A credit card is the easiest way to establish a credit history, which is crucial when purchasing a home or making other big financial decisions. In addition, there can be some perks to having a credit card, such as earning points or cash back.

Having a credit card can be either a blessing or a curse, depending on how financially responsible you are. Unfortunately, having multiple credit cards can also get increasingly difficult to manage.

One of the easiest and most preventable ways people get into debt is by misusing their credit cards or failing to make payments to keep their balances under control.

Don’t Panic About Your Credit Card Balance

This is easier said than done. However, despite popular belief, it’s not wrong to have a credit card balance. Your financial institution is happy to see a credit card balance. What can impact your credit is:

• Not making any payments
• Failing to make minimum payments and cover the interest

Once you miss a couple of payments, it can be challenging to get back on track if you don’t have the room in your budget to make large payments. This can be overwhelming, as having a balance you must pay off slowly weighing on your mind can take a toll on you mentally.

Limiting your credit card usage will help you make your financial situation much less stressful. There is no overnight solution, but there are small steps you can take towards making things better.

To avoid plummeting into further credit card debt, here are five unconventional ways you can limit your credit card use, especially if you have a difficult time controlling your spending.

Lock Up Your Credit Cards

It might be time to throw your credit cards in jail for your bad behavior. Putting your credit cards out of sight can help you put them out of your mind when you’re tempted to use them. If you must, literally lock up your cards so you can avoid using them for impulse or unnecessary purchases.

You can lock your credit card away in a safe if that would be helpful. You can also consider locking them in a lock box or a filing cabinet. If you are concerned that having your credit cards locked up at home won’t be enough of a deterrent, consider giving the key to a trusted person or your spouse, so you can’t get into it.

Breaking bad financial habits, such as using your credit card when you want something but don’t have the available funds, takes time and practice. An important thing to remember is that learning a new habit can help you healthily replace a bad habit.

Don’t Leave Your House with Your Cards

It can be tempting to throw your purchases on your credit card when you’re shopping. It can be even more tempting to earn points or cash back on your credit cards. However, if you’re not prone to paying off your balance when you purchase something, it’s not worth bringing your credit card with you.

You’ll have to be honest with yourself about your credit card habits. For example, sometimes, we use our credit cards to transfer money from our bank account right away, but we don’t end up doing it.

Until you get to the point in your financial journey where you are disciplined enough to pay off your credit card purchases immediately, it’s best to avoid using them when you’re out altogether. Thus, you won’t have the ability to spend money you don’t have.

Ask for a Credit Card Limit Increase

Asking for a credit card limit increase shouldn’t be done so you have more credit to spend. Instead, limiting your credit card use through an increase is to avoid being maxed out.

Maxing out your credit card can be easy to do accidentally. If you are close to your credit card limit and manage to miss a payment or two, it can push you over the edge. Having that extra wiggle room in your credit limit can help you avoid this potential problem.

The only way to ensure that increasing your credit card limit will be feasible in reducing your credit card use is to implement other strategies to make sure you don’t get spend-happy with your newly available credit.

Requesting a credit card limit increase could look slightly different depending on what financial institution or company you have it with. You might have to call your bank or visit them. It’s also possible to complete the process online. Then, you will usually be asked for personal information and your income status.

The worst thing that could happen is that your financial institution says no. However, having your request denied will not impact your financial health. You might have to get your overall balance down a little more before trying again.

If you can get a credit limit increase, you might also have the option of transferring a balance from one of your other credit cards to this credit card with a higher limit. This can eliminate some of those pesky interest payments you’re making on multiple cards. You’ll also have fewer payments to manage in your budget.

Scare Yourself Out of Using Your Cards

You don’t know what you don’t know, which could be true about your financial situation. For example, you might not realize just how much money you’re wasting on credit card fees and interest. This is especially true if you have a decent-sized balance on one or more credit cards.

Consider adding up those fees and interest payments. You might be surprised just how much money you will have to pay that has nothing to do with actual purchases you’ve made using your credit card. This could be enough to scare you into making better financial decisions.

