Is It Time To Cut Up Your Credit Cards?

Are You Ready to Put Away Your Credit Cards for Good?

There’s a good chance that you’re one of the many people who have become dependent on credit cards for everyday purchases, from groceries to petrol. However, with rising credit card balances and dwindling income, your good intentions of paying off your debt may have fallen by the wayside.

Yet some manage to quit credit cards altogether and quickly adapt to a cash-only lifestyle thanks to a well-thought-out spending and saving plan. And then there are those who only have a few credit cards and effectively manage their spending. Regardless of which category you fall into, it’s possible to have a healthy relationship with credit.

Four-Step Approach to Improving Your Credit Health

Breaking the habit of mindlessly using a credit card can take time. But before you start slicing up your credit cards, consider these four steps to improve your credit health: evaluate, quantify, classify, and balance. These steps can help you become more disciplined and successful, whether you wish to quit using credit cards completely, reduce your credit card usage, or eliminate credit card debt entirely.


Start by making a list of all the items you charge to your credit cards. This can help you understand your credit usage patterns and identify potential areas of concern.

For example, do you buy your morning coffee with your credit card? Do you use it for car maintenance, dinners out, or your children’s extracurricular activities? Do you rely on credit for groceries, gas, or bills?

Once you have this list, it’s time to figure out how to plan and pay for these expenses with cash.


Expand your list by noting the cost next to each item. Go through your credit card statements and review your charges.

It might be uncomfortable to see your spending habits laid out clearly. On the bright side, it could also open your eyes to better spending and savings opportunities.

Remember to include interest charges at the end of your list. This is the (often substantial) cost of using credit cards and not paying the full balance every month. To move forward, you need to understand the total cost of your credit card usage – which includes both your spending and the credit card company’s charges.


Having a clear picture of your credit card spending, including interest charges, it’s time to check whether it fits into your monthly budget. In other words, can you afford to pay cash for these purchases?

You might find that you can allocate money in your budget to pay for these purchases without straining your fixed monthly expenses or using credit cards. This is a great discovery! You now have a plan to stop using credit cards, and you might feel confident enough to cut up your credit cards.

Alternatively, you might realize that many of the expenses on your list can be eliminated, freeing up cash flow in your budget and reducing your credit card usage. You can use these extra funds to pay down your balances and possibly increase your savings.

However, if you find that your expenses exceed your income, it’s time to classify.

Go back to your list of credit card expenses. Which purchases are essential? Which ones are unnecessary splurges?

If your monthly budget is tight, you simply can’t afford to make extra purchases on a credit card. How will you pay off the credit card charges, plus interest, if you don’t have any wiggle room in your budget?

Along with putting away your credit cards, you might need to explore additional debt reduction strategies.

Balance: Life-Changing Debt Solutions

Dealing with unmanageable debt is stressful. It can strain relationships and negatively impact your mental and physical health. If your finances are causing you or a family member stress, it’s time to balance your debt and explore options to eliminate it for good.

Bankruptcy Canada offers a Free Confidential Consultation and several Life-Changing Debt Solutions to help you find the right path toward a financial fresh start. A Licensed Insolvency Trustee will meet with you to review your finances, understand your challenges, and identify your options.

You may qualify for Bankruptcy or a Consumer Proposal, which could help you become debt-free within anywhere from nine months to five years from your initial filing. Or you may benefit from another alternative. Regardless of your situation, your Licensed Insolvency Trustee will help you make the best choice to defeat your debt, reach your goals, and regain control of your life.

Find Your Personal Debt Relief Solution

Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

Discuss options to get out of debt with a trained & licensed debt relief professional.