How Do You Overcome A Credit Card Addiction
Many people that want to help a compulsive shopper will often advise them to just stop shopping or stop using your card. That doesnt help. Overcoming this addiction takes more than just willpower and improving your spending habits. In fact, 92% of compulsive buyers that try to fight this addiction are unsuccessful.
Fortunately, overcoming a card addiction is possible. Heres where to start:
Signs That Prove Youre A Credit Card Addict
Alcohol addiction, tobacco addiction, gambling addiction, drug addiction, etc. are just a few examples of commonly found addictions among people. The newest inclusion to this list of addictions, believe it or not, is Credit Card addiction.
You heard that right! can be addictive, thanks to the immense buying power that comes with them. While there is no harm in swiping your card, loving your Credit Card way too much can earn you the title of a Credit Card junkie. Here are 8 tell-tale signs that prove that you are suffering from a Credit Card addiction.
1.Your Credit Card debt is a secret
Though you are not a very secretive person, when it comes to Credit Card debt, you are careful about hiding it from your loved ones. The fear of being reprimanded by others for your ridiculously huge debt, due to reckless Credit Card expenditure, encourages you to keep your Credit Card debt a closely guarded secret. Sometimes you are so afraid to check your bill statement that you prefer to keep it a secret from yourself too! Tsk, tsk!
2. Increase in APR% doesnt bother you
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3. You need to have every new Credit Card
4. You have zero savings due to Credit Card bills
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6. You withdraw money using a Credit Card when you need cash
7. You have maxed out your Credit Limit
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8. You live in denial
Youre Completely Tapped Out
Have you maxed out all of your credit cards? Unless it is the result of some sort of financial emergency, we have a problem. This clearly indicates that your everyday spending is out of control, as it clearly exceeds your income. And its time to crack the whip and get a handle on your financial habits.
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Tips For Financially Recovering From Money Addiction
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When you think of addiction, you might automatically think of people who are dependent on drugs, alcohol, food, or sex as a coping mechanism. But its also possible to be addicted to money. This issue can manifest itself through unhealthy behaviors such as gambling, frequent overspending, or extreme saving .
Having an addiction to money can be harmful financially and emotionally it can also put a strain on your personal relationships. Recognizing the signs of a money addiction can be the first step in making a recovery.
Read on to learn more, including:
Can you be addicted to money?
What are the signs of being addicted to money?
What impact does it have if you are addicted to money?
How can you recover from a money addiction?
Your Credit Cards Are Maxed Out
Many of us have maxed out a credit card or two at some point in our lives. After all, unexpected home or car repairs, medical bills or other emergencies can run up the balance fast.
However, if your high credit card balance is due to impulsive purchases for clothing you never wear, fancy dinners out and boxes of electronics and other online purchases that remain unopened, you may be addicted to the rush of spending rather than buying things you need.
Tip: Paying down your credit cards as much as possible to improve your credit utilization rate the ratio of rotating debt to your available credit can raise your credit score. Pay cash when you can. Youll feel the spending pain more when you see cash leaving your hands.
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Have Your Spending Habits Changed
A good rewards card can enable you to earn lots of points, cash back, or miles for spending you would have to do anyway. But in order to maximize the rewards you earn, you want a card that has a bonus program that’s matched to your spending habits.
For example, if you tend to spend most of your money on groceries, you may want to look for a card offering bonus cash back or points at the grocery store. But if you’re a frequent traveler, it may be more important for your bonus rewards to come from flight or hotel purchases.
If your spending habits have changed since you signed up for your existing rewards card, it makes sense to see if a new card might be a better fit.
Will You Be Taking Out Any Large Loans
Finally, consider whether you’ll be taking out a large loan such as a mortgage or car loan. If you are planning that, you may want to hold off on opening a new card. Doing so could hurt your credit score temporarily by reducing your average age of credit and leaving you with an inquiry on your credit record. And it’s not worth the chances of paying a higher rate on these larger loans.
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Warning Signs Of Credit Card Addiction
Compulsive buying disorder is most common in developed countries like the US, UK, France, or Germany, where the culture of hyper-consumerism is encouraged, and people have easy access to credit cards.
