5 Steps to Keeping Your Credit Card Balances in Check

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A man checks his credit card balance on his computer

There’s a reason the word “balance” is associated with borrowing money on your credit card. Yes, your balance is the amount of money you owe on your credit card. But taking a slightly more poetic approach, “balance” also refers to keeping things in proper proportions. Or, as it relates to your credit card, keeping your available credit high and the amount you owe relatively low. Here are 5 steps you can take to strike a proper balance with your credit card usage.

1. Track Your Credit Balance Online

The first rule of owning a credit card is to keep track of how much you charge. Sign up with your credit card issuer to receive credit card statements and balance information online. That way, you can patrol your spending from the convenience of your computer or phone to keep your balance in check. Many financial experts advise keeping your credit utilization ratio below 30%.

2. Know Your Spending Weaknesses

As you track your credit card usage, take the opportunity to learn more about your spending habits. Look at your past purchases to find your spending weaknesses—areas where you tend to spend a little too much discretionary money. Knowing that you spend too much on food, for example, can help you steer clear of using your credit card to grab a quick bite to eat. And it will help you keep your spending and credit card balance in check.

3. Plan Your Credit Card Use

Make spending goals each month and plan out exactly how much you want to put on your credit card. This will force you to prioritize your purchases and avoid spending money mindlessly on your credit card. A lot of people use their credit cards for specific budgeted categories like gas, groceries, and/or utility payments. Whatever you decide, stick with your credit card spending plan, which should include a way to pay down your balance before the end of your billing cycle.

4. Change Tactics for Unplanned Expenses

There are times when you may spend more money on your credit card than you normally do. Think about holidays or vacations as an example. While it’s always best to budget for these expenses, you should adjust your tactics for paying down your credit card balance if you run into unexpectedly large expenses. When you know that your credit card spending is higher than your usual monthly spending, it may be a good idea to make a higher monthly payment. If making a higher payment isn’t an option for you, it may be a good idea to make more than one payment during your payment cycle.

A man checks his credit card balance on his computer

5. Adjust Your Spending

If you find yourself putting more money on your credit card than you’re comfortable with, don’t be afraid to adjust your spending appropriately. Especially if you’re trying to pay down a credit card balance, lower your monthly credit card expenditures as you plan out your monthly budget. Remember to use the 30% utilization rate rule as your guide. If you’re comfortably keeping your credit card utilization ratio under 30% every month, you’re probably in a good spot with your credit card spending.

When it comes to your finances, finding balance is key. Follow these 5 steps to keep your spending in check and strike a healthy balance between your credit card usage and available limit.