3 How To Use Credit Cards Less (With 18 Steps)

doylc.com - How To Use Credit Cards Less - Credit card debt continues to rise. For example, in the United States, the average balance for people with credit card debt is $16,048. If you want to avoid this type of debt burden, make a commitment to use your credit cards less. Start looking for credit card substitutes like cash and debit cards. Reduce your expenses by setting a budget and finding cheaper substitutes for things you buy. If you've built up a debt load, pay it off quickly with a debt consolidation or debt management plan.

Find substitutes for credit cards

1. Use cash. Cash is convenient and accepted almost everywhere. Additionally, people will spend about 15% less if they use cash instead of credit. Remember to withdraw cash directly from your checking account - do not get a cash advance with a credit card as you will be charged a high interest rate.

Of course, you should not carry large amounts of cash with you, otherwise you will become a target for thieves. Still, you can take as much cash with you as you would normally spend on any given day.

2. Get a debit card. With a debit card, you can only spend the amount of money that is in your bank account. Once you exceed the limit, your card will be declined. Contact your bank to get a debit card.

Debit cards have some advantages over cash. For example, if someone steals the card (or if you lose it), you can report the card as missing and the account will be blocked.

3. Buy a prepaid debit card. If you can't get a debit card linked to your bank account, you can buy a prepaid debit card. You load cash onto the card manually, either at a checkout (e.g. at Wal-Mart) or at an ATM. Two of the most popular are Visa's AccountNow Gold prepaid debit card and American Express' Bluebird. PayPal also has a prepaid debit card.

You will be charged fees for using a prepaid debit card: transaction fees, maintenance fees, ATM fees and live customer service fees.

Check the debit card's terms and conditions carefully, just like you did for your credit cards.

4. Use a secured credit card. A "secured" credit card is like a debit card. You deposit funds into your account and get a line of credit equal to your deposit. Look online for a secured credit card.

Many secured credit cards charge monthly maintenance fees and an annual fee. You will also be charged interest on any fees that you do not pay before the payment deadline.

5. Pay with a personal check. You can use credit cards to pay your bills, which is convenient. However, you can also open a checking account at a bank and use personal checks. Contact a bank or credit union to set up a checking account.

Some prepaid debit cards also give you access to paper checks. For example, AccountNow's Gold Visa prepaid card and American Express' Bluebird offer checks.

6. Use an Electronic Funds Transfer (EFT). When you shop online, you can sometimes pay by electronic transfer. Money is then deducted directly from your checking or savings account. It's a good option if you're trying to limit your spending.

You might feel a little uncomfortable giving a company your bank account numbers. In general, only use EFT if the person on the phone is explaining the process and asking your permission.

Do not provide your bank details if you have never used the provider before or if they have contacted you.

Spend less

1. Find cheaper replacements. Identify what you buy the most. Take out your credit card statements and check your spending. Do you spend the most on basic necessities like groceries, energy and gas? Or do you spend money on movies, books and meals at restaurants? Find cheaper options now.

Instead of buying books, get them from the library.

Instead of eating out at a restaurant, grab a new cookbook and start cooking at home. Use generic branded items to save extra money.

Instead of meeting up with friends at the bar, schedule a meeting at your home. You can play cards and drink healthy non-alcoholic drinks.

Instead of buying new clothes or furniture, shop at thrift stores, which saves you a lot of money.

2. Use coupons. Coupons can be found as inserts in your local newspaper. Cut them out and present them to the cashier at your grocery or drug store. You can also find coupons online that you may need to print out.

Some stores duplicate coupons. You can do this periodically throughout the year or double the coupons every day of the year. search online.

3. Avoid instant gratification. Credit cards make it easy to indulge any desire instantly. Practice delaying your gratification. For example, you can wait 30 days before making a purchase. When you see a new purse or set of golf clubs that you want, write down the date and wait a month. Chances are your wish will pass.

