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Shopping with credit cards is convenient, and certainly has advantages over using cash for your purchases. With credit cards, you rack up rewards that effectively pay you for things you were going to buy anyway.
But as helpful as credit cards are, they can make it dangerously easy to wind up in debt. And to be clear, that’s not the healthy kind of debt. Rather, it’s the kind that can damage your credit score, making it difficult to borrow money affordably when you need to. If you want to avoid credit card debt in 2021, it’ll take a lot of discipline — but these helpful tricks will make it easier.
1. Don’t carry all your credit cards with you at all times
Every credit card comes with a spending limit, and some of those limits may be more generous than others. Collectively, your cards may provide you quite a lot of flexibility. It’s for this very reason that it’s wise to not give yourself access to all your cards at the same time. Doing so could make it easier to indulge in an impulse purchase that busts your budget and leaves you in a financial hole. Instead, carry just one or two cards when you shop for essentials like groceries.
2. Don’t store your credit card details on your electronic devices
It’s common practice these days to store credit card information on our phones, tablets, and laptops. But doing so could lead to needless spending. If you browse online retailers for fun, when you’re bored, or when you’re having trouble falling asleep, that innocent browsing could easily turn into buying if your card details are stored on your go-to device. But you’re less likely to make those needless purchases if you have to get out of bed or off the couch to dig up your wallet and type in your credit card number.
3. Check your credit card balances frequently
When you withdraw $200 from an ATM and begin spending it, you can clearly see that pile of money shrink. But when you charge expenses on a credit card, it’s more difficult to notice that you’re going overboard — you’re not parting with a physical resource when you simply swipe a piece of plastic or enter numbers on websites.
If you want to avoid debt in the coming year, check your credit card balances once a week. You’ll see what you’ve spent so far, and if the numbers are too high for comfort, you can cut back, or perhaps return unnecessary items you’ve bought. Checking your balances often can also give you an early heads-up if you fall victim to credit card fraud, so it’s a good practice even if you’re not particularly prone to overspending.
Credit card debt is bad news. It can cost you a lot of money, wreck your credit score, and cause a world of unnecessary stress. These tips, however, can help you avoid those unpleasant outcomes, so follow them for a debt-free 2021.