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how to stop using credit cards

How to Stop Using Credit Cards

In this article I am going to discuss how to stop using credit cards as an important part of getting control of your money. Taking control of your credit card spending, and your spending in general, is an essential part of building an awesome financial future for you and your family!


11 Important Steps on How to Stop Using Credit Cards

As of 2017, Americans had more than $1 trillion in credit card debt. That’s more than $4,000 for every adult living in the U.S. And the average American had more than $6,300 of credit card debt. It’s no secret that many Americans chronically overspend and that credit card debt is a big problem. Not only does it threaten financial security, but the overspending that is the real problem that credit card debt is, unfortunately, just one of many symptoms of keeps people from being able to reach important financial milestones like saving an emergency fund, paying cash for large purchases, saving for retirement, and saving for kids’ college.

But if you are caught in a vicious cycle of credit card spending, where you are today does not have to be your future. You’re not stuck. You’re not. You can start taking small steps today to change your spending habits and your life so that credit card bills are no longer a part of the picture, but true financial peace and security and guilt-free, intentional spending and wealth building are.

Below I talk about 11 essential steps you can start doing today that are crucial if you want to know how to stop using credit cards and start building a firm foundation for financial success.



1. Figure out your current financial situation.

As an important initial part of your goal to stop using your credit cards, you have to know what is going on with your money.

First with your spouse (if you’re married) and then with your older children if you have them, acknowledge the reality of your financial situation. No matter how bad it is, dive into the numbers, and figure out your overall financial picture so you will know what you need to tackle. This includes totaling up all of your debt (credit card debt, car debt, student loan debt, medical debt, and any other debt) as well as figuring out as closely as you can your overall household income. (This is easy if you’re on salary and receive the same amount every pay period, but if you receive overtime pay, are on commission, or are self-employed, just estimate as best you can.)

Then once you recognize the financial reality you live in, determine from here on out that things are going to be different and that you are going to make the changes that you need to turn your situation around. And then commit to working together as a couple or as a family to dig yourselves out of credit card and other debt and make your financial future what you want it to be.


2. Figure out where your money is going by tracking your spending.

The next step to take to stop using credit cards is to track your spending so that you will know how much money you have and know where it is going.

Once you have a general idea of your overall financial situation, begin tracking your spending and start using a budget. You’ll feel like you got a raise (really!), and you’ll be able to really start making progress toward ditching your debt.

In order to start working your way out of debt you need to be able to gain financial traction, and the way to do that is to optimize the power of your income. By really digging into the numbers you’ll start seeing places where you can cut spending. For example, most people can reduce spending almost immediately on groceries and especially eating out, clothing, and entertainment. Use the worksheet available below to start tracking your spending.


3. Create and stick to a budget or spending plan.

A third important step for how to stop using credit cards is to follow a budget.

To help you stop relying on your credit cards and spending more than you earn, you need to follow a budget. I know you might cringe when you hear the word, either because of past difficulties with budgeting or because of negative feelings you might associate with the word that have kept you from budgeting in the past. But a budget, or spending plan, is just a list of monthly goals for your money. It is where you decide what you want to spend for each area of your finances.

As you create your first budget and then work to tweak it, don’t shoot for perfection and don’t be too hard on yourself. It will take a few months for you to get most of the kinks worked out and for you to start really budgeting effectively. But when you do, chances are that you will feel like you got a raise, even before you start adjusting your budget in order to spend less and save more.

Find steps for creating your budget here, and sign up below to download my free spending tracker and budget worksheets!

And find motivation to help you stick to your budget here.

If you are working to stop overspending in addition to stopping your use of credit cards, you will probably want to estimate a little high for the different budget categories at the beginning, just to give yourself some wiggle room. We’ll start working on ways to find more money in your budget a little later in this article.


Related articles:

Beginner’s Guide to Budgeting

17 Must-Know Tips to Rock Your Budget

13 Top Tips to Help You Stick to Your Budget

Budgeting Fail? Try This Simple Alternative to Budgeting

42 Cheap and Easy Budget-Friendly Meals for under $5!


4. Decide to be content.

Another important step in the behavior shift to stop overspending and stop using credit cards is to learn to be truly content with what you have and where you are in life. Now, that doesn’t mean that you give up all worthy ambitions and never try to improve your situation or attain more in life. Of course not. Rather, it means that you be happy with things as they are, while you continually seek for the things and to improve in the ways that truly matter.

