5 Signs That Your Credit Card Spending Is Out of Control

By Silicon Valley Blogger. Last updated 4 January 2012. 15 comments
Photo: pnoeric

How good are you at staying on top of your credit card spending? Credit cards are a convenient financial tool that many of us prefer to use in lieu of cash, but they can become a thorn in your side if you’re not careful. To determine how disciplined you are when it comes to spending with plastic, it may be a good idea to do a self-assessment. Here are five signs that your self-control goes out the window when it comes to buying stuff with your credit cards. If any of these signs seem familiar to you, then it’s time to sit down and give yourself a good talking-to.

You can't leave the house without your credit cards.

This may be a sign that you are overly dependent on your cards, and that you've grown inured to a certain level of spending. Do you really need a credit card every time you pop into town for a quart of milk? When you carry your card around, it's easier to succumb to spending temptations that can add to your card balance. Try leaving it behind once in a while and see if doing so has a positive effect on your card balance and even your spending habits. You might be surprised by the results. (See also: 6 Reasons Why Cash Is Still King)

Every single thing you buy has to be bought with your credit card.

Have you fallen for the pitch that you should put all your financial transactions on your credit card? It's a good thing if you have a rewards credit card, and you are able to pay your bill in full every month to reap those rewards. But if you're keeping a credit card balance, then you need to think about the possible consequences of putting everything you buy on there. Maintaining a credit card balance that grows over time means that you will ultimately find it harder and harder to pay down. Many consumers mistakenly assume that their card rewards will neutralize or make up for their spending. This, of course, isn't the case.

What type of credit card are you interested in?
How much do you spend per month?
Do you carry a balance?

Impulse buying has become second nature.

Impulse buying gets us all once in a while. But the habit can sneak up on you more easily if you always have a credit card with a high credit limit in your back pocket. In order to curb impulse shopping, you need to regain some common sense and question everything you buy for a while. One way to control your spending urges is to set up a budget and account for all the spending you do. It's helped me to keep a closer eye on the purchases I make.

You don't stick to a budget.

I just mentioned the benefits of drawing up a budget. A budget allows you to become intimately aware of your limits so you don’t exceed them, and many responsible credit card users are able to keep their spending in check because of the simple act of budgeting. But it's not enough to set up a budget; you also have to make the commitment to stick to it! You can develop a budget with the use of simple spreadsheets or a free budgeting tool like Mint.com. If you are more inclined towards desktop applications, then YNAB is a good option.

The idea of cutting up your credit cards makes you break out in a cold sweat.

Does it make you nervous when you think about leaving the house without your cards? If it does, it’s time to think seriously about who is in control — you or your credit card. You should never feel as if you couldn’t do without one in your wallet. Many folks have switched to using cash for all their transactions and have actually found it to be a liberating experience.

If you can’t spot any of the above signs just yet, congratulations. You are still in full control of both your common sense and your credit cards. But don't get complacent yet; it's important for you to always track your credit card usage and how much you spend. So keep your eye on those cards!

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Guest's picture

Put simply, I'd say that if you are in debt at all, then you need to take a close look at your credit card spending.

It could probably use some paring down

Guest's picture
stannius

I pretty much never leave home without my credit card. Even my ultra-pared-down "biking wallet" has my driver's license (for ID purposes), credit card, and a couple dollars cash. The cash is bus fare to get me home - the credit card is for any emergency that costs more than that.

Guest's picture

I don't think I'm out of control concerning my spending. I always bring my ID, one credit card, and some cash with me pretty much for the same reasons stannius mentioned even if I don't plan on spending any money. You never know when you may find yourself stuck in a situation not have an ID or money on you.

Guest's picture
Victor

Fortuantly, I have never really had a problem with credit or impulse buying. Have never really liked owing people money, which is a big part of it. I live within my means pretty well and don't mind hardwork and fixing things, so I can often get a good deal on things when they are broken.

Of course, I have a number of friends who have not been so fortuant, including one guy who ended up about $10,000 in debt by the time he graduated high school. Of course, in that case, he wasn't soley to blame, as his parents probably could have prevented a lot of that by putting their foot down. In either case, the credit industry can be really predatory and so I feel it is really important to try to break the dependency some folks have.

Guest's picture

Another sign could be that a person ignores determining the total amount of credit card debt one has. I think many people are aware of generally how much they owe (some big number, or some really bigger number) but it can be freighting to actually sit down and calculate the actual number, it makes real at that point.

A somewhat related personal experience, while I was in college I didnt have a credit card, but I would think in the same terms the amount of cash I had without getting into a specific dollar amount. Over time i found that the less cash I had available the more money I would spend. I figured, if I was going to be broke, I might as well enjoy the ride there. :/

Guest's picture

It is so important to get a grip on credit card spending. There gets to be a point where it becomes very very difficult to pay back the debt, and hard decisions have to be made. It's so much easier to get a grip on the debt before it gets out of hand (believe I've been there). Despite what we are told, and often taught, it is possible to live without credit cards, and for those of us (yes me too) that have a difficulty with spending with credit cards, it's critical to learn to live credit card free.

Guest's picture

Another sign: if you keep on justifying your credit card purchases. Credit card addiction trick you into believing that you can cover just about anything you buy on credit.

Guest's picture

Great Post! If you can't stick to a budget and pay off your balance in full each month - get rid of the credit cards, the interest you pay on a balance you carry will far outweigh the cost of having a card.

Guest's picture
Aaron

Spending is subject to habits just like everything else we do. If someone has a bad habit to kick a little shock will get their momentum going.

Knowing how much your credit balance costs you is some excellent motivation to file your card away somewhere and never take it out again. At least it did for me. Of course, I always knew that my debts (of which a 10% APY credit card was half) were costing a considerable amount, and I was making a regular effort to overpay to clear them. However, until I had some hard numbers to look at I didn't really push my frugality as far as I could in order to make serious progress.

Up until that time the credit card was like a bank account. After paying other bills I would transfer most of my remaining checking balance to the card and then use the card to make non-food purchases as needed. That seemed to make sense, but in the back of my mind there was this lurking notion that having paid off $x I could once in a while spend up to $x and it wouldn't be so bad. In the end it was a very bad approach, because after two years I still had credit card debt to pay off.

Guest's picture
Aaron

*10% APR. Minor typo there.

Guest's picture
Lowint

This are some of the typical problems of those people who are depending on the use of their credit cards, sometimes over use of credits card can put them into more trouble. Thanks for posting this problems so they can able to realize what should they have to do in order to prevent further doing of this bad habits.

Guest's picture

I can truly say that I have never read so much useful information about 5 Signs That Your Credit Card Spending Is Out of Control | Wise Bread. I want to express my gratitude to the webmaster of this blog.

Guest's picture
Guest in CA

If you have in your mind that you 'can' pay off your CC each month but you actually don't (& the balance keeps creeping up).

I am in the final month or two of getting some fairly large balances paid down to $0 over the last year and a half. Just went through all the statements since we started paying down to the present and put the total amounts paid, interest paid, and the amount we kept adding to them (for awhile) on a spread sheet - the bottom line totals were a real gut shot. Never again!

Guest's picture
Guest

I use my credit card because if a fraudulent purchase is made(Happened to my brother), I can cancel the credit transaction easier than a debit transaction. Balance gets paid off every month. Still, credit is easier to spend than debit for some reason,

Guest's picture
Yazmin

Although there are some benefits to using credit cards, you shouldn't use them if they have a high APR or if you're already in debt. I no longer use a credit card. I use my debit card because I was spending money on everyday items like coffee when I didn't have cash. The interest really adds up!