4. Find new ways to relieve stress. Many people spend money to relieve stress. They immediately go from work to their favorite store and pull out their credit cards. Find healthier and cheaper ways to unwind from a stressful day.

Go walk around the block. Strenuous exercise will give you a psychological boost and take your mind off work.

Practice mediation by closing the door and lowering the blinds. Focus on your inner harmony.

Read or watch movies. These are good ways to increase your knowledge and relax at the same time.

5. Remove your credit card numbers from your online accounts. Many online merchants store your credit card information in your profile. That makes buying every visit to the site easy — too easy, in fact. Go to your profile and delete all credit card information. This will slow you down the next time you go online to buy something.

6. Block your credit cards. Make it difficult to reach your credit cards for an impulse purchase. One idea: freeze them in a bowl of water. While you can thaw them, it will take quite a while and your impulse to buy will likely pass.

You can also "freeze" your credit cards by calling the card issuer and asking them to freeze the account. However, it's easy to revisit the account and unfreeze it, so using a bowl of water might be the best method.

7. Close unused credit cards . On average, Americans have four credit cards. The more cards you have, the more tempted you will be to charge for all of them. Accordingly, you can close some unused credit cards.

Be aware that closing a credit card hurts your credit score. Ideally, you should only close a card if you don't have a balance on any of them. Closing a card will increase your "Usage Rate" which is the amount of Available Balance you are using. When you close a card, your available balance shrinks, so your utilization increases when you have balance.

Close a card when you have more than 10 or when your spending is completely out of control. Although your credit score will suffer, you are probably already suffering financially from all your credit card debt.

Pay off credit card debt

1. Consolidate debt. Debt consolidation saves you money by paying off high-interest debt with a loan at a lower interest rate. For example, you might owe $5,000 on a credit card with an APR of 24.99%. You'll save money if you get a loan for that amount, but at a lower interest rate.

Buy a personal loan from a bank or credit union. Credit unions tend to be more forgiving if your credit score isn't as good.

You can also buy a credit card for the balance transfer. Generally these come with an APR of 0% for 6-24 months. You can then transfer your high-interest credit card debt to your new card and pay off the balance quickly.

2. Save more In order to pay off debt, you must reduce your expenses so that they are less than your income. Account for all monthly expenses by creating a budget.

Now is also a good time to break bad habits. Your smoking or drinking habits are costing you a lot of money. Avoid cigarettes and alcohol. Your bank balance and health will improve.

Try to set aside a little money from your paycheck every week or month. Then gradually increase this amount as you begin to develop a healthy saving habit.

3. Increase your income. When you can no longer eliminate expenses from your budget, you need to increase income. Take a part-time job or work part-time as a freelancer. Pursue a passion like writing or photography to make it fun.

You can also increase cash receipts by selling your valuables. Host a garage sale or sell on Craigslist or eBay.

4. Pay more than the minimum payment on your credit cards. Your credit card statement should state the minimum amount you will be charged and how much time it will take you to settle the balance if you only pay the minimum amount. Try doubling the payments and paying that amount every month.

If you have debt on multiple cards, pay off the card with the highest interest rate first. Pay at least the minimum on all cards, then apply extra money to the card with the highest interest rate. Once you've paid off that card, apply your payments to the card with the next higher interest rate.

5. Contact a credit advisor. If your spending is spiraling out of control, you might benefit from meeting with a credit counselor. You can review your debt and create an action plan. Find reputable loan advisors near you through credit unions, universities, and housing authorities.

You can also sign up for a debt management plan with a debt counselor. They will negotiate with your credit card companies to lower your interest rate and waive any fees or penalties. You then make a payment to the loan advisor, who distributes the payments to your creditors.

Debt management plans aren't for everyone. For example, you cannot use credit cards or take out new loans for the time you are in the plan.

Check the loan advisor's fee and make sure it's reasonable. Be aware that you can also negotiate with your credit card companies yourself. Call them and ask if they can waive penalties and late fees.