5 Ways to Stop Overspending With Your Credit Card

You’re struggling. You know you need to stop overspending with your credit card but every time you try, you end up right back in a pile of debt.

I’ve been there.

In fact, most people have struggled or are struggling with debt. Debt.org averaged that each household with a credit card carries $8,398 in credit card debt. This is a big problem.

As you know, credit cards have high-interest rates. Once you overspend to the point where you can only make payments instead of paying off the balance, you become trapped in a vicious cycle.

The good news is that you can stop overspending with your credit card. You can avoid falling prey to this nasty habit if you practice the following tips.

5 ways to stop overspending with credit card

1. Correct your ignorance

Ignorance means having a lack of knowledge or information. Many people act in ignorance of basic credit card usage simply because of listening to the wrong information throughout generations of incorrect thinking. 

You might have heard or said, “credit cards are for emergencies” at some point in your life. This is completely WRONG. If someone told you this, I would be willing to bet that they worry about money themselves.

Credit cards allow you to quickly borrow money. It should never be considered “emergency money.” If you charge something to a credit card, you need to have the cash available to pay it off immediately.

So if credit cards aren’t for emergencies, how does someone cover an emergency? The answer is simple. An emergency fund.

An emergency fund is money that you have set aside to cover unexpected expenses that pop up in life. If you are in a lot of debt, most people would agree that you should have at least $1000 saved up to cover an emergency. $1000 isn’t enough to cover you for the long term, but it can cover a popped tire, an emergency flight to visit an ill family member, and most other actual emergencies.

Educating yourself and correcting your mindset is half the battle to stop overspending with your credit card.

2. Create a budget

STOP!

Don’t be one of those people that skip over this. A budget doesn’t have to be constraining, boring, or a hassle. A budget is simply a written plan for your money. The control is yours.

Also, You don’t need to go out and buy a fancy budget either, we have the Perfect Budgeting Guide and a How-to Video for free in our resource library. You can download the easy spreadsheet today and start telling your money where to go.

When you create a budget, your money is no longer in control – you are. Do you want to spend $300 dollars at the store today? Fine. Put it in your budget. 

A budget gives you permission to spend without feeling guilty or falling into unexpected debt. The best way to stop overspending with your credit card is by creating, and sticking to, a budget. Download our free budget from our resource library by filling out this form:

3. Wait before you buy

One way to avoid overspending, in general, is to hold off buying a wanted item for a specified amount of time. 

For example, let’s say you are at the store and see an item that you’d like to have – and it’s on SALE! Instead of immediately buying it, wait 24 hours. If you still want it after 24 hours, then buy it.

Most of the time, you’ll find that you no longer feel the need to have the item and that you were just “in the moment.” Retailers love this “moment” because it makes them a lot of money.

The Unicorn I had to have…

Recently, I was in this dilemma. I was out shopping and came across… out of all things… a singing and dancing unicorn plush. I normally don’t buy these types of items but I found this unicorn to be hilarious. Plus, my daughter loves unicorns.

I looked at the price and it was $9.99. “Perfect! AND it’s affordable,” I thought. My husband thought I’d lost my mind because this type of item is considered clutter in our household – and we don’t like clutter.

After I put this unicorn in my cart my husband reminded me of our “wait before you buy” rule. Immediately, I got angry. How could he not think this unicorn was a necessity? 

I didn’t like putting the unicorn back. However, we had agreed to implement the “wait before you buy” rule to help us accelerate the time it took us to get debt-free, which was what we wanted most of all. Plus, if I still wanted the unicorn tomorrow, it was all mine.

Over the next few days, I didn’t feel like going back to the store just to get the unicorn. I still wanted it though. A week later, when I visited the same store, I went straight for the unicorn.

I excitedly pushed the play button on the unicorn and to my surprise, I didn’t even think it was funny anymore. In fact, I kind of found the melody to be annoying. Turns out, I was just in the moment. Now, $9.99 wouldn’t have ruined us financially, but recurring impulsing buying results in financial ruin for many people. 

If you impulse buy three of these $9.99 items a week that’s about an extra $120 a month you are adding to your debt. The waiting rule works. It isn’t always fun, but it works!

4. Lower your limit

The first three ways to stop overspending with your credit card focused on will power. These next two focus more on forcing yourself to stop.

One way you can force yourself to stop overspending is by calling your credit card company and asking them to lower your spending limit. You can’t get into too much trouble if you have a very low limit. 

This allows you to get the benefits that your card provides but also keeps the limit to an amount that you can afford to immediately pay off.

5. Get rid of the card

If you don’t have the will power to stop overspending with your credit card, you need to take control by getting rid of it. You may need to cut up the card and delete the card number out of your online accounts.

No one likes the idea of cutting up a credit card. However, you have to ask yourself what you want more. Do you want the credit card more or do you want to get debt-free and get control over your finances?

If you incorporate these 5 ways to stop overspending with your credit cards, you will gain control over this nasty, debt producing habit.

Remember, credit cards aren’t for emergencies. An emergency fund is for emergencies. Tell your money what to do by creating a budget and wait at least 24 hours before making an unnecessary purchase. 

Lastly, if all else fails, force yourself to stop overspending by getting your credit limit lowered or removing the credit card from your life altogether. You CAN gain control over this and break the chains that debt has wrapped around your life.

If you aren’t already in our Facebook group, The Financial Independence Community, we invite you to join and surround yourself with other people trying to build wealth and make smart financial choices. See you there!