It may be tempting to use a credit card to pay for dinner, a flight to the Caribbean or other discretionary expenses. However, credit cards are best used for emergencies such as repairing a vehicle or fixing the refrigerator after it stops working suddenly. Let’s look at two strategies that can help you put down the credit card in favor of cash or a debit card.

Calculate the True Cost of a Credit Transaction

Let’s say that you are planning on taking a trip to Florida this summer. While it may be easier to pay for a hotel, plane ticket and other expenses with a credit card, it could inflate the true cost of your trip. Let’s also say that your total expenses for the trip were $1,500 and you started planning the trip a year in advance.

By paying for the vacation with cash, you would need to set aside $125 per month to fund the excursion. If you put it on a credit card with an average interest rate of 17%, you would pay almost $137 per month over the course of a year. When you see how much more that you have to pay out of pocket when using a credit card, it may provide some motivation to use cash instead.

Create a Budget

In many cases, people rely on credit cards because they aren’t sure how much money that they need each week, month or year. Creating a budget allows you to see how much is needed to pay for food, rent and other important expense. It can also help you see whether you can cut expenses to free up money for dinners, trips and other discretionary purchases. In lieu of cutting expenses, you can find another source of income to help finance your preferred lifestyle without the need to go into debt.

What’s a Structured Settlement?

A structured settlement is something that you may receive after resolving a personal injury case. Paying a settlement in installments may be preferable for both yourself and the person responsible for making the payments. In some cases, the money doesn’t need to be reported as income, which reduces your tax liability.

While a credit card can be an effective financial tool, it should not be used recklessly. If you a struggling to get out of credit card debt, a financial adviser may be able to provide strategies to eventually become debt-free.