11 Bad Habits You Need to Break if You Want to Get Out of Credit Card Debt

Unless you change some key habits, your credit card debt could become a major problem with long-term financial consequences.
Last updated March 24, 2023 | By Michelle Smith Edited By Chris Kissell
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Is your credit card habit hurting you more than it’s helping? As long as you pay off the balance each month, credit cards can help you build credit. The best rewards credit cards also can help you earn cash back or other perks.

But credit cards have the potential to be more dangerous than rewarding. If you have a hard time reining in spending, a credit card can create a mountain of expensive debt.

The following 11 financial warning signs indicate that unless you change some key habits now, your credit card debt could last for a very long time.

You use a credit card to pay for emergencies

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An emergency fund is a savings account you can turn to in the event of a major and unexpected financial crisis, such as a medical emergency, car repair, or job loss.

If you don’t have an emergency fund, you’ll probably have to cover those costs with your credit card. But emergency expenses typically aren’t cheap, and they get even more expensive when you charge them to a card with a high interest rate.

So, if possible, try to eliminate some money stress by building up an emergency fund that covers six months or more of expenses.

You only make minimum payments each month

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It is crucial that you make at least the minimum payment on your credit card debt each month. However, making larger payments can shave months to years off the time you spend in debt.

If you can’t find room in your budget to put even a few extra dollars toward your credit card bill, consider picking up a part-time job or developing a side hustle to make extra cash that you can use to pay down debt.

You’re not sure exactly how much debt you have

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Staying on top of your finances means knowing exactly how much you have in the bank and how much you owe creditors.

Losing track of your credit card balance means you’re more likely to accidentally max out the card and rack up late fees for missed payments.

It’s hard to make a plan to get out of debt when you don’t know how much money you need to pay off your obligations. So, summon the courage to look your situation in the eye. Then, develop a plan to change things for the better.

You pay for housing expenses using a credit card

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If you frequently turn to your credit card in order to pay for monthly expenses, such as housing costs, you will soon run into problems.

For starters, landlords and lenders often make it difficult to use a credit card to pay rent or mortgage expenses. And even if you are allowed to do so, the amount of interest you accrue from charging one month’s payment to your credit card can be large.

If possible, avoid using plastic to pay housing obligations under any circumstances and plan ahead so that you won't be tempted.

Your credit card is declined for being over the limit

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Once you’ve maxed out your credit card, you won’t be able to add more debt to the card. That is a good thing.

But having a maxed-out card is a sign that you are spending far too much. So, if your card is declined because you are over the limit, take it as a warning sign to change your behavior now.

Remember, interest on that debt will not stop accruing even if you no longer use the card.

You can’t seem to stop spending

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If you have pledged to stop spending but cannot make those promises stick, there’s no doubt about it: Your debt is a problem, and it likely will be for the foreseeable future.

To avoid a bleak financial future, consider seeking help, advice, and support from family members, friends, therapists, or a financial advisor.

Your debt-to-income ratio is high

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Lenders use a debt-to-income ratio when determining whether you will be likely to pay back the money you borrow. You can find this number by dividing all your monthly debt payments by your gross monthly income.

If you are a homeowner, the Consumer Financial Protection Bureau urges you to keep a DTI of 36% or less, although some lenders might accept a DTI of up to 43%, or even a bit higher. For renters, it's recommended keeping it under 20%

If credit card debt is pushing you above those percentages, take steps to address your spending situation ASAP before it becomes a problem that you can't easily solve.

Your credit score keeps dropping

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If your credit score consistently drops month over month because of late payments or maxed-out cards, take that as a warning sign that your credit card debt is starting to sabotage your financial future.

The best way to push your score higher is to make payments on time, every time. Lowering your debt-to-income ratio also can help. Once your score stops dropping and starts rising, you will know you are on the right path.

You consistently spend beyond your means

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Ideally, you put a portion of each paycheck toward expenses and the rest into savings, such as an emergency fund or a retirement savings account.

On the other hand, if you simply spend until your paycheck runs out and put the additional expenses on a credit card, you’ll have a hard time breaking the cycle of spending and debt.

You use your credit card instead of saving for big purchases

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Making a big purchase on credit isn’t necessarily a warning sign on its own. However, if you consistently use your card to pay for one-time purchases that cost hundreds of dollars or more, it is a sign of trouble.

If you buy things knowing you can’t pay them off before your next billing deadline, your credit card debt might be here to stay. So, try to develop the discipline to save up the cash for big purchases.

Once you have enough put away, then you can feel free to buy the item you want — but not until then.

You can’t visualize a future without credit card debt

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The first step to paying off any credit card debt is believing you can do it. It’s hard to motivate yourself to work toward something if you don’t actually believe you can achieve it.

Creating a concrete repayment plan with achievable goals can help you feel like a debt-free future is possible.

If you are struggling to create a viable plan for paying down debt, consider reaching out to a nonprofit credit counseling organization for help.

Bottom line

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If you recognize these warning signs in your relationship with credit cards, don’t lose hope. Instead, consider this a wake-up call to reassess your credit card habits.

The sooner you stop using credit cards and start paying off debt, the faster you’ll be able to move into a debt-free life.

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Author Details

Michelle Smith Michelle Smith has spent a decade writing for and about small businesses. She specializes in all things finance and has written for publications like G2 and SmallBizDaily. When she's not writing for work at her desk, you can usually find her writing for pleasure near large bodies of water.