Your Credit Card Finally Has a $0 Balance: Now What?

Paying off debt and getting your credit card down to a zero balance can be a huge feat. But if you’re not careful, it can be too easy to get right back into the same predicament. Here are some things to do to stay financially healthy:

Set a New Goal: If you don’t have one already, setting up an emergency fund should be your first financial goal. People who have saved enough money to cover three to six months of expenses are less likely to end up in debt again. And as you’re squaring away your emergency fund, make sure you also take a look at your longer-term goals like retirement. For example, take full advantage of your employer’s matching 401(k) contributions.

Think about Your Triggers: How do people and experiences influence your attitude about money? For instance, do you give in to your friends’ pressure to spend on expensive dinners, trips or shopping sprees, or do you open the Amazon app whenever you’re bored? Identifying these patterns and ways of thinking and then taking steps to change your behavior will help keep you out of debt. Isolating your triggers might require an outside opinion, so consider working with a coach or a counselor.

Track Expenses: Keeping track of your spending patterns is one of the best ways to stay out of debt. Apps like You Need A Budget (YNAB) and GoodBudget can help you do this without the hassle.

Don't Cut Up the Card: The longer you hold a card, the more valuable it is in your credit card score determination. While closing a card won’t damage your credit score forever, it is a particularly important consideration for people who may be using their credit score in the near future to buy a house or car or secure another type of loan.

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