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11 tips on what to do if you’re worried about overspending on your credit cards

When high living costs hit people’s pockets, it can be tempting to spend more on your credit cards. But it’s all too easy to slip into debt if you don’t manage your repayments.

If you’re worried about how much you’re spending, read on. This guide explores practical strategies to help you manage your debt and regain control of your finances.

a customer smiling and handing over a credit card

How can I offset the impact of the cost of living?

Soaring energy prices, rising inflation and a slowdown in wage rises have all combined to put a real squeeze on personal finances. With money sometimes hard to come by, it’s understandable why so many people may be relying on their credit cards more than ever.

Credit cards offer a convenient and immediate way to pay. They can also help you to budget for bigger buys. But it’s important to remember spending more than you can afford to repay can quickly get out of hand.

What are the dangers of overspending on a credit card?

High interest rates 

Many credit cards come with a high rate of interest. This means you could pay far more than just the original purchase price if you don’t pay off your card monthly. 

Hidden fees and charges 

It’s important to read the terms and conditions of any credit card. Some have low interest rates or opening deals, but these may be offset by extra charges or fees. These can quickly rack up the amount you owe. 

Impact on your credit score 

If you regularly overspend on your credit card and don’t clear the balance, it could damage your credit score. This may make it harder for you to borrow money in future. 

Debts can get out of hand 

You may find yourself struggling to clear the balance on your credit cards. Debts can quickly spiral out of control, making it even harder to meet your repayments schedule. 

Get help if you’re worried about your finances

How can I start to reduce my credit card spending?

It can be hard to face the fact you’re spending too much on credit cards or know where to start doing something about it. Here, we’ve shared 11 steps to help get your spending under control and clear your debts.

Where to start

1. Be honest with yourself about your finances

Start by gathering all your credit card statements. Understand the total amount you owe, the interest rates you’re paying and the minimum monthly payments you’re making. Tracking where your money’s going is the first step in finding where you can cut back.

2. Create a realistic monthly budget

Work out how your spending’s split between needs and wants. Make sure you cover all your essential costs first. Then you should be able to set aside a monthly amount towards repayments to help you reduce your credit card balances.

3. Tackle any high-interest credit cards first

If you’re spending on multiple cards, pay off those with the highest interest rates first. If they all have similar rates, consider paying off the smallest debt first. This may give you more money over time to meet the larger repayments.

Make borrowing work for you 

4. Consider a debt consolidation loan 

This is a type of loan that lets you combine multiple debts into a single, more manageable payment. Personal loans may offer lower interest rates than credit cards. 

5. Transfer multiple credit card debts on to a single card  

Many credit cards let you transfer your existing debts onto one card. Look for cards with lower interest rates than you’re currently paying. But watch out for any transfer fees and introductory rates that may change later. 

6. Cut down on unnecessary expenses 

Set a monthly budget that cuts back on non-essential spending. It helps to make temporary lifestyle changes. Do you really need that daily coffee or subscriptions to multiple streaming services? Once back on an even financial keel, you can look at whether you want or need to

Don’t suffer in silence – help is available

7. Talk to your credit card company 

Talk to your card issuers if you’re struggling with repayments. Explain your situation. Inquire about hardship programmes or temporary rate reductions. They may be able to waive late fees or penalties. And they’ll be more likely agree to this if you can show you’re committed to paying off your debts.  

8. Seek professional help 

If you’re unsure how to start reducing your debts, a credit counselling agency or financial advisor will be able to give expert guidance. Many organisations offer impartial advice on dealing with money concerns, often for free. 

How do I get back on a firm financial footing?    

9. Teach yourself healthy financial habits 

Only use your credit cards when absolutely necessary. If possible, pay off the full balance each month. And consider other ways to pay when shopping, like debit cards or cash. Budgeting apps can help you track and amend your spending habits too. 

10. Build up an emergency fund 

It’s good idea to have an emergency fund for unexpected expenses. This can help you avoid spending extra on your credit cards and give you financial peace of mind. Aim for at least three to six months’ worth of living expenses. 

11. Keep up to date with your personal credit score 

It’s good financial practice to regularly check your credit score and personal credit report. If you’re clearing credit card or other debts, it can show how you’re doing and any areas that need further attention. 

Be brave and take that first step 

Dealing with credit card overspending and debt can seem like a daunting task. But with patience, careful planning and expert help you can start freeing yourself from spending worries. It may take time, but financial freedom is more than possible to achieve. 

Having difficulty managing your credit card debt?

Further help for debt and money worries