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October 6th, 2015 by Jason M. Kaplan, Esq.

8 Core Habits That Define People with No Credit Card Debt

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Becoming an increasingly essential part of our lives, credit cards are vital for making strategic buying decisions. Thus, it would be unwise and unfair to tell people to stay away from credit cards altogether. However, owning a credit card does not necessarily mean that you have to be laden with debt. In fact, with a few neat habits, many people tend to do the unthinkable: possess credit cards and avoid debt. According to experts who have done it, here's how to own a credit card without putting yourself under debt.

 

  1. Have Some Cash as Back-Up:

Credit cards provide us with the luxury of enjoying products or services in the current and paying for it later. However, this exact feature of credit cards is what makes its holders so susceptible to debt as well. According to experts, the best way around this is to have some cash as backup for emergencies. With some cash to fall back on, you will ensure that you do not make tough situations worse by getting embroiled in debt. For vacations too, it is advised to pay in the current with cash rather than pay for them later on.

 

  1. Do not Fall for Rewards:

Credit card rewards or points are carefully thought out so that the user of the card believes that he or she is actually getting something in return for free. However, since the only way to rack up points is by swiping your card, users unknowingly end up spending too much and paying huge sums of interest. For instance, if you get a 2% cash back but the interest being charged is 16%, then it’s simply not worth over spending and putting yourself at risk.

 

  1. Leave your Card at Home:

Providing a false sense of financial strength, credit cards entice the holders to spend more. To avoid this, leave your card at home and only take the amount you believe you will spend. For instance, if a lunch costs $40, take that amount in cash and leave your card at home.

 

  1. Spend with Care:

Credit cards allow holders to spend more without taking into account their real financial position. With huge limits, these cards entice users to spend in a manner that would otherwise not be possible if the person paid in cash. Therefore, the key is to think over your financial situation and then decide how to spend your money wisely.

 

  1. Make Regular Payments:

People who have no credit card debt pay off their balances on a weekly basis. Doing so allows these people to get a hold of the balance and not let it spiral out of control.

 

  1. Make a Shopping-List:

Although we would all like to buy everything we desire, sometimes we end up buying goods that we did not really have a lasting desire for. Ergo, avoid impulse purchases by making a proper shopping list and purchasing the items according to their importance levels. Also, according to a recent study, it is advised to not go shopping while you are hungry or you will end up spending a lot more than you planned on spending.

 

  1. Make the Card Hard to Get:

A little more extreme than the habits mentioned above, some people stay away from credit card debt by making it tough for themselves to actually access their cards. Handing the card over to a loved one, for instance, would mean that you would have to explain why you need the card and explain the purpose of the desired purchase.

 

  1. Keep a Check on Your Credit Score:

Credit scores define your financial position in regards to debt. Often a time a less than perfect score motivates people to get rid of the imperfections. The key here is to regularly check your credit score for any discrepancies.

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