Ready to learn how to stop using your credit card? We recently put together a report of the DFM FB Group on what their biggest struggle is financially. 26% of polled said that credit card debt was their biggest concern. In fact, it was the number one biggest struggle more than student loan debt.
There are millennials inside of the group who have actually made great strides in their debt free journey by not using their credit card. I asked the group on how exactly they stopped using their credit cards and I wanted to share some really amazing answers to help you learn how to stop using your credit card to pay off debt.
Use a spreadsheet
Rebecca said she copy/pasted her credit card statement into an Excel document. Every time she made a payment, she greyed out what that payment was paying off. It had a motivating effect! She saw how her debt payments paid off a TV or watching smaller ones add up. Now she equates working her four side hustles to purchases. Even a $12 trip to the movies requires at least two hours of work on minimum wage.
Cut up your credit card
Maggie, on the other hand, broke up with her credit card, then got back together when she could handle the relationship. It wasn’t until she realized she was putting herself into more debt that she started to change. Now she has a healthy relationship paying off her balance in full every month and getting the points/miles/rewards! Her best tip: be honest! Cut the card and DO NOT USE IT. Understand interest rates and know what will work best for you when you know how to handle a card.
Have an emergency fund
Aaron straight up cut them up! He also discussed how other people drop credit cards in Tupperware, fill with water, and freeze it, so that you have to literally unthaw it before using. That should be long enough to think hard about how bad you need to do that. He says he avoids needing it as a safety net and instead plans with his wife and have an emergency fund to fall back on.
Awesome job, guys. These are inspiring tips on how to stop using your credit card and focus on debt pay off.
Want my take on how to stop using your credit card?
I want to be clear with you. I did not have a credit card until all of my student loan debt was paid off. If you haven’t read my story with debt, you can read that here. But here’s what I do know: credit card debt is causing millennials unnecessary stress and anxiety.
Credit card debt shouldn’t keep you from living a lifestyle that you love. I know because my student loan debt prevented me from living in a nice high-rise apartment and grabbing sushi whenever I wanted.
The best way to cure credit card debt is to start tracking your spending. This can be as simple as writing down each day in a journal what you spent money on. Looking at your spending is a great way to stop using your credit card. Why? Because you can see every single thing you spent money on in the past month. I do this through a Google spreadsheet (which is inside of my toolkit) but you can use any money-tracking method that works for your brain.
Start using cash and stop using your credit card
If you have been spending to no end on your credit card, you might have a negative relationship with money. Whether you avoid it or can’t get enough of it, credit card debt is a clear indicator that you are most likely spending more than what you bring in.
A great way to combat credit card debt is to start using cash. I talk about how to get started with the cash envelope system in another post, but the basic premise is that if you buy anything, you whip out the dollar bills.
Date at Kebab Shop? Pay for it in cash.
Going to the grocery store? You better be slapping down those Hamilton’s.
Headed to Target? Only cash goes with you and nothing else.
Using cash by far helped me have a better relationship with money. You can do it, too! It’s not hard to learn how to stop using your credit card when you start applying the strategies above.
If you want to learn step-by-step strategies on how to pay off debt for good and stay in control with your money, consider checking out my online program, the Freedom Project!