Paul McGerrigan, CEO of
| Ask the Expert

Ask the Expert: How can I control my credit card spending?

Our weekly financial FAQ series of posts continues, this time looking at how to control credit card spending.

Q: How can I control my credit card spending?

A: Whether you’re facing credit card debt, or you’re just looking to control your finances a little better, there are a variety of things that you can do to control your credit card spending.

Do you have to use your credit card?

1) Of course, if you can, the easiest way to control your spending is to not use your card at all!

2) If you have enough money in your current account or savings, consider using that to make your purchase, rather than a credit card, especially for purchases such as petrol, food and clothes. This way, you won’t have interest to pay back on top of the payment itself.

3) Many of us do of course use our cards and in this scenario paying off the card in full is the best option if you are in a position to do so.

4) The reality is many of us use cards because we want to spread the cost of a larger payment over a period of time to pay for something we need or want now. The important thing to do (which the vast majority of us don’t) when using a credit card in this way, is to set a clear reschedule plan to repay the capital and not to only think about affording the minimum monthly payment. The repayment plan you come up with maybe 3 months, 6 months, 12 months or even longer. The key is to have a plan and work toward paying off the capital amount you borrow from day 1.

Helpful Hints

Only use a credit card if you need to

Unless you're very disciplined and clear your balance each month in full it can be dangerous to use your card for purchases when you do not have to.  When your statement arrives, the temptation can be to only pay the minimum and keep the capital amount in your current account. Suddenly, you find you have a balance on your credit card you had not planned.

Don’t let Incentives entice you

Don’t let incentives encourage you to increase your debt. Sometimes, you’ll be offered rewards for using your card, for example, free airline flights. However, these benefits should never incentivize you to spend on your credit card. 

Don’t take your card on a night out

If you are going out for a night with friends or colleagues, having a credit card with you can make you more likely to offer to pay for extra rounds. Try to only take the money you think you’ll need for the night, and your debit card. That way you won’t be tempted to spend more than you actually have.

Reduce your limits

If you have to have a credit card, but want to make sure you don’t spend too much, make sure the card has a low limit. This will help you resist the urge to put everything on your credit card. If you make your payments in time always and use you credit card, the credit card company will sometimes increase your limit without you requesting it. If you don’t want to increase your spending speak to your credit card company and ask them to reduce the limit back to what was.

Do not have more cards than you need

Only hold the number of cards you need. It can be tempting to apply for and hold 2, 3 or 4 credit cards. By doing this you increase the limit you have available and the temptation to put smaller balances across a number of cards and this can exacerbate an issue with too much credit card debt. 

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