I Stopped Using Credit Cards – Here’s How It Changed My Spending Habits

A lot of people use credit cards on a regular basis. And it can make a lot of sense to use them for the perks they offer, such cash back on purchases.

But there may come a point when it’s time to stop using credit cards. And it looks like this Reddit poster has gotten there.

The reality is that stopping to use credit cards could be good for your finances. But there are also ways to use credit cards responsibly so they can help you instead of hurting you.

The problem with credit cards

When you hand over a bunch of cash for a purchase you’re making, you’re able to recognize what it’s costing you. With a credit card, it’s much easier to tap or swipe your way to new things. And you may not realize just how much you’re spending until your bill arrives at the end of the month.

Now the nice thing about credit cards is that they give you the leeway to just pay your minimum each month and carry your balance forward if you don’t have the money to pay it off in full. The problem with that arrangement, though, is that you can end up spending a lot of money on interest — not to mention get trapped in a cycle of debt.

Worse yet, if you abuse your credit cards, you could end up doing serious damage to your credit score. And that’s something it could take you years to recover from. So if your credit cards have been driving you to overspend, you may want to ditch them and use cash or a debit card to buy things instead.

How to use credit cards responsibly

Because there are benefits to using credit cards, it pays to find ways to keep yours but use them in a manner that helps your finances instead of hurting them.

One Reddit user said they use their credit card like a debit card — meaning, they only charge expenses they know they have the funds to cover. Another user said they use credit cards but pay off their bills in full every month. That gives them the best of both worlds — flexibility and better cash flow during the month, and cash back or rewards on the things they’re buying.

If you want to use your credit cards in a way that’s beneficial to your finances, follow these ground rules:

• Never charge more than what you can afford to pay by the time your bill comes due
• Check your credit card balances every week to make sure you’re not going overboard
• Treat your credit cards like your savings account or debit card, not like extra money
• Read your credit card agreements and understand the terms you’re signing up for

If you stick to these rules, you may find that you’re able to earn cash back on the things you’re buying without falling into the trap so many consumers land in.

Meanwhile, if you’re already in credit card debt, do your best to get out of it as quickly as possible. You may want to consolidate your balances into a personal loan, or do a balance transfer, to shave money off of your debt’s interest rate and make it easier to repay.