4 Strategies to Keep Your Credit Card Balance Down

by Maurie Backman | Published on Aug. 19, 2021

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A man sitting in an armchair and typing into his laptop while holding a credit card in one hand.

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Here's how to avoid charging up a storm.

Credit cards can be a useful financial tool. Not only can they spare you from having to carry cash all the time, but often, they'll reward you with cash back for purchases you were already planning to make.

But if you're going to use credit cards regularly, it's important to keep your balance at a manageable level so you're able to pay it in full each month. If you don't, you'll accrue interest on your purchases and also risk damage to your credit score if your balance gets too high. Here are a few things you can do to avoid accumulating too high a balance.

1. Have an emergency fund

People often fall back on credit cards when emergency expenses strike and they don't have enough money in savings to cover those bills. Unfortunately, that's a good way to rack up a large credit card balance.

A better bet? Have a fully loaded emergency fund -- ideally, one with enough money to cover three to six months of essential bills. Having adequate cash reserves could spare you from accruing a balance that will take months or years to pay off.

2. Stick to a budget

People who don't follow a budget often have a hard time managing their money. That, in turn, could lead to a scenario where you charge more on a credit card than you can afford to pay off by the time your bill comes due.

A smarter idea is to follow a budget that maps out your various expense categories and shows you what you can afford to spend on each one every month. Having that budget could help you avoid going overboard on the spending front, and it may even help you identify ways to trim your living costs and bank more savings.

3. Check your balance every week

Some people don't check their credit card balance until their monthly statement arrives. If you're trying to keep your charges down, that's a mistake.

It's easy to lose track of how much you're spending on your credit card over the course of a month. If that total becomes unmanageable, you'll be forced to carry that balance forward and pay interest on it until it's gone. Instead of running that risk, make a point to log into your credit card account every week and see where your balance stands. If you notice during the second or third week of your billing cycle that it's higher than normal, that might prompt you to cut back on spending until your cycle rolls over and another paycheck comes your way.

4. Avoid impulse buys

Many people fall victim to unplanned purchases. After all, it's almost impossible to enter a store or log onto a retail website without the word "sale" hitting you in the face.

The problem with impulse buys, however, is that they can lead to a higher credit card balance than you're comfortable with. If you steer clear of those unplanned purchases, you might manage to keep your balance at a more favorable level.

So how do you avoid impulse buys? For one thing, make a list each time you hit the store so you're more likely to stay focused. Secondly, avoid storing credit card details on your phone, laptop, or other devices. You'd be amazed at how the simple act of having to get off the couch to get your credit card and enter the information manually deters you from going through with a purchase.

Keeping your credit card balance down could help you stay out of debt and avoid the unwanted repercussions that come with it. Use these tricks to avoid charging up a storm -- they could really work wonders for your finances.

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