It likely comes as no surprise that the toughest part of getting out of credit card debt is not eliminating the old charges, but preventing any new ones.
It is just too dang simple these days to toss a credit card on the counter for whatever purchase happens to strike your fancy. Many people don’t even think about the credit card debt they are racking up until it is way beyond being too late.
The only way to break the cycle is to change your spending habits. You can do this by first looking at your current debt and understanding how you got to this point, and then by establishing a plan of the changes you need to make.
When you look at your credit card spending history, look for the reasons you spend. Are you being reckless – an expensive night out you can’t afford or $200 shoes you don’t need – or are you using your credit cards to keep your head above water – medical expenses or other emergencies?
If you spend for fun, the only way to stop the credit card debt cycle is to make the conscious decision to go cash-only for entertainment. If, on the other hand, your debt is due to emergencies, now is the time to establish a savings account. Sign up for automatic deposit, and you’ll never miss the money.
Next, cut up your cards. Yes, keep one for extreme emergencies. Otherwise, pay cash for gasoline, entertainment, gifts, vacations, day-to-day expenses, or anything else.
Finally, track your expenses. Figure out how much money you have coming in versus how much you spend each month. When you find out how you spend, you can control it.