Should I Avoid Using Credit Cards with ADHD? A Practical Guide to Making the Right Choice for You
Let’s jump right into a topic that hits close to home for many of us: credit cards. Ah, those little plastic rectangles of temptation, the biggest fans of our impulse shopping and ultimate debt-creating rivals to financial freedom! Are they a good idea for those of us navigating the ADHD brain, or should we give them a wide berth and avoid them altogether? Let’s break it down, so you can figure out if they are a tool you should be using or not when it comes to your personal finances!
Spoiler alert: there’s no one-size-fits-all answer here. Our ADHD brains work in wonderfully unique ways, and what works for one person might not work for another. So, let’s explore some specific tips to help you decide if a credit card is a yay or nay for you.
Understanding Credit Cards and Impulsivity: One of the classic financial challenges of ADHD is the tendency to act on impulse without fully considering the consequences, with impulse buying being a significant part of that. Hello, new hyperfocus! If you find yourself easily swayed by shiny new gadgets and impulse buys, you might want to proceed with caution when it comes to credit cards. Consider whether you can resist the urge to add to your cart and hit buy now when those Instagram or TikTok ads that are so well-targeted hit you mid-scroll.
Budgeting Skills: You had to know this was coming #sorrynotsorry! Managing money can be a real challenge for those of us with ADHD, but it’s really important when it comes to credit cards. When thinking about whether credit cards will be part of your financial toolkit, take a good, hard look at your budgeting skills. Are you budgeting currently? Can you keep track of your spending? Do you have a solid grasp of your income and expenses? If not, it might be worth holding off on the credit card until you feel more confident in your budgeting abilities. If budgeting is something you are ready to start looking into, my free budget template can help you with that!
Payment Discipline: This one’s a biggie. When it comes to credit cards, making on-time payments is non-negotiable. Late payments can result in hefty fees and significant damage to your credit score, so staying on top of them is important. If you struggle with time management or forget deadlines, you’ll need to put extra effort into setting up reminders and staying organized.
Interest Rates and Fees: Interest rates can be astronomical, and some cards come with additional fees. If you carry a balance on a credit card, the interest can add up quickly. If you don’t currently have a credit card, but feel you’re ready to have one, take the time to research different cards and find one with reasonable rates and fees that won’t break the bank. And for the love of all things financial, read the fine print! I recommend starting with a card that has no annual or monthly fees. That way, you can keep it for a long time, and when paid off consistently, it can help to build your credit.
Carrying credit card debt right now? If you currently have a balance on a credit card, this is a good sign that credit cards may not be for you, at least not right now. If you can try pausing the use of your credit card and focus on using your debit cards while working to pay down your credit card balance. Then when it is paid off, consider if it’s something you want to go back to using or if using debit has been better for you.
Points, rewards, and added protection: Yes, credit cards can come with many benefits. The most talked about one is usually credit cards points, or cashback rewards. These can be really amazing, but can also lead to overspending so this is something to pay attention to. Credit cards can also offer added protection in many ways. A few examples are by adding extra warranty, or insurance coverage. These vary significantly by card so consider this carefully if you are looking for a new credit card.
So, should people with ADHD use credit cards? Well, like I said earlier there is no one answer that fits every ADHDer! If you have strong budgeting skills, can resist impulsive purchases, and are diligent about making on-time payments, a credit card can be a valuable tool for building credit and managing your finances. However, if you struggle with budgeting, tend to make impulsive purchases, or have difficulty keeping track of deadlines, you might want to hold off on getting a credit card, or pause using an existing credit card until you feel more confident in your abilities.
If you do decide to make a credit card part of your regular financial plan, here are a few things I recommend:
Stick with a credit limit that you feel comfortable with. If you have a card with a higher limit than you want right now, you can call to ask to reduce it. An important point is that if you carry a balance on your card, lowering the limit can reduce your credit score.
Do everything you can not to carry a balance. Pay off your credit card in full regularly. Yes, you only get a statement once a month and only need to make one monthly payment, but paying more often can help you steer clear of credit card debt. I recommend starting with paying the balance off weekly. This will help you stay more in-tuned with how much you have been spending. You can even pay it off each time you make a purchase. That way, you’re never carrying a balance! 🤑
Check-in with yourself to see how things are going. If you start using a credit card, set a reminder on your phone for 2-3 months from now for you to take a few minutes to think about how things are going. Have you been paying the card off in full regularly? Or are you currently carrying a balance any paying interest? If it’s not working, it’s okay to stop using the card.
Remember, there’s no shame in asking for help if you review your budgeting and money management plans if needed. If you’re feeling overwhelmed or unsure about whether a credit card is right for you or where to start with making changes to your overall finances, let’s connect on a free 30-minute consultation to see if working together is a good next step for you.
At the end of the day, managing money with ADHD can be a challenge, but it’s not impossible. By understanding your strengths and weaknesses, setting realistic goals, and arming yourself with the right tools and strategies, you can take control of your finances and build a brighter financial future.
So go kick ass and conquer the world of credit cards (or not) with confidence and clarity. You’ve got this! 🚀
