How to Have a Credit Card without Debt

Many people think of having a credit card as having automatic debt, but it doesn’t have to be that way. Here are some tips to having a credit card without having debt:

Pay It in Full
This one is pretty obvious, but most people do not follow it. Every month when you get the bill for your credit card, pay the full amount. Most credit card companies do not charge interest when you have no balance on your card. If you cannot afford to pay the full amount, you probably need to reevaluate the use of the card. Ideally, credit cards should be used for convenience when you don’t have cash around, not to buy stuff you can’t afford.

For example, if you charge a big ticket item on your credit card, like a trip to Jamaica, you need to have a plan of how you are going to pay that off when you get the bill. Sure, it’s easier to use a credit card when you are paying online or over the phone, but you need to have that actual money already in the bank or at least guaranteed to be coming soon. If you need to finance a big purchase, like furniture or a car, try to get interest-free financing through the company itself instead of using your credit card. Companies often have “18-months, no interest” deals to entice you and, if you think you can pay it off in 18 months or less, that is a better deal than your credit card, which only gives you one month with no interest.

Live Within Your Means
You know how much money you make and hopefully you have a budget. Now what about the hundreds of little expenses that occur each year that are not covered by your budget? Some of these things may be that all your dishes are chipped and you want new ones, your screen door needs to be replaced, or you just want a new outfit for your high school reunion. Or what if you want to go out to eat Friday through Sunday of each weekend but you only have $30 a week in the budget for restaurants? If you want to be credit card debt-free, then the answer is not pulling out your credit card for every little thing. If you really want it, figure out how you can skimp in some other areas for a while so you can have it.

Be Determined
Getting out of credit card debt is not easy, especially when you have been dependent on your credit card as “extra income” for years. But if you are truly determined to get out from under your reliance on credit cards, you can do it. You might want to consider designating the credit cards in your family to be used for emergency only. It’s always comforting to know that you have the credit card in your wallet “just in case”. But “just in case” should be followed by “my car breaks down and I have to have it towed”, not “I see a new sweater that I have to have.”