I get it. Credit is sexy. It was designed to be that way.
What’s sexier than being able to finance large purchases, buy the things you really want and not have to think about it for a while? Probably nothing.
Still, if you aren’t careful, temptation will seduce you and can land you in a world of trouble.
Here are five of my favorite ways to avoid credit temptation.
1. Set a proper (credit-free) budget.
The first rule to resisting credit temptation? Living within your means so you do not have to use a card.
I’m not here to teach you the budgeting basics, as there is a ton of literature out there on that very topic, but I am here to encourage you to experiment with a budgeting system that works for you.
Budgeting in its most commonly known sense doesn’t work for everyone. There are many different ways to budget: the 50-30-20 approach, reverse budgeting and “pay yourself first.”
It doesn’t matter which one you choose, but pick something you like and will be consistent with.
2. Out of sight, out of mind
Unless you are living hand to mouth (see number one above), you probably shouldn’t carry a credit card in your purse if you are (like me) bad about pulling out the card and swiping for minor purchases.
If you are only using the card for points, or for when you book travel, why not put it in a safe place in your office or dresser drawer?
There was a time when I was truly bad about using my cards and I ended up freezing the card. I know it seems silly, but it worked!
“It can be tempting to open up
the latest and greatest card.”
3. Know your limits.
An offer to raise your credit limit won’t hurt your credit or affect you in any way, but the offer to give you more money is just a cheap ploy to get you to spend more.
Credit card companies want you to consume – it’s how they make money.
If you feel you handle credit responsibly, then by all means accept the credit increase. However, if you feel the extra wiggle room in your credit limit calling your name, take a step back and reevaluate your limits.
4. Ignore credit card offers.
It can be pretty tempting to open up the latest and greatest card for the rewards or points being offered. Still, those often come with spending incentives in order to get the points, and I caution you against falling for this trick.
You never know what kind of annual fee my come with a card or what may happen in your future that could prevent you from paying down the card (for instance, if there is a specified intro zero percent APR for X amount of months.)
You should really only open a new card or do a balance transfer if you are trying to lower interest rates on existing debt in order to get out of it faster.
5. Find a new hobby.
My biggest problem when dealing with credit was my then-favorite hobby: shopping.
Whenever I was bored, sad, frustrated or excited, I went to the mall and window-shopped. With a credit card in hand, window-shopping quickly became actual shopping.
Even if you have control of your credit card spending, window-shopping only creates a large amount of unfulfilled wanting, which you don’t need in your life anyway.
What are your favorite tips for avoiding the temptation of using a credit card?
Photo source: reneweddaily.com