- Analyze your spending. Are you using your card for routine purchases like gas and groceries? Or are you using credit as a means to buy things you can’t really afford – like electronics, unnecessary clothing, big nights out, etc. If you see some outrageous numbers (like $300 on new clothes or $500 on dining out) that depress you, it might be just the kick in the pants you need to overhaul your habits.
- Understand marketing tactics. You don’t need everything, despite what advertisers want you to believe. This works for both products you want to spend your money on and credit card companies trying to lure you in with deceptively low interest rates and free gifts. Start to question your purchases and stop talking yourself into buying things. Asking “do I really need this?” sounds simple, but it actually works for me a lot of the time.
- Cash only. Until you pay down your balances, try to only use cash. It’s easier to understand just how much you’re spending when you have a finite amount of money at your disposal. It brings you back to the days before credit was mainstream. Think about 12-year-old you. If you didn’t have money to buy the new Nerf gun, you didn’t get it. (Unless your parents bought it for you, then you’re spoiled and that’s probably why you have a high credit card balance!) (Kidding. Kind of.)
- Consolidate and close. This can get tricky, but it might help to get all of your credit card balances onto one card with a lower interest rate. Then, close all but one or two of your credit cards. If you’re concerned about your credit score, keep your longest-lasting account open. But overspending is way more dangerous than having your score drop a bit from closing accounts.
- Lock away your cards. You’ll never pay down your balance if you keep spending! Use cash, pay down your balances, and don’t touch your card unless it’s an extreme emergency. Some people freeze them in ice, like the lead character in Confessions of a Shopaholic.
- Pay down your balances. Sounds like common sense, but making a commitment to pay more than the minimum each month is a great way to nick away at that debt. Don’t be discouraged if it takes longer than you thought it would. The important thing to remember is that you’re forming good habits, and your credit score and your financial health will thank you in the long run.
Bank Your Way
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