If you’re struggling with debt and trying to dig yourself out, you need to eliminate as much spending as possible so you can funnel extra funds toward debt repayment. That’s especially true when it comes to credit cards. When you charge a new purchase you don’t just pay the amount on the price tag. You’ll actually pay a whole lot more in interest and finance charges, which is why you should stop using your credit cards as long as you are in debt.
Unfortunately that is often easier said than done. You know you shouldn’t be buying anything unless you can afford to pay cash for it, but you just can’t seem to help yourself. So rather than walking out of the store empty-handed you try convince yourself that it is okay to whip out the plastic just this once.
Here are five of the most common excuses people use to justify unplanned charges on their credit cards:
This is just too good a deal to pass up
You weren’t really planning to spend any money but you just happen to be in the right place at the right time. There’s a big sale on an item you’ve had your eye on and the timing is just too good to be true. It’s a sign that you’re meant to have it! It’s not in your budget of course, but you’ll never see another deal like this again, right? Right?
The rewards points I earn will make it worth while
Credit card companies don’t offer points and rewards out of the goodness of their hearts. They do it because it makes them a boatload of money. Earning rewards on purchases that you were going to make anyway (like gas and groceries) makes sense, but buying unnecessary items just to earn points toward free music downloads or a gift card to The Olive Garden is foolish. Also, if you aren’t paying your credit card balance in full every month then those rewards points are costing you a lot more in interest charges then they’re worth.
I’ll pay if off as soon as I get paid (for real this time)
How many times have you uttered those words with the best of intentions? How many times have you sworn to pay off your cards and never carry a balance again? Did you succeed?
Yea, that’s what I thought.
It’s an emergency!
Your car needs a new transmission. Your washing machine just died. Your water heater is leaking all over the basement floor. These are all examples of the unexpected expenses that everyone faces from time to time. If you have an emergency fund to tap into you could easily cover the expense. But since you don’t you end up charging it and paying finance charges for years to come.
I work hard. I deserve to treat myself once in awhile
Listen, we all deserve a treat now and then. It’s important to reward yourself once in awhile, especially when you’ve been making sacrifices and busting your butt to pay down your credit cards. But be realistic and don’t go overboard. Sure the $1200 flat screen TV will look beautiful in your family room, but it will seriously hamper your efforts to pay down your debt.
Have you ever found yourself using these common excuses for charging unplanned purchases? Are there any other little lies you tell yourself to justify purchases?
Mike Collins blogs at WealthyTurtle.com, a personal finance site that focuses on increasing income and building wealth.