I Haven't Carried a Credit Card Balance Since College. Here's How

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  • Carrying a credit card balance comes with costly interest charges.
  • I've taken steps to avoid carrying a balance over the past 20 years.
  • I track my spending and automate my payments so I don't pay interest.

Could these tips help you avoid carrying a credit card balance?

Credit cards can be a great tool to earn rewards and build credit. But if you carry a balance on your cards, they can end up costing you a ton of money due to their high interest rates.

I use credit cards all the time because I want to reap the many benefits they provide. However, ever since I graduated from college, I've made absolutely sure I pay off my statement in full each month because I never want to pay those high credit-card financing charges again.  

After getting in over my head in college, signing up for too many cards, and working hard to pay them off once I realized I had a problem, I've developed a system to make sure that never happens again. Here's how I make certain not to carry a balance. 

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I track my spending

The most important step that I've taken to ensure I avoid getting into credit card debt involves setting a budget and tracking my spending. I've made a detailed plan to ensure I always keep my expenditures below what my income is. And I monitor the amount I am charging on my card regularly in order to make certain that I don't exceed the limits I've set for different expenditures.

Since I keep track of how much I am charging on my cards each month, I can make sure I don't charge any more than I can comfortably repay out of my checking account. If it seems like I'm going to spend too much during the month, I immediately change course and start looking for cuts to make or for ways to increase my income so I don't have to tap into savings to pay the bill or get stuck carrying a balance.

I've automated my payments 

Because I track my spending carefully on my cards, I know that I will always have enough in my bank account to repay the full balance due. So, in order to make absolutely sure I don't carry a balance, I've set up an automated payment for the full amount of the charges that accrued over the course of the month. 

This automated payment happens the day after I get paid for my work, and it is about a week before my statement due date. The money is taken out of my bank account when I'm sure I'll have the cash available in the account so I don't have to worry about overdraft fees. And it is paid automatically, so I don't have to manually remember to pay off the balance or force myself to make the responsible choice every month. The default is to pay the card in full, so that's what happens.

Now, setting automated payments wouldn't work if I wasn't sure there'd be funds for the payment to clear, which is why the two-step process of tracking spending and paying the balance in full automatically is so important. This is a process that can work for anyone who wants to earn credit card rewards and build credit but who doesn't want to take a chance of owing interest that could cost them their hard-earned cash.

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