I have 26 credit cards. Here’s the best advice I can give you on staying out of credit-card debt.

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Holly Johnson.

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Holly Johnson.
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Courtesy of Holly Johnson

As of April 2019, my husband and I have 26 credit cards for ourselves and our businesses.

This includes a combination of travel credit cards, business credit cards, cash-back credit cards, and flexible credit cards, basically all the various cards that give me free stuff when I spend money.

Most of my credit cards charge higher annual percentage rates (APRs) than the average 17.67%, including my beloved Chase Sapphire Reserve, which charges a shocking 19.24% in interest whenever I carry a balance. (Note that the APR on this card is a variable rate and can be up to 26.24%.)

The thing is, I haven’t carried a balance on a credit card since my late 20s – which was, inexplicably, more than 10 years ago!

It’s easy to assume having lots of credit cards is the best way to rack up soul-crushing credit-card debt. After all, the average American with credit-card debt carries a balance of $5,700.

But there are plenty of us who aren’t average – consumers who are able to use credit cards for the rewards and perks without overspending or getting into debt. I know because I’m one of them.

Here’s how you can do the same:

1. Use a written monthly budget

The best way to avoid debt with or without credit cards is using a written budget every month.

My favorite type of budget is zero-sum budgeting, as evidenced by the fact I wrote an entire book on the topic.

In “Zero Down Your Debt: Reclaim Your Income and Build a Life You’ll Love,” I explain the nitty-gritty details of zero-sum budgeting, including the fact that it requires you to give every dollar you earn a purpose. You also plan out every dollar you spend before the month starts, which helps you avoid waste and avoid impulse spending on stuff you don’t really need.

Regardless of the type of budget you use, planning your monthly spending can help you avoid debt. When you use a budget and plan your spending each month, you are considerably less likely to go overboard with credit cards and charge balances you can’t pay off.

2. Track your spending

Of course, budgeting works only if you stay on top of it every month. If you budget $650 for groceries for the next 30 days but don’t bother tracking your spending to see how you’re doing, what good is your budget going to do?

Keeping a close eye on your credit-card bills to make sure you don’t spend more than you planned on food, transportation, entertainment, and other fluctuating categories can help you stay on track with your spending plan and avoid surprise credit-card bills.

3. Pay your credit-card bills more than once per month

Another tip: Don’t wait until the end of the month to pay your credit-card bills. There are a few reasons I always pay my credit-card bills a few times per month:

  • Making a payment toward my credit-card balances helps me keep track of how much I have left to spend in categories such as food, entertainment, and transportation.
  • Paying money toward my balances forces me to accept the consequences of my spending immediately instead of delaying the pain until my bill is due.
  • Paying my bills more than once per month helps me stay organized and internalize how much I’ve spent.

Paying your credit-card bills more than once per month makes more sense if you pay bills online. Fortunately, most credit-card issuers have robust online-banking platforms that make online money transfers a piece of cake.

4. Don’t chase rewards

Finally, it does take a certain amount of discipline to avoid using credit cards to earn more rewards. You need to teach yourself that it never makes sense to chase rewards – as in, buying things you don’t need to rack up more points.

If you find yourself rationalizing expensive purchases to earn credit-card sign-up bonuses or using credit-card shopping portals when you’re bored, you may find you’re better off using cash or debit and staying away from credit cards altogether.

The bottom line

Having a lot of credit cards does require a certain level of organization and commitment, but it doesn’t mean you’re destined to endure a lifetime of debt. There are plenty of us who absolutely abhor debt and never pay a dime in interest but also utilize credit-card perks and rewards all year long.

If you want to maximize the benefits of credit cards without ruining your financial goals, it can help to ease into it a little bit at a time. Create a monthly budget you can live with, try using a few basic rewards credit cards for regular purchases, and see whether you can take advantage of the upsides of credit without falling apart.

If you are disciplined and careful, credit cards can be an asset instead of a liability. I’m living proof.

Curious which credit cards I use the most and why? Here are some of my favorites: