Buzz
About five years ago, I found myself in significant credit card debt—around $14,000 in total, which I’ve since fully paid off. Back then, I wasn’t earning much money and relied on credit, like many others, for essential expenses (groceries) and the not-quite-essential-but-still-important items for career progression (clothes, a new laptop).
Once I began earning enough to cover basics like groceries, I stopped using my credit cards altogether. I became cautious, fearing how quickly the debt could pile up, especially after I had worked so hard to pay it down. (I dedicated 20 percent of my pre-tax paycheck to tackling that debt.)
I didn’t start using credit again until about a year ago. By then, my debt was cleared, and I realized I was missing out on credit card perks and rewards by only using a debit card.
Now, I use credit for nearly every purchase I can. The only time I use my debit card is for cash back at the grocery store. Otherwise, I reach for one of my credit cards to earn miles or cash back rewards. If I had my way, I’d use credit for absolutely everything.
But I needed to find a way to reassure myself that I could consistently pay off my credit card bills in full each month. I had to promise myself that I would never again fall into credit card debt.
I know the simple answer is 'just don’t spend more than you make,' but if it were truly that easy, none of us would find ourselves in credit card debt. That's why we need a few extra strategies.
Here’s what worked for me as I transitioned back to using credit for most of my purchases:
Create a savings buffer
I rely on two built-in safety nets to make sure I always have enough to cover my credit card bills: a $3,000 cushion in my checking account and a savings account. If my checking account goes below $3,000, I use the next few paychecks to replenish it. This means I intentionally set aside a certain percentage of each paycheck—specifically for the buffer.
I also set aside 15% of each paycheck into a savings account. This money isn’t meant for paying off my credit card—it's reserved for my emergency fund, contributions to my Roth IRA, and future goals like home down payments. But I know that, if absolutely necessary, I can use that money to settle my credit card debt.
At this point, you're probably thinking one of two things:
I could never save $3,000 plus 15% of each paycheck.
You only have $3,000 in savings? I’d rather have $10K.
I’ll leave this here as a reminder that we spend and save according to our income. So, set up your savings buffer in a way that fits your own earnings. But if you plan to charge all your purchases to credit, you’ll need a buffer in case you overspend in any given month.
Try to plan as much of your spending ahead of time as you can
To ensure that you never spend more than you earn, you need to plan your expenditures carefully.
Notice that I didn’t say 'budget.' I’m not a fan of the way most people approach budgeting, which often involves guessing how much they’ll spend in different categories. For example, they might allocate $300 for 'restaurants' or $500 for 'clothing' just because it 'feels about right,' or because their budgeting app suggests it based on average spending in those categories.
To ensure you don’t spend beyond your means, it’s crucial to plan your spending.
I like to review the entire month and estimate my expected expenses. Do I have any restaurant meals planned? What will those meals likely cost? What type of travel do I have coming up this month? Are there any birthdays or holidays that require gift-giving? Is this the month my Amazon Prime bill is due?
By planning my spending ahead of time, I can determine exactly what I can afford and figure out which purchases might need to be trimmed, adjusted, or delayed until later.
Don’t plan to spend every dollar you make.
Something always comes up before the month ends, so if you can afford to save some of your paycheck, do it. You might still end up spending everything, because life happens, but you’ll be less likely to overspend.
Let your apps assist you.
Check your credit card balances regularly—daily, if you prefer. If you're using apps like Mint or YNAB, you can get push notifications when you exceed your budget in a particular category. Stay on top of your spending to know when you're approaching your limit.
You might think these tips are more about 'how to manage your money' than 'how to use a credit card.' That’s because credit cards are there to help you manage your finances. Technically, they exist for banks to earn interest, but from your perspective, credit cards are designed to help you manage cash flow, earn rewards and protections, build your credit score, and handle your finances more effectively.
By keeping this mindset at the forefront as you plan and monitor your expenses, you can confidently use credit cards for every purchase without worrying about accumulating a bill you can't pay off.
