Credit card addiction: How to spot the warning signs and break the habit

With more than $40,000 in credit card debt and more than 20 credit cards to her name, Diana Ryan didn't think she had a problem -- even though her husband had no idea just how many pieces of plastic she had tucked in her wallet. "It sounds cliche," Ryan says, "but I thought I could stop at any time."

But the lure of special offers and other card deals was much stronger than Ryan's willpower. "I couldn't say no when a cashier asked if I wanted to open a new card to get an instant in-store savings or receive a new promotion," she says.

Ryan represents a growing number of Americans who've passed the point of merely overspending and have entered into the realm of addiction. And, in doing so, they're maxing out a record number of credit cards.

One reason for this growing epidemic is the way consumers perceive credit cards. Credit cards were designed as a form of convenience, an alternative to writing a check or going to the bank to get cash. Yet many consumers use plastic as if its extra spending money, says Ethan Ewing, president of,a personal finance education portal. They forget about the potential liabilities of spending beyond their means or not being able to pay their balance off at the end of the month.

Spotting the warning signs

As with most addictions, the person with the problem is often the last one to realize they have a problem. That, Ewing says, usually compounds the situation. In Ryan's case, whenever she went on a shopping spree, she would rationalize her actions:

"I told myself we needed something, or might need it," she said. "I never missed a sale and would buy something just for the sake of feeling like I was getting a good deal. Whether or not we needed it or could afford it didn't really matter."

Certified financial planner Julie Casserly says identifying with just one or two of the following traits could be a sign you're heading toward addiction. If three or more of these signs are already familiar, it might be time for a plastic intervention.

  • You never have cash in your wallet.
  • When you do have cash, it burns a hole in your pocket.
  • You buy things just because they're on sale, or because they make you feel better if you're upset.
  • You have more than two "branded" or store credit cards.
  • You and your spouse or partner argue over money.
  • Credit cards balances are growing -- and not being paid down -- each month.
  • Your cards are all maxed out. But instead of paying them off, you open new ones in order to have additional credit.
  • You don't know how much you owe on the cards you have.
  • You own several things you've never worn, used, etc.

Another key indicator that you're addicted to your credit cards is dishonesty. "I hid my cards and statements from my husband," Ryan said. "I'd hide purchases of clothes, toys for the kids, you name it, in the trunk or the backs of closets. I've even used the dishwasher as a hiding spot."

"Hiding purchases and credit accounts leads to far more than debt and potential financial ruin," says Ewing. It can cause extreme stress on a relationship. "[My husband and I] separated for four months," Ryan says. "He only agreed to reconcile if I went though credit counseling."

Breaking the addiction

Things got so bad that Ryan began looking for a solution to her addiction. She tried cutting up her cards, but it failed to reign in her spending.

"I tried that several times," she said, "but I always opened new ones." Instead, she found that carrying her statements in her purse served as a compelling reminder of the debt she'd racked up from her addiction. "I also joined a debtor's support group."

Ewing suggests treating "compulsive debting" as you would any other addiction and seek help. Debtors Anonymous offers support in-person, on-line and via the phone.

In addition to debt counseling, the following three steps will help keep you addiction-free.

Spend cash

Start paying with paper instead of plastic for routine expenditures like gas, groceries and dog food. Carrying cash will reduce the chance you'll toss impulse purchases onto the counter since you won't want to be embarrassed if you don't have enough money with you to pay for them. Whatever you do, urges Ewing, "don't use a revolving credit account card."

Freeze out plastic

The theory "out of sight, out of mind" really works, says Ewing. One of the easiest and simplest tricks, he says, is to put your card in a sandwich bag in the freezer. Or ask a trusted family member to hold onto it for you. "The time it takes to retrieve the card is often enough to quell an impulse," he says. Even the one minute it takes to retrieve it from the freezer can be enough to allow financial logic to kick in.

Set goals

Setting a "no plastic for 30 days" goal is a good idea. But Ewing says you should look beyond your credit cards when setting goals in order to truly break a credit addiction. "Decide what short- and long-term financial goals you'd like to achieve," he says, and once you have some goals in mind, it'll be easier to develop spending habits that encourage those goals.

Gina Roberts-Grey is a freelance writer specializing in consumer issues.

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