One of my favorite scriptures from the Bible is this one where Paul is speaking to the Philippians and says to them, “I am not saying this because I am in need, for I have learned to be content whatever the circumstances” (Philippians 4:11).

One important part of that is to understand that, unless you’re living in true poverty, you already have enough. You already have the necessities of life—adequate food, clothing, shelter, transportation, and utilities. And undoubtedly you have much of what you want, as well.

When striving to change the way we think in order to be content with what we have, it helps to remember the hedonic treadmill. What this phrase means, in terms of our money and possessions, is that the more we buy—the more we acquire—the more we’ll likely want. Pretty soon, that shiny thing we bought last month isn’t shiny enough anymore. The new dress just isn’t cute enough. The new ATV or car or truck has lost much of its luster. The way to reverse this potentially neverending spiral is to think about what’s truly important to you (probably your family, your friends, your health, your relationship with God or a higher power, your love of nature—intangible things like that), and to say that enough is enough. You don’t need any more stuff. Instead, work to simplify your life, strengthen your relationships, declutter your home, and be mindful with your spending.

And then, when you’re no longer spending all of your money and then some on shiny stuff, you can get your money under control and start using it for things of more long-term value like financial security, independence, your children’s college educations, a comfortable retirement, generous giving, and more.


5. Distinguish between true needs and wants.

Another helpful step to stop relying on credit cards is to honestly distinguish between your needs and your wants.

If you are painfully honest with yourself, you’ll likely recognize that much of your spending is for things that you want but not that you truly need. You probably already have a closet full of clothes, a car that can get you around for many years to come, and gadgets and toys and home furnishings that make your home or apartment burst at the seams. 

So the reality is that you could probably go a long time without needing to buy anything at all besides food and gas for your car. To break yourself of mindless, needless, or even reckless spending, do a no-spend month. The savings can be dramatic, and the change to your mind-set monumental. Or if that seems too extreme, start with a no-spend week. Learn more about how to do a no-spend challenge.

To help you differentiate between needs and wants, keep this distinction in mind: you need transportation, but you don’t need the newest or the biggest or even the safest SUV on the block. You need shelter, but you don’t need a fancy three-story home with three-car garage within the best school district (even though I admit having a good school is nice). You need food, but you don’t need filet mignon or lobster or the finest cuts of beef and you don’t ever need to step foot inside a fast-food joint or sit-down restaurant. And you need clothes, but you don’t need designer labels.

Learn more about differentiating needs versus wants here.



6. Reduce your spending in order to live on less than you earn and to stop using credit cards.

If you have been overspending your budget and that is part of the reason whythat you have decided to stop using credit cards, you should find ways to spend less money.

You can probably reduce your spending in almost every item of your budget, if you become very intentional with your money. There are so many ways to reduce your spending, in fact, that I’m not going to list them here because it’s enough great content to be an article (probably a book!) all on its own. For a great list of ways that you can start spending less money in different areas, read this article with more than 20 ideas on how to reduce your spending.

But here are just a few ideas to get you started: you can slash your grocery bill, spend less money eating out, go on a clothes-buying moratorium or reduce your spending on clothes in other ways, cut your cable or satellite, cut your entertainment spending or fun money allotment (or both), opt for a cheaper cell phone plan, go on a no-spend challenge for a week or a month, reduce your driving and save on transportation in other ways, downsize your automobile or home, reduce your travel and vacation spending, and curb your (spending on) Christmas and other gift giving.


Related articles:

Budgeting Fail? Try This Simple Alternative to Budgeting
13 Surefire Steps to Help You Stick to Your Budget
9 Must-Know Tips to Help You Finally Start Saving!


7. Build a substantial emergency fund.

Another important part of deciding to stop using credit cards is to make sure that you have a good emergency available to you when you have financial troubles.

Begin building a safety net for unexpected expenses by creating a starter emergency fund of at least $1,000 or up to one month’s worth of expenses. Do this while paying minimum payments on your credit cards, until you have your starter EF in place. Then once you pay off your credit card and pay off other nonmortgage debt, build up at least a three- to six-month emergency fund so that you have money to cover unexpected expenses and don’t have to rely on your credit cards to bail you out of financial trouble. An emergency fund is an essential part of anyone’s overall financial plan. For more information about building an emergency fund, read this article.


