How to avoid overspending on your credit card

Overspending is much easier than you think, especially if you are using your credit card to make all the payments.  The thing with overspending is that it is never planned. You might walk into a store with a goal of purchasing one specific item and walk out of the store with 5 or more items. You will not feel the impact or consequences until you have to make the payments on your credit card. It will take you a long time but you will have to deal with the overspending one way or another.

Overspending on your credit cards leads to major balances and this can be very negative from your finances. The balances end up hurting your credit score. it can also reduce your future income and savings by a strong number which will make it even harder for you to pay off your debts and mortgage.  The only time you have to face the consequences is when you make the payments on the credit card loans.

You have control over how much you spend on your credit card and that s the good thing about it. The following tips will help you keep your spending low and avoid all the consequences

Always remember that you have to pay the money back

There is a huge disconnect between the purchases you make and all the payments you have to make when it comes to credit cards. Many people do not realise that they are spending the money for products they do not need at all. You only get to feel the pleasure of the purchase until you have to make the payments back.

Research shows that more people are willing to make the payments for the products when they are using the credit card. You have to keep reminding yourself that the money is not free and you will have to make the payments with your finances one way or the other.

Be careful when you are using the first credit cards

It is common knowledge that when you have multiple credit cards it is easy for you to overspend. Multiple credit cards come with more credit limit and this gives you more opportunities to spend the money.  Managing all the cards at the same time will not be easy. If you want to keep the balances at a specific limit, you should get just one credit card.

Look at the balance instead of the credit limit

If you manage your balances well, have a great and consistent income and great potential to clear all your debts in time you will give you a bigger credit limit. You do not have to use the entire limit because it increases the chances of affecting your score.

Increased credit expands your purchasing power but this is not the same as having a lot of money in your bank account. Paying your balance in full is easier when you do not spend the money on leisure items.  Set a personal spending limit based on your excess income and utility expenditure. You could ask the credit card issuer to lower the credit card limit to keep yourself from overspending.