Credit cards are a staple of modern society, sometimes considered an indicator of your wealth. For instance, waving around a black credit card is a display of your net worth. However, owning a credit card is not exclusively for the wealthy any more. In fact, more and more low-to-middle income families use credit cards to take advantage of many benefits, such as converting large purchases into instalments, sometimes even interest-free, and to get special credit card-only discounts on certain items or vendors e.g. cashback schemes for petrol or at supermarkets. In this same vein, credit cards have become not only a necessity in this day and age but have also become a debt trap due to the very convenience it affords. The temptation to “put it on your credit card” and pay it back later proves to be too great for many who end up in more credit card debt than they can possibly hope to get out of. If you have just got out of credit card debt, barely managed to avoid such a situation or if you feel like you are heading down that road by relying too much on your plastic, here are some tips on how to stop using credit cards.
Cancel Your Credit Card
The easiest way to stop using your credit card and completely eliminate even the remotest possibility of going into debt is to cancel your credit card. Believe it or not, living without a credit card is not only possible but so deceptively easy that you would end up wondering why you needed one in the first place. You would need to liaise with your bank in order to do this, and settle all pending payments on your card. However, this might not be feasible for most people who use a credit card for emergency purposes, are currently paying off ongoing instalment plans or have a huge balance yet to be repaid. Canceling your credit card is best considered a preventative measure for falling into credit card debt.
Make Credit Cards Inaccessible
Suppose you are unable to cancel your credit card entirely – maybe you are still paying it off, or you simply want to have it around for emergencies but really don’t want to use it on a regular basis – you can still avoid racking up huge bills by using any one of the following tricks.
Keep Card at Home
The easiest way to reduce your credit card usage is to leave it at home. This way, you will not be able to whip it out for any impulse purchases, but you can always return home and fetch it in the event of an emergency.
Freeze The Card
Freezing your credit card in a block of ice is a trick most shopaholics use to ensure that they can only use their card for an actual emergency (hopefully not a very time-sensitive one, though!). This way, when you really need to use it, you’ll have to put in the time and effort to melt the ice block before using your card.
Give It to a Trusted Person
By handing over your credit card to someone you trust, you have a gatekeeper who will only release the card provided you have a very valid reason for requiring it. This loved one could be your significant other, family member or co-worker who can be trusted not to misuse the card, make a fair call regarding your requirement as well as be available to collect the card easily from if you require it urgently.
Delete card details from phone / browser
If you are an avid online shopper, in addition to any of the above suggestions, delete your credit card details from your phone and web browser to make it more inconvenient to go on your next shopping spree. Next time you wish to make an online payment or purchase, you would need to manually fetch your credit card and enter the details, the hassle of which should ideally prevent you from making any unnecessary expenses.
Cut up Your Card
If you don’t see yourself using your card any time soon but have a hefty balance to be paid off so you can’t just cancel your card, do the next best thing and cut up your card using a pair of scissors or a shredder (ensure that no one can recover the card details from the pieces). This way you will be unable to use the card but the credit card still exists in the bank records. Remember to cancel your card once you are done paying the balance, and simply request for a new card from the bank if and when you need it.
Eliminate the Need for a Credit Card
Another way to stop using your credit card is to get rid of any reasons you would use it for. Most people use credit cards to take advantage of offers, to stagger purchases through instalments and for emergencies. If it’s special offers that you are looking for, there are other ways to enjoy discounts – through debit card offers, cash offers, seasonal offers etc. While they don’t entirely make up for credit cards, you can still walk away with a pretty good deal. Instalment schemes are also offered by certain shops themselves, such as hire-purchase schemes. An emergency fund (separate from your savings) is crucial these days, which can serve you better than a credit card which cannot give you hard cash if required without a hefty service charge.
Deal with Cash Only
By sticking to a cash only lifestyle (with a debit card for convenience), you can avoid spending money that you don’t have. Dealing purely in cash might seem old-fashioned and outdated in today’s credit-fuelled world. However, it is an admirable habit to inculcate and one that would greatly benefit you in the long run. In the event you find yourself requiring money in the event of an absolute, critical emergency, there are many short-term solutions like online loan providers such as OnCredit.lk, which might mean you need to repay the loan with a bit of interest (possibly higher than that of credit cards) but once that is settled, you no longer have any temptation to rely on credit.
While all the above tips and tricks might somewhat reduce your credit card dependency, nothing would be as effective as exercising a bit of self control in your spending. Credit cards can be immensely useful in this day and age, and having one on stand-by will be extremely beneficial provided you are able to use it carefully.