Dedicated Credit Cards
Credit debt is a huge problem in America. We are a nation of chargers, so much so that in January of 2010, US consumers held 609.8 million credit cards with each person averaging 3.5 credit cards.
Three and a half credit cards may not sound alarming, but consider this: CardWeb.com reports that most Americans who have at least one credit card also have about $10,700 of credit-card debt. This number is alarming, and if you are hoping to save money and become thriftier, the first step you must take isn't clipping coupons or menu planning (though, trust me, I will be talking about this soon), but is, in fact, cutting up most of the credit cards you have and reserving one or two for specific items.
Dedicated Credit Cards
When we began cutting back on our spending after I decided to stay at home with my first born, we made a decision to cut up all extra credit cards and use only two: one for ‘other' expenses, such as bathroom towels or clothes, and one for groceries.
Gone were the department store credit cards. Snipped were the extra credit cards we'd had. We kept two, each dedicated to its own items – and, each paid off in full by the end of every month so we didn't accrue interest.
Today, we still own only two credit cards. The first I use only for groceries. The second I use only for extra items like clothes, birthday gifts, and new tires for the car.
A Game of Math
Saving money is really just a game of math, and it begins not with cash but with credit cards. Cash spending is easy to track; credit cards, not so much. The more credit cards you have, the more likely you are to overspend. It's easy to run to three different stores and use three different credit cards, forgetting what you put on Card One. When you have one card you use for all extra purchases and you pay this card off each month, you're more likely to recall that fifty-dollar dress you purchased at the mall last week.
So today, do this: Go through your wallet and get rid of all the extra cards. Yes, all of them! Don't cry! This doesn't mean you can't spend, it just means when you do spend you will be better able to keep track of what is going out.
You don't have to cut these cards either, as that is hard for so many people to do. Instead, pull them out of your wallet and vow not to use them for an entire month. In the next month, be conscious of what you put on each card. Track your spending, and make sure you can pay it off at the end of the month.