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How to Split with Your Credit Card Addiction

Lifestyle

Addiction to credit cards is a very real problem. These shiny pieces of plastic have a huge impact on your financial health. While there isn’t an exact number of credit cards a consumer should have, it varies depending on each person. If you’re failing to make your minimum payments and have numerous different cards, it may be time for you to break your credit card addiction. Credit cards have become the new standard form of payment for everything from groceries to gas to monthly bills. However, some people rack up more credit card debt than they can afford and it begins what many call a “debt snowball.”


It starts with spending a little more than you can afford and saying you’ll pay it next month, or not realizing what you spend during a monthly period. When you start to say the same thing month after month it starts to add up, and before you know it you can barely afford the minimum payments on your cards. If you’re struggling and failing to make your minimum payments on your credit cards each month or you simply have a lot of debt, it may be time for you to break the cycle and end your credit card addiction.

Here are some tips to help you get started and rid yourself of credit card debt.

Photo Courtesy of Quickens Loans

Recognize the Problem

Credit card debt may be hard to beat, but the first step to overcoming it is recognizing your issue. If you are in deep credit card debt, it may be hard to face your financial troubles. Using too many credit cards is a problem, and “withdrawal” is necessary. There are various reasons why you may have fallen into debt – stress, fear, unforeseen unemployment, economic disaster – but you can break the credit card addiction, and you will be happier for it. Debt for many can be embarrassing and stressful which is why many people avoid dealing with it or deny it all together.

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So, what are the signs you have a problem? If you have no available credit on your credit cards, you are afraid to look at your statements, and there is no money in your bank accounts at the end of the month you may have a credit card addiction.

Start Saying No

Credit card companies want your business, and it’s not unlikely you are constantly being bombarded with incentives for more cards offering short-term benefits like low interest rates on balance transfers. While this is enticing, for those with credit card addiction, this is very dangerous. A good start to being able to “just say no” is to place unsolicited mail from potential creditor’s right into the trash. Doing this will help you stop the vicious cycle of more debt due to credit cards.

Give Your Credit Cards a Week Off

Yes, that’s right put your cards in your drawer stored away for one week and see how you do. Keep your debt card handy, but track how many times you would reach for a credit card in the short course of a week. If you don’t have your card accessible in your wallet, then you have the ability to determine if the purchase is an impulse buy, or something truly necessary. After the week is over, sort through you put away and choose one to keep in your wallet for emergencies for one month. If after a month those other cards do not leave the draw, you have learned you do not need them either. You may want to consider choosing one or two to put in your wallet and get rid of the rest.

Have a “What If” Fund

Today, it is important to have cash in the bank for emergencies, and the security that comes with knowing you have the money to fall back on. Ideally, you should aim to have six months’ of regular expenses based on your budget. The point of having a well-stocked emergency fund is to avoid credit cards for emergencies. If you reach for cash instead of card every time something unforeseen arises, your financial situation will be more manageable.

Make a Tight Budget

To get out of a credit card addiction you need to know what you can spend each month. If you’re one of many people whose monthly income just matches up with your expenses or you spend more than you make, it’s time to go through all your financial statements and fully understand what you are spending. Look into cheaper options for things such as cable and cut out unnecessary expenses such as magazine subscriptions and unused gym memberships. Cutting these expenses will give you more money to put towards paying off your credit card debt each month.

Target One Debt at a Time

Whether your goal is to pay off one card or boost your credit score completely, both can be accomplished by tackling one debt at a time. Focusing on the highest interest rate card or the card with the lowest debt are both great starting points. You can put as much as you can towards them each month while still paying the minimum balance on your other debts. This can make the task less stressful and like you are accomplishing more.

Cash Not Card

If you like to shop, having a credit card can easily sway you to make unnecessary, large purchases that you cannot afford. With cash or debit, you are less likely to overspend because you are working with a finite amount. Cash spending is generally more thought out while credit card spending tends to be more impulsive. If you can’t control the spending, bring only cash on your shopping trips. It is easy to underestimate how much you’re spending when swiping a card.

However, if you use the old-fashioned method of spending cash, you will become more aware of how much you are spending. You will be able to limit how much you spend! I suggest bringing a pre-budgeted amount of cash with you when you go shopping to ensure that you do not spend more than you intended. Most purchases like gas, food, and healthcare related items can be bought with cash since those items have no need for warranty or return.

Eventually, credit card addiction will catch up with you and this is why it’s essential to deal with your issue head on. Don’t be afraid to ask for help many may need a support system if they are dealing with an overspending problem. Breaking addictions is challenging, but once you to take control of your situation you can build a secure financial future and stay out of debt.

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How to Become an Expert at Managing Your Finances

It isn't always easy to stay on top of your finances, especially when you have developed unhealthy spending habits over the years. However, as you begin to realize the many benefits of having healthy finances, it can become something you want to make a conscious effort to improve. When your finances are in a good place, you often have access to better opportunities whether it be a mortgage loan, greater credit line or business loan. On that note, here is how you can become an expert at managing your finances in case you need a few tips.


Learn to Use Technology

The good thing about managing finances in the technological age is that you don't have to do it alone. There are so many apps available that will help you pay bills on time and track your expenses. For instance, some apps force you to live within your actual income and tell you what to do when you need to balance your budget.

If you need an app that will help you get better at saving, then some will set aside your spare change for you. Also, don't be afraid to use more simple tools such as your smartphone calendar to set reminders about payments if you don't automate them.

Seek Legal Advice

Sometimes, being an expert at something means understanding that you can't possibly know it all. This is why you have professionals around you that can help fill in the gaps where you're lacking. Consider hiring a legal firm to help with any challenges that are beyond you. Lexington Law is a good firm as they could help remove negative items from your credit report. Read this Lexington Law Review (Our #1 Credit Repair Service of 2019) to find out more about how they could help improve your finances.

Prioritize Learning

You can't do better than what you know when it comes to managing finances. You should, therefore, invest your time in learning more about finances and how to manage them. Think about what your goals for your finances are and what knowledge gaps you need to fill.

For example, if you want to invest in the stock market so that you can improve your net worth, then you may need to learn more about investing to do so successfully. To boost your knowledge, try reading articles on credible blogs that share finance information from professionals. Also, be weary of content from finance-driven companies as it could be biased.

Work on Growing Your Income

As a self-proclaimed finance guru, you know that the more sources of income that you have, the better. Work on increasing your streams of income so that you have more money to meet your targets whether it's to save for a property or put larger sums towards retirement. One way to do so would be by getting extra income by doing social media marketing for businesses or creating tutorials on YouTube. If you own a property, renting out rooms is a great way to make passive income.

Live Within Your Means

It can be difficult to live within your means when you live in a society that is always presenting you with things to buy. However, being more conscious about the things that you purchase could help you realize that most are wants rather than needs. To live within your means, always take time to think about a purchase as opposed to impulse spending. You should always get good at bargain hunting as many times you can find items of similar quality at a cheaper price.

Learn How to Manage Debt

Debt doesn't have to be a bad thing if you understand how it works and how to manage it. It can be a tool for credit building when you understand the fundamentals. For instance, if you take out a loan or credit card, always be mindful of your interest rates.

By paying the amount of money you borrowed back in full before the due date, you won't have to pay interest on what you borrowed. If you can't pay back in full, paying more than the minimum payment will ensure you incur less interest. For the most part, the secret to good debt management is never spending more than you can afford to pay back.

Managing finances is a life skill that can help improve your quality of life. By following the mentioned tips and taking your finances more seriously, you're more likely to master the art of healthy finances.