3 signs it’s time to give up credit cards

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You may need to ditch your credit cards for good.


Key points

  • Credit cards can reward you for your purchases and help you build up credit.
  • They can also wipe out your finances and drag you into costly debt.
  • Rising debt and a falling credit score are just two signs that you should put your cards down.

There’s a reason so many people love using credit cards. Not only do they make shopping more convenient, but they’ll often reward you with cash back on purchases, from everyday items to the biggest splurges.

Plus, using a credit card can actually help you build credit. When you pay your bills, that activity is added to your payment history. And if you pay regularly on time, it could help your credit score improve, making things like getting a loan or renting a place easier.

But while credit cards clearly have their benefits, they’re not for everyone. And if these three signs apply to you, it might be time to throw away those credit cards and start paying for all your purchases with cash.

1. Your level of debt keeps increasing

Using credit cards does not automatically mean ending up with more debt. But he box means that. And if you continue to find your credit card balances increasing month-over-month rather than decreasing, it might be time to stop using credit cards and limit yourself to cash. This way, you won’t have the option of buying things that you can’t afford right away.

2. Your credit score keeps dropping

We just learned that using credit cards could help you build credit. Well, it can also have the opposite effect. Even if you manage to pay your bills on time, if you have a credit card balance that is too high compared to your total spending limit, it could negatively impact your credit score. And that, in turn, could make it difficult to borrow money affordably when you need it.

3. You are frequently the victim of impulse purchases

Limiting yourself to cash purchases may not eliminate your impulse buying habit, but it could help curb it. Unplanned purchases become so much easier to make when you don’t have to worry about running out of money and can just swipe a credit card. But if you stick to cash or debit cards, you’ll be more motivated not to make sudden purchases when your wallet is getting thinner or your checking account balance is getting dangerously low.

A temporary change may be in order

Credit cards can certainly be a useful tool, and when managed strategically, they can help those who use them improve their finances. But credit cards aren’t for everyone, and if these signs apply to you, it might be time to lock down yours.

That doesn’t mean you can’t already use credit cards again, though. Maybe you need time to get your financial house in order before coming back to them.

In fact, even if you decide to stop using credit cards, canceling them may be a bad idea, as it could hurt your credit score. A better bet may be to store them somewhere safe, but stick to cash in your day-to-day life. Once you’ve successfully paid off your debt and mastered the art of prudent budgeting, it may be appropriate to start swiping credit cards again, so it’s good to keep this option open.

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