How to Use Credit Cards to Monitor Your Spending

First let's discuss how to use a credit card for your benefit.

1. Find a card that gives you cash back. I recommend American Express Blue and Discover Card.
2. Everytime you use it, realize you will pay that amount when the credit card bill comes
3. Repeat of #3, don't ever carry a balance. Pay your bill in full each month.
4. Take advantage of the online features of your credit card website to track where you spend your money.

I pretty much use my credit card for everything I buy. I never carry a balance from month to month. I watch my balances online so I know how much I've spent and how much I need to pay at the end of the month. I use my cash back to reduce what I owe the credit card company. I use my credit card data to see where I spend my money each month and where I need to cut back on my spending. Dining out creeping up this month? I better cut back and find something at home to eat. If I use cash I tend to lose track of where I spend the money.

Don't even get a credit card if you will do any of the following:

1. Know you won't pay the balance in full every month.
2. You don't realize your spending the equivalent of cash every time you use it.
3. You won't go back and see where you are spending your money and make adjustments to stay within your means.

I repeat. Don't get a credit card if you won't pay it off every month. The first month you can't pay it off, cut it up.

I'm kind of the opposite of most people. If I have cash in my pocket I tend to spend it on silly stuff like frozen cokes and shakes. For some reason, it doesn't make sense for me to use a credit card on this kind of purchases so I won't buy them if I don't have cash. Most people find it hard to spend cash but easy to spend on credit. I fear not being able to cover the credit card bill at the end of the month and tend to cut back on spending.