5 Tips to Effectively Manage Credit Card Spending
If you are finding it difficult to control how much you spend on your credit cards, you may need some help determining how to get it under control. According to the experts at SoFi, “Your credit card spending limit is a powerful number.”
Credit cards can be used for many purposes. One of these is to take advantage of the rewards that come with being a card-carrying member. However, it’s also important to remember that carrying a balance isn’t ideal.
If you regularly overspend on your credit cards, there are some things that you can do to put yourself in a better financial position. Check out a few tips on how to limit credit card spending.
1. Try Sticking to Using One Credit Card
Ideally, try using multiple cards to get the most out of your rewards. One card can offer great rewards for dining out and other purchases, while another card can provide added miles and cashback.
However, if you are constantly in debt and are trying to keep your spending under control, it’s important to stick with just one card. It will allow you to keep track of your balances and, in most cases, earn the best cashback or points rate.
2. Set Yourself a Spending Limit
You’ll also want to set a budget and limit different categories of spending. Having a set amount for each of these will help you keep track of how much you’re spending. To get started, figure out how much money you have left over after paying off all of your debts. Then, set a spending limit and a goal for how you will use it.
Instead of going through a detailed budget, try setting aside some of your income to pay for discretionary purchases. This method works by limiting spending to 50% of your income, saving 20%, and paying off the credit card balance without exceeding it.
3. Keep Track of Your Balances
After setting a budget and credit card limit, it’s important to keep track of how you’re using it. A good way to keep track of your card balance is by going through your account statements each day and comparing the amount you’re charged to the cash available to pay it off.
If you’re running out of funds, stop using your card immediately. It will help you avoid getting into credit card debt.
4. Use Apps to Alert Your Overspending Habits
There are certain apps that can be set up to alert you when you spend over a certain dollar amount. You can also set up spending limits on specific categories and use the app to link them to your accounts. It will notify you when it gets close to reaching that amount.
These apps will alert you when you start to charge too much. They can also let you know when it’s time to stop spending.
5. Don’t Make Your Cards Easily Accessible
Another tip is to remove your credit card information from your online accounts. If you have a hard time refraining from spending online at your favorite websites, remove your credit cards from the accounts. This will give you time to think twice before making a purchase.
Since many websites allow one-click purchases, it’s very easy to shop for things without thinking about them. However, if you have to type in your card number, it can be very time-consuming and make you less likely to shop.
Getting your credit card spending under control is doable. It is important to set yourself a budget and work hard sticking to it.
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5 Tips to Effectively Manage Credit Card Spending
