There is a specific dissociation that people experience when using credit cards as opposed to paper money. People tend to spend freely when using a charge card because there is no physical exchange of bills taking place. Seeing cash leave your hand is a very tangible experience. Shopping with plastic is simpler, making it easy to overspend.
To avoid that, we’ve put together this list of seven tips to avoid credit card overspending.
Focus on Your Balance and Not Your Credit Limit
Credit cards have a limit on how much they allow users to spend. When using a credit card, it is imperative to focus on your balance instead of your credit limit. A credit limit is tempting, and many individuals feel like they have more money to spend because their ceiling is high. That’s an easy way to fall into debt. By focusing on what the balance is and how much you’ve paid, you can keep yourself in check.
Think Twice About Using Multiple Credit Cards
Applying for more than one credit card can be a good idea if you can afford it. When you pay your bill consistently, more card companies will start sending you offers. It might be a good idea to take advantage of the cards that give you cash back and points for your benefit. That way, you’re accumulating something besides debt.
Keeping a card on the side for emergencies (like a significant car repair or medical crisis) can also help you. Remember that it’s is significantly harder to manage multiple lines of credit rather than one, and you should only get extra cards if you can afford to pay off all your balances monthly.
Don’t Allow Emotions in the Buying Process
A study conducted by the National Science Foundation found that people tend to spend more money when they’re sad. Researchers showed participants either a sad or neutral TV clip and then allowed them to make a purchase afterward. Individuals who were upset and emotional were willing to pay 300 times more for their purchases.
Don’t Buy Anything Special with Your Credit Card
The general rule is, if you don’t have the cash for it, don’t buy it! You should use your cards for things you would buy anyway on a daily basis, like groceries or cleaning products. If you can’t afford that costly TV in cash, don’t put it on your card and expect not to go into debt.
Leave Those Cards at Home
If you leave your cards at home, you can make sure that you won’t make any unnecessary purchases. Many smartphones also allow you to save your cards into a digital wallet. Avoid overspending by not only leaving your card at home but also unlinking your card from your phone.
Set Goals and Follow Up
Base your spending on your financial goals. Do you want to take a trip? Do you want to put a down payment on a house? These are things to consider before you whip out your card at the store next time.
Don’t Forget to Pay It Back
Individuals who use credit to buy things they can’t afford often end up with a problem because chances are, if you can’t afford to buy it in the first place, you won’t be able to pay the credit card company for it. Don’t forget you still have to pay for everything you buy.
If your spending habits have already led to serious debt issues which may even include a creditor lawsuit, the time is now to secure legal representation. Heather Benveniste of Benveniste Law Offices is a former debt collection attorney who uses her insight to help ailing debtors.
As an Illinois credit card debt settlement attorney, she engages in negotiation on her client’s behalf with debt collectors to renegotiate debt repayment terms and even represent you in court in the event of legal action from a creditor. Contact Heather today at 1-800-497-5358 for a free case evaluation and discuss your legal options.