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3 Powerful Reasons To Do a Credit Card Detox



Like many Americans, my relationship with credit cards over the course of my adult life has been somewhat complicated. I love the rewards and sign-up bonuses they provide, but hate the high credit limits that encourage overspending. 

Recent studies have shown I’m not the only one who has mixed feelings about credit cards. About a quarter of Americans think they’re dangerous. And 12% of people believe credit cards are downright predatory, likely due to their high interest rates. If you feel like your credit cards are more harmful than helpful, it may be time for a credit card detox. 

How to Do a Credit Card Detox

A credit card detox involves quitting credit cards cold turkey for a few months. During my detox, I paid for groceries, gas, and any “extras” I wanted in cash or out of a separate, discretionary checking account. This forced me to think carefully about my spending decisions, because I only had a limited amount of money in my wallet and bank account for the week. 

When I ran out of money, I didn’t bail myself out by refilling my wallet or checking account unless absolutely necessary. I forced myself to live with my spending decisions and find creative ways to make it to the next week. This helped me learn how to stick to a budget and weigh my purchases instead of charging whatever I wanted to my credit card like I used to. 

When I embarked on this detox about a year ago, I thought I would never use credit cards again. However, the lessons I learned from my detox reset my relationship with plastic. Now I’m able to use credit cards wisely and in moderation to earn rewards without overspending. Here are some of the financial benefits I experienced from quitting credit cards for a while, which will hopefully inspire you to do your own detox! 

3 Benefits of Credit Card Detoxes 

Improve Your Budgeting Skills

Before I did my credit card detox, I wasn’t in touch with my day-to-day spending. I dreaded checking my credit card balance because it was always higher than I wanted it to be. 

When I started carrying a limited amount of cash, I realized that you can’t make purchases on autopilot if you want to stick to a budget. You have to tally up your spending every day or two to see how much money you have left in each budget category and plan accordingly, or else you’ll run out of funds. My credit card detox got me into the habit of regularly tracking my money, so now I’m able to avoid overspending even when I’m using a high-limit credit card to earn rewards. 

Staying on top of my money sometimes means I’m not able to go out and do something I want to do over the weekend. But I’d rather have a chill night in and meet my financial goals than overspend. My credit card detox helped me see that budgeting is all about adjusting your expectations and reordering your priorities. I might not be able to treat myself whenever I want, but it’s still possible to enjoy life and stay within my budget. 

Reset Your Relationship With Credit 

When I got my first credit card, it kind of felt like I had access to free money. For some reason, those numbers on a screen showing my balance just didn’t feel as real and concrete as cash in my hand. And research shows I’m not alone. A study on credit cards found that people were willing to pay twice as much for concert tickets when they were paying with a credit card rather than cash. 

People may be willing to spend more on credit due to a phenomenon called payment coupling. Credit cards remove the need to pay for what you buy immediately, which makes impulse purchases feel less real. It’s easier for consumers to charge a credit card and spend future paychecks than hand over cold hard cash right now. 

My credit card detox forced me to budget and pay with cash, which made me much more financially conservative and frugal. I started to see money as a limited resource that should be used wisely and carefully rather than something to be spent. Now I’m able to apply this new money mindset to credit cards and use them to earn rewards without blowing my budget. 

Pay Yourself First Instead of Last

Using credit cards can cause you to pay yourself last instead of first. With credit, you’re only able to save whatever money is left over after you pay off your balance. And if you tend to spend more when you use credit cards, you may not have much extra money to set aside for a rainy day after you pay the piper. 

When you’re on a credit card detox, you’ll pay for your discretionary purchases in real-time and won’t have a big bill waiting for you at the end of the month. This will enable you to pay yourself first when your paycheck comes in and set aside a larger portion of your income. 

Just imagine the financial progress you’ll be able to make! You could pay off your debt or save up for a dream vacation just by being more intentional with your money instead of using credit cards on autopilot. 

Would you be willing to do a credit card detox? Why or why not? Share your thoughts in the comments below!

Read More 

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4 Easy Ways to Maximize Your Credit Card Rewards

5 Habits That Seem Frugal But Actually Aren’t

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