There are many consumers who are able to use their credit cards wisely, paying off any balance each month, reaping rewards benefits, and keeping their credit score in excellent health. However there is also a large sector of credit card users who simply use them in an undisciplined fashion, paying little regard to their ability to repay the sums they spend. One of the major causes of this is simply lack of understanding of the financial consequences of over using credit.
During recent years people have become more wary about letting their credit card spending run out of control, though many find it hard to break spendthrift habits. Educating oneself about how credit cards work and coming to a clear understanding of how money spent on credit costs far more when interest is added to it, may make some think twice before automatically reaching for the plastic. The gradual realisation that making minimum payments only does nothing to decrease outstanding credit card debt has had an impact on the way some people pay their monthly statements.
If you find it a problem to control yourself when out and about with credit cards it may be time to leave them in the deep freeze for emergencies, and try to restrict yourself to cash spending, or use a debit card instead. There is the option of setting yourself a monthly spending limit on your card usage, but if you know you are likely to throw good intentions out of the window when the latest must have purchase beckons, this is unlikely to be effective.
MasterCard may just have come up with the answer to your spendthrift ways, by launching a new card which will be available from Citi bank by the end of 2010. It is an innovate new credit card which you can set with certain spending limits which the card will refuse to let you breach. It will help you to control when and where you spend, and save you from your own worst excesses.
The card will be available as the Citi inControl MasterCard, and has been designed to foster responsible financial behaviour. Other banks are likely to follow suit by introducing their own inControl MasterCards which should rein in random spending.
Another way to prevent yourself overspending on credit cards is to request a low credit limit, but this could end up being detrimental to your credit score, as it may make you more likely to max out your card and thus carry a high debt to credit ratio. However if you do have a low credit score it is likely to make you ineligible for other credit cards, which could be a good thing.
At the end of the day if you really want to stop yourself overspending on your credit cards it comes down to financial discipline. If that is simply not in your nature it may be better for you to give up the credit cards until you have adjusted to living within your means, thus keeping temptation well and truly at bay. It may seem hard but it can be easier than living with the consequences of credit card debt.