Tips to Avoid Overspending on Credit Cards
Shopping or buying things is one of the guilty pleasures in life
and with the presence of credit cards, spending seems to be more
like a habit and way of life. Credit cards make one's life
easier but it could also make one's life a living hell once you
find yourself drowning with credit card debt.
For people that are not yet in this situation, good for you (and
read on anyway to make sure you recognize the danger signals)
but for those who are just inches away from that situation (or
worse), pay attention because this might actually save your life
from overspending your credit cards.
1. Know your credit limit
The first thing that you should know is your credit card limit
so that you know if you are going overboard. Always keep in mind
that once you cross that limit, there is no turning back.
2. Set your own credit limit
Aside from the credit limit set by the credit card company, it
is advisable that you set your own credit limit that you can
follow. It would be good if it is significantly lower than your
standard credit limit so that you could actually be in control.
3. List down all your expenses
Having a list is really helpful in determining the things that
you are buying and purchasing. Listing it will help you track
down the things that you put your money into and trust me, half
of it is really not that important to your life.
4. Don't succumb to the following sales pressures
Advertising on TV, radio, or elsewhere is meant to not only
inform but to tempt you into making purchases you would
otherwise do without. Some common techniques are associating the
product with heroes, as a status symbol, as a way to be more
attractive, sexy, or smart. Avoid purchase decisions based on
advertising techniques because they are cleverly done solely as
a way to get you to transfer your money to the company that's
doing the advertising.
5. Avoid shopping unless it is really needed
It is not easy to resist temptation especially if the name of
that temptation is the word, "sale". Avoiding stores would help
you overcome the instinct of buying and using your credit card
unnecessarily. It would be better if you did not see the things
that would tempt you. Just use your imagination! Also avoid
buying just because there is a coupon, free gift, or other
incentive attached, unless you really need the item.
6. Keep your credit cards at home
If you are the type of person that carries at least 5 types of
credit cards in their wallet, I suggest that it would be better
if you just carry one or two so that you will not be tempted to
use all of them. If you cannot avoid the shops, then just leave
your non-emergency credit cards at home.
7. Keep your receipts
If you are still not aware that you are on the verge of
overspending, keep your receipts for a week and then total all
the expenses that you did for that week. This would really be an
effective wake-up call, more so even than coffee for your body!
8. Carry cash
Instead of making the habit of paying through credit cards,
develop a habit to depend on paying transactions by cash so that
you could really be able to keep track of your expenses. Cash is
easier to count rather than card transactions. It will also make
you more resistant to impulsive purchases.
Do this exercise: Sit down and try to remember the major
purchases you've made in the last year or more (or go through
your old receipts to jog your memory). How many of those
purchases would you consider to be a "bad" purchase? In other
words, was it something that you haven't really used, worn, or
wasn't as important as you thought at the time?
Of those major purchases (items that cost maybe $100 or more
that weren't necessities), how many of those purchases would you
repeat if you knew then what you know now?
You'll probably find that at least half of your purchases were
"bad". So use that as a guideline to help you avoid making
similar bad purchases in the future, perhaps by postponing
instant gratification by "sleeping on the decision". More often
than not, you'll wake up in less of a buying mood than you were
the day before, and you won't miss the item you would have
purchased in the slightest.
9. Recognize the signs that you are overspending
Once you realize that you are having a hard time paying your
monthly credit card statement, that is already a sign that you
are losing your control over the matter. Be aware of these
things because it is a warning to be heeded.
10. Know your limitations
Being aware of yourself could actually save you a lot of money
because you already know the things that you need and the things
that you don't. Knowing your limitations could help you stop the
unnecessary spending through the use of credit cards.
Credit cards are convenient to use, and absolutely necessary
sometimes, but if one abuses the usage of their convenience,
overspending results and it can really be a big burden for a
person.
Find out why "credit is a four letter word" and pick up a free
report that will help you reduce or even eliminate your debt, by
visiting Credit-is-a-Fo
ur-Letter-Word.com