When it comes to credit cards, you might think of yourself as a low-key rock star: You always pay on time and in full and maintain excellent credit. Compared with others, you’ve mastered the basics. And yet you — yes, you — might be using credit cards to spend too much.
Don’t let your good credit card habits lull you into complacency.
“It’s kind of like going to the doctor and having your cholesterol tested and seeing that it’s normal … and then saying, ‘Hey, I’m in great health!’” says Brad Klontz, a certified financial planner and associate professor of financial psychology at Creighton University in Omaha, Nebraska. “Financial health has many elements.”
Here are some signs that your credit card balances are becoming bloated and ways to rein in your spending.
You’re falling behind on savings goals
When you’re overspending, your savings goals — such as an emergency fund with three to six months’ worth of basic living expenses or a retirement fund — are often the first to suffer. Neglecting them long term could put you in a precarious financial position.
“You just want to make sure you’re first putting money aside or paying for things that matter the most to you,” Klontz says.