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 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 oftentimes 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

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.

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 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, email us or give us a call to explore your options.