Wednesday 7 May 2014

How To Control Spending With Cash Back Credit Cards

It’s not always easy to watch what you spend when you like to shop a lot and the things you buy happen to be expensive. Then there is the possibility of running low on cash in a time when you really need cash. Both situations could get you into financial problems. And a credit card, depending on how well you use it, could get you deeper in debt or be your way out.

It’s Not Free Money

Cash back credit cards may add to your dilemma because these offers allow you to get what may seem like “free money.” For instance, when you buy items at a retail store, you can ask for an additional amount — in cash — to be charged to your credit card. Other cash-back programs from various credit card companies may offer you a small percentage of what you spend. You have the option to get the small percentage in cash (i.e., you could get 5 percent back on groceries) or as points for your credit card (i.e. get enough points and you may get a free trip from the credit company).

To avoid overspending on your credit card by frequently getting cash, plan out your purchases. Maybe you forgot to bring money and you have to pay for taxi fare. You can duck into a gas station, charge a few items, and then ask for cash. Consider using the cash-back option only in emergencies or when you only, truly need cash.

Take Control of Your Finances

Other than being smart about when to get the cash-back offer, the best way to control your spending is to choose your credit card well. There are many credit cards that offer cash-back programs; compare interest rates, annual fees, rules about expirations, redemptions, and forfeitures, and policies. In other words, read the fine print so that you know what you’re in for when you use the cash-back offer.

In theory, credit cards are meant to help you out. For one thing, you don’t have to bring a thick wad of cash wherever you go. For another, you can save what little cash you have on you and use your credit card to get what you need. But sometimes the temptation to buy things or acquire services can be so great because using your credit card will feel like you’re getting stuff for free, and you forget that you will be billed for the things you charged.

So try to control your spending. Splurge less, plan more. And be smart about cash-back offers.

Do you have have any questions or suggestions? Write in comment section.

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