Good morning Dinks. You have read me preach time and time again about not overspending on your credit cards. I know firsthand how damaging to your life financial problems can be. Not so long ago when I was in my early 20s I was living off my credit cards. I would use my entire paycheck to make minimum monthly payments and then be forced to pay my rent late. By the time I hit my late 20s I had five credits and they were all maxed.
Finding a balance between spending and overspending
Now that I am in my 30s (34 in October) and live a financially responsible life I always try to find a balance between spending responsibly and not being tempted to overspend. I want to continue using my credit card and paying it off every month so I can rebuild my credit score. However, I am always afraid to swipe my credit card in case I fall back into old bad habits. The truth is I actually don’t even carry the card in my wallet very often because I’m afraid I will start spending.
Having a balance on my credit card stresses me out. So now I try to make small purchases on my credit card that I know I can pay off at the end of the month. I find the key to being financially responsible is to make monthly payments on my credit card but keep the spending within a limit I can afford to pay off- currently I don’t spend more than $200 biweekly on my credit card.
Purchases that you should always make on your credit card:
Monthly recurring payments. I set up my gym membership to charge my credit card monthly. It’s only $45 per month and it keeps my credit in good standing. How so? Well in case I forget to make a purchase on my credit card one month I know that I will always have my gym membership charged to keep the card active.
Basically recurring payments make sure I use my credit card each and every month. It’s also an amount that I can afford to pay off. $45 a month is affordable and it doesn’t put me in danger of getting back into debt.
My weekly groceries. I always charge my groceries on my credit card because Nick and I get 4 x the cash back rewards on all grocery and dining purchases. It is approximately $100 a week and lets us accumulate cash back extremely quickly. Last year we received $75 in cash back rewards with a credit to our monthly statement.
It’s definitely worth it to get free money by making purchases that you would normally make on a monthly basis. I don’t believe in spending money that you normally wouldn’t spend just to get a free gift, but I absolutely believe in maximizing all your financial benefits if you are spending the money anyways.
What are the credit card purchases you make each and every month?
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