Those that have difficulty managing credit card spending often justify their purchases with this thought, “I’ll pay it off later.” As a result, they make more purchases and spend more money on each item than they would if they used a debit card or paid with the cash in their wallet.
Use a Prepaid Credit Card
One alternative is a prepaid credit card, which functions similarly to a debit card and it still helps you work towards improving your credit profile. You decide how much money to put on the card, and then purchases are deducted, running down the balance until you reload the card. The portion you reload is the secured amount and the balance is the credit available to you. Visa and MasterCard offer the cards, so they can be used anywhere those cards are accepted.
But keep in mind, the cards typically come with fees, which vary greatly from card to card. You may need to pay an activation fee, a reloading fee, or a monthly fee just to have the card. But, in the end, it will keep you more in check with credit card spending.
Review Your Credit Card Statement in Detail
The more aware you are of all the charges on your credit card statement, the less likely you’ll make excessive charges each month. Reviewing your credit card statement in detail each month will act as a constant reminder of how much you owe and your bad spending habits.
Set Goals to Pay Down Your Credit Card Balance
If you set certain payment goals each month, you’ll be less likely to divert from your goal with excessive spending. Nowadays, your credit card statement will include a section detailing how long it will take to pay off your balance if you only pay the minimum each billing cycle versus paying more. Although that table is helpful, it doesn’t mean much unless you factor how much you’re capable of paying into your monthly budget. This is done by adding up your actual expenses monthly, categorizing them in to your budget categories and comparing them to your budget. Overages where you spent more than you budgeted should be noted. Actual expenses that were not in your budget should be evaluated and, if needed, a new budget item should be set up for those expenses. Of course you will need to reduce another expense to add a new one.
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