Top tips on how to have a beneficial mindset about credit cards

Don’t let the excitement of credit cloud your judgment when making purchases.

14:41 13 March 2014

Many of us think of credit cards as a way to siphon our money out of budgets, and some of us see golden opportunities where credit cards are concerned. It’s important to have a beneficial mindset about credit cards so that you don’t end up with too much debt. It’s easy to spend money with credit and then find out later you won’t be able to afford the payments. 

Here are a few ways you can keep yourself in check to make sure you don’t create a downward financial spiral:

•    Allow yourself time to think about purchases before you make them. If you happen to be an impulsive shopper, leave the credit card at home whenever you shop. Window-shop first and think about what you actually need for a few days before you decide to take the credit card with you.

•    Remember that unless you pay your entire credit card balance off each month, you’re going to pay more than the price tag at the store. Interest can accumulate quickly if you decide to simply pay the minimum amount due. You could be paying for a shirt for months. Make sure you can decide whether or not your purchases are necessary or not. If they are not necessary, you don’t have to refuse to purchase the item, it’s just better to save out of pocket to purchase the item so you’re not paying a bunch of extra money on interest.

•    If you have already used up the credit limit on a credit card, it is not a signal to get another credit card. Instead, you should begin paying as much extra as possible on that credit card. The more you pay each month, the more you save in reduced interest. It is preferable to pay off balances each month instead.