I’ll be the first to admit that I have a credit card. Truth be told, I am not 100% against them. When my husband and I first started getting our finances in order, we had a credit card strictly for emergencies. We rarely used it and when we did, we’d pay it off right away. You see, we didn’t have a huge amount of money in savings. We were working to become debt free (you can read that awesome story HERE) and I wanted a safety net.
But let’s get real here. Credit cards aren’t for everyone. Are they inherently bad? No! But can they suck the life out of you? Yes! Below are 5 clear signs that it might be time to cut up your credit card today.
1. You swipe without thinking.
If you’re out shopping and you can’t help but swipe your credit card, then it might just be time to cut that card up. Credit cards allow people to buy items on impulse. Most of the time those items are one that you haven’t planned for or just can’t afford. The worst is when you’re out shopping with a friend or roaming the aisles of Target and you just can’t help yourself. The next thing you know, you’re walking out of the store and you’ve just charged $200. “What just happened?!” you think. If you can relate, then it might be time to cut up your cards. Still have a balance on your card? Lock it up and vow not to use it again!
2. The interest is killing you.
Is the interest on your credit card causing you to go broke? Many people find themselves way in over their head with interest making it difficult to pay off their credit cards each month. If you’re struggling to pay that sucker off, then it might be time to cut it up and stop using it! The more you use your credit card, the larger your balance will be. And the higher your balance, the more interest you’ll end up paying….especially if you’re living that paycheck to paycheck life. Let me tell you that paying interest is NOT worth a nice meal out, cute outfit, or new piece of furniture! Learn more about how to make large purchases without going into debt HERE.
3. You carry a credit card balance.
If you’re unable to pay off your credit card each month, it might be time to cut it up and stop using it! Credit cards aren’t bad, but carrying a balance is not ideal! When you carry a balance on your card, you’re just sending more of your hard earned money to the credit card company. And let’s get real here. If you’re working hard each day to bring home a paycheck, don’t you want to keep as much of it as possible? I know I would! Once you pay your card off, cancel it so you can’t spend on it anymore.
4. You have more credit cards than you can manage.
If you open your wallet and have more credit cards than you can even count, then it might be time to get rid of a few of them! No one needs a ton of credit cards! Especially if you owe money on each of them! Keep a few and get rid of the rest. Chances are likely you won’t even miss them.
5. You’re spending money you don’t have.
Take a moment and imagine this scenario with me. Payday is a week away and you’re down to $23 in your checking account. You vow to not spend another dime on your credit card, but then you realize that you need to buy groceries. Or maybe a friend asks you to go out to dinner. You could even need to fill your car with gas! Instead of using your debit card (because you have barely any money left!), you start using your credit card. Next thing you know you’ve spent $300 in a week and your credit card balance is much larger than it was last month. If this (or even a version of this) has happened to you, then it might be time to cut that credit card up and learn how to budget better!
Writing a realistic budget (and actually sticking to it) is the best and most effective way to keep you from overspending on your credit card! If you’re not sure where to start when it come to budgeting, don’t worry! I’ve got you covered! Sign up for my free (yes, I said FREE) Budgeting Basics Email Course. I’ll send you over 14 pages of free printables to help make budgeting easy along with lessons on how to write a budget that will work for you!
Worried about your credit score?
“But Allison, if I close my credit cards, my credit score will drop!” I hear this all the time. However, do you know if it’s actually true? As we paid off credit cards, our credit score increased each time! Yes, that’s right! In fact, many people that I’ve worked with saw an increase in their credit score as they paid off debt and closed their accounts. Don’t let the fear of your credit score dropping keep you from making decisions that will help you out in the long run!