It’s easy to get addicted to credit cards. They enable you to make those impulse buys that leave you on a retail high.
Inevitably, getting your credit card statement through the door is a sobering moment, where that magic piece of plastic exposes itself for what it really is: a one-way ticket to debt. With user friendly internet shopping, temptation is right on your doorstep – you don’t even need to leave the house!
Charge Only What You Can Afford
Set aside a budget, and purchase only what you can pay for. When you feel the need to make a purchase on your credit card, make sure you understand your motivations. Impulse credit card spending feeds off emotions, and if you’ve had a bad day, you could end up making impractical credit card choices.
Don’t spend right off the bat – ever. Make a list of items you want and consider it over the space of a week. If you still want to buy the item, go back with cash in hand.
Prioritise your expenditures. Often, people fall for making feel-good purchases, instead of boring, but essential, payments like bills.
Treat yourself to a little luxury. Like a crash diet, you can end up binging on items when you have deprived yourself for too long. Money is there to be enjoyed – just rein it in.
If you can trust yourself, leave your credit cards at home. Out of sight, out of mind. Take only cash with you for your planned purchases.
In a relationship with someone financially trustworthy? Take them shopping, to keep you in check. Let them know it is their mission to stage an intervention if you try to buy non-essential items.
Have an Emergency Fund
Sometimes people rack up debt because they just weren’t prepared for large, emergency expenditures, like car maintenance. Prevent this by setting aside an emergency fund and avoid putting it on the credit card.
Pay Your Balance in Full, Monthly
Wipe out your credit card balance every month. Minimum payments are no longer a worry, and you don’t carry money through to next month either.
Don’t Let Anyone Borrow Your Credit Card
Effectively, you are welcoming them to spend what they like. Even if the promise to pay the bill, you are ultimately the shmuck that has to raise the cash, if they fail to.
Limit Your Number of Credit Cards
More cards mean more potential debt to juggle. If you can charge more, you might be more tempted to spend extra – thousands of pounds at your disposal can be oh-so tempting.
Learning to say “no” really nips debt in the bud. Create the discipline to deny yourself what you want until you really can afford it. It may be old-fashioned, but it works.
Become Credit Card Savvy
Don’t just walk around blindly with a credit card in your pocket. Know your interest rates and how they will be applied to your account, your minimum payment, and when you will be charged. Shop around for greater rates. Or best of all, close that credit card!
This guest article was written by Tony, a blogger from the UK with a passion for saving money, on behalf of IVA expert. Click here to visit their website.