The Dark Side of Credit Card Spending

bad things about shopping with credit cardsNo matter how strong the Force may be, it’s still easy to fall prey to the nefarious habits of bad credit card usage.

Instead of going over to the dark side, become a credit Jedi master by learning how credit cards work. That way, you can guard yourself from the perils of credit card debt.

Don’t Fall Prey to Impulsive Credit Habits

Although no one gets a credit card with the intention of racking up debt, impulse purchases are sometimes too convenient to pass up. One thing leads to another, and before you know it you’re suddenly faced with more debt than you can handle.

Rather than continue to make impulsive buys, look to limit your spontaneous purchases. A good rule of thumb is to let things sit for a while. If you suddenly see something you want to buy, wait a day or two. If you still feel as inclined to make the purchase as you did a few days ago, then it’s no longer an impulsive purchase.

Refuse the Temptation to Pay in Plastic

When you pay for something with cash, you automatically feel how much you spend. Paying in cash also means that you have a finite amount of money to spend at a given time. However, it can be hard to really comprehend how much something costs when you simply hand over a credit card. It’s easier, faster, and sometimes even dangerous.

Before going out, remember to bring cash with you and, if possible, leave your credit card(s) at the door. You’ll have a set amount of money, and you won’t have to worry about going over budget.

Instant Cash… at a Price

It’s easy to walk over to an ATM with your credit card and – presto – you have money. Unfortunately, this instant cash comes with a cost. Most credit card ATM transactions charge a fee, usually around three percent or so.

Try to stick to ATMs that are directly connected to your bank, as these usually don’t charge a fee. Sometimes they may be a bit further away, but it’s usually worth it to avoid having to pay needless fees.

Keep an Eye Out for Various Offers and Deals

One of the biggest (and most dangerous, depending on how you look at it) perks of having a credit card is being privy to their various incentives and/or cash back deals. While the incentives themselves aren’t bad, they encourage people to use their credit cards more often, thus increasing their risk of going over their credit limit.

Also Read: How Bad Credit Can Affect Your Job Search

Keep an eye on how often you use your credit card. Signing up for online and mobile banking can help you keep tabs on when, where, and how often you’re using your card. Plus, it’ll save paper.

Think You’re on Top of Your Monthly Statement Because You’re Paying the Minimum Balance Each Month? Think Again

Although you may think that paying the minimum balance is beneficial, it actually does very little to effectively reduce your debt. In truth, paying the minimum balance simply draws out the amount of time spent on paying off your debt.

Make it a priority to pay a bit more each month. Start slow, possibly adding an extra $20 here and there. Once you’ve gotten into the habit of paying a tiny bit extra, work to increase your payments. Paying more than the minimum will help you pay your debt off faster because you won’t have to worry about those long-drawn-out interest fees.

It’s a (Debt) Trap!

Misusing credit cards is the number one way people go into debt. Instead of falling prey to the seductive nature of credit cards, look to change your binge purchasing habits and work towards limiting your credit card use to a minimum.

Also Read: Ten Things You Should Never Charge to Your Credit Card

It’s important to remember that credit cards themselves aren’t evil; it’s how we use them that can be downright diabolical. Credit cards are merely a tool — it’s up to you to decide how to use their power.

Now that you’ve armed yourself with this knowledge, Vader himself would be powerless in your presence.