Towards better use of our credit cards, here are the best ways that you should view your credit card purchases in order to help you become more responsible.
Add to the price. When we shop with credit cards, we always make sure that we are getting the best deal possible. If you consider yourself a responsible shopper, then you also understand that by not paying off your purchase, you are adding to the price of the item that you are purchasing. That means that you can easily add 50% to the price of the item by not paying it off and allowing interest and other fees to accrue.
Look at the temporary nature. The things that we purchase that we think we need most often are not. Once you buy something with your credit card and take it home, the purchase is almost devoid of value because you still owe money on it and yet, it does not satisfy that urge you had to purchase it in the first place. If you view your card purchases in this manner, it will help you keep from making them. Things are temporary, but debt goes on for long periods of time. Just think about how long it will take to pay for the item that you want to purchase. Can you see yourself continuing to pay for it in twelve months? That is very possible with a credit card purchase.
Add to your debt load. You keep adding to the amount of money that you owe when you buy things with your credit cards. It is not uncommon to hear of people who owe tens of thousands of dollars on their credit cards. Those who do are in jeopardy of never being able to pay them off, apart from working out a settlement or repayment plan. So, why allow yourself to get there in the first place?
Pay higher fees. When you make purchases and do not pay them off, you incur fees that add to your balances. But you also pay more in other ways, too. When you go to apply for other loans such as vehicles or mortgages, you will pay higher interest rates because your credit score is not what it should be. Life becomes more expensive when you do not view your credit card purchases properly.
Compare to cash. Suppose you pay most of your purchases with cash or a debit card. Doing so will help promote responsible money management practices and will help you keep your balances low on your credit cards. In this way, you will have a proper view of credit cards and their place in your life. They should not command the amount of attention that they do if you employ responsible practices with them.
Your view of credit cards should encompass an overall money management strategy that puts them in their proper place in your financial picture. Use them for the occasional purchase, and then pay them off every month. And, avoid poor credit card practices and uses like balance transfer cards because of the high fees you can incur. If you can do this, then you have a fighting chance of staying out of major debt with credit cards.