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Do you want know how to stop using credit cards?
In this post, I’ll walk you through the common reasons why most people choose to stop using credit cards and how to make sure you are firm in your beliefs.
I’ll also share with you some tips of how to get back on track with your finances and how to use your credit wisely in the future.
Table of Contents
How To Stop Using Credit Cards
Know Your Reason Why
Learning how to stop using credit cards may seem like a smart decision for many.
However, the decision to stop using them will depend entirely on your individual financial situation.
It’s important you identify the reason or reasons why you no longer want to use credit cards.
By understanding the reasons, you can make better financial decisions for yourself.
And you might even find that you can achieve your desired result and continue to use credit cards.
Here are some common reasons why people stop using their credit cards.
Some people treat their credit cards as if they were cash and spend money on a wide variety of things that may or may not be included in their monthly budget.
When you engage in compulsive spending or have poor spending habits, and find it difficult to quit shopping with your credit card, it is essential to figure out how to stop using credit cards to improve your financial situation.
Sometimes, getting professional help can be the best course of action to remedy this.
The reality is, many times out of control credit card spending is a symptom of a greater issue, like unhappiness or depression.
How do you know if your spending is out of control?
The classic sign is a high credit card balance.
If you are getting close to your credit limit, this is a sign you need to limit your credit card use.
But what if you aren’t close to your credit limit?
Luckily you can use the credit utilization ratio to know for sure.
Simply take all your credit card balances and total them up. Then add up your total available credit on all your cards.
Now divide them and get your ratio.
For example, let’s say you have 2 credit cards, both with a $500 balance.
These cards have a $2,000 credit limit each.
You take your total balance of $1,000 and divide by $4,000 to get a ratio of 25%.
Reliance On Your Credit Card For Affording Essentials
Having to lean on your credit card for support during difficult times is not your fault.
However, if you find that your credit card is becoming the more commonly used form of payment for essentials, it may be time to stop swiping and come up with a solution to your financial issues.
When you’re only spending cash you have, it becomes much more apparent how much income you actually have and what you need to do in order to boost it and live within your means.
You’re Falling Behind On Your Credit Card Bill
When used responsibly, credit cards generally aren’t an issue for many users.
It’s when you fail to make monthly payments that late fees and interest charges are tacked onto your total balance, making it increasingly hard to clear all your debt.
When this happens, making an effort to stop using your card until your debt is gone is key to getting out of the red and back to a stable financial position.
With all this in mind, it’s important to remember that having a credit card is key to having a credit score as well.
If you don’t have any open lines of credit and continue to do so, credit bureaus won’t have a credit history to report.
This makes it harder to do simple things like apply for apartments or secure a mortgage.
Learning how to stop using credit cards can be a short-term solution for eliminating debt and improving your financial standing.
However, it’s not a comprehensive solution that will offer you a host of benefits over time.
Once you learn how to use your credit card responsibly, it’s important to continue using that account or open up a new one so you build your score over time.
A Few Tips On How To Stop Using Credit Cards
For some, no longer making credit card purchases will be easy.
For others, it can be much harder due to their reliance on the card in their day-to-day life.
Here are a few tips to help you get started no matter where you may fall on the spectrum.
Keep Your Cards At Home When You Go Shopping
The most obvious way to limit your use of credit cards is to make sure that you don’t have them with you when you go shopping.
This creates awareness about how often you use it when you reach for it to pay for something at the grocery store.
If you have a digital wallet installed on your phone, make sure that you don’t have your card accessible on there so you don’t have the temptation of paying with it at places that accept mobile pay.
Over time, you’ll begin to break the habit of turning to your credit card to pay for everything.
Use Your Debit Card Instead
Another option to look into is to shop with your debit card.
The benefit here is you don’t need to carry cash with you when you go out, and you can’t get into debt as you can only spend the money you have in your checking account.
However, debit cards do not have the same protections against fraud like credit cards do.
- Read now: See the pros and cons of debit cards
- Read now: Understand the pros and cons of credit cards
Make sure you know how debit cards work so you don’t end up hurting your finances as a result.
