Most people enjoy a little impulse spending every now and then, but when you see your credit card balance climbing you know that you have a credit card overspending problem. It is so easy to buy what we want on a credit card, rather than what we need and impulse spending is one of the worst because they are not usually items we ‘need’.
A person with a credit card can be a bit like a kiddie in a lollie shop, not knowing which thing to choose first.
If you find that you have trouble controlling your credit card spending then consider the following 5 tips which may relate to your credit card use.
1. Don’t carry your credit cards on you every day
This can be a sure fire way of using your credit card too often. It is so easy just to pull it out and spend without really thinking. The next tip will really help with impulsive spending. Carry a small amount of cash for emergencies and only use the card when it is ‘planned use’.
2. Make a list before going out with your card
On shopping day, make a list of what you really need and stick closely to that list so that you do not overspend on the credit card. If you are going clothes shopping make sure that you make a list of what you are looking for and don’t get side tracked with other items you see. Credit card overspending is so easy when you go shopping because shop owners spend many hours planning how they will entice you to spend your dollars. You have to learn to beat them at their own game!
3. Read your credit card statements
Don’t just shove that credit card statement in the drawer. Read it and think about the items on it that you have bought. Ask yourself if you are going overboard in some areas because if you are you will find that you will have a maxed out card in a very short space of time if you do not control your spending. The credit card statements literally spell out what you are spending on.
4. Cut down the number of cards you own
Pay down the balance of your smallest card and get rid of it. Once you have done this you can start working on another. Take a good look at the cards that you have and see if you are paying high annual fees for a rewards card and never get to use the rewards. This could be costing you a lot of money. You may earn more rewards and on something that you will use, if you have your balances transferred to just one card that has features that you will use.
5. Question yourself before using your card
To help change your spending habit, remember one small but through provoking question, ‘would I still want this if I had to pay cash?’ The point is you do have to pay cash, just not right now! Another question which may suit you is, ‘Do I need this, or do I just want it?’ If you can answer either of these two questions without a twinge then it would seem like a good idea to buy it.
Using a credit card should be for purchases of a nature that you already have allowed for in your cash budget. Facing the reality of paying for the purchases is what you need to think about. Don’t spend on the premise that you ‘might’ have the money in when the credit card has to be paid.
If you haven’t got the money to cover it, don’t spend it, as credit card overspending can cause many, many problems for you financially.