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BillSavings > Blog > Credit Cards > For This Recession, Put Away the Plastic

BillSavings.com Blog

For This Recession, Put Away the Plastic

Posted By Frank

It tends to be a natural reaction to lean times, it seems, to increase our reliance on credit cards when money is tight in the hopes that later on things we'll get better and then you can pay off your credit card balance when the economy begins it's recovery. The numbers back me up on this line of thinking, as there was a 7% annual rise in U.S. Household credit card debt. Yet with the recession winding up to be much worse than anyone expected, this may be a time to put the plastic away, hunker down, and try to hold out with your financial situation intact, according to a recent article in the Wall Street Journal.

Much of what drives this debt is a combination of needs and wants. Often times, according to an HSBC Direct survey conducted in August, we like to splurge on ourselves as a reward or release from the daily stress of our jobs and puling obligation. 42% of the 1,084 consumers they surveyed charged up their credit cards because they “deserved” it.

To get control of your credit card use, especially in fragile economic times, it's best to track what you're spending your money on. Go through last month's credit card bill and walk yourself through what you spent money on and why. Chances are you'll be checking off a lot more wants then you thought, and you can wean yourself off of those purchases. Understanding how and why you spend money is an important part of reigning in your spending and helping you tighten the belt while the market and economy is in chaos.

Category: Credit Cards

11/19/2008

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