Published in: Credit Cards | Dec. 13, 2018

5 Hacks to Prevent Falling Into Credit Card Debt

By:  Lyle Daly

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Credit card debt can wreak havoc on your finances. To stay safe when you use your card, check out these hacks that can keep you out of debt.

Man and woman sitting on couch looking worried with paperwork in hand

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Anyone who has been in credit card debt can tell you that it’s no picnic. Whether it’s the result of one extravagant purchase or a habit of overspending creeping up on you, those credit card balances can quickly rack up interest and become difficult to pay off.

That’s why everyone should know how to stay debt-free. While a common solution is to swear off credit cards entirely, then you’d be giving up on all the benefits of using them, including greater security and rewards on your spending.

With some helpful hacks, you can avoid spending too much and prevent credit card debt.

1. Give yourself a 72-hour rule on big purchases and impulse buys

My personal favorite technique is to temporarily pump the brakes when I’m thinking of buying something that I don’t need. I find about three days is long enough to avoid unnecessary spending, but you may decide on a longer or shorter timeframe.

It’s easy to see something you want, either in a store or online, and get swept up in the rush of buying it then and there. When you wait a few days to decide, you can approach things from a more logical perspective. I can’t tell you how many times I’ve wanted to order something, waited on it, and then realized later it would have been a waste of money.

2. Pay off charges right away

The best way to use your credit card is to treat it like a debit card. Only use your credit card for purchases that you could pay for with the money in your bank account.

The trouble comes when you spend more because you know you’ll have time before the bill is due. Then you’re constantly catching up to your previous charges. If you’re ever in that situation, a smart adjustment is to start paying your credit card bill right away. Log in to your account every day and pay off any charges you made.

An added perk when you do this is it helps keep your credit utilization low, which can make a positive impact on your credit score.

3. Don’t save your credit card info on shopping sites

E-commerce makes it more convenient to buy just about anything these days. That can be a good thing, but it’s also much easier to shop for items and services you don’t need. And with one-click ordering, the process goes even faster.

If you’re the type of person who does too much online shopping, don’t keep your credit card info on file with any of the sites you use. While this can’t completely stop you from placing an order, it adds an extra hurdle. You’ll have to fish out your credit card and plug in all the information, instead of just picking out a product and submitting an order in seconds.

4. Find an alternative when you feel like shopping

Shopping isn’t just something we do out of necessity. For many of us, shopping is an enjoyable activity. Unfortunately, that enjoyment comes at a cost.

Here’s one solution -- replace that expensive activity with a low or no-cost alternative. Like to work out? Hit the gym or go for a run. If that’s not your cup of tea, you could read a book or watch a movie. The important part is that you find something else you enjoy to substitute for shopping.

5. Don’t finance expenses with your credit card

A credit card is hardly ever a good way to pay off an expense over the long term. You can typically get a personal loan with a lower interest rate, and then you could also have consistent monthly installment payments instead of a revolving line of credit with a small minimum payment.

0% intro APR credit cards are an exception that can work well for financing expenses, but really think about if that’s necessary first. It’s always better to pay for purchases outright and stay out of debt. While a 0% APR card can help you avoid interest if you pay off the balance during the intro period, all it takes is one emergency expense to throw your payment plan off track.

None of these hacks are a foolproof way to prevent credit card debt, because there is no hack for that. It’s all a matter of monitoring your money and making smart spending decisions. These hacks simply encourage positive spending choices and help you build good habits with your credit card.

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