If you’re not careful, you could revert back to your old habits and end up in debt again. Just like with battling addiction, those with a credit card problem in their past need to be careful not to relapse.
Use these six tips to prevent falling back into credit card debt and undoing all your hard work to pay it off.
1. Give up credit cards
To avoid the possibility of ending up in credit card debt again, the best option is to not use credit cards at all.
It’s possible that you may be smarter now and know how to manage credit cards so you won’t end up in debt. But why take the chance? If you cut out credit cards entirely, there’s zero chance you’ll end up in credit card debt.
2. Switch to a debit card
Giving up credit cards doesn’t mean cash is your only option. Debit cards offer a good middle ground.
It’s nearly impossible to end up in debt with a debit card since you can’t spend money you don’t have.
Debit cards offer nearly all of the conveniences of credit cards and may offer some additional advantages, too. You’ll have many of the same protections that credit cards provide and can still make purchases without carrying cash.
The catch is that you won’t be able to buy first and pay later like you did with credit, but that’s a good thing for preventing debt.
3. Save before you buy
Credit cards allow consumers to buy now and pay later. If you’re spending money before you have it in the bank, that’s a poor habit whether you’re in debt or not. Racking up too much on a credit card and not being able to pay the balance for whatever reason is a primary cause of credit card debt.
The solution to this problem is simple: save up before you buy. You’ll have to wait until you have the money, but you won’t end up in debt. Saving first can help prevent impulse purchases, too.
4. Have an emergency fund ready
While some debts might come from shopping and spending unwisely, others end up in debt because emergency strikes and they don’t have the cash to pay the bills. Whether it’s medical costs, car problems, or home repairs, emergency expenses can pop up any time, and you need to be ready.
To avoid using credit as a crutch, you need to have money set aside for these unexpected situations. If cash committed to emergencies is in the bank and isn’t touched for any other reasons, it’s guaranteed to be there when you most need it.
5. Avoid lifestyle inflation
When you get a raise at work, what’s the first thing you think about? There’s a good chance you picture how you’re going to spend it and what you can afford now that you couldn’t before this additional income.
Once you’re done paying down debt, you may suddenly have more money around with the monthly payments gone. This extra cash might not have a place in your budget yet, meaning you’ll have excess money that you might be tempted to spend.
Before you go on a shopping spree, consider saving some or all of the money you used to use to pay off debt. If you’ve been working on your debt for a long time, some of your other financial goals, like saving for retirement or your child’s college educations, might have been put on the back-burner.
Make sure to catch up on lost time for these important financial goals first before you decide to spend freely. Some good places to start: max out your IRA contributions or fund a 529 plan for college savings before spending on less important things.
6. Use your debt-filled past to stay motivated
Staying away from credit card debt can be a psychological challenge. You may be tempted in times of weakness to ditch your new habits and go back to your old ways. This is when the horrors of your past can come in handy.
For many, being in credit card debt is miserable, and just thinking of the headaches of paying bills while interest charges pile up might be a good reminder to avoid going down that path again.
There’s no need to dwell on your past debt problems, but in times of weakness, remind yourself of both the stress from credit card debt and your hard work to get out of debt.