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.
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