Lock Your Cards Up In A Safe
For some, learning how to stop using credit cards may not be as simple as keeping them at home.
In situations like these where the temptation to spend is too much, you can take actions like locking your cards up in a safe.
The safe that you choose should be a bit more difficult to use so that you don’t find it too easy to access your cards whenever you want.
If you have a partner who is responsible with their money, you may also ask them to stash it away so that you don’t know the combination and can’t easily get to them.
Sometimes, you have to do what you have to do in order to improve your finances!
Take More Dramatic Action If Needed
Some people looking to figure out how to stop using credit cards may not find the above information as helpful as it’s intended to be.
When all else fails, taking dramatic action may be necessary.
But what does this entail?
If you don’t want to risk spending at all, one course of action may be to cut up your credit card with a pair of scissors or shred their credit card and re-order it once they’re back on track with their finances.
Something else that people do is freeze their card in a block of ice.
Simply wrap your credit card in tin foil, place it in a Ziploc bag filled with water and place the sealed bag in the freezer.
The time it would take to thaw out the credit card is enough of a deterrent.
One thing you don’t want to do is close your accounts, especially old credit card accounts you have had open for a long time.
This is because the length of your credit history is a key factor in your credit score.
If you close these older accounts, it will have a negative impact on your credit report.
You are better off cutting up these cards or doing something else if you want to stop using it.
If the card is a newer credit card, then you can close the account.
Just know there is a chance your credit score will drop 50-100 points temporarily.
Whatever method you choose, make sure to do your due diligence and understand the consequences before you pursue any course of action.
Just make sure that if you go this route, you still make a small purchase every year or two on these cards.
This will keep your account in good standing and the credit card company won’t close your account.
How To Get Back On Track
Once you’ve discovered the most effective method to stop using credit cards, it’s important that you’re actively working to better your financial health so that you can start working on your credit score again.
A few ways to make sure that you’re going in the right direction include the following.
Establishing A Budget
You can’t see where you stand financially if you don’t have a budget at your disposal.
Now is the time to get back to basics and create a budget that covers your current income, your monthly expenses, your credit card debt, and other categories like savings.
When you have a budget, spending your money responsibly becomes much easier.
- Read now: Find 17 free budget templates to download
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And when you spend more responsibly, you can also save more money, helping you to get ahead financially.
Rewarding Yourself For Good Habits
Spending some of your money on yourself now and again isn’t a bad thing.
However, compulsive spending can be, which is often what gets credit card users into debt.
If you’ve been working hard towards building the right habits and improving your finances, don’t be afraid to reinforce these good habits with a small treat.
Creating An Emergency Fund
If you’ve been using your credit card to pay for necessary expenses, placing a greater emphasis on saving so that this doesn’t become a major issue in the future can help you enormously.
Now is the time to create an emergency fund that covers anywhere from 6 to 12 month’s worth of expenses.
If you do run into any financial issues, you’ll have this amount to tap into when you need it most.
Paying Off Your Debt Quickly
If you have credit card debt that’s weighing you down, speaking with your credit card issuer or related resources to come up with a repayment plan that works for you is important if you want to get rid of the debt altogether.
Then, make sure you’re paying as much as possible and that you’re making all payments on time.
- Read now: Find out the pros and cons of bill pay
The last thing you want is your debt to grow due to interest or to put yourself into a tougher position with late payments.
When you’ve finally developed the right financial habits, owning a credit card may not be so difficult!
There are many reasons why you might want to stop using credit cards.
The most important thing you can do is to make sure you understand why you want to stop in the first place.
Otherwise you will start using your credit shortly after you decided not to, and possibly end up in worse financial shape.
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I have over 15 years experience in the financial services industry and 20 years investing in the stock market. I have both my undergrad and graduate degrees in Finance, and am FINRA Series 65 licensed and have a Certificate in Financial Planning.
Visit my About Me page to learn more about me and why I am your trusted personal finance expert.