How to Handle Your Credit Cards After You’ve Gotten Out of Debt
There’s a moment that will come when you will pay off all your debt. It’s July 1st (knock on wood) for me, and I couldn’t be more excited. But like any reformed spender, I want to make sure I will be responsible when I get back to living normally, spending and saving and not throwing everything at debt. I have a plan for using my credit cards without getting into trouble again.
If You Don’t Have It, Don’t Spend It
After the hard lesson I learned piling up and then paying down credit card debt, my first rule is knowing how much money I have to spend. Know exactly what’s available for you to spend on variable expenses like food, gas and entertainment, while still having enough to cover housing and any other monthly bills. If you only have $50 extra this week, you can hold off on shopping or paying for a future trip until you have the money.
Take Advantage of Perks
The next is to take advantage of what’s out there. You can apply for a credit card to take advantage of rewards, companion flights and other perks. As long as you are only spending the money you have and not using it as a short term loan, your credit card can be just another tool. Think of it in the philosophy of “first do no harm”. You use tons of other things in your life as tools without causing harm to yourself. You use your cell phone daily right? You take care of business, talk to family and friends and just use it as an all around guide. But do you also use it to repeatedly call your ex, thus embarrassing yourself, or prank call your old place of business, thus getting a restraining order taken out on you? Of course not. You use your phone within reason, usually without too much emotion. Just do the same thing with your credit cards.
OK, so you’re going to put a short term loan on your credit card even though you know it’s not the best idea. The best thing you can do is look for interest free credit cards to take advantage of their short term zero interest rates. As long as you pay it off before the interest is due (and hopefully use that money to make more money), then you are still using your credit card responsibly. So that wasn’t too hard, was it?