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I hear this all the time! People say, “Hey, I just paid off my debt! I’m through with credit cards – I’ll never use them again!”
This is the wrong way of thinking – not using credit cards ever again is only going to hurt your credit score and put you in another financial bind. How will you feel when you apply for a mortgage or go to buy a new car to celebrate your debt-free lifestyle, and you can’t get approved for financing?
If you think that can’t happen to you, I have news for you – it happens every day! Every day I hear from people who are unhappy because they didn’t realize they needed to keep using credit cards responsibly in order to have the best credit score and the ability to get approved for loans.
Here’s what you should do: Pay only the bills you can afford and would have paid anyway with your credit card. You can set up automatic payments with your utility companies and your bills will be paid on time automatically – all you have to do is pay the credit card balance in full every month before the due date. You can keep the actual credit card under your mattress or locked in a piggybank – I don’t even care if you cut it up, if that makes you feel better – just set up those automatic payments first. If keeping the actual card will be too tempting when the shopping urge hits, then write down the number in a safe place and destroy the card.
As long as you keep putting charges on the card and pay them off in full each month, you won’t get into trouble again. You won’t pay interest, you won’t get into debt, and your credit score will go up as the credit card reports your on-time payments to the credit bureaus.
Paying off your credit card debt was the first step – the second step is achieving and maintaining an excellent credit score. You can do it!