3 Signs It's Time to Swear Off Credit Cards

You may need to ditch your credit cards for good.

There's a reason so many people like using credit cards. Not only do they make shopping more convenient, but they'll often reward you with cash back for making purchases, from everyday items to larger splurges.

Plus, using a credit card can actually help you build credit. As you pay your bills, that activity gets added to your payment history. And if you pay on time consistently, it could help your credit score improve, thereby making it easier to do things like take out a loan or rent a place to live.

But while credit cards clearly have their perks, they're not right for everyone. And if these three signs apply to you, it may be time to dump those credit cards and start paying for all of your purchases in cash.

1. Your debt level keeps rising

Using credit cards doesn't automatically mean ending up with more debt. But it can mean that. And if you keep finding that your credit card balances are growing from month to month rather than shrinking, then it may be time to stop using credit cards and limit yourself to cash. That way, you won't have the option to buy things you can't pay for right away.

2. Your credit score keeps dropping

We just learned that using credit cards could help you build credit. Well, it can also have the opposite effect. Even if you manage to pay your bills on time, if you carry too high a credit card balance relative to your total spending limit, it could have a negative impact on your credit score. And that could, in turn, make it difficult to borrow money affordably when you need to.

3. You frequently fall victim to impulse buys

Limiting yourself to cash purchases may not eliminate your impulse buying habit -- but it could help curb it. Unplanned purchases become so much easier to complete when you don't have to worry about running out of cash and can simply swipe a credit card. But if you stick to cash or debit cards, you'll be more motivated not to complete sudden purchases when your wallet gets thin or your checking account balance gets dangerously low.

A temporary change may be in order

Credit cards can definitely be a useful tool, and when managed strategically, they can help those who use them improve their finances. But credit cards aren't right for everyone, and if these signs apply to you, then it may be time to lock yours away.

That doesn't mean you can't ever use credit cards again, though. Perhaps you need some time to get your financial house in order before going back to them.

In fact, even if you decide you should no longer use credit cards, canceling them may be a bad idea, since doing so could hurt your credit score. A better bet may be to tuck them away in a safe place but stick to cash as you go about your daily life. Once you've managed to pay off your debt and master the art of careful budgeting, it may be appropriate to start swiping credit cards again, so it's good to keep that option open.