Ficonomical Blog

Credit cards have dramatically changed the way people spend money. Swish, swash swipe and go that’s what they tell us to do but don’t forget that credit cards are the leading cause of debt in USA. But if you use your card wisely you can enjoy its benefits without suffering from debts. Rule one is never to use card to buy that you cannot afford. Living beyond your means leads to debt. Second rule is not to use card for daily expense like food, gas or clothes etc as it’s difficult to pay for what has been used up already. For such expenses stick to cash or debit card.

Money can buy a lot of things but happiness is not one of them. Don’t let anyone convince you otherwise. So keep it aside for those other things while you learn to have fun without it. Stop buying books and movies and everything else that you don’t use more than once or twice. Borrow from friends or join a library. Don’t indulge in impulsive buying and don’t buy food when you are hungry. You will not only cut your food bills but also avoid wastage. Instead of money on expensive entertainment, get out and enjoy the beauty of Mother Nature in all its hues.

Saving money is a matter of attitude. You can live frugally and still have fun. The easiest way to start is to turn down your air conditioning and heating. Wear warm clothes inside the home and use fans in summers. You will not only cut down your electricity bill but also global warming. Instead of buying video games, try services like GAMEFLY. Cut down going out for movies eating out as they are the biggest expense. Instead, take services like Netflix and arrange barbeques and eat-outs in your backyard with friends. It is great fun at a fraction of the cost.

It is a lot easier to carry plastic instead of real cash and good replacement for cash transaction but you cannot completely do away with cash. Debit cards are hailed to be as good as the hard cash as it draws on the money in your account but remember that all establishments do not accept debit cards. Stalls and small stores do not accept them neither can you pay your cab fare with it. When your brats demand money, debit card is of no use. Fort all the debit cards in your pocket, you still need to keep a little cash handy for emergency.

Debit cards are a great if you are starting out to replace cash transactions with plastic but they cannot be compared to credit cards. They only take work on the basis of the money that is already in your account and since you cannot monitor your transactions all the time as only a few stores have this facility of checking your current balance. It can be really embarrassing to have your card turned down after you have made the purchases. It can be even more troublesome if you don’t have a credit card or cash in your pocket. Some debit cards that allow you to overspend charge you higher interest rate than a credit card.

A lot of people get into credit card debts due to the fact that they become reckless with their credit cards. They learn to their hazard that spending now and paying later is not an easy thing to deal with. If you are in such a situation, there is nothing else except to deal with the situation. But most important is your behaviour after you pay off the debt. Your spending habits must become more disciplined and reasonable. It comes naturally when you restrict your expenditure while paying off the debt. But some people pay off and then go back to their old ways. Don’t allow yourself to be sucked into credit spiral again.