Good Credit Habits of Smart Spenders

How to use credit without abusing it and causing debt problems.

Credit cards are not the enemy of a healthy financial outlook. You can use credit effectively without putting your financial stability at risk. But like so many things in life, a credit habit becomes detrimental when it’s abused. When you overuse credit, charge without thinking or use your cards knowing you can’t afford to pay back the debt then yes, credit cards have the potential to cause problems in your life.

However, credit counseling is like rehab for people who have faced challenges with credit card debt in the past. And like many rehabilitation programs, you can go back to using credit responsibly once you’ve recovered by eliminating the debt that was holding you back. You learn to avoid triggers for things like impulse purchases and get coaching on how to live within a budget so you don’t overspend.

Of course, if you have an all-out credit card spending addiction, then you may need to cut out credit usage in your life completely. However, for most people it’s about getting out of a bad situation and learning better habits to use moving forward.

Recognizing the warning signs of a bad credit habit

Could you live without charging for 30 days? Think about that – no charging things that catch your eye in a store, no charging for those unexpected expenses or emergencies that always seem to pop up every month. Not charging whatsoever.

If you, your budget and your finances couldn’t handle going without credit for just one month, then you may be developing a bad credit habit that needs to be broken. Dependence on credit is dangerous because it’s often a sign that you’re not living within your means. If you need to use credit cards just to get by every month then that’s definitely an issue.

However, even if you have a budget and pay for regular expenses with your regular income, if you can’t afford to cover for unexpected expenses and emergencies with money in your savings, then you aren’t fully financially stable.

In this case, you need to get your finances to a place where you can save for emergencies and cover all of the expenses in your budget without relying on credit. If you can’t do that because your credit card bills are eating up income, it’s time to look into options for debt relief. This will allow you to lower your debt payments so you can start to save, while crafting a strategy that allows you to eliminate your debt in full as quickly as possible.