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 actually help your financial situation. The following tips can help you manage your credit card usage and preserve 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 is considered 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 in order to pay off the balance quickly.
Beware of Emotional Spending for Credit Card Use
We’ve all had those weeks where we felt like we really deserve to treat ourselves. Maybe you’ve had a bad week and feel like a fun purchase could really make you feel better. Or, maybe you just hit a big goal at work and want to indulge a bit. Regardless of the reason, impulse shopping can really 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. If you hold high interest credit card balances, consider opening a debt consolidation loan to have a lower rate.
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 can actually help you eliminate extra interest charges.
We’re Here to Help!
If you have questions on using credit cards wisely or need assistance getting out of debt, call, chat, text, or stop in! Our team is available M-F, 9am-4pm ET. (315) 671-4000.
Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.
