Examining bad credit card habits

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So many people have credit card debt and feel they have nothing to show for it.   A valuable exercise is to look back through the last year of credit card statements and look at your purchases (if you have no idea where those statements are look them up online and look forward to our post on organizing your financial records!).  The question you want to ask yourself is: What did I charge that I couldn’t pay off? 

 

BASIC LIVING:

 

If it was rent you need to reconsider where you live and why you can’t afford it.  When you take into account interest charges you could probably be renting a room in the Playboy Mansion without the added stress of crippling credit card debt.

 

If it was utilities or regular bills like cell phones, cable, gym memberships, Netflix, TiVo, or online clubs create a budget you can live with or cut your expenses.  FYI, cable is not a necessity. We promise.

 

If it was clothing sell what you don’t wear and make due with what you own. Hint: if your closet and dresser are too full to find something to wear you have too many clothes.

 

If it was eating out suck it up and cook at home. That $4 burrito will cost less than a buck homemade and you won’t owe interest. 

 

If it was school books, supplies or tuition apply for student aid, grants or loans which have much better rates and repayment options. Or buy used books, borrow from friends and survive without the ultra shiny space pen for note taking.

 

ENTERTAINMENT:

 

If it was movies, games and computer equipment sell what you can or use what you already own.  Trade items you don’t like with friends and buy used next time (with cash).

 

If it was books and magazines get a library card and use it.  If you must have subscriptions ask for renewals for your birthday or Christmas.

 

If it was music downloads and CDs pick up free music at the library or exchange with a friend.

 

If it was concerts buy a CD -they’re cheaper- and play it in your car at the local park.  Or limit your concert goings and stick to the cheap seats. 

 

If it was clubbing, drinks, cab rides and hangover cures go visit your local AA.  Just kidding.  Limit your recreational time to what you can afford.  That may mean one fabulous club a week or four dives a month.  And just say no to the age old question “would you like to open a tab?”

 

If it was a vacation or timeshare then create a budget that saves money for those events BEFORE you book them.  A vacation is a luxury, entertainment and escapism.  It is not necessary and not as much fun when you consider those seven days in “paradise” will result in seven years of credit debt hell.

 

MISC:

 

If it was purchases that can only be described as “stuff”, make up, action figures, decorative coasters, anything from the SkyMall catalog, then you need to find a support group.  Or give yourself a weekly or monthly allowance which you can spend on any thing you want, even Slurpees from 7-11 at 1:23AM, without tracking. 

  

If it was car repairs or other emergencies start an EF right now.  FWIW, ‘pimpin’ your ride’ is not a valid emergency nor a reason to whip out the Visa.

 

If it was groceries and alcohol stop eating OR create a simple list of food you need to survive and a budget.  You’re in debt.  This is not the time to pretend you’re stocking Emeril’s dream kitchen or host college frat rush week. 

 

If it was medical bills evaluate your medical insurance and then start a Hospital EF right now.

 

 

What did you charge on a credit card that you couldn’t pay off?