Finance Globe

U.S. financial and economic topics from several finance writers.
2 minutes reading time (318 words)

Why Are You Overspending On Your Credit Card?

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Carrying a credit card is a great responsibility. If you’re not careful, it’s easy to overspend and regret it at some point in the near future.

By understanding why you have overspent on your credit card in the past, you can avoid a similar situation down the road.

Even if you‘ve never found yourself in this position, you can still learn from the mistakes that others have made.

Here is why you may be overspending on your credit card:

•    Neglecting to track your spending. Unlike a debit card, for example, you know that you have a high credit limit. So, if you don’t track your spending, your balance could quickly grow out of control.
•    Chasing reward points. It’s nice that you can earn points for every dollar you spend, but you don’t want to do so if it’ll put you in a bad financial position in the long run. If you can afford to pay your bill in full, you’re in good shape. If you can’t, you may be “point chasing.”
•    It’s convenient. There’s no denying the convenience of shopping with a credit card. You don’t have to record the payment (as you would with a debit card) or carry around cash. While the convenience is a good thing, don’t let this lead to overspending.

Using a credit card can be one of the best financial decisions you ever make, or something that drags you down month after month.

If you find yourself overspending for any reason, it’s time to do these three things:

•    Identify the problem
•    Pay down your balance
•    Implement a plan for avoiding the same situation

After you do these things, it’s much easier to use your credit card in a responsible manner.

Have you run into this problem in the past? What strategy are you using to avoid the same in the future? Share your thoughts in the comment section below.

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Comments 1

Frank on Thursday, 26 October 2017 09:29

My wife ran into this problem many times before I met her. She did not fully understand the concept of credit cards and it took her awhile to fully understand it. Now we both payoff our credit card bills every month!

My wife ran into this problem many times before I met her. She did not fully understand the concept of credit cards and it took her awhile to fully understand it. Now we both payoff our credit card bills every month!
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Monday, 19 August 2019

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