Seasonal spender or credit card addict?
It's not a big surprise if you find yourself reaching for your credit card more often around the holidays. The National Retail Federation is projecting that consumers plan to spend an average of $1,007 on gifts, decorations, and candy this season.
However, if you've noticed your plastic habits don't fluctuate throughout the year, it could mean you're living beyond your means … and you may be heading for financial disaster. Here are some ways to tell that you need to get your spending habits under control:
Your credit card balances keep growing. If you're only tackling minimum payments, you're not going to see your credit card balance go down. To start digging yourself out of a financial hole, try paying double the minimum payment amount. Then keep doubling it. Your goal should be to pay the total balance on your credit card each month.
You've got a lot of rotating plastic. Have you taken out a cash advance on one credit card to pay off another, then applied for another card when the first comes due? Stop. Instead, make a list of your credit cards and balances and start working backwards. If you opened two new cards this year, work to eliminate the balances of those two card cards in 2019. Then move on to the next two, and so on.
You're working overtime to cover expenses. If you're finding yourself taking on more and more work to pay for your expenses, something's amiss. Spend some time reviewing what has changed with your finances and work life in the past year. Maybe you moved and your rent is much more than you expected. Once you've determined the biggest money drains, you can figure out how to deal with them. This might mean moving somewhere with cheaper rent, or cutting social life costs.
You routinely charge everyday expenses. Do you use credit cards to pay for groceries, gas and meals? Unless you're disciplined and pay off the charges every month, your credit card balances can grow exponentially. Set a goal to pay off the amount you charged on everyday items each month.
You're refused credit. If your credit score has tanked, it's likely you'll have a hard time getting approved for lines of credit. Luckily, you have the power to raise your credit score. You can start by paying more than just the interest on your credit card.
With some time and a financial self-control, you can get your credit card game on track. Call if you have questions on how to amp up your tax savings to free up some cash to pay down your credit cards.