How to End a Bad Relationship with Your Credit Card

 

By April Lewis-Parks

Your credit card may be your best friend when it comes to long shopping trips, booking vacations and your weekly manicure and pedicure sessions, but when the end of the month rolls around and your bill comes due, you may realize that your relationship with credit is more toxic than beneficial.

A healthy and disciplined use of credit can have positive benefits for your credit score and help you reach financial independence. However, a reliance on credit can have the opposite effect, and it’s important to know how to end poor credit management habits that may result in credit score damage or heavy debt. 

Recognize harmful credit behaviors


Many people mistakenly believe that carrying excessive debt is the only credit problem that leads to a lower score. While this can seriously hamper your rating, there are other behaviors you should steer clear of that can have a heavy impact on your rating. For example, skipping payments every now and again can cause your score to fall, especially if bills are 30 days or more overdue. Your payment history makes up the largest percentage of your credit score – 35 percent to be exact – so paying on time is crucial.

In addition, excessive applications for new credit lines – ranging from new traditional cards to rewards retail products – can also drive down your rating. You might also be tempted at some point to get rid of the high number of accounts you’re holding by canceling some cards. This is another credit no-no, particularly if the accounts are older. If you are exhibiting any of these behaviors, it may time to reevaluate your relationship with your credit card. 

Use cash


Leaning more heavily on dollars and cents rather than plastic may encourage you to avoid impulse buys and other unnecessary spending, which can help you stick to your budget and prioritize your spending. It’s easy to overspend when you swipe a card and don’t see your balances change, but it’s much more difficult to justify a splurge purchase when you feel your purse getting lighter. If you prefer the convenience of swiping a card and don’t carry large quantities of cash with you, consider using your debit rather than credit card. If you download a budgeting app on your smartphone, inputting balances as you make transactions may also help you ward off temptations.