How to Spend Less on Credit Cards

Steps

1. Ask yourself if you really need the purchase. Think before you buy. It may sound cliché but it is incredibly important to weigh up the benefits of purchasing an item or service now with waiting a bit longer when you have the cash spare. Do some mental calculations first about the urgency before slapping it on the card.
2. Consider if you need to use the card. Many of us get into a habit of always using the card when cash may indeed be the better option. Cash once spent is gone. Credit once charged continues to hang over our heads. If you do not need the traceability benefits of a credit card receipt and if you are only spending small amounts, it is often better to use cash. Keep your receipts or ask for a receipt if you need certainty about the transaction. And make some purchases credit-free zones, such as:
   • Snacks
   • Groceries (you will have long eaten the items before paying for them)
   • Minor clothing purchases, such as socks, pantyhose, hair accessories
   • Entry fees to gardens, entertainment places, cinema etc. Use debit cards instead and have the cash drawn immediately. If you cannot afford this, then maybe you cannot afford to be entertaining yourself.
   • Toys - the reason for this is that if the toy is not affordable with spare cash, it is a good lesson for the children about saving. Seriously.
3. Find a credit card that does not carry an annual fee. This is one less thing to worry about. It will probably mean less frills, but if those frills are getting you into debt, then they're not frills - they're just lures to spend.
4. Use alternative rewards schemes such as AirMiles to reduce the incentive to keep using a card just to get "points" for rewards. The price to be paid for these "free" rewards can be very high indeed when you have a debt to pay back.
5. Ask for reduction or removal of a late fee. It pays to ask - if you get a late fee on your card, phone up and ask for it to be removed (provided you have paid the outstanding amount before you call). Many companies will remove it for you.
6. Re-align your credit payment date with your salary. This may help you to avoid late fees and missed payments. Phone up and ask.
7. Seek reduction of interest rates at all times. Compare the interest rates of competitor companies, read the literature sent to you by your credit card provider in case there are new offers to be taken up and ring up occasionally to ask if interest rate reductions are available.

Tips

• Only have one credit card. The less cards you have, the less temptation exists to juggle debt and extend debt.
• Charge big purchases just after the billing cycle closes to get the maximum pay-back time.
• Always try to pay off the balance monthly. This is the best way to keep credit card debt under control.
• Use cash.

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