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12 Tips to Use a Credit Card but Not End Up in Debt

A couple using credit cards and not getting into debt.

By Julie Jaggernath

Do you ever wonder how people without credit card debt do it? How do they use credit cards but not end up in debt

Most people, once they start using a credit card, find it hard to imagine their life without at least one credit again. Credit cards are convenient, they let you accumulate reward points for trips or merchandise, they even help you avoid service charges in your bank account because you don't debit or withdraw cash as often. 

However, if you're not careful, your flexible friend can quickly become a foe. When your bank account is running near empty, paying for items you need or want with a credit card can amount to a lot of debt.

Here are 12 tips to use a credit card but not end up in debt: 

1. Save Up for Purchases

Use your savings account to first save up for purchases, and don’t “just go shopping” with your credit card. If you don’t have it with you, you won’t be tempted to spend impulsively. Use the credit card to make planned purchases and then pay them off as soon as the bill arrives. You’ll have the money saved, so it’ll be easy to do!

2. Prepay Your Credit Card With Every Pay Cheque

Once you know what you spend each month on an anticipated expense, pay that set amount to your credit card when you get your pay cheque. For example, you budget about $200 each month for eating out. Pay $100 from each pay cheque to your credit card so that you don’t spend the money on something else in error. This helps you to follow through with your budget, build a positive credit rating and only have a very small bill to pay (or none at all) if you stick with your plan. This only works well, however, if you pay your card in full every month.

3. Limit What You Use Your Credit Card For

Use your credit card for only one type of purchase – and that’s it, e.g. gas. Choose a type of purchase that has an automatic limit to your spending. A magazine subscription or set monthly bill also works. Avoid costs that can vary a lot from one month to the next, like cell phone bills. 

4. Keep the Limit Low

Request a low limit, or if your limit is currently higher than you're comfortable with, call the credit card company to lower the limit. They are no longer allowed to raise your credit card limit without your consent, so they might try to talk you out of lowering it. Stick to your guns and lower your limit to something reasonable. You do not need high credit limits and numerous credit cards to build a positive credit rating, and if you should be the victim of fraud, a lower limit means a thief can do less damage.

5. Be AccountableTwo pieces of credit cards

Chose to be accountable to a family member or close friend for your credit card use. Show them the bill each month and ask them to help you stick with your plan to pay your credit card off in full each and every month.

6. Put the Card Away If You Can’t Pay It Off Each Month

If you can’t pay the credit card in full for one month, put it away until it’s paid off. If you have to, damage the card so that you can’t use it. When you’re ready to use it again, call and ask for a replacement card. However, don’t try this more than once or twice – the credit card company will wonder if you’re up to no good!

7. Pay Double the Minimum Payment

Making only minimum payments will keep you in debt for years. In fact, if you look closely at the notes at the very bottom of your credit card statement, it tells you how long it will take you to pay off your credit card if you only make minimum payments. If you can’t pay the full balance every month, pay at least double the minimum required payment each month. Then also stop using the card and you’ll see your balance disappearing.  

8. Only Have One Credit Card

Make it your personal rule to only have one credit card, period. No exceptions. This also makes it easier to decline credit card offers when you’re approached in malls or stores.

9. Don’t Use Credit to Pay for Credit

Many people use their line of credit, which has a much lower interest rate, to pay off their credit cards. But if your line of credit is never paid off, your debt will only get bigger each month. Get help if you’re not able to pay your credit card off within a few months or if you find that you’re using it to pay for regular living expenses.

10. Make Sure Your “Rewards” Are Worth It

Be aware of the terms and conditions of your card holder agreements, as well as how the reward programs work. It can be easy to collect points but it may have been less expensive to purchase the item outright, especially if you end up paying interest on your purchases. 

Related: How to Make Credit Card Reward Points Work for You

11. Build Credit Without Going into Debt

If you want to use the credit card to help build your credit rating and you’re worried that you’ll overspend, don’t use the card for retail purchases. Instead, set up one pre-authorized charge that will go through for a set amount each month, e.g. a gym membership, and then lock the card up. You’ll still build a positive credit rating because the account is being used, you know that it fits your budget because you’ve planned for that expense, but you won’t be tempted to overspend.

12. Reward Yourself 

Find inexpensive ways to reward yourself when you use your credit card wisely and don't end up in debt. It can be tough to stick with your plan, but staying out of debt allows you to reach your goals and that’s something to be really proud of!

What do you do to use a credit card but not end up in debt? Share your tips below!


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