March 28, 2011

Breaking Credit Card Debt

Being in debt is no fun, but having fun costs money and that is what got you in debt in the first place. Credit card debt can creep up on you if you aren’t keeping track of your spending habits. Here are 5 things that are keeping you in debt that you might not even be aware of.

Bargain Shopping

We all love a great deal, and you may think that because something is on sale, that you are doing yourself a favor by making that purchase. But, before you buy, ask yourself if you really need this item. If you do, then if it is on sale you are saving money in the long-run. If you are buying it just because of the discount, then you are spending money that you shouldn’t be which of course isn’t helping you.

Your Friends

This becomes a problem if you are always going out to dinner/movies/bar etc. and spending money with your friends. Of course I am not saying don’t hang out with your friends, but find other ways to socialize that don’t cost money. Host a game night or go on a hike. I understand that this is unrealistic every time you get together, but try to incorporate free activities into your social circle when you can.

Credit Card Rewards

Many credit cards that are out there now offer various rewards on your purchases. While these rewards can really benefit you, be careful to make sure you can make your payments at the end of the month. Just because you are racking up airline miles by that outrageous charge on your card, doesn’t mean it is worth it if you can’t pay off your balance.

Tax Refund

If you are fortunate enough to get a tax refund this year, then lucky you! But just because you are getting a lump sum of money, doesn’t mean you need to go and spend frivolously. I know it may seem like you deserve to treat yourself, and that this is “extra” money, but be smart about it and use the refund to pay off some of your debt.

Gift Buying

Just because your friend spent an excessive amount on you for your birthday, doesn’t mean you need to do the same. If you are trying to stick to a budget, remember it is the thought that counts when it comes to gifts. If he/she is a true friend they will understand your financial situation and won’t resent you for not over indulging for their birthday.

Can you think of any other things that are keeping you in debt?


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