6 Steps to Kick Your Credit Card Habit

Did you know the average American consumer has 2.6 (let's say 3) credit cards?  This is according to Gallup data collected which "includes the 29% of Americans who don't have any credit cards" and what is even scarier is that 16% of those surveyed have five or more credit cards. 

As of December 31, 2018, the national average rates on these cards were 17.21%.  

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While some make the claim that the credit card spending is an addiction, the first step is to recognize its a problem.  I tend to take it a step further to recognize why it's a problem.  Below are my 6 steps to kicking away your credit spending habits.

1. Ask Yourself "Why You Use Credit Cards?"

Most consumers have traded the paper currency from cash to plastic as a way of convenience.  It is faster, easier, and gives you a sense of safety instead of walking around with cash.  If you aren't keeping these bills caught up, the interest alone can eat away at your little bites at a time.

Eventually, you are engulfed and can't keep up which means you are now more reliant on credit than before.

2. Know How Much You Owe

Now that you understand why you are engulfed in debt, it is time to tally up every debt balance and write those down.  Use ink and paper, not making a note on your iPad or smartphone.  When you write important items on paper, your brain triggers a memory cell that helps to reinforce action. 

List your debts from the smallest balance owed to the largest balance.  See Debt Stacking (Snowball) for more information on this. 

3. Get a Plan to Pay Off

You only make so much income every paycheck which means if you are in debt, you are going to start budgeting the smart way and need to find ways to make more income.  If you are making more income, this will help to lessen the stress; otherwise, you will need to cut expenses which is necessary anyway.  Read about Budgeting here.

4. Refuse to Use

Here is the toughest part of kicking away your bad habit.  As with any addiction, it is very difficult to say no!  This is a time to reflect on your end goal and what it is you're trying to accomplish.  In this scenario, it is to become debt-free!  

Achieving financial freedom is the greatest gift because it gives you the income to travel more, enjoy more of life, work less, etc.  You must reflect on these goals or your own personal goals regularly to stay motivated.  During the difficult times of when money is tight and you are tempted to use your credit cards, remind yourself of how painful it is to be in debt!

5. Prioritize Your Cards

While I am not recommending your cancel your cards because this may have a negative impact on your credit score, I do recommend cutting all your retail cards and keeping no more than two credit cards.  If you have more credit cards, then cut these up. 

Cutting up your cards will avoid future use while keeping your accounts active while you pay off your debts to help improve your credit score.

6. Start Using Cash/Debit

Gain muscle memory by using cash or paying with your debit card.  Kicking away the credit habit is difficult but gets easier as you start planning your purchases in advance by budgeting for the month and using cash for flexible amounts you may spend such as evening outings or grocery shopping.

If you continue with the struggles of debt, I highly recommend you contact Debtors Anonymous which offers face-to-face, phone, internet meetings, and other services to help you. 

Get your debt on track by downloading the free printables for debt tracking and budgeting. DOWNLOAD HERE

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