Financing your Habits
If you use your credit card for every little purchase - either because you are desperately trying to earn reward points or because you just have a habit of charging everything - then it’s probably time you take a step back and think about what you’re doing. You especially need to analyze your credit card habits if you don’t pay your balance off in full every month.
What do you buy? If you have some expensive habits that you finance with your credit card then you’re not putting the health of your personal finances at a very high priority. For example, if you use your credit card to pay for something you don’t need, like cigarettes or designer coffee, then you’re financing a habit that will cost you a lot of money in finance charges as well as the sheer cost of the things you’re purchasing.
In other words, you’re spending money to buy whatever it is your habit is, and if you’re putting it on a credit card that you don’t pay off every month you’re spending plenty of money in interest charges.
Credit cards can be a big help when you need to pay for an unexpected expense, but you should really think twice if you’re using your credit card to pay for stuff that you don’t even need. If you can’t afford to pay for your habits then it’s probably time to get rid of the habit. Of course, this is usually easier said than done when you have a habit that isn’t easy to break. It’s unlikely that you can simply decide to quit something you’re actually addicted to based on a desire to curb your spending. You can use it as a really good motivation, though.
The next time you reach for your credit card to buy something that you don’t really need, stop and think about the bigger picture. Your designer coffee costs $5, but putting that on a credit card means that it will quickly double, triple, and eventually evolve into a really expensive purchase if you don’t pay it off. How long do you want to pay for that same coffee?
If you insist upon using a credit card to fuel your habit, at least pay off the balance every month.
