We all love the convenience of credit cards but it’s so easy to misuse them and one can quickly end up in a terrible debt situation! Take a look at these warning signs and think about them before you next swipe.
1 – You don’t know what you credit card balance is
It’s easy to lose track and end up spending more than what you can afford to pay. You should get into the habit of checking your balance at least once a week to make sure you’re on track and that you haven’t overspent. It’s easy with a banking app.
2 – You get stressed when you see your credit card statement
This is a definite warning sign that should get you a little worried. If you’re stressing about your statement then it means that you have spent too much and are likely in more debt than you realised. Listen to your inner voice and cut down on your spending. Rather focus on paying off some of the debt and getting your finances back on track.
3 – You can only afford the minimum payment
This is a severe warning sign that you’ve misused your credit card! If you’ve reached this level then you really have to take action immediately and stop spending on anything that is not absolutely essential! It’s really hard to change your spending habits but only paying the minimum payment means that you will remain in debt for a long time and the fees and interest rates will cost you a lot of money! Debt is expensive and can easily get worse each month.
4 – You purchase groceries on the budget facility
The budget facility on your card should only be used in emergencies or for planned expenses. Buying groceries and other essentials on the budget facility is a very bad choice and will quickly lead you into further debt. As soon as you need to start buying essential items on credit then you should know that something is wrong! Spend some alone time with your journal and see if you can work out a budget to help you manage your spending.
5 – You have to apply for a new card as your current card is maxed out
Applying for a new card simply because your current one is maxed out is a severe sign of misuse and you should seek professional advice to help you out of your debt. The problem is that debt will never disappear and by taking out a new card you simply make the problem worse. Instead of burying your head in the sand, take charge of the situation and take action.
6 – You shop when you’re sad
Retail therapy is a real thing and it’s dangerous for your credit card. The occasional shopping when you are sad can be helpful but forming a habit and using your credit card for short-term relief is really bad in the long run. The stress of debt will only make it worse and you could end up in a cycle of shopping to make you feel better about your debt which in turn makes you take more debt, and that stresses you more. It;s a vicious cycle.
7 – You don’t worry about the price
A sure sign that you’ve become too complacent with that credit card of yours is when you shop without looking at prices. It’s interesting to know that using cash makes one more conscious of what we spend. Catch yourself next time you simply pick up an item.
8 – You’re never certain which card will work
Not only can this be embarrassing, it’s also a warning sign that you should take seriously. If you have several credit cards and you don’t actually know which one will work at the store then you’re in real financial trouble! Consider writing down the balance of each one along with the expected payment and make a point of knowing exactly what your debt situation is.
9 – You transfer money from one card to pay another
Transferring money from one card to pay off another leads you down the slippery slope of debt entrapment. It’s a scary thought that you need debt in order to pay other debt. You should consider consolidating your debt but do this with a debt counsellor who can help you get out of the situation. Use the opportunity to empower yourself and grow from the experience.
10 – You’re embarrassed to discuss your credit card spending
This is generally a sign that things aren’t right and if you’re embarrassed about how much you spend on your card and don’t feel that you can discuss it with anyone then chances are good that you really should be sharing it with someone. Confide in a close friend and share your experiences. Often just admitting that we have a problem can help us find a solution.
Please don’t ignore these warning signs as dealing with debt can be stressful to you and your family. Take yourself on a coffee date and really think about your shopping habits and create a little budget for yourself to help you manage your credit card better.
If you want to chat to a Financial Adviser please feel free to use this contact form and I’ll put you in touch with a registered FSP; it’s someone I use myself!