Never Get in Trouble with Credit Card Debt Again
Once you pay down this costly debt, you need to focus on keeping it in check. These three tips can help.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
Debt is an ugly four-letter word. It comes in all shapes and sizes, and generally includes mortgages, auto and student loans, credits cards and more. In fact, as of December 2015, an average American household was estimated to have $130,922 in debt, with $15,762 belonging to credit cards. Even more staggering is the total $733 billion of credit card debt owned by U.S. consumers coming into this year.
As credit card debt is considered to be a costly threat to your financial success (and one of the worst kinds of debt), it's often reviewed first when putting together a financial plan. One overlooked question, however, is what comes next. What if you stuck to your plan and got those pesky credit card balances down to zero? What steps can you take to ensure you don't rack up those bills again?
Below are my top three recommendations for keeping those credit card balances in check now that you've greatly reduced or eliminated your debt.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Cut Up Those Credit Cards
As cliché as that image has become, this is an essential first step. There are a lot of psychological factors that go into acquiring debt, and if you were prone to racking up debt in the past, chances are you are prone to do it again. Don't take the risk. Cut up your credit cards and rely on a bank debit card. This will ensure you only spend the money you actually have—not the funds your credit card company so generously lets you borrow.
Check Yourself and Remain Accountable
Accountability is key when it comes to keeping credit card balances in check. At a minimum, schedule an annual financial check-up to build in that accountability. This can be done in a variety of ways—be it with a family member, a spouse, financial planner or even YOURSELF. Knowing that this event is on the calendar will hopefully provide you with the needed motivation to stay on track.
Utilize Tech Tools
With the advent of technology, mobility and online resources, it's now possible to find solutions to virtually anything using tech tools. Why not leverage technology to get a comprehensive view of your financial well-being? You can do this with the help of a financial professional or even complimentary sites, such as mint.com. Use these tools to track your spending or set budgets, and make it a habit to log in once per week to ensure consistency and results.
While there are plenty of reasons people fall into debt, more often than not, debt begins to spiral out of control because people neglect their finances. They are afraid to look, and by the time they get the courage—it's too late. Be proactive, take control and use the necessary tools to stay on track of your debt. The less you owe, the more you own, and the better chances of a successful financial life.
Taylor Schulte, CFP® is founder and CEO of Define Financial, a San Diego-based fee-only firm. He is passionate about helping clients accumulate wealth and plan for retirement.
-
Over 65? Here's What the New $6K 'Senior Deduction' Means for Medicare IRMAA CostsTax Breaks A new deduction for people over age 65 has some thinking about Medicare premiums and MAGI strategy.
-
U.S. Congress to End Emergency Tax Bill Over $6,000 Senior Deduction and Tip, Overtime Tax Breaks in D.C.Tax Law Here's how taxpayers can amend their already-filed income tax returns amid a potentially looming legal battle on Capitol Hill.
-
5 Investing Rules You Can Steal From MillennialsMillennials are reshaping the investing landscape. See how the tech-savvy generation is approaching capital markets – and the strategies you can take from them.
-
I'm a Financial Planner: These Small Money Habits Stick (and Now Is the Perfect Time to Adopt Them)February gets a bad rap for being the month when resolutions fade — in fact, it's the perfect time to reset and focus on small changes that actually pay off.
-
One of the Most Powerful Wealth-Building Moves a Woman Can Make: A Midcareer PivotIf it feels like you can't sustain what you're doing for the next 20 years, it's time for an honest look at what's draining you and what energizes you.
-
I'm a Wealth Adviser Obsessed With Mahjong: Here Are 8 Ways It Can Teach Us How to Manage Our MoneyThis increasingly popular Chinese game can teach us not only how to help manage our money but also how important it is to connect with other people.
-
Looking for a Financial Book That Won't Put Your Young Adult to Sleep? This One Makes 'Cents'"Wealth Your Way" by Cosmo DeStefano offers a highly accessible guide for young adults and their parents on building wealth through simple, consistent habits.
-
To Love, Honor and Make Financial Decisions as Equal PartnersEnsuring both partners are engaged in financial decisions isn't just about fairness — it's a risk-management strategy that protects against costly crises.
-
For More Flexible Giving, Consider Combining a Charitable Remainder Trust With a Donor-Advised FundIf a charitable remainder trust puts too many constraints on your family's charitable giving, consider combining it with a donor-advised fund for more control.
-
These Thoughtful Retirement Planning Steps Help Protect the Life You Want in RetirementThis kind of planning focuses on the intentional design of your estate, philanthropy and long-term care protection.
-
A Wake-Up Call and a Healthy Dose of Terror: How to Survive Your First Days in PrisonThis young man needed to be scared straight after his mother expressed her fear that he was on a path to prison. Hearing these eight do's and don'ts worked.
