Credit Cards

3 signs it’s time to give up credit cards

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You may need to get rid of your credit cards for good.

Key points

  • Credit cards can reward you for making purchases and help you build credit.
  • They can also ruin your finances and lead you into costly debt.
  • Rising debt and falling credit scores are just two signs that you should put down your cards.

There’s a reason so many people like to use credit cards. Not only do they make shopping more convenient, but they’ll often reward you with cash back for purchases ranging from everyday items to big splurges.

Also, using a credit card can help you build credit. As you pay your bills, that activity is added to your payment history. And if you consistently pay on time, it could help improve your credit score, making it easier to do things like take out a loan or rent a place to live.

But while credit cards clearly have their advantages, they’re not right for everyone. And if these three signs apply to you, it may be time to ditch 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 it can mean that. And if you keep finding that your credit card balances are increasing from month to month instead of going down, then it may be time to stop using credit cards and stick to cash. That way, you won’t have the option to buy things that you can’t pay for right away.

2. Your credit score keeps falling

We just found out 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 carry a credit card balance that is too high in relation to your total spending limit, it could have a negative impact on your credit score. And that, in turn, could make it difficult to affordably borrow money when you need it.

3. You are often a 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 much easier to complete when you don’t have to worry about running out of cash and can simply swipe a credit card. But if you stick with cash or debit cards, you’ll be more motivated not to make sudden purchases when your wallet runs dry or your checking account balance is dangerously low.

A temporary change may be in order

Credit cards can definitely be a useful tool and, when managed strategically, can help those who use them improve their finances. But credit cards aren’t right for everyone, and if these signs apply to you, then it may be time to block yours.

However, that doesn’t mean you can’t use credit cards again. Maybe you need some time to get your finances in order before you go back to them.

In fact, even if you decide you shouldn’t use credit cards anymore, canceling them may be a bad idea, as doing so could hurt your credit score. A better bet may be to keep them in a safe place, but keep the cash as you go about your daily life. Once you’ve managed to pay off your debt and master the art of careful budgeting, it may be appropriate to start swiping credit cards again, so it’s good to keep that option open.

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