How much should I put on my credit card?

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How much should I put on my credit card?

There’s nothing wrong with using a credit card. However, it can get you into a lot of trouble if you’re irresponsible. It’s important that you track your spending and do your best to pay off your balance every month. 

Many people struggle with this question: how much should I put on my credit card?

There’s no simple answer as it varies from one person to the next. For example, you may be able to spend and pay off $2,000 per month with no problem. But the next person may run into major financial difficulties if they went down this path.

Here are some questions you can answer to help determine where to draw the line:

1. What’s your credit card spending budget?

This is the first question to answer. Once you have a clear idea of your credit card spending budget, you can take steps to stay within it. Without a budget, there’s a much greater chance of overspending and regretting it in the near future. 

2. Have you been able to stay within your budget in the recent past?

Playing off the question above, be sure that you review your performance in the past. If you’ve been unable to stay within your budget, it’s likely because there’s something wrong. Look into changes you can make, such as increasing your budget or reducing the amount that you spend on your credit card every month. 

3. What’s your plan if you can’t pay your balance in full one month?

Will you make the minimum payment? Will you pay as much as you can to minimize the interest charge? You hope that this never happens, but you never know what could go wrong. Having a plan is critical to taking swift and appropriate action. 

4. Do you have a system for tracking your credit card spending?

If you want to stay within your budget, it’s a must that you have a system for tracking your credit card spending. Neglecting to do this can result in a big surprise when your statement period comes to a close. 

Final thoughts

If you’re worried about overspending, put your credit card away for a month. From there, examine your spending and saving habits to determine if it worked. You may find that you no longer need a credit card. 

For most people, middle ground is the best option. This means access to a credit card and using it responsibly. 

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