Compulsive buyers tend to use credit cards over cash because it makes spending money a lot easier. You can enjoy the high of shopping without the guilt of paying for it right away. Access to credit cards also enables addiction because you can give in to your impulses and go on a shopping spree even if you dont have money in your pocket.
Besides their reliance on credit, there are many other common traits and behaviors among people with a credit card addiction. These include:
- Inability to control shopping urges
- Carrying balances on multiple credit cards
- A desire to shop that increases when youre sad, worried, unhappy, or lonely
- Falling behind on payments or only paying the minimum balance each month
- A bigger rush of excitement from the act of buying than from actually owning the item
- Buying and hoarding items that you dont need and rarely use
- Feeling ashamed of your behavior and hiding it from your family or friends
Like every other addiction, people who suffer from credit card addiction often remain in denial until they are ready to deal with their problem.
Where Can You Find A Debtors Anonymous Meeting
The best way to find one is through the DA website:
There are more than 500 chapters around the U.S. and 13 other countries, so DA has come a long way since those bell-bottomed days of 1968.
Unfortunately for millions of Americans, getting in debt never goes out of style. So give DA a try. The only thing you have to lose is debt.
6 Minute Read
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Unwilling And Unable To Change Money Habits
Another sign of money addiction is a sense of resignation, or knowing that you have a problem with money but not doing anything about it. You might feel ashamed to let someone else know that you need help with money, for instance. Or you might take the attitude that things have been the way they are for so long already that theres no point in trying to change the situation.
You Use Creative Ways To Pay Your Bills
Do you borrow money from anyone willing to lend it? Are you constantly asking your friends for just a small loan because you had a few unexpected expenses this month?
Sometimes you even take cash advantages on your credit cards just to be able to pay your monthly bills and pay no attention to any fees that might occur.
If this is you and you have absolutely no way of paying any of these people back you might have an addiction to your credit cards.
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Tips To Recover From Money Addiction
If you have a money addiction, you dont have to stay stuck with it. There are things you can do to cope with and manage an addiction to money, similar to how youd deal with any other type of addiction.
Improving your money mindset can lead to positive actions and break the addictive cycle. Here are some key steps on your path to recovery.
What You Need To Do
If you answered, yes to many of these questions, you might be a credit card addict. If you dont break the addiction youre headed for serious financial trouble, which could end up with you having to file for bankruptcy. So, what can you do? First, toss all those credit cards. This might be the most painful thing you do this year but you need to shred all those cards. This is because theres just no way to get out of debt while youre still carrying those addictive pieces of plastic.
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Your Closet Is Filled With Unworn Clothing
Okay, we all like a good sale. But when you buy clothes simply because theyre a good deal or on clearance, hang them in your closet and then never look at them again, you could have a shopping addiction thats never satisfied.
Tip: When you see clothing online, wait a day before purchasing until the initial rush of excitement goes away. You may change your mind. When shopping in-person, leave your debit and credit cards in the car. That way, youll have to think about the purchase rather than just whipping out the plastic.
Get Your Debt Under Control
Once youve rid yourself of those addictive credit cards, you need to go to work to get your debt under control. To do this, you will need to sit down and develop a debt management program. If the task seems overwhelming you might go to one of those nonprofit consumer credit counseling agencies for help. These agencies have experienced counselors who will go over your spending and income and help you devise a plan for becoming debt-free. In some cases they will even work with your creditors to get your interest rates reduced so that you can become debt free somewhat faster. Do understand that if you havent already gotten rid of those credit cards, the consumer credit counseling agency will insist that you do so. If you follow the advice youre given by your debt counselor you should be debt-free in about five years or less.
If you havent already created a household budget its important that you do so. There are numerous budgeting tools and apps available many of which are free. The one that we like the best is Mint.com. This is a free financial management tool that will track your spending to help you develop a budget and then even send you email alerts if you overspend in any of your categories. Mint is very easy to use, too. All thats required is that you type in the numbers of your savings and checking accounts, credit card accounts, investments, auto loans and so forth. Mint will then display all of your financial information together in one easy-to-read graphic.
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Stop By A Local Debtors Anonymous Meeting
Are You In Denial
If you never look at your credit card statements to double check the balances and make sure that there are no issues but simple pay the minimum amount due each month, you could possibly be in denial about how much you really owe.