You also want to consider figuring out how your credit card payments work within your budget. When you have this information, you can look at how long it will take you to pay off your credit card balances, how many extra fees there are, and how much interest that period will add to your balance.

This will most likely shock and scare you, but that could be the motivation you need to get your credit card use back on track. It’s one thing to have a healthy amount of debt, which for most people, is unavoidable. It’s another thing to be wasting money on your debt and letting it snowball to the point that you can’t get ahead.

Everyone is motivated by different things, but it’s easy to have cognitive dissonance about our finances when we avoid looking at the numbers. So, look at the numbers; it’s the only way to know how to best strategize a solution.

If All Else Fails, Downsize

It is possible to get a grapple on your credit card usage without having to pull out the scissors or the shredder. However, you will have to practice restraint and effort to be more responsible with your credit cards. If you’re not there yet, you might want to consider downsizing the number of credit cards you have or even cutting up the credit cards you have.

When you do this, you are not closing that credit card account. You can’t do that until you pay off your balance. So, what this will do for you is prevent you from using that credit card.

If not having your credit card on your person isn’t enough for you to find a way to stop using it, destroying it might be your best bet to start getting a handle on your credit card usage.

If you’re feeling lost and could use some financial advice, speaking with a financial advisor about your credit card situation can be very helpful. It might be worth discussing how you can consolidate your credit card debts if you have multiple credit cards and you’re having trouble finding a way to manage your payments effectively.

Most financial advisors would not recommend you close all your credit cards unless you have no other alternative to get your spending under control. This is because eliminating your credit options can impact your credit score, which is one of the main reasons people have credit cards, to begin with.

Know Your Credit Utilization Rate

One thing to be cognizant of when deciding how to limit your credit card usage is how closing out your credit cards could impact your credit score. This is because your credit score doesn’t only consist of what debt you have and how you handle your debt, but how many types of credit you have had.

Having different types of credit that you are actively paying off makes up your credit utilization rate. In addition, having a history of different types of credit shows that you have had a healthy enough credit situation to have been approved for different types of credit.

When it comes to applying for new sources of credit, such as a loan or a mortgage, your credit utilization will be considered as part of your approval process. The way your credit utilization rate is scored will depend on how much credit you have been approved for versus how much you are using.

The Points Guy offers more great credit card advice on his blog.

How To Understand Your Credit Utilization Rate

For example, if you have a total approved credit limit of $20,000 split up between four credit cards, and your total balance on all four credit cards adds up to $5,000, your credit utilization rate would be 25%.

Therefore, when your credit is analyzed to approve you for more credit, the lower your credit utilization rate is, the better off you are.

Now, how does closing credit cards potentially impact your credit utilization negatively? When you close a credit card, you take that portion of your credit limit off your credit score.

Going back to the previous example, if you closed two of your credit cards, eliminating $10,000 from your approved credit limit, it’d go down to just $10,000. If you still have $5,000 owing, your credit utilization rate is now 50%, which is not as good as 25%.

To manage this effectively, you can consider no longer using that credit card for purchases but keep it open for your credit history. This way, your credit utilization rate will continue to get lower, thus improving your overall credit score.

How To Close Credit Cards the Right Way

Part of your financial health journey could be simplifying your finances, which is always a good goal. However, if part of this includes reducing the number of credit cards you have, you must consider some things before simply canceling your cards.

As previously mentioned, getting a credit limit increase is an option. If you can add more credit to a couple of your cards, this will increase the amount of credit you’ve been approved for. Thus, you can close a couple of the cards you no longer want without having as much of an impact on your credit utilization rate.

Final Thoughts

By making new commitments to yourself regarding your credit card use, you can overcome the mountain of debt you either already have or are getting close to having on your credit card. Self-discipline is a skill that requires time to perfect, but the effort is worth it for a safer and more responsible financial future.

It’s essential to try and work through any guilt or self-loathing associated with your current credit card situation.

Things happen, and one emergency can throw us completely off balance. It’s never too late to improve your financial health. Don’t forget to reward yourself when you accomplish your financial goals; don’t use your credit card to do so.

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