If used carefully, credit cards can be valuable financial tools. If used haphazardly, on the other hand, they can send your budget – and your finances – into a major tailspin.
The biggest problem with credit cards is that their use can easily lead to long-term debt. And if you carry debt from one month to the next, you're not only building a balance you must repay one day, but you're paying monthly interest charges to boot.
4 Reasons to Stop Using Credit Cards if You Have Credit Card Debt
If you're deep in credit card debt and still using credit, your situation is probably getting worse by the month. By and large, the best way to stop the bleeding is to stop using credit altogether – at least, for the time being. This might sound like a punishment, but it is probably the best gift you can give yourself.
While sticking to cash or debit for a while may not sound convenient, it can help you reinvent your finances and, hopefully, turn your situation around. Here are four reasons you should stop using credit cards if you struggle with credit card debt:
When you quit credit, you quit adding to your debts
If you're carrying credit card debt and still using credit, chances are good you're watching your balances grow every month. Your monthly payment may not have budged much, but the amount of money you need to pay back may be unceasing. And the more you owe, the more interest you'll need to pay until your balance is paid off.
When you stop using credit, you quit adding more debts to the pile. While this won't solve your current debt problem, it can prevent you from making it worse.
Without credit, you cannot spend money you don't have
Quitting credit forces you to come to terms with the initial cause of your debt and financial woes. By and large, the reason you're in debt is because you spend money you don't have, right?
When you switch to debit or cash, you learn to stop using credit as a crutch. Instead of charging what you want and worrying about it later, you learn to make spending decisions based on reality instead of wishful thinking. Don't have the cash? You can't buy it. Over time, you'll realize this is the best financial lesson anyone can learn.
Avoiding credit helps you realize what you can actually afford
In that same vein, switching from credit to cash or debit can incite a serious reality check. When you can no longer charge what you want and worry about payment later, you're forced to come to terms with what you can actually afford.
This can be a painful experience for some people, and for obvious reasons. Still, learning to live within your means is the only way to build a realistic life you can afford in the long run.
Once you stop using credit, you can focus on becoming debt-free
When you're still using credit and building up balances, it's nearly impossible to think about becoming debt-free. But when you stop using credit, you're able to get serious about paying it off.
Once you quit growing your balances, you can take a look at how much you owe and come up with a plan. You may not like what you see, but at least you stopped the bleeding and gave yourself a starting point to work from.
If you're struggling with credit card debt, stop using credit cards. Focus on using cash or debit instead, and you'll "get real" about your finances in a hurry.
You can't pay off debt until you know how much you owe, and you can't find your starting point until you stop adding to the pile. But when you quit credit – at least for a while – you stop making your financial problems worse.