Is 2021 the year to cut your credit cards?

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There are several benefits you could get if you regularly use credit cards. On the one hand, credit cards make shopping easy and convenient. You don’t have to worry about carrying cash, and you can store your card details on your phone or laptop to make online purchases a snap.

Credit cards also give you the chance to earn financial rewards for purchases you already make. If you normally refuel your car twice a week and go to the grocery store every five or six days, you could earn extra cash back on those purchases that you can spend as you wish.

But while credit cards are certainly helpful, they can also lead to less than ideal financial decisions. If the following points apply to you, then this may be the year to stop using credit cards.

1. You never manage to pay your monthly bills in full

Credit card companies make money when consumers charge expenses and don’t pay them in full when their bills fall due. If you find that you still can’t pay your credit card bill month after month and your balance is only getting bigger, it might be time to say goodbye to your credit cards right now.

Carrying too large a scale can have damaging consequences. Doing so can cause you to spend a lot of money on interest (money you might otherwise be spending on important things, like paying for most of the essentials), and it can damage your credit score.

It’s one thing if you can’t pay your credit card bill in full from time to time. But if you establish a consistent tendency to fail, consider throwing these cards as early as possible.

2. You shop regularly out of boredom

Some people only shop when they need a specific item. But if you tend to shop when you’re bored, your credit cards can be overspending. If so, you might be better off getting rid of them so that they don’t hurt your finances in the long run.

3. You have trouble controlling yourself in the store

When you make a shopping list before you go to the store and only bring enough cash to cover the items you need, you eliminate the possibility of overspending. Now, if you usually show good self-control when shopping, you may not need to give up your cards. But if you overspend every time you’re in the store and your credit cards give you the chance to spend more, it might be time to throw them away.

There is no reason to cut your credit cards if you are primarily on a budget and pay your bill on time. But if the above applies to you, it might be time to say goodbye to those cards until you can pay off your debt and work on the habits that often make you overspend.

You can decide to get rid of your credit cards this year and get your finances in order at the same time. But once you get to a better place, you can decide to start using credit cards again, and that’s okay.

In fact, rather than cut your credit cards, a better bet may be to store them in a safe place that is also not that easy to access (maybe a safe at your bank). That way, you won’t be tempted to use them in the short term, but they’ll be there for you once you’re ready to come back to them.

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