How to Stop Living Off Credit Cards: 10 Tips

It can start out small. You’re a little short, so you put a week’s worth of gas and groceries on your Mastercard. It’s not much, and you even get points or cash back. Then you find that because you’re coming up short more often, you need to put more on your card so that you can pay your bills and rent. Then slowly, you end up making a higher and higher minimum payment, your interest rate goes up, and suddenly all the gas and groceries, the power and trash bill, even your kid’s daycare costs are being put on a card. Suddenly your card is two cards, then three or four, with juggled balances and another card just to transfer balances so you can have some breathing room…

And then you’re deep in debt and looking for a way out that doesn’t involve more debt.

Here’s a list of tips to help you out of the hole, but there’s no silver bullet that can get rid of a problem years in the making. Just figure out a course of action and proceed with it. It will take time and effort, but you can stop living off credit cards.

Ten Tips to Stop Living Off Credit Cards

When you decide to stop living off credit cards, you have to change the habits that got you into credit card debt in the first place. It’s a big change, and it starts with these ten basic tips to stop living off credit cards.

1. Make a budget. How much do you have coming in versus how much has to go out. Factor in housing, utilities, transportation, food, health insurance, and regular medicines like diabetes drugs, heart medications, and blood pressure treatments.
2. Look at what you’re spending outside the essentials. Are you picking up a coffee at Starbucks every morning on the way to work? Are you buying lunches every day and brunches on weekends in addition to a Friday or Saturday night out? Does Zappos.com know and love you?
3. Chop the non-essentials. Get rid of the cable package and become a streamer, and forget splashing cash on the new iPhone. Look for ways to do everything cheaper. Remember, you need to stick with essentials, not blow $50 a week on lunch.
4. Cash only. Leave the plastic at home and go out with the amount of cash that you need. If you don’t want to carry that much cash, then put it on a prepaid debit card and track what you purchase with it.
5. Pause your cards. Also called ‘freezing’ a card, this essentially stops activity on a card without it being reported lost or stolen. You won’t have any new charges, but your payments are still due.
6. Make the card inaccessible. You can do the time-honored trick of freezing your card in a block of ice, shredding it, or putting it in a hard-to-reach spot – like taping it to the back of a major appliance.
7. Delete all card information from your browser and apps on your phone. Point, click, checkout has to go. Think about every single purchase, and if you can make as many of them in person as you can. With COVID19, shopping in person may not be something you want to do, but it might be worth your while to try pickup services where offered.
8. Pare down. While everyone wants to look good, sometimes things get out of hand. Are you collecting high-end accessories? How many designer bags and shoes and watches do you need? It might be time to put a bunch of your fashion-forward or collector’s items like comics and Funko Pops on the auction block.
9. Avalanche, snowball, and snowflake. Nickle and dime your way to better financial health with a change jar, and then – when you can – blast out huge chunks of debt. You’ll see results, and that can make you more determined to knock down the rest of your credit card debts.
10. Consider closing accounts carefully. If you’ve paid down a card and it’s the only one you have with an annual fee, consider getting rid of it. Yes, available credit is a big part of your credit score, but some cards just are not worth keeping. You might want to keep a card with low interest, or a high limit, but others can go. This includes store cards, where you can’t make that credit work anywhere else.

It won’t happen fast, but soon you’ll see results in both your financial health and your pocket money. Paying down debt spares your credit rating from the hard hit of bankruptcy, but there are no automatic stays, and delinquent accounts stay on your account along with late payments and charge-offs.

What About Bankruptcy?

There is a time to ask for help, and when your debts are overwhelming your ability to meet necessary expenses, and you’re having a difficult time keeping up with minimum payments that bankruptcy should be on the table. Chapter 13 and Chapter 7 bankruptcy are open to individuals, though Chapter 7 bankruptcy requires that you pass a means test. If you cannot pass the means test, your filing will be converted to a Chapter 13 – meaning that you will have to pay off your creditors in accordance with the terms of the court. After your bankruptcy is discharged, no matter which filing you make, your debt is settled and cannot return.

We Can Help!

At Van Horn Law Group, we specialize in debt, not just bankruptcy. Since 2009, we’ve been working with South Floridians to get them out from under their debts whether it’s through renegotiation, consolidation, or bankruptcy. We offer free initial consultation either by telephone, videoconferencing or in-person. Get in touch with us by calling (954) 765-3166 to schedule a consultation today and stop living off credit cards!