It is almost mind-boggling that a tiny piece of plastic tucked inside your wallet has the power to control your finances, wreck your monthly budget, and, in the worst cases, lead to financial ruin.

According to NerdWallet, the average American household carries $15,000 in credit card debt. That is the price of a new car or a year of college. In other words, think of all the things you can do with that money!

That means that the majority of us live outside of our means. In some cases, we have no alternative but to run up our credit card debt as we struggle to pay for the necessities of life or encounter an emergency that requires quick cash. Our credit card is the easiest alternative.

But there are ways to avoid credit card debt. And most of them require an important, time-honored skill: financial discipline.

1. Pay as You Go

You might need to switch your thinking about credit cards. Use them as a debit card by only using them to pay for things that you already have money allotted for.

Let’s say that you have a credit card that gives you airline miles. You want to pay for your big budget monthly items with the cards to ring up the miles in hopes of getting a free or reduced trip somewhere. That’s a great plan. However, you must avoid the trap of reaching for that credit card to pay for things that you don’t normally buy. If you pay for your groceries, gas, and dining with the card, transfer the money from your checking account into your savings immediately to cover the credit card bill. That way, when the bill comes due at the end of the month, you’ve already got the money to cover it.

2. Pay It Off

Each month you must resolve to pay off the credit card debt in full. The last thing that you want is to carry that debt around and continue to ring up interest charges of 15%-20%. That is wasted money.

3. Live Within Your Means

You should know exactly how much money comes into your house each month. Take that number and build a workable, reasonable budget that you and your family can live with each month. Once this budget is locked in, resolve to live within those means — no matter how difficult it is — and lock up the credit cards.

4. Resist the Impulse

One way to resist the desire to pull out credit cards is to save up money for something you truly want. Credit cards give us the option to buy an item in the moment and pay it off later. That’s a dangerous temptation. Resolve to put money aside when you can to save up for that special item, rather than running out and giving in to that impulse.

5. Make a Plan

If you do accumulate credit card debt, make a plan to pay it off. That might mean you need to skip vacations, home upgrades, and major purchases in order to do that. Know going in that it will be a challenge, but it will be worth it when you’re debt free and can start putting that money towards something else.

6. Cut Up the Card

This might seem drastic, but it might be your best option if the credit card is too big a temptation to resist. Sure, credit cards are great in an emergency or for items that you don’t have the money for right now. But overuse of those cards can lead to big trouble. If you just can’t help yourself, you might need to find another option.

How do you manage your credit card usage? Share with us in the comments!

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