How to beat bad credit habits and reduce your debt

Over the years, credit cards have become a great convenience and, for some, a necessity. There are many beneficial reasons to use credit cards. When you want to make a purchase all you need to do is take out your plastic, swipe it, sign the electronic digital pad if required, and you can walk away with your purchase. Very fast, simple and, above all, convenient.

However, as with most things in life, with every benefit comes some sort of tradeoff. And with credit cards, there are a number of drawbacks to consider. One of the primary negative issues associated with credit cards the debt that can accompany it. According to, the average consumer debt per credit card that carries a balance is $8,220. Bad credit card habits are usually at the root of the problem, which can range from some budget overspending to flat out going into deep debt. In order to avoid falling into either of these categories, it is important to break the bad habits. Or if your credit balances have already spiraled out of control, you can change your habits and pull yourself out of the debt trap.

Strategies that can be used to break bad credit card habits include:

Set a budget and track receipts

With the ease of use credit cards provide, it can be easy to overspend if you are not limited to cash. Many people tend to swipe a card without giving it full thought, especially on impulse buys. In this scenario, the charges can stack up quickly without a person even realizing how much they’ve spent.

Establishing a limited budget and setting up a system to track your receipts can give you a goal to meet and also a visual to see where your money is going. There are a number of ways you can do this, including keeping a spreadsheet, adding in the charges as they are made. This way you can see a running balance, calculate your needs and know when to cut yourself off from excess spending. Additionally, through budgeting and tracking there are no surprises at the end of the monthly cycle when the bank sends its bill.

Bottom line—watch those receipts and don’t spend more than you can realistically afford.

Keep minimal lines of credit open

It is common for credit card companies to create promotional activities to entice consumers to open a line of credit, providing rewards such as prizes, gifts or monetary incentives. Avoid these temptations. While the offers may sound good, in the long run, consumers carrying multiple cards tend to raise their balances of money owed even higher.

By keeping a minimal line of credit open, you can limit your spending. It also prevents compulsive spending, which can lead to maxing out credit limits on a number of different cards. In addition, limiting the number of credit cards also prevents the credit score problems associated with too many credit lines.

Pay your statement in full

A big mistake many consumers make is carrying balances over from month to month especially those that only pay the minimum balance. These kinds of bill-paying practices will only eventually lead to accumulated interest payments and higher debt.

Shift to cash

One of the best ways to avoid falling into the credit card pitfalls is to switch to cash. Cash is finite, when it runs out, you can’t spend any more. By establishing a monthly budget, you’ll know exactly what you have and what you can afford to spend. If you need a credit card, use it only in the event of an emergency, this way when the bill arrives, it won’t be out of control from frivolous or unnecessary impulse spending. And remember, don’t use your ATM to get cash using credit, those interests rates are typically much higher than if you were to charge a purchase directly.

Bad credit card habits has had an unfortunate impact on many consumers. Credit cards can definitely be of value when used properly, but bad practices can send an individual spiraling into debt. To avoid the debt traps, establish good spending and tracking habits and those bad credit card habits can easily be kicked.