Written by Spotloan

There are many different methods we can use to secure a healthy financial present and future. Avoiding credit card debt like the plague is one of the best and biggest ones. That’s not to say that credit cards, on the whole, are terrible and have no redeeming qualities. When you use them the right way, they can help you build your credit, make large purchases, and earn rewards.

But the problem is, more people abuse credit cards than use them responsibly. It makes sense, it’s easy to do, but it’s still a huge problem. American households that have credit cards carry an average of $8,398 in credit card debt

Luckily, credit card debt can be avoided and we’re here to show you how.

How to Avoid Building Credit Card Debt

1. Build an emergency fund

Saving enough money to build a solid emergency fund to fall back on when you need it can help ease the financial burden of many situations. It might be an unexpected medical bill, a leaky roof, or a broken-down car, but whatever it is, it’ll help to be prepared. If you have money stowed away for emergencies, you won’t have to put them on your credit card and spend years paying off the balance.

2. Plan ahead for bigger expenses 

Like the emergency fund, this one will require a bit of foresight. Instead of waiting until the last minute and charging your next vacation (or a class or your wedding) to your credit card, think ahead and create savings goals. As soon as you know that a big event or expense is coming up, start saving. This way, you can set aside a little bit each month, week, or day, and pay for it in cash instead. It helps to add up the total and divide it up, depending on your timeframe, budget, and preferences.

3. Don’t charge beyond your means

Having a credit card often tricks us into spending money that we don’t have. Generally speaking, if you don’t have enough cash or money in the bank to pay for something outright, it might be a good idea to reconsider. Is it something you genuinely need, or is it an impulse buy? Setting a budget and sticking to it can help you avoid the trap of excessive credit card spending.

There’s an easy trick you can use to stick to living within your means: if there’s something you want, but you’re not sure that you need it, leave it in your cart for a few days before you buy it. Chances are, by the time you go back to it, your interest in it will have faded, or you’ll have realized that it wasn’t a necessary purchase.  

4. Carry cash for everyday purchases

Cash may be the forgotten cousin of the credit and debit card, but we’re bringing it back. Next time you get paid, pull out enough cash for everyday expenses like groceries, coffee runs, gas, and the occasional restaurant meal. This way, it’ll be much harder for you to grab impulse purchases off of the shelf in the store or order more than you originally planned at the next happy hour. Having a physical representation of your budget is a really effective way to keep yourself on track and help you meet your financial goals. 

5. Avoid cash advance credit card offers

Cash advances from your credit card provide a great solution if you need access to funds fast. It’s important to note, however, that these cash advances from your credit cards often come at a high interest rate. So, ensure that you look into alternate options to secure emergency funds before electing a credit card cash advance. You may find that a family member or friend can loan money to you on a short-term basis. Not only will this help you to avoid paying incremental interest, it will also inevitably help you avoid adding on to the credit card debt that you already have.

Find the Best Method for You to Avoid Credit Card Debt 

The suggestions above are five of the best ways to avoid building credit card debt, but they’re not the only ones, and everyone is different. If you find another way(s) to avoid credit card debt that works for you, that’s fantastic! The key to a healthy financial future is making smart money moves whenever you can. Here are a few other fan favorites for avoiding credit card debt.

  • Use credit cards only for emergencies
  • Pay your balance in full every month
  • Make timely payments so you don’t get slammed with late fees
  • Avoid holding more than two credit cards at a time
  • Always read the fine print so you understand the total costs that you are taking on
  • Track your purchases