Tips to Stay Out of Credit Card Debt

It is so easy these days just to either hand your card over for a purchase, or even worse, shop online, where you can buy with a few clicks, or even faster if using Amazon and you can make a one-click purchase.  It can be easy to fall into credit card debt, so much in fact that according to a recent study by NerdWallet, the average American household has more than $16,000 in credit card debt, and $779 billion for all U.S. consumers.  In order to prepare to be financially free by the time you hit retirement age, although it may seem like too far away to worry about now, you want to ensure you stay out of credit card debt today.

Spend Within Your Means

Sure, it can be easier said than done, but you should only spend what you can afford.  If you don’t have the money in your bank account now, don’t buy it, plain and simple, and if you want it, save up for it.  Either having a budget, or at least tracking your purchases will help in seeing exactly where your money is going, even taking a step further in analyzing purchases line by line and seeing if they were necessary.

Use Cash Instead of Plastic

With the ease of using your credit card everywhere you go, you can continue to run up charges over the next month until you receive the statement in the mail, and it’s from there you have to figure out how you are going to pay that balance by the statement due date.  A good way to avoid the credit card is to give yourself a cash allowance, sort of like what your parents gave you as kids, only being able to spend what you have until the next paycheck, and maybe seeing that cash transaction leaving your hand and into the register will be enough to give an impulse purchase a second thought.

Cut Up and Leave Account Open

If you just can’t seem to break the habit of using your credit card and you find yourself having one too many shopping sprees, you can cut up the credit card (and throw away the pieces so you can’t piece together to still shop online).  If you do lose the card, it is important to leave the account open, no matter the balance, even if it is at zero, otherwise closing the account would reduce your available credit and actually ruin your credit score when you think you are doing yourself a favor.

Remember What It’s Like

I used to have trouble with credit cards, and my motivation to stay on track is that I remember what it was like before, with the weight on your shoulders, wondering how you will ever get out of debt.  Fortunately, I was able to come out ok, but I never want to be in that position again, so if you had the same experience, or even if you have not, listen to us, and stay on course.


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