Denial is probably one of the largest indicators that youre addicted to your credit cards.
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You Keep Opening New Cards Even Though Youre Deeply In Debt
Most people take a maxed out credit card as a sign that they need to be more careful about their spending , but plastic addicts simply open more cards when they charge their old ones to its limit. If you find yourself constantly opening new cards without paying off your old ones, you should take this as a sign that your finances are in trouble.
Are You Using Your Card’s Benefits
Many cards offer benefits beyond just rewards. For example, you might get airline lounge access, purchase protection, rental car insurance, an extended warranty, or a host of other cardholder perks.
If you aren’t using the extra benefits your card offers, then it may be worth switching to a different card that has features you would actually appreciate. That’s especially true if you are paying an annual fee for a card that’s no longer worth it.
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Your Dog Wears Cashmere Sweaters
Nobody wants their dainty chihuahua to get goosebumps while walking on a cold, winter day. But did you really need that $200 sweater you bought for her online? And the same goes for that $400 gold-plated cat bed you bought for your purring Siamese.
Is it your pet youre really thinking about with these extravagant purchases, or is your spending addiction getting the best of you?
Tip: Shop for affordable dog duds at Chewy.com like the rest of us and spend that money on pet health insurance instead.
How Do Credit Cards Work
Using credit cards means you dont have to carry around cash or write checks With credit cards, a person can buy things that one would have needed to wait for years to buy. It can cover large unexpected expenses too, so credit cards are not always the villain others make it out to be. They can be very useful when used correctly!
However, credit cards can charge outrageously high-interest rates so as your debt grows out of control, it could do more long-term harm than good. Credit card companies give a preset limit depending on your credit history. Higher-end credit cards come with better perks at a higher preset limit.
My husband and I have two cards with no preset limit both cards give great flight miles but a no limit card is pretty silly and incredibly dangerous in the wrong hands.
A bad credit score can impact all the circumstances related to job search and landing a good mortgage rate. A good credit history means a lower interest rate on debt payback. Lenders are trying to reduce their own risks by screening each borrower.
A commercial credit score is made up of:
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Debt Addiction Is A Serious Problem Among Canadians These Are The Signs To Look Out For And How To Begin Your Recovery
2020-10-07 minute read
Millions of Canadians are struggling with debt addiction a problem that has worsened over more than a decade of historically low interest rates and a growing culture of debt normalization. With the ongoing financial challenges of the COVID-19 pandemic, and with interest rates plunging yet again, it appears the issue will get worse before it gets better for many households.
Could You Be Addicted To Credit Cards
John P. Schmoll is a longtime veteran of the financial services industry who authors personal finance guides on topics ranging from the wise use of credit to strategies for saving money and building personal wealth. His work has been featured on Forbes, Yahoo! Finance, CNBC, Fortune, Lifehacker, Investopedia, Lending Tree, and his personal blog, FrugalRules.com. John shares financial tools and tips to help his audience enjoy the freedom that comes from living frugally and responsibly.
Edited by: Lillian Guevara-Castro
Lillian brings more than 30 years of editing and journalism experience. She has written and edited for major news organizations, including The Atlanta Journal-Constitution and the New York Times, and she previously served as an adjunct instructor at the University of Florida. Today, she edits all CardRates content for clarity, accuracy, and reader engagement.
With one look at statistics, it would be easy to think that credit card addiction is widespread in our society.
After all, when you see the average debt per card over $8,200, it is easy to see that credit cards can be a problem but is it really an addiction?
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Decide What Credit Card Should You Apply For
Once you know your credit score, you can find the right card for you based on their credit score requirements. You can sort credit cards into two main types:
- Secured/Student Cards: These cards require a low credit score. Sometimes they may not even need one. However, they will require a security deposit, and they also offer lower credit limits, meaning you cant spend as much with an unsecured or student card.
- Unsecured Rewards Cards: These credit cards require a moderate to high credit score, and some may charge annual membership fees. Depending on the rewards card, you could receive discounts for retail stores, airline travel, or cash back. You can view the rewards cards available from Citi here.
