Credit cards – they’re one of the most powerful drugs of all.
We all start off with good intentions, claiming that our credit card is only for emergencies, and that we’ll pay it back in full each month. Then just once we can’t afford to. No problem. The balance is low – we’ll do it next month.
And then the rollercoaster starts. The interest starts to add up, and before you know it that innocent little piece of plastic has wracked up an astonishing outstanding balance. Worse, you know that sooner or later you’re going to have to deal with debt and pay it off.
A critical part of the process of paying off credit card debt, however, is weaning yourself off the addiction. We need to find ways to stop using credit cards altogether, and instead rely on money we actually have.
If you’re looking for ways to stop using your credit card, here are a few ideas to consider…
Eliminate the Need for a Credit Card
The first question you need to ask yourself is why you use a credit card to begin with. For some people spending on a credit card doesn’t feel like “real” money.
We know we’ll have to pay it back eventually, but we’re under no pressure when that actually occurs. We therefore spend now, with a view to dealing with the repayment “some day”.
For other people, the very honest reason is we can’t afford to live right now without relying on credit from time to time.
Whatever the case, in many situations increasing our income can be beneficial. This means we no longer need to rely on credit, and can instead spend the money we already have in our accounts.
Increase Your Income
No matter what your level of education or experience, thanks to the Internet there are ever more ways to make money from home. One of the most flexible is to start your own blog (read my tutorial here) which can not just earn you a little side income but even has the chance to become a full time job.
The important lesson here is to consider whether you’re using a credit card because your lifestyle costs more than you earn, and if so to consider creative ways in which you might increase your income.
Learn to Budget
A second common reason for using a credit card is simply that there is “too much month left at the end of the money”. Learning how to create an effective spending plan is therefore another useful tip.
By carefully planning your expenses, and arranging your finances so that you have enough to cover everything necessary you’ll never again have to rely on your credit card to help you make it to your next payday.
Eliminate the Habit of Spending on a Credit Card
Of course, rearranging your finances so you don’t need to use a credit card is one thing. But many of us become “hard-wired” into using them all the same. Somehow if we have $1,000 in a bank account, and spend $1,000 on a credit card, we feel like we still have $1,000 available, when in actuality these two figures have cancelled each other out.
If you want to cut the habit of actually using your credit card out of habit then the following tips may prove useful…
Stop Teasing Yourself
If you’re the kind of person who uses a credit card for luxury purchases that you can’t afford, then avoiding these temptations is a strong first step.
Stop going “window shopping” and looking in those clothes shops that you love so much, and you’ll only convince yourself that you have to buy something.
Instead, avoid the shops altogether, and find yourself a new low-cost hobby that doesn’t tempt you to spend money constantly to enjoy yourself.
Take your credit card(s) out of your wallet entirely. You don’t want to be tempted when you’re out shopping to put “just one more” expense on it. If you don’t have your card with you, then you can’t use it.
Cut It Up
A more extreme version of this concept is to actually cut up your credit card so that it cannot be used. While this may sound like a step too far for some people, giving up your card entirely may be the best option of all.
A unique idea proposed by some personal finance experts is to freeze your credit card in a block of ice. This is simple enough to do – just pop it into a plastic tub filled with water and pop it in your freezer.
This way, if you’re desperate to try and spend money on your credit card you’ll have to wait for the ice to melt off. And by that point you’ll probably have given up on wanting to spend your money anyway.
[Note that freezing you card can of course do damage to it]
Lock It Away
It’s one thing to take your credit card out of your wallet, but quite a different thing if you think you’ll just pop it in your pocket when you might need it. Locking your credit card away in a safe or similar device makes it one step more difficult to access.
Give It To a Guardian
Consider giving your credit card to a relative or friend, and tell them not to give you access to it for a period of time. If you manage to go for three months without your credit card you’ll probably find that you’re far less likely to use it when you finally get it back.
Use Cash Only
It’s a lot easier to pay for something on a card with “imaginary money” than it is to hand across cold, hard cash. So once you’ve created your spending plan, consider withdrawing only the cash that you truly have available to spend freely. Then just use this. Suddenly shopping becomes a far more uncomfortable experience as you watch all those crisp notes exiting your wallet.
Use a Debit Card
As a second option to going cash-only, consider only carrying (and using) a debit card so that when you’re out of money the card will be refused.