Beyond a shadow of a doubt, credit cards offer convenience. They allow you to proceed with purchases without really paying for them immediately. What is required of you is to pay for the minimum monthly payment. While that looks great at first glance, in reality, it really isn’t.
How to prevent yourself from overspending on credit cards
1. Pick one credit card
Having several credit cards may seem more convenient to you, but this is hardly the case. It takes a lot of self-discipline to control yourself and not use them all all the time. Choosing only one credit card is the first step towards the right direction. It will help you keep better track of your spending and ultimately, pay less. If you have 4 credit cards and use them all on a regular basis, it is hard to remember that you spent $50 on the first one, $120 on the second one, $150 on the third and $200 on the fourth. On the contrary, if you use only one credit card you will know exactly how much you have spent and where. That way, if you start overspending, you will understand it immediately.
2. Pay more than minimum monthly payment
If you use your credit card often and pay only for the minimum monthly payment, you are basically only paying for the interest, and not for the balance. Start paying more than the minimum monthly payment as often as you can, to be able to reduce the balance as well.
3. When cash is an option, it should be your first choice
When cash is an option, it should be your first choice. With cash, you know beforehand that you can only spend what you can really afford. That knowledge will not allow you to overspend, even if you want to. Furthermore, unlike what happens with credit cards, with cash you often qualify to ask for discounts, and that means that often you end up paying less.
4. A prepaid credit card is a the best choice
A prepaid credit card is the ideal choice for those who tend to overspend. With a prepaid credit card, you are given the chance to set your own spending limit, tailored to your financial situation and your needs. You can change it any time you like, something that cannot happen with other credit cards. Furthermore, with prepaid credit cards, there is no reason to worry about personal data. Anonymous prepaid credit cards protect you against credit card theft or fraud. They are ideal for online purchases, where cash is usually not an acceptable payment method.
As long as you keep in mind that you are using your credit cards and not the other way around, overspending will not be a danger.