7 Ways to Beat Credit Card Addiction
It’s tough to avoid having a credit card in today’s world. Credit cards are a necessary part of online shopping, building credit history and more, and offer a lifeline in case of financial emergency. Plus, most credit cards offer rewards programs that can make using them on a regular basis extremely beneficial.
However, credit cards come with some major problems attached. Most people get one as soon as they become an adult but don’t get appropriately educated on how to use (and not abuse) their credit privileges. For many, this leads to developing bad habits with credit before they understand the gravity of how serious unchecked spending can become.
As such, we wanted to offer a few tips you can use to re-shape your relationship with your credit card. Resisting the urge to use your card can be tough, but is a necessary step towards achieving financial freedom. Putting in the work to make changes is worth the outcome!
1. Leave it at home when you can
It’s easy to trick yourself into thinking you’ve got thousands to spend when you use credit. In reality, you’ve got access to thousands you can borrow. You’re on the hook for every dollar you spend, but it doesn’t always feel that way when you’re adding a few extra items onto a purchase at a store.
Instead, try to leave your credit card at home when you can and rely on cash as often as possible. Research shows that people who regularly shop on their credit card spend 12%-18% more than those who just shop with cash. The logic is simple: taking a finite amount of money to the grocery store forces you to only buy what you need, while taking a credit card means you can get anything you want without any immediate consequences.
Plus, cash is helpful as it visually reinforces the amount of money you have. It can be tough to think about money spent on your card in the same way, subtly encouraging you to spend more than you can really afford to.
2. Don’t take on more than you need
Many people start getting into serious trouble with credit once they start taking on more than they need. This can be done by increasing one’s credit limit and/or opening multiple credit cards, and is often a response to maxing out a first card or feeling uneasy about having very little available credit on a regular basis.
The problem here is that these “solutions” don’t address the personal choices that lead people to get into debt. If you’re not addressing your spending habits and get a brand-new card with thousands available to spend, you’ll be likely to start repeating the same mistakes that made the first card a problem. Soon, you’ll be responsible for multiple monthly payments and interest charges from multiple credit card companies. It’s easy to see how this can spiral out of control if you’re not careful.
Instead, keep your credit limit as low as you can to cover your needs and don’t open multiple cards unless it’s absolutely necessary. Your focus needs to be on changing your behaviours instead of increasing the amount of credit you have access to.
3. Learn what a post-tax hour of your work yields
A useful tool when making spending decisions with your credit card is to understand how much money you earn for each hour you work after tax has been deducted. Then, when you’re questioning whether to spend or not, you can think back on this dollar amount and determine how many hours you need to work to cover the cost of the purchase. Is it really worth your time?
Once you start thinking about everything you buy in these terms, lots of purchases don’t seem as valuable anymore. If you need a visual reminder, you can even take a small piece of paper, write your amount on it and tape it to your card to remind yourself each time you go to use it.
4. Get specific about your goals
It can be easy to overspend when you’re not focused on what you want to achieve with your money. Small purchases often don’t seem like that big of a deal when you’re making them. However, lots of small purchases add up – they’re easy to forget about and can drastically increase the amount you’re on the hook to repay each month.
Instead, focusing on something you really want to achieve can help make non-essential purchases seem unnecessary. It’s been reported that 83% of people who have clear financial goals feel better about their financial situation within a year of setting them. Whether it be the goal of owing $0 to your creditors, affording a down payment on a home or simply saving for something fun like a dream vacation, there’s nothing that can motivate you to shape up like the mental image of achieving what you want most.
An excellent way to do this is to get specific about what you’re saving for and create a dedicated account for that goal. It can be extremely motivating to watch the balance within this fund grow and can encourage you to stay on track, skipping little purchases so you can put that money towards your goals instead. Saving with QUBER is an excellent way to go about it. Within your QUBER Vault, you can start a dedicated Saving Jar for each financial goal you want to work towards and work on achieving each at your own pace. Or, you can also choose from a number of targeted Saving Challenges that’ll offer you a cash reward when you successfully reach your goal at the end.
→ If you’re looking to get started growing your savings with QUBER, you can download the app by clicking here.
5. Learn more about your triggers
There are a variety of reasons why people become reliant on their credit cards. For many, they abuse their credit privileges in moments when they’re feeling emotional. This could be after a stressful day or a particularly great day – either way, those who are emotional spenders feel compelled to indulge order to “treat themselves” as a response to their emotional state.
If you find that this applies to you, it would be beneficial to do some soul-searching to learn more about what specific feelings trigger you to spend. For example, are you finding that you’re always getting take-out after a hectic, extra busy work day? If so, do your best to pre-prep your dinner if you see your schedule is looking hectic, or find a few easy-to-make recipes that’ll satisfy your desire for comfort food without costing a fortune (even if they’re not the healthiest).
6. Read some scary stories
This is a bit of a sad one, but could be very effective if you’re not having much luck with other strategies. Unfortunately, there are countless people out there who have horror stories to share about their personal struggles with managing credit. A quick online search through forums on Reddit or other similar sites will yield a large number of stories from people who’ve suffered serious consequences, such as homelessness or six-figure debt, due to their inability to stop spending.
While this isn’t the most pleasant thing to do, reading about the negative experiences of others who let their spending habits spin out of control might be a bit of a ‘scared straight’ moment for you. Even if your issues with credit aren’t severe, it can be useful to remind yourself of how quickly things can go wrong if poor spending habits are left unchecked.
7. Work with a partner
Finally, chances are, you’ve got a few friends who also struggle with managing credit in the same ways you do. When working on any type of habit change, like eating better or getting active, it can be extremely beneficial to tackle the problem with the help of a buddy. Credit card addiction is no different!
On good days, you’ll have someone to hype you up and congratulate you for making better choices with your spending. On bad days, you’ll have someone there to keep you accountable, reminding you of the bigger picture and pushing you to stay focused. You can also think of this person and your shared goal when it comes time to use (or not use) your credit card.
