Having a credit card in your wallet can be lethal if you are not disciplined in your spending behaviour. Here are some effective ways to cut your credit card spending.
Credit cards are convenient and easy to use, but they have a down side. You will always end up paying interest on purchases one way or another, so even with reward schemes, cash back deals and extra benefits you might get with a credit card, spending on one will cost you more overall than not using one.
This will be the case, even if you pay your balance off in a timely fashion, as many retailers and businesses now add a credit card surcharge to purchases, and annual fees on cards can be significant.
In order to cut down credit card spending there are a few things you can do:
Debit Cards
Make sure you also have a debit card. You can use this for online purchases and as an emergency back up so long as you maintain a balance in the account. In the majority of cases you will not have to pay anything for using a debit card. Most debit cards can be used otherwise just like a credit card so you will not have to change your spending behaviour.
Cash Advances
Absolutely do not use a credit card for cash advances. Credit cards almost always charge more interest and fees on cash advances, so unless it is absolutely necessary use a different means to get cash.
Carry Cash
Always try and carry cash with you. Although there are obvious dangers to carrying large sums of cash, small amounts as we normally might need to spend in a day are not likely to get you into any trouble, and using cash instead of your credit card will save you money.
Leave your credit card at home and only take it out for pre-planned purchases. This may mean that you don’t have the card as an emergency back-up, but a lot of credit card spending is impulse buying, even if you think you are not susceptible.
Those few extra items in the grocery cart that you would have left on the shelf if you had a fixed cash amount to spend. That bit more fuel to top the tank right off and so on make it very hard to stay within a budget over a short period. Using cash is always going to make this spending behaviour easier to change.
Charge Cards
Consider a charge card instead of a credit card. Charge cards work by billing you each month in total for any purchases made. There is still the danger of spending more than your budget, and some credit cards can be used in this way at little cost, however a charge card is generally cheaper for a disciplined person regardless of their normal spending behaviour.
Low Interest Cards
Look into changing to a credit card with lower interest rates. This will hopefully allow you to pay off any balance quicker than otherwise, meaning a reduction of spending on compound interest charges.
Related posts:
Posted on Thursday, June 24th, 2010 at 10:29 pm
You can leave a response, or trackback from your own site.
