Can't keep your credit card spending under control? These psychological tricks might help.
The best part of credit cards is actually their worst - it’s the ability to spend money that you don’t have. When you have undisciplined spenders with credit cards, it’s like putting a power drill in the hands of a nine-year-old: the result is uncertain, but it will probably require months to recover from.
If that’s you, here’s how to control your credit card spend:
1. Break the Card
Even without the physical credit card, you can make payments for bills online - you just need the card number, expiry date, etc. You can also make credit card payments without the card at an AXS machine.
So if your spending is out of control, break the card. This will stop you from using casually in stores and diners. Getting a replacement card will take about a week, which is enough “cooling off” time to reconsider big purchases.
2. Get Someone Else to Shop for You
If you’re easily tempted, avoid going into the stores. You’ll be distracted by something, and end up buying more than you need. Instead, give a shopping list to a trusted friend or family member, and pass them your card. Since they’re shopping for you, they’ll follow the list exactly and won’t pile on extras.
3. Compare the Price to Something Familiar
Assign a favourite item to a few price ranges: S$3, S$5, and S$50. For example, your favourite things could be chicken rice at S$3, a music download at S$5, or video games at S$50. Now when you next feel an urge to buy something, compare the price to your assigned ranges. For example:
Say you feel an urge to buy a S$1,000 smart watch. You could compare it to your S$50 price band, and ask: would I rather have this watch, or 20 video games? Would I rather have this watch, of 200 music downloads?
A little bit of contrast can quickly kill the urge to swipe your card.
4. Impose a Discussion on Certain Price Points
Set a rule, between you and a trusted friend or family member, regarding a given price point (say S$100). The rule is that, before any of you buy something at or above the given price, you will contact each other to talk it over.
This will give someone else a chance to persuade you not to buy. Maybe they’ll know a cheaper alternative, maybe they can talk you out of spending altogether. This is especially good for supplementary card holders, since it stops the main card holder from being caught off guard by large bills.
5. Make Yourself Enter Credit Card Details Manually
Even if you are allowed to save your credit card details (some shopping sites allow this), don’t do so. First, it compromises your security if anyone gets access. Second, doing so allows you to “click and buy”. This is how people rack up S$10,000 bills on an online game, or max out their credit cards halfway through the month.
When you are filling out credit card details manually, you are forced to ponder your purchase carefully. It gives you time to back out, and if it’s an impulse purchase then many times you will.
6. Keep Your Credit Card at the Very Bottom of a Packed Bag
Going shopping? Keep your credit card all the way at the bottom of your bag. Use the power of laziness to your benefit: when it’s hard to get to, you’re less likely to resort to an impulse buy. It’s also a good way to keep your card out of reach from pickpockets - a good tactic if you are going to be a tourist somewhere dangerous. Be careful not to break it though, unless point 1 is your intention.
7. Slip it Into a Book that has Some Meaning
Find your favourite book on financial prudence (or a religious scripture if you subscribe to such), and use your credit card to mark an important page. Pick one that explains the importance of savings, prudence, etc. and slip the card in it. Now, you will be reminded of the need for thrift whenever you try to use the card - hopefully it will be enough to dissuade you.
As an alternative, you can also paperclip the card to a photo of family, if remembering grandpa’s words or being reminded of your children will stop you spending.
If you trust yourself with a credit card, you can find the best credit card for you at SingSaver.com.sg.
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