up a lot of debt that way. So many of us have been conditioned to swipe the credit card without much thought. We want as much ease as possible, especially regarding finances. Credit cards provide the easiest way to get what we want quickly and the easiest way to rack up consumer debt. In my days as a chronic credit card user, I would swipe the card for nearly every purchase, only to get the statement at month’s end and think, “I don’t remember buying half of this stuff!” Couple that with the fact that the pleasure that the purchase once provided had now faded and I was left with nothing but an outstanding balance. Easy is NOT always good!

Alternative – The best way to avoid using credit cards is to leave them at home. “What!?!” I know; this shocks some people. But you can’t go into credit card debt if you don’t have them with you. “What if I memorize the account number?” Well, then there’s a bigger issue, beyond the scope of this article. But for our purposes, at least temporarily or until your spending habits are under control, go on a steady “cash diet.” That way, you will not add to your debt, you improve your chances of lowering your current debt levels, and (AND THIS IS A BIG “AND”), you will start thinking more constructively about your purchases. It “hurts” a little when we spend cash. We feel something leaving our wallets…and our lives…and that sense of loss makes us consider our purchases more carefully than when we simply swipe the credit card. We start to distinguish a WANT from a NEED (the focus of an upcoming article). This is a HUGE step in the right direction. Eventually, you will mange your credit cards as easily as you once used them.


You work hard, two jobs, in fact. The boss has been “on your back” for a month. Then you go home and have to take the kids to soccer practice, band rehearsal; you have to pay the bills, finish the laundry. You deserve to “kick back” a bit. You deserve some “Me Time.” You’re right; you do! But for many people, men and women alike, “kicking back” translates to several sessions of “Retail Therapy”: at the mall, at the home improvement store, etc. Yes, you do deserve some “Me Time,” but “Me Time” does not have to “break the bank.” When a sense of entitlement overwhelms our sense of logic…and our money…problems start. The busier we get, the more stressed we become. The more stressed we become, the more entitled we feel. The more entitled we feel, the greater the chances of rising credit card debt. Entitlement usually starts small. But it rarely stays small. As responsibilities and stress levels rise, we tend to want larger, more expensive items to “satisfy” us. That also means a greater reliance on credit cards. And likely, growing debt on a monthly basis….and More Stress!

It does not have to be that way.

Alternative – Here’s a suggestion that some folks may see as “sacrilege.” But here goes: REDUCE the “To Do” list. You may not be able to reduce your responsibilities at work, but maybe you (and your kids) are overscheduled outside of work and school. We’ve become a society of “do’ers,” frequently operating on “automatic pilot,” simply to check another item off our list as if it were a “badge of honor.” If we don’t have at least a half-dozen items there, we think that we are underachievers. If we are not exhausted when our heads hit the pillow, we feel unsatisfied. Some parents have said to me, “If (kid’s name) is not doing all of these activities, (he/she) won’t get into college!” Usually, my response is “Nonsense.” And this comes from having taught on the college level for 16 years. Grades do play a role in gaining college admission, you know. Simply put, we are living “Quantity Lives” when we should be living “Quality Lives.” And we are training the next generation to live the same way: overwhelmed, stressed, and entitled. Reduce the unnecessary activities in your family. Spend more time together at home as a family unit. This will add to your quality of life and greatly diminish the belief that we are entitled to a houseful of stuff.

Joe Paretta is an author, speaker, and coach. His first book, Master The Card: Say Goodbye to Credit Card Debt…Forever! (Balboa Press, 2010), is one which he considers “a labor of love.”  After accumulating $12,000 in credit card debt, Joe changed the way he thought about and used money and credit cards. As a result, he has been free from credit card debt for many years and coaches others to freedom, too. To learn more about Joe or to purchase his book, visit his website