Borrow Debt

Your Credit Card Has Zero Balance: Now What?

Lisa Rabasca Roepe  |  November 16, 2023

Once your credit cards are down to zero balance, there are steps you should take to avoid falling into debt again.

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.

With inflation putting a strain on our budgets, more of us are facing credit card debt. According to a recent report from the Federal Reserve Bank of America, Americans collectively owe $1.08 trillion on their credit cards.

If you’re planning to tackle credit card debt soon, or have just paid off a credit card, get a plan in place to make sure history doesn’t repeat itself.

Set a New Goal

If you don’t have one already, setting up an emergency fund should be your first financial goal, Liz Davidson, founder and CEO of Financial Finesse, says. In her experience working with clients, the people who have saved enough money to cover three to six months of expenses are less likely to end up in debt again. “The biggest things that trigger us to go back into debt are those unexpected expenses,” she says. “An emergency fund is an automatic failsafe.”

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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. Even if you don’t have much cash to set aside, not opening a 401(k) as soon as you can means you’re leaving money on the table! Also, open a health savings account if you have the option. (A health saving account, or HSA, unlike a flexible spending account, carries over each year and can be used in retirement. “More often than not, we are too conservative and under-fund” our HSAs, Davidson says.)

Find Your Triggers

Once you’ve gotten your credit cards down to a zero balance, ask yourself how you got into debt in the first place. How do you approach your finances? 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.

If your love of shopping is more about finding the perfect pair of shoes and less about owning something new, perhaps offering to help a friend to shop for that job interview or upcoming wedding would give you the same sense of joy — without the expense.

Isolating your triggers might require an outside opinion, and working with a coach or a counselor can help change negative financial behaviors, says Davidson. Finding a financial coach is cheaper and easier than it used to be, and some workplaces now offer financial education programs, she says. HerMoney offers a comprehensive 8-week Money Makeover program called FinanceFixx, where participants are paired with a financial coach and a group of accountability partners (and friends!) to learn more about saving, investing, getting out of debt, and so much more. We’d love to have you!

Track Your Expenses

Keeping track of your spending patterns is one of the best ways to stay out of debt, says Kevin Gallegos, credit and debt expert and vice president of Phoenix operations at Freedom Financial Network. Apps like You Need A Budget (YNAB) and GoodBudget can help you do this without the hassle.

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Once you’ve tracked your spending for a few months, Gallegos recommends taking a hard look at where you can cut back. “Most people are surprised to find how much they spend each day on small items,” he says. The last thing you want is for impulse buys to unknowingly derail your progress on all your bigger (and important!) financial goals

Don’t Immediately Close Those Zero Balance Accounts

While it might be tempting to close your credit cards once you’ve paid them off and gotten them down to a zero balance, closing them could damage your credit score. “The longer you hold a card, the more valuable it is in your credit card score determination,” Gallegos says. 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, a car, or secure another type of loan.

If you’re trying to curb impulse spending, you can make your credit cards less accessible by putting them in a safe, giving them to someone you trust or placing them in a bowl of water and (literally) freezing them. “The time it takes to thaw out your credit card may deter your impulse spending,” Gallegos says.

Check In on Your Credit

Even if you have autopay set up on your credit cards to pay your entire balance, Matthew Coan, founder of says, you should look at your statement each month to make sure there aren’t any mistakes, or refunds that you were expecting that never came through.

Don’t forget to check your credit score, too, especially while you’re still paying off debt, says Gallegos. Federal law mandates that you have access to a free credit report from each of the three national reporting agencies (Experian, Equifax and TransUnion) once a year.

If you see any errors, follow the directions on the agency’s website to report them. Under the terms of the Fair Credit Reporting Act, the credit bureau must investigate any disputed items and remove them from the credit report if they cannot be verified, Gallegos says.


FIXX YOUR FINANCES: Join Jean Chatzky’s money makeover team at FinanceFixx. You work one-on-one with a coach and learn sustainable, lasting change to get your budget on track.

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