8. Create additional savings accounts for the various things you need to save up for.

An additional important step related to how to stop using credit cards is to set up various savings accounts for eventual needed purchases and expenses.

Once you have paid off your credit cards and other nonmortgage debt and have a three- to six-month emergency fund in place, start saving up for things like automobile repairs, replacement vehicles, home repairs, furniture and appliances, vacations, Christmas, and other gift giving (create sinking funds).

If you spend more than $500 a year on a particular item or category in your budget, then it’s worth having its own savings account. I love my Capital One 360 bank account, which we’ve had for over 14 years now (opened back when it was still ING Direct), because I’m able to easily  bank online and because we’re able to open various savings accounts (we have more than 10) for different savings goals and they are all linked to our checking account. Once you open the various savings accounts, automatically transfer the amounts for each category that you decide work for your monthly budget into the various accounts.

Learn more about this process and about other ways to automate your finances in order to reach your financial goals and dreams.


9. Cut up your credit cards.

If you are serious about learning how to stop using credit cards, cutting up your cards is another important step.

The best way to avoid the temptation of relying on your credit cards to buy products and services you can’t afford (because by definition if you are relying on your credit cards to buy them that means you can’t afford them) is to cut them up and close the accounts. I know that credit cards are very common and they make life more convenient, but you can do virtually everything with a debit card that you can do with a credit—except for get yourself into trouble by spending money you don’t have. You can even earn rewards! (See the next section for more info.) And if you’re carrying a balance on your credit cards, the fees and interest you are paying on your credit cards are undoubtedly canceling out any rewards you receive. Statistically, if that weren’t the case for most credit card users, credit card companies wouldn’t make any money off of them, so they probably wouldn’t offer rewards.


10. Find better rewards.

If one of the reasons you have a credit card (or you’ve kept your credit card) is because of the rewards programs that some of them offer, then consider these rewards debit cards, instead! You get the same types of benefits, without the temptation (or the ability!) to overspend! Here are some of the best debit card reward programs currently available:

The PayPal Debit MasterCard (for businesses) is the rewards debit card that I have had and used for years now. It earns you 1 percent cash back on all signature-based purchases (where you don’t use a PIN). Opening an account with PayPal is easy and free, and another advantage that I really like is that you can link your PayPal card to various checking accounts and transfer the money from whichever account you want into your PayPal account to cover your purchases, or they will just pull the money from the default account you designate if you don’t have any money in your PayPal account (I generally don’t’). There are no minimum balances and no fees.

Discover Bank has a checking account that pays 1 percent cash back on debit card purchases. There are no monthly fees or minimum account balance requirements.

American Express Serve cash back debit card offers 1 percent cash back for every $1 you spend with your prepaid debit card. There is no cap on the amount of cash back you can earn.

Green Dot Cash Back Visa Rewards Debit Card pays you 5 percent cash back on all purchases you make with your card, up to $100 a year. Though it caps out after you spend $2,000, it’s still a great incentive program.

The SunTrust Delta SkyMiles World debit card offers 1 mile for every $1 you spend on PIN point-of-sale transactions and 2 miles for every $1 you spend on direct purchases from Delta.

The UFB Airlines Rewards Card offers you 1 mile earned for every $3 spent with point-of-sale debit card transactions. For now they are partnered with American Airlines, but in the future, they may open up opportunities with other airlines as well.

The Key Bank rewards debit card offers one reward point for every $6 you spend on qualifying purchases, and there is no cap on the amount of points you can earn.

If you want a list of even more rewards debit cards that are available, check out the article “15 Best Debit Card Reward Programs,” from GoBankingRates.com.

Though there aren’t nearly as many debit card rewards programs as there used to be, they still exist, and if you love the rewards but have trouble managing your spending with credit cards (that is, you carry a balance on your credit card), then they’re a great alternative.


11. Increase your income.

A final important move related to how to stop using credit cards is to increase your income.

