Credit card debt is one of the worst debt traps to fall into which results from inability of people in controlling credit card spending. Not only are credit cards especially easy to use throughout the month, they come with some of the worst rates and penalties around, making it easy to get caught up in a minimum payment debt cycle. The easiest way to control such dangerous spending is to change your habits before problems occur. Here are several tips for controlling credit card spending
Tips for Controlling Credit Card Spending
1. Set Up Automatic Payments BEFORE You Buy: Online technologies and automatic bill paying have handily changed the way that credit card companies interact with their customers. Among other benefits, this allows credit card companies to offer automatic payment options. You can link the credit account with a bank checking account and arrange for automatic withdrawals so that you do not miss any payments. When you first get a credit card, set up this ability to prevent any future problems – there is absolutely no reason not to use such an amazing service. This is the easiest and sure fire way of controlling credit card spending
2. When it Comes to Credit Card Use, Less is More: For some, credit card use does not come naturally. These people are more inclined to pull out their debit cards and only access cash they actually have in their accounts. These people are the lucky ones – those that have gotten into the habit of pulling out the credit card at restaurants, movies, and stores need to make some alterations. Treat the credit card as a special service that should only be used occasionally. If you do not have money budgeted for entertainment, let along in your bank account, you should not be whipping out a credit card at every other occasion. Sometimes going without is the best strategy.
3. Narrow Down the Number of Cards, Too: Do you have more than one credit card? Stop it. Pay off your balances and, one by one, close down your accounts (wait between each account closing so the effect on your credit rating is minimized). Only use one credit card for your credit purchases. Not only will this help you in controlling credit card spending, it will prevent you from any dangerous practices like use one credit card to pay off another or spending too much just because you have an extra account that is fully paid off.
4. Eliminate Unplanned Purchases: Budgeting is a must for any responsible financial plan, and that budgeting should carry into credit card use. To make the rule simple: Never use a credit card for an unplanned purchase. Spur of the moment spending can be fun – as long as you have extra cash because you have been financially responsible. Making unplanned credit card purchases, on the other hand, is unwise and shows a dangerous lack of financial control. If it is not on your list or schedule, do not use a credit card to pay for it. That will show you how valuable it really is.
5. Set a Limit…Under Your Limit: While budgeting, set up a credit limit for each month. You will spend up to this much on your credit card, but no more. This limit should reflect what you are able to afford and pay off each month, but it should also be below the limit on your card. Set it about 30 percent lower than the stated limit. That will keep you in a safe zone, but it will also show your credit company and the credit bureaus that you can manage a credit card responsibility and are a low credit risk.
Phillip Saunders is a professional blogger who provide financial advice and information as well as how to get quick cash loans. He writes for InstaLoan, a leading provider of title loans, personal loans and signature loans.