Controlling Credit Card Usage (3 Minute Debt Break)

2022-06-17

Credit Counselling

Credit cards can be a valuable tool for personal finance. If you can control the spending, and pay off the balances regularly there are no issues. But it’s easy for credit card spending to get out of control. Before you start cutting that plastic in half, consider these steps in credit card spending: analyze, monetize, prioritize and stabilize. These can help you become more consistent and successful whether you quit credit cards cold turkey, reduce your use of credit cards or erase credit card debt from your life for good.

Person on their laptop holding a credit card

First… Analyze. Create a list of all the items you have been charging to your credit cards. This will help you drive to the heart of how you use credit and offer clues for how to reduce or eliminate problem behaviours. Then it’s time to figure out how to plan and pay for these expenses with cash going forward. 

Next… Monetize. Expand your list by adding a dollar amount next to each item. Grab your credit card statements and go through your charges one by one. Be sure to add interest charges to the bottom of your list. This is the cost and consequence of using credit cards and not paying the balance in full every month. 

The next step is to Prioritize. Now that you know how much you’re spending on credit cards – including interest charges – you need to determine whether that would fit into your monthly budget or spending plan. In other words, can you afford to pay cash for those purchases? You may discover you can afford to set money aside in your budget to pay for these purchases without jeopardizing your fixed monthly expenses or putting anything on your credit cards. 
Finally, the last step is to Stabilize. Unmanageable debt is stressful. It can strain relationships and negatively affect your mental and physical health. If you are in a situation where your finances are causing you or a family member stress, it’s time to stabilize your debt and consider options to eliminate it for good.

MNP offers a Free Confidential Consultation and several Life-Changing Debt Solutions to help you find the right path toward a financial fresh start. A Licensed Insolvency Trustee will meet with you to review your finances, understand your challenges and identify your options.

You may qualify for Bankruptcy or a Consumer Proposal which could help you become debt free within anywhere from nine months to five years from your initial filing. Or you may benefit from another alternative. No matter your situation, your Licensed Insolvency Trustee will help you make the best choice for you to defeat your debt, reach your goals and get back to life.

 

Subscribe to MNP 3 Minute Debt Break on your favourite streaming service.

 Listen on Apple Podcasts  Listen on Spotify  Watch and listen on YouTube
 Listen on Google Podcasts  Listen on tune in  Listen on SoundCloud