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5 Habits of People with No Credit Card Debt

5 Habits of People with No Credit Card Debt

By Matt Diehl • August 26, 2019

If you carry a balance on your credit cards, you’re not alone. The average individual credit card debt is over $5,300.1 But what about the people with no credit card debt? How do they do it?

The strategy is simple: discipline, planning and a desire to improve. Once you start using these actions to your advantage, you can begin enjoying the benefits of no credit card debt, too.

Here are five habits of people with zero credit card debt:

1. They monitor their spending regularly

Tracking your spending can be one of the most effective ways to lower your credit card debt. After all, to decrease your account balance, you need to be mindful of what you add to it. Effective methods include the traditional pen and paper method or one of many apps that help track your spending.

Keeping a close eye on your spending could also benefit your personal finances in other ways. For example, it could motivate you to cut back in other areas like entertainment and dining out. And if you’re known to impulse shop, you might think twice about buying something once you enter the dollar amount into your tracker and see how it affects your budget.

2. They pay more than the minimum monthly payment

Paying your minimum monthly payment on time will keep your payment history strong and help avoid late fees. However, if you’re aiming to eliminate credit card debt altogether, paying more than the minimum due could be a successful technique.

If your minimum payment is $50 and you pay $75, an additional $25 could go toward your principal balance. In addition to lowering your principal balance, it could also reduce the amount of interest you pay over time. Before you try this method, check with your credit card provider to make sure that the extra money you pay each month will be put toward your principal balance.

3. They have emergency funds

Emergency funds can be useful for many reasons, including keeping credit card debt down. But you don’t use the funds to make credit card payments — the money is used so you don’t put surprise or unexpectedly large expenses on your credit card.

Think about it. What would you do if your car broke down today and your repair bill was $2,000? Or if your refrigerator stopped working and a new one cost you $1,500? If you don’t have an emergency fund in place, or the extra cash on hand, you might have no choice but to use a credit card. And not only will your balance go up, you’ll be charged interest on that purchase until you pay it off.

4. They have a long-term plan

Financial goals can be hard to accomplish without setting a clear plan. By creating a start date, end goal and a series of milestones in between, you can keep yourself honest and on course. Financial plans can be especially useful if you’ve never attempted to pay down credit card debt or have struggled to in the past.

If you need help creating your plan for success, check out these blogs for advice:

5. They educate themselves on personal finance

Unless you work as a financial advisor, you may not be overly familiar with the topic of personal finance. Yes, you might pay your own bills and watch your credit score but are you doing everything you can to improve your situation?

Whether you said “yes” or “no” the internet has a ton of free personal finance advice. In fact, we have over 300 blogs in the Resources section of our website that can help you master a variety of financial topics. If you’re ready to learn some good credit habits and money habits, choose the category you want to start with:

Take it one day at a time

Getting rid of credit card debt can be a long process. It takes planning, self-control and a stubborn commitment. And if you stumble along the way, don’t get down on yourself. Correct your mistakes, refocus your habits, and keep your eye on that “$0 Balance” prize. You’ll get there.


1.O’Connell, Brian. “What's the Average U.S. Credit Card Debt by Income and Age in 2019?” Thestreet.com. https://www.thestreet.com/personal-finance/credit-cards/average-credit-card-debt-14863601 (accessed August 5, 2019).


*This article has been updated from its original posting on Tuesday, January 3rd 2017.

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