Realistically, there’s a limit to the amount of money you can save, but the amount of money that you can earn is literally limitless. That’s one reason that yours truly, a once very much nonentrepreneurial soul, has changed my tune.  Here are some ideas for increasing your income.

  • Ask for a raise or promotion. If it’s been a couple of years or more since you received a significant raise and you’ve been an exceptional employee at work, catalog your contributions and your accomplishments, and schedule a meeting with your boss to request a raise or a promotion. Focus on ways that you’ve earned the company money or saved them money. If you learn that a raise or promotion isn’t going to happen right away, ask what specific steps you can take in the next year or two to make it a reality. Read this article for more information on how to seek a raise or promotion.
  • Do freelance work or coaching/consulting. If you work in a field that lends itself to doing freelance work, take advantage of that opportunity to earn extra income to pay toward your debt! I have been doing freelance writing and editing since before I graduated from college with my English degree and editing minor, and doing freelance work has not only helped me gain experience in other areas besides what I do for my full-time job but has also at times (when I wanted to give the time to it) brought in significant additional income.
  • Get a (second) job. If one spouse is available to get a second job in the evenings or on Saturday, for example, then this is another great potential way to earn additional income. And if you are a one-income family, or if one of you works only part-time, you might want to consider reentering the workforce or going full-time temporarily in order to get out of debt more quickly. Though raises and promotions are awesome because you’re earning more money without necessarily having to spend any more time, you’ll generally make a lot more by working at another job. (And of course, if you and your spouse both get a raise and a second job, then you take advantage of both methods of increasing your income. Yay!)
  • Start a side hustle. If you would rather earn money without working another regular job, there are a lot of things you can do to earn a little extra income. Some ideas include starting your own small business where you turn a hobby into a money-maker, being a virtual assistant, or driving for Uber or Lyft. Learn how to start a side hustle and find out about many side hustles that you can explore.
  • Start a money-making blog. The potential for significant income is one of the reasons that I started this blog. If you love helping people and enjoy writing, being a blogger might be a great fit for you. In addition to great income potential (check out these amazing income reports of bloggers who make $10,000 to $100,000 or more per month!), there are many other benefits of being a blogger, such as being able to be your own boss and work on your own schedule. Learn how to start a blog for cheap.
  • Earn passive income. Some options for earning passive income are to create a product you have someone sell, write a book, create a money-making podcast or vlog, develop an online course, or participate in affiliate marketing. Read this article to learn more ideas for earning passive income.
  • Use rebate apps like Ibotta and Ebates. With rebate services such as Ebates and Ibotta, you can earn money by shopping for things and at places where you would shop anyway. With Ebates, you generally buy items through their website to save up to 40 percent on purchases. It is primarily an online service. Ibotta, on the other hand, is an app you use primarily after you make purchases at brick-and-mortar stores. Because of this, you can actually sign up for and use both apps to save on purchases. Sign up for a free Ebates account here, and sign up for a free Ibotta account here. You can literally sign up for both in just seconds and let the savings start stacking up.
  • Sell stuff on eBay or Amazon. If you have a good eye for a bargain, you can buy items at thrift stores or garage sales and sell them for a profit on eBay, Amazon, Craigslist, or your local online classifieds.
  • Sell your clothes to consignment shops. If you’re like most people, you probably have more clothes than you need. So use them to bring in some quick cash!

Find additional ways to increase your income here.



Learning how to stop using credit cards, if you use them to overspend, really is a crucial part of getting control of your finances and winning with your money.

I know that in our society today it goes against the norm to not have (and rely on) a credit card and a credit card balance. But normal is living paycheck to paycheck; normal is broke. You don’t want to be normal! You want to be weird—financially weird, anyway. Because financially weird people end up being successful with their money by spending less than they earn and saving and investing the rest. They don’t rely on credit cards to help make ends meet.

You can begin to change your financial outlook and your whole financial life by following the steps outlined above. And as you pay off your credit cards, you’ll feel the peace that comes with being in control of your spending and having more control of your income—income that you can put toward reaching your own awesome financial goals and dreams.


I hope that you found this article on how to stop using credit cards helpful! What have you done to be able to stop relying on credit cards? Or which of these tips for how to stop relying on credit cards do you think will be most helpful to you? Leave a comment below and let me know; I would love to hear your thoughts!


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