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Having a credit card can be very convenient but at the same time can be a source of a problem. Well, I know because I am currently experiencing a predicament right now with my credit card debt. And because of that experience, I can safely say that I am speaking from experience.
To help you control your spending and make sure not to succumb to financial problems related to this plastic money, here are five tips on how to control your credit card expenses:
- Use your credit card wisely. Remember that you are borrowing money that you don’t have.
Your credit card limit is not an extension of your income. It is the amount the credit card company can lend you for a certain time with or with interest. Meaning, the amount you spend using your credit card will still be taken from your existing income. Keep in mind that every time you swipe your credit card, you owe the bank money and you need to pay it soon.
- Use your credit card for expenses you are sure you have the budget to pay.
If you buy something beyond what you can afford, that will put you in danger. Remember that every month that you can’t pay your credit card bill means accumulated interest to pay on your part. If you pay the minimum only, the interest will accumulate dramatically and might put you in a grave financial crisis.
- Use your credit card if they have monthly installments.
Purchase items using your credit card if monthly installments are available and that you can pay the stipulated amount. This will prevent the accumulation of interests for non-payment. If no monthly installment plan is available, make sure you can pay for your purchase in full by the next billing cycle.
Temptation is real. So, if you go shopping (online or offline), leave your credit card somewhere safe in your house and away from you. You go out with a budget, see a lot of sales and promos, if you have your credit card with you, the tendency of going home with unplanned purchases will likely happen.
- Leave your credit card at home (or your safety box) when shopping.
If you shop online and the sale season is coming up, like Black Friday and Cyber Monday sale, asked someone to hide your credit card from you. In that way, you will not be tempted to purchase anything online. And also make sure that your credit card details are not stored on your PC or mobile phone.
- Be careful with zero-interest offers.
One zero-interest offer is good, but if you buy a lot at that kind of offer, the monthly payment will grow bigger and you might end up defaulting on these. Make a file of your purchases under zero-interest just to be sure you are not overspending under the guise of a good offer.
A credit card is good if you are able to pay your dues on time and not only the minimum. It can help you during real emergencies, not sale offers. But, if you are not careful, you might end up with unimaginable interest beyond your wildest dream!
Some people discourage the use of credit while some say it is good to have one if you use it wisely. Whatever the case is, always remember, you are the only one responsible for your spending habits. So make sure, to spend wisely in cash or in credit!