The Simple & Painless Way I Control My Credit Card Spending

I was at a get-together recently and I had this conversation with someone that, if I’m being 100% honest,  I think I have had mentally about a thousand times before it actually happened out loud.

“I need your help with my money.” my friend asked.

I, eager to help, said, “Sure what can I do?”

“Well, I’m good with money, but it’s my damn credit card spending. I always pay it off in full every month, never had a late payment, or an interest penalty. But every month it feels like this card wipes out all of our funds. What should I do?”

“Umm….” I said, “Have you tried not using the card?”

“Well yeah but,” he continued, “I get cash back for everything I do. If I’m spending $2000 a month, I want to get back my $20 to $80 depending on what I’ve bought. It seems like a waste otherwise.”

“I totally get that. I’m the same way. If I’m spending money, then I want to get something in return, whether it’s cash or points.”

“Right?!!” he said. I could see that he was surprised that I was on his side with all of this. He probably thought I would go into a rant about credit cards being evil.

“So what do I do???” he asked.

“I’ll get back to you” I said.

A few weeks went by, and I was still about that question. I think we’ve all been there. It seems like every month, your credit card bill is larger than you want it to be. For years now, I look at how much we spend as a family, and it drives me mental thinking about our credit card statement. I obsessed over this question. How do I control credit card spending, without cutting them up?

Every month it’s the same cycle.

Credit card bill comes in. I look at it, puzzled as to how this could have happened. I decide something needs to be done about it. I have no clue what to do besides saying, “I’ll just pay closer attention to what goes on the card.” Fast forward a month. Credit card bill comes…

I have given this a ton of thought lately. Here’s how I see it:

  • I need want to have a big enough credit card limit, in case there is a need for a large purchase (car repair, or something sudden).
  • I view myself as an adult (largely because I’m older than 18 and have kids, and that’s the lowest definition I can come up with), and therefore somewhat good with my money.
  • I deserve things and stuff (two very technical words there, but you get the point).
  • I haven’t had a problem paying off my credit card every month, so there really isn’t a problem.

That last line is the important one.

I haven’t had a problem paying off my card every month, so there really isn’t a problem.

That’s like saying, “I haven’t had a heart attack yet, so I must be healthy.”

It’s just one of those little lies I tell myself (and come on, we all do it). I think because I meet my monthly bill obligations, I think I’m doing a good job adulting. When really, I’m not.

This needs to change. I need to get better with my money, if I want to break free and move on to bigger and better things. And to get free, I need to make changes. They don’t have to be huge changes, but I do have to change. Remember: it’s the little changes that add up.

Simplest Way To Control Your Credit Card Spending

The simplest way would be to cut up your credit cards and go to cash, or debit with no overdraft protection. That will sober up your spending pretty quickly.

But I don’t really like that idea, mostly because it feels like I’m leaving money on the table. I have a cash back card (actually two), and I like to use it for my everyday purchases. Because around November, I get a nice check for the spending I’ve done through the year. If I don’t use a card, then I don’t get that cash back.

Instead of going cash-only, I’m calling the bank and lowering my limit. I don’t ever, EVER want to spend more than $3,000 a month on my card, so I’m not giving myself the opportunity to be able to. That’s the new limit; that’s the amount I can stand to get in the mail every month and say: “Oh, it’s in line with our plan.

This is going to put me on guard. Big time!

If you have ever had a card declined at a store, you know how embarrassing it is. You imagine the clerk thinking, “Looks like someone didn’t pay their bills,” while you fumble around searching for another way to pay.

That’s a situation I’m going to avoid.

Andrew Daniels is the blogger behind Family Money Plan, where he writes about how he and his family paid off their mortgage in 6 years and are now beginning their journey towards financial freedom.

Image via Unsplash

  • Gloria Wallace

    Lowering your card limit will increase your % credit use, which is taken into account in your credit score. You never want to be consistently using more than 60% of your credit limit on a credit card. Ideally you’d want it to be even less than that. That’s why it’s also a good idea not to close credit cards that you do not use anymore, and instead use them to maintain a low % credit use across all your credit products. This is doubly true if it is a very old card, as age of credit (or average age of credit) is also taken into account when calculating credit score.

    • Hmm, I closed my oldest credit card from 10 years ago. Nothing happened to my credit score…

  • LynnP2

    This is not the best financial advice for the reason @disqus_I5v1bI0Mna:disqus explained. I’d also prefer to have a higher limit in case of a true emergency (obviously backed up my an emergency fund account is ideal here). I think there’s a much easier way to spend on your credit card: budget your money, and treat credit card spending the same as you would treat money going out of your checking account. I use YNAB for this, but there are any number of programs that work, including a good ol’ fashioned spreadsheet. The important part is that the money is “spent,” and no longer available in my budget, as soon as I swipe my card – NOT when I pay if off.

    • Completely agree, this is what I do as well. As soon as I swipe my card I count the money as being spent in my budget (I use Mint). I also pay my credit card bill weekly, to keep better tabs on how much has been spent. This keeps the money level in my checking account lower, so I don’t get lulled into thinking I have more money to spend than I actually do.

  • I agree that paying off your card weekly and using a program like YNAB are great ideas, but I’m tired of everyone being super obsessed with their credit score. If your score is low, by all means focus on raising it. But if you have a good credit score, and are not planning on buying a house or applying for a car loan in the near future, I think we can ease up a little on our credit utilization rate. It’s not the end all be all of financial measures.

  • Lisa

    I feel like we have all become so greedy in terms of “getting something back” in order to make a purchase. For 75% of Americans this is what’s really killing them because even if they “get back” those advantages most people won’t sit down and calculate the “cost” of using that card if you can’t pay it off IN FULL, RIGHT AWAY, I do Not even wait for statement. Credit interest in no joke and adds up so fast that it will not only wipe out any “rewards” you receive but add to you overall cost of purchase VERY quickly. Bottom line, if I don’t have the money in the bank to make the purchase I don’t use credit cards. If you go grocery shopping and use a card, then I go home and make a payment the next day usually. And as far as keeping credit utilization at a small % (i.e.20- 30%)to help with credit, I don’t worry about that unless I am planning to make a purchase such as mortgage, car, etc. Then I’ll just go put a months worth of my expenses (groceries, gas, bills,etc) on my credit card prior to applying for a large loan, save my month’s worth of money and once the loan is approved use my cash to pay off the credit card immediately. This is the BEST way to stay out of debit but have available credit. Lowering available credit limits really does affect your utilization % as well as age of credit on your reports. Keep your oldest accounts open whenever possible…

  • Summer

    I’m not sure I really see the value in voluntarily lowering your credit limit if you’re already diligent about paying off the balance each month and therefore aren’t paying interest anyway. I have a $13,000 limit on my Venture card and it never occurs to me to overspend. I don’t see the limit as free money or even as a wishful temptation. It’s just an arbitrary number that means about as much to me as the number on tag of my jeans. I realize that not everyone has the self-control to abstain from overspending, but I think this is the point we really should be driving home above anything else. Having the common sense, willpower, and self-control to NOT spend irresponsibly just because your credit card hasn’t declined yet is a far more realistic and sustainable goal than having to essentially treat yourself like a child who can’t be trusted to only take one cookie from the jar.