4 warning signs your credit card spending is out of control



Are you going crazy while spending your credit cards? Here are some warning signs that you are not managing credit responsibly.

Spending money on credit cards is actually smart. You can earn rewards for every dollar spent and get great merchandise, cash back, or free travel with credit card points or miles programs. But it only makes sense to spend on credit cards if you can do it responsibly.

Unfortunately, far too many people are not able to handle a credit card because the temptation to spend irresponsibly is just too strong. How do you know if you are one of them? Just watch out for these four red flags that suggest your spending is out of control.

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1. You’ve used up your credit cards

Maximizing your credit cards is bad news for a number of reasons. First of all, if you keep billing up to your credit limit, you won’t have any available credit if you need it – and you’ll likely have a hard time paying off your balance every month.

Spending up to your credit limit can also hurt your credit score. This is because the credit utilization rate is one of the most important factors in determining your score, which will suffer if you use more than 30% of your available credit. Try to keep your spending well below this limit to avoid lowering your credit score and making it more difficult to borrow in the future. If you can’t, that’s a problem.

2. You find it hard to pay more than the minimum

Credit card companies require you to make only small minimum payments each month. But if you only make the minimum payments, it will take you years to pay off your debt and you will be paying a fortune in interest.

Ideally, you should pay off your entire credit card balance when the bill is due so that you don’t pay any interest. Otherwise, any interest you have to pay will not only negate the value of any rewards you earn – because the interest charges are so much higher than the reward value – but it will also make the total cost of each purchase more. Dear.

If you can’t pay the entire bill, you should at least pay more than the minimum owed so that more of your payment goes to repaying the principal. Otherwise, a large chunk of the minimum payment is only for interest and you are not making any real progress on your debt. If you can’t pay more than the minimum, that’s a major red flag that you’ve overspended and need to take debt repayment seriously.

3. You have no idea how much you will owe each month

While you don’t necessarily have to keep track of every dollar, you should have a rough idea of ​​what you’ve put on your credit card so you know you can afford to pay it off from your bank account. .

If you find yourself mindlessly searching for plastic and are shocked at how much your credit card balance is each month, it suggests that you need to get your spending under control.

4. Your credit card debt affects other financial goals

Are your credit card payments so high that you can’t afford to save for retirement or for a down payment on a home? Are your cards to the max hurt your credit score so much that you can’t get the car loan you need to buy a vehicle so you can get to work? Is your debt ratio so high because of your cards that you can’t qualify for further financing?

If so, you need to get your credit card spending under control so that it stops having such a negative impact on other important financial transactions. You certainly don’t want to find yourself in a position where you can’t do important things just because you’ve charged so much on your cards.

You can control your spending

The good news is, if your credit card spending is currently out of control, you can take action. You just need to make a plan to pay off what you owe and live on a budget. Watch what you spend in general, limit the amount you charge, and don’t spend more than you can afford each month. With a little effort, you can learn to use credit cards responsibly and reap the benefits they offer.



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