Four Tips to Curb Credit Card Usage and Spending

Keep Your Credit Cards Out of Mind and Out of Sight

Cardholders can curb credit card usage by leaving their cards at home and keeping them “out of mind and out of sight”. It might sound silly but you can start by using more cash! Psychologically, credit cards make spending extremely convenient. If you remove convenience out of the equation, this should in turn allow you to better manage your impulses to use credit every chance you get. Moreover, when you use cash you are much more likely to feel the impact of your spending (i.e. breaking a $100 bill will affect you more psychologically than just swiping for purchases). If you feel like it’s too difficult to leave all your credit cards behind, maybe consider just leave 1 or 2 in your wallet.

Limit Your Total Credit Card Count

The more credit cards you carry in your wallet the harder it is to limit your credit card usage. The more credit cards you have the more options you have to mess up and spend more freely. If you limit your total credit card count, you'll be well on your way to lowering your credit card usage and your spending.

Avoid Sales for Unnecessary Things

This might sound counterintuitive but if you want to curb credit card usage, sales might not always be your best friend. Sales are great for what they are, but if your goal is to consume less and buy less in general, it’s often times better to ignore the sales and not even look at them. Sales entice us to buy more due to savings and they often make us justify our spending. It’s a bit of an oxymoron since it feels great saving money, but in order to save money you’ll also be required to spend it. So, if your ultimate goal is spend less, ignore sales and discounts, until you’re in a better financial position and in a better place regarding your budget.

Start Using More Cash

Start using cash more! This will make you more conservative in your spending by default. Just think of it this way: “What will have a bigger impact on your spending habits? Taking a $100 bill out of your pocket and paying for something in cash or using a credit card to thoughtlessly swipe and charge a purchase to your credit card?”. Using cash is a great way to reinforce the positives of sticking to your budget and change your spending habits. Although it’s unrealistic to use cash in every scenario, mixing up your payment methods by using cash for purchases can help you see things differently and rewire your brain. This should in turn have a positive impact on your spend habits and help you curb credit card usage.

What about Alternative Options as Opposed to Credit?

Promotional 0% Balance Transfers

Promotional 0% interest rates might be able to help you curb usage somewhat, but the problem with 0% credit cards are that they often times make people feel “safe” when spending on frivolous purchases. Also, you will typically pay an upfront charge (usually 4%) when balance transferring to a 0% card.

Personal Loans to Consolidate

Yes, you can definitely take out a personal loan to consolidate your debt but understand that your monthly payment will become higher. Moreover, if you have bad impulse control this may not be the best move for you, since this will set all your credit card balances to $0 and have a “wealth effect” on your spending (i.e. you may feel like you have more money than you do since your balances are paid).

The best way to curb your spending and credit card usage is by keeping your credit cards out of mind and out of sight! You can also start using other payment methods to help mix things up. All in all, the following tips should help you cut usage.