If you are a shopaholic, nothing can stop you from shopping! When you run out of cash, you have credit cards to take care of your bills!
Little you may realise that your impulsive shopping is not just bad for your wallet, but also for your creditor too!
Don’t be surprised. It’s true that the more you shop with your credit card, the more your creditor bank earns interests. But they too are scared of your uncontrolled spends. This is because every card has a credit limit. This is calculated according to your paying capacity. If you shop very close to that limit, the bank raises doubts on your credibility and you might have problems getting loans in future!
Technicalities apart, the bigger problem is that when you shop too much with your credit card, it does not just dig deeper into your pocket but also makes it difficult for you to pay back the loan. ‘Loan’ might sound a bit heavy for a credit card, but in reality that’s what it is!
Ideally, credit cards should be used in two situations: one, where there’s an emergency - you need something urgently and do not have enough cash to buy it; and two, where you do not wish to carry too much cash with you, like on a long trip or while shopping for a wedding in the house.
Here are some tips that will keep a check on your impulsive shopping with the credit card and save you from falling into a debt trap.
Pick the right card.
The first and foremost thing to do is to pick the credit card that is best suited to your requirement. Compare credit card offers and various schemes offered by your bank. Also compare the various charges on the cards like finance charge, annual fee, cash advance fees and late payment fees. Do not opt for a higher credit limit just to have a greater ease for shopping, because your credit limit is the best check on your card usage.
Now that you have the right credit card, you need to concentrate on your shopping bills to limit spends.
Stop shopping for free gifts!
Shop for your requirements. If free gifts follow, well and good. If they don’t, let them be! Don’t keep purchasing things that you don’t need just because there’s a cool offer you want to avail. If you already have enough pairs of jeans, another pair is not worth buying even at a 50% off!
Remember, offers will always repeat themselves.
Avoid credit card-friendly destinations.
When you know you can pay with your card, you do not size up your pocket. This leads to uncontrolled bills and finally a debt trap. Avoid going to shopping malls where dozens of credit card-friendly shops dazzle your eyes! Another place to avoid is an online shopping store, where your credit card does all the shopping, while you remain clueless about how much you have spent! One more way to avoid the use of credit cards is to stop subscribing to catalogues. They provide you with the easiest way to shop with your credit cards.
And now, a little doze on the careful use of credit cards.
Pay, and pay on time!
Don’t skip credit card bill payments. They will all pile on in future and eat up a major portion of your income. Also, make timely payments or you will end up paying considerably more than you shopped for! If, for any reason you are not able to pay before the due date, let your bank know the situation. The bank might waive off the late fee if it finds your reason genuine enough.
Never share your Pin
Sharing your credit card pin number is like giving your credit card to someone for use. The pin can be easily misused in online bookings and the like and you will end up paying for someone else’s purchases!
These tips will broadly help you control your credit card bills to a large extent. If you still find yourself helpless in front of your shopping impulses here’s another interesting way. I read about it in one of the blogs, and found it quite effective:
Freeze your card! Don’t laugh, it works! Put your plastic money in a plastic bag and keep it in your freezer. Now, you can go to whichever mall you want and choose to buy whatever you wish. To pay for it, you will need to come back home, melt the ice, dry the card and then go back to the store to use it. This will give you enough time to rethink over your decision and chances are that your rational self will take over your impulsive one!