Controlling Your Credit Card Spending
For many, the difficulty in controlling credit card spending stems from the ease of credit card use making it difficult to keep tally of a realistic balance as the month proceeds.
One of the easiest ways to keep track of what your statement will likely look like is to simply keep a record of your expenditures. There are a number of very straight forward ways to do this. One way is to simply carry with you a small notebook in your bag or piece of paper folded in your wallet - when you sign for a purchase or enter your pin number, simply jot down the amount you’ve spent, where and on what. If this isn’t convenient for you, you can instead keep all your credit card receipts and every day or couple of days you should make a list with all the above information. This will serve three important purposes: you will know exactly how much you have spent and so your next credit card statement will contain no surprises, equally if you see you are nearing your spending limit you have plenty of warning and can cut back if necessary. Secondly, you will have a detailed list of what you spend your money on, placing you in an excellent position for reviewing your finances if and when necessary. Finally, when your credit card statement comes you will have an easy reference to check it off against in order to confirm all the details are correct.
Another highly recommended way of controlling your credit card spending is to set yourself a credit card allowance each month. If you already have an outstanding balance on your credit card you should factor monthly repayments into this allowance. With a set spending limit per month you will find yourself considering individual purchases more carefully and with an ongoing tally of your monthly expenditures you will be able to moderate, and pace your spending. Large one-off purchases can pose a problem - a $1500 suite for example will probably not be covered by one month’s card allowance; that’s okay. Spending large amounts is no problem, and is one of the major advantages of a credit card, but only if you have a plan for paying it off. For example, having purchased the $1500 couch you should factor in monthly re-payments of $200 per month for the coming 8 months. Most importantly; if you genuinely can’t afford something don’t buy it. Credit cards delay payment - they don’t make it free: you know exactly how much you earn, if you can’t realistically cover an expenditure don’t purchase it!
Moreover, always look at your bills and be sure to understand the valuable information they contain - in the long run it will save you money. Credit card statements will have a section detailing the APR of your agreement and charges that will vary depending on the amount repaid from your monthly balance. This information should be taken into account when making each repayment decision as an extra $10 repayment could be the difference of several percent in charges.
Ideally one would always be able to pay off their balances in full each month, but that is simply not realistic. Credit cards are a great tool for making your money go further and so long as the minimum payment each month is met and you have a well thought through and reliable plan for payment, you will find that you are successfully controlling your credit card spending.
Finally, check out Mint.com and set yourself up with an account. Mint allows you track all your finances in one place including your different credit cards. They are relatively new so they might not have every financial institution in their database, but most likely yours will be listed. Mint shows you how you can save money, where your spending is going the most, your spending trends, and the ability to track all your credit card spending under one roof.