Using a credit card instead of using cash or a check MAY be a good idea since it’s convenient, safe and secure, all on one bill, and may offer rewards. But use it wisely.
While it may not be easy to do, refraining from using your credit card, with the exception of emergencies, will help prevent you from building up lots of debt rather quickly. So, how do you go about it you ask?
1. Learn to differentiate between essential and non-essential items.
2. Think about purchasing in terms of cash and don’t shrug it off with an “I’ll worry about it later” attitude.
3. Wait to make purchases. Eliminating “impulse buying” will immediately decrease your spending, and by waiting you may even find the item on sale later on, or you may find you don’t really need the item and can do without it entirely.
4. Track your spending in order to make sure you know where your money is going. You may be surprised at how quickly little things add up to large amounts.
5. Set limits and goals on your spending to eliminate running out of money before running out of month.
6. Emergencies do happen, and credit cards are useful for the unexpected, but when they are used the balances should be paid as quickly as practical.
By tracking spending and reducing credit card usage you’ll have a better chance of saving money and actually having cash later on for essential purchases.
Oh, and one other thing. If you do use a credit card for essential purchases, make sure it’s a low interest rate card, such as offered by UKFCU. For more information on our credit card, click here.