Let’s face it…while credit cards are a great way to build your credit, they can get you into trouble if you’re not careful. With so many people taking advantage of the ease of online shopping these days, overspending can happen fast, and before you know it, you’re up to your ears in debt.
Taking control of your spending is essential to maintaining a good credit score. And, when used appropriately, credit cards can usually help your financial situation.
The following tips can help you keep your spending under control while preserving your good credit.
Plan Carefully
Most people say they’ll use their credit cards for emergency purposes only, but often-times the definition of “emergency” gets skewed. This is where overspending can occur. Define what you consider an emergency and stick to it. When the time comes where you do have to use your credit card, make sure to set a budget. Then create a plan to pay off the debt as soon as you can. Look for ways you can cut back each month to pay off the balance quickly.
Beware of Emotional Spending
We’ve all had those weeks where we felt like we deserve to treat ourselves. Maybe you’ve had a bad week and feel like a fun purchase could make you feel better. Or perhaps you just hit a big goal at work and want to indulge a bit. Regardless of the reason, impulse shopping can take a toll on your wallet. Don’t let your emotions take over your spending. Instead, avoid places where you may be tempted to buy and look for ways to reward yourself without spending money.
Avoid Carrying a Balance
The easiest way to build your credit and increase your credit score significantly is to pay off your credit cards each month. While this may sound nearly impossible, the bottom line is if you can’t pay off your credit cards each month, then you’re likely overspending, and this can lead to financial trouble. If you are carrying a balance due to unforeseen expenses, such as medical bills, set a budget to get the balance paid off as soon as possible.
When Using a Credit Card Makes Sense
There are situations where using your credit card can actually make financial sense. For instance, if you’re carrying large balances on several high-interest credit cards, consolidating that debt onto one low-interest credit card could help you eliminate extra interest charges.
We’re Here to Help!
Credit cards are great financial tools when used responsibly. If you have questions on managing credit card debt or would like to explore debt consolidation with our VISA Platinum card, please stop by any branch location or give us a call at 800-997-7919.
Your Turn: How do you use your credit cards responsibly while keeping your score high? Share your best tips with us in the comments.