The Not-So-Obvious Ways to Use Our Credit Cards Responsibly
Credit cards can make our spending feel really murky. It’s hard to know if we’re spending more than we have because we don’t feel the pain of spending more (or the reward of spending less) until it’s time to make our credit card payment at the end of a cycle.
This can make it hard to pay off our credit card each month, and it can also make us feel really guilty in our everyday spending since we’re not quite sure whether or not we can afford the things we’re purchasing.
For some, the solution is to use cash. Cash makes us conscious and it’s very clear when we run out. But for others, cash doesn’t make sense.
Some aren’t comfortable carrying cash, or it can be a hassle to get money from the bank. Many have turned to debit cards since they provide a clear picture of where they stand and how much is in their account.
But with all the hacks, scams, and fraud we’re seeing as of late, I get a lot of questions around the safety of debit cards. If debit isn’t feeling like a good fit for you, here are some strategies to make your credit card feel more like a debit card.
How can we make sure we’re using our credit cards in the most responsible way?
Pay it off each week.
In order to stay on top of our balance and keep our bank accounts in check, we can pay down our balance more frequently. Paying off our balance every week (instead of every month) keeps us more honest about what we have and what we’ve already spent. It’s a quick and easy way to make sure our spending is more closely matching our bank accounts.
Have a plan.
To truly know how much we can be spending each week (and still reaching our goals), we want to have a plan. I created this happiness allocation (aka budgeting) tool to help you set up your plan for the next twelve months. I’m a big fan of planning for the entire year since lots of expenses (and usually the big ones) don’t happen each week or even each month.
From there, we can confidently track our spending.
If we’re keeping a close eye on our spending, it matters a lot less what’s happening with our credit cards. We know what we want to be spending (from our plan above) and with tracking, we can make sure we’re sticking with that plan. You can track your spending in a money journal, in notes on your phone, or using a spending app.
Even when we’re tracking our spending, we still want to review our credit card statements to make sure there aren’t any incorrect or fraudulent charges. You’d be surprised what can show up on there!
Avoid the relativity trap.
Another reason we may spend more on our credit cards is that a small expense seems like no big deal compared with the hefty balance we see. We end up thinking “what’s another $10!?” and those can really add up.
Just knowing that we have a tendency to do this helps us stop it from happening. We can avoid checking our credit card balances frequently and envision them as zero when we pay them off each month. Keeping up with tracking our spending also helps with this!