Hey, let’s go shopping! Before you heed the siren call of retail, consider these warnings about credit card misuse:
- Studies show that consumers buy more when they use credit versus paying cash. Why do you think that every retailer these days accepts plastic?
- Is there is one (or a few) category(s) where you can be counted on to go nuts? You may not need to go cold turkey on cutting up your cards, but maybe it would be better to pay cash for purchases in these categories.
- Emotional or impulse spending. If you placate the blues by spending, you may be setting yourself up for trouble. Try substituting another habit, like exercise. Impulse spending can lead to a clutter of junk you don’t use or a closet full of clothes you don’t wear. Think about what you have already and emotions or circumstances that lead to the purchase before buying more.
- You’re maxing out cards and struggling to keep up the minimum payments. This is a sign that credit use has become abuse. In a perfect world, you should pay off every card every month and never carry a balance. Credit card fees and interest rates are a budget busting disaster. A balance transfer to a lower interest rate card may help. But you must have good credit to pull that off – 690 or higher. If this is you, it’s time to cut up your cards and attack spending with a hatchet!
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