Do you find yourself charging purchases instead of paying with cash, more often than not? Even though credit cards can make it convenient to make a purchase online or offline, it's easy to forget to pay off that balance in full before the billing cycle ends. You could be paying much more than you realize in interest charges as a result. Maxing out your credit cards can put you in a weak financial position and contribute to debt overload. Use some of these tips and strategies to break your credit card habit!
Leave Home without Them
One of the simplest ways to break your credit card habit is to stop giving yourself access to the card altogether. Leave the cards at home. Better yet, store them away in a safe or a safe filing cabinet so you don't even have the option to pop them into your wallet when you leave the house. You might feel uncomfortable - even anxious - about leaving your cards at home when you head off on that next shopping trip, but you'll remove the temptation to charge purchases to a credit card altogether.
Review Your Personal Budget
If you can no longer charge a single dollar on a credit card, how much disposable income do you have to buy things you want? Do you even know how much cash you have available for your weekly expenses and day-to-day purchases? Take some time to review your personal budget and determine how much cash you actually have at your disposal each week. What types of purchases are most important to you? Now that you're responsible for spending only money that you have earned, what types of things do you really want to buy?
Making purchases with a credit card can give you a false sense of security when buying things. For many people, it's easy to overlook the real value of an item and forget about shopping for the best price. When you start paying for everything with cash, you may just start to make more informed decisions and become a more conscientious shopper.
Remind Yourself that Credit Cards Aren't "As Good as Cash"
If you don't have the cash to buy something, credit cards aren't "free money" - even though they can feel like a safe cash cushion. Don't use credit cards to fuel a shopping addiction. Every purchase you make that doesn't get paid off before your billing cycle ends will be subject to interest charges. Leave that balance on your card for a few months and you could end up paying a high price even for the smallest item. If you want to go on a shopping spree, create a list of things you want and set some limits on how much you are going to spend. Remind yourself that credit cards can't be spent as freely as cash! Credit card spending comes at a price.
Plan Your Purchases
Whether you're shopping for a new computer, designer shoes or a new vacuum cleaner, make a list of your "wants" and "needs" and make a plan to purchase them with cash by a specific date. Being specific about your purchasing goals and prioritizing your "wants" and "needs" can make you think twice about splurging and pulling out that credit card. Set some savings goals so that you can get what you want with your own, hard-earned cash. Whether this means dipping into your savings account or just setting aside more money for something over several weeks, create a plan that works for you and steer clear of credit card charges altogether.
Reward Yourself for "Credit Card Free" Weeks
Positive reinforcement can help you stay committed to breaking the credit card habit. Credit card spending can be just like any other addiction, so you may need to set up a rewards system to keep yourself on track. Treat yourself to something you've been putting off for a while (purchasing with cash, of course) or enjoy a free activity in the neighborhood. Find ways to reward yourself or just keep a log of your successful weeks so that you can look back and see the progress you've made.