While we rarely think of credit cards as being in line with alcohol, smoking, and drugs, they can be just as addictive. That’s especially true in the US, where any college student is bombarded with credit cards, and people already in debt regularly receive “pre-approved” credit card offers in the mail. Many people have come to rely on credit cards, not as a privilege, but as one of life’s necessities. They won’t leave the house without a credit card (or two or three), and many people wouldn’t even dream of shopping with only their available cash anymore. These are signs of credit card addiction. If this sounds like you, follow this five-step program to help you beat it.
1. Admit that you have a problem.
As with any kind of addiction, the addict is often the last person to know. The first step is to admit to yourself that you really have a problem, and to truly believe that. If you don’t understand your problem, you can’t solve it. Once you’ve admitted your credit card addiction, make a commitment to yourself to beat it. Write that commitment down in a short contract with yourself.
2. Ask for support from loved ones.
I’m not talking about financial support here. You need to find at least one person that you can trust explicitly, and confide in them. Tell that about your problem. Ask them to serve as your moral support, and to encourage you if you should “fall off the wagon.”
3. Make amends with people that your addiction has hurt
Your credit card addiction has likely hurt many more people than just yourself. Perhaps your family helped you pay off some old debts, and it hurt them financially. Perhaps your lousy credit has hurt your spouse or children, because you couldn’t get a new car, buy a home, or send your kid to a better school. Maybe you’ve had to resort to “borrowing” money from friends that you’ve never been check now able to pay back. Now is the time to apologize to anyone who’s been hurt by your credit card addiction, and to tell them about your plan to fix things.
4. Set a budget.
Once you’ve dealt with the emotional and psychological aspects of your credit card addiction, it’s time to start taking action. The first thing to do is set a budget for yourself. Evaluate where your money is going, and decide where you can cut costs. Discuss your budget with your family, because it will likely affect them, and they can give you suggestions for ways to cut costs without giving up what’s most important to you. The idea is to live by spending less, but not to live so lowly that you’re miserable. If your budget makes your life feel like a nightmare, you won’t stick to it, so be realistic when creating it.
5. Pay off those credit cards!
As you live according to your new budget, you’ll have extra money on hand. Cut up those credit cards, and put half of that extra money towards paying them off (that’s in addition to what you were paying on them each month previously). Put the other half into a savings or money market account, so you can earn interest. By the time your credit cards are paid off, you should have a nice “reward” for yourself and your family saved up. Use it to take a vacation or to buy something the whole family can enjoy, and you won’t need a credit card to do it!