My Top Hack For Keeping My Credit Card Spending Under Control

My top hack for keeping my credit card spending under control: This is so simple. Just aggregate your bank balances and credit card balances together EVERY time you look at them! This makes you feel like you are spending cash when you are really spending on your card. I love the credit card rewards, but it's so important to monitor spending when using credit cards!

I’ve been using credit cards for well over a decade now. I got my first card in college but due to my frugal upbringing, I never went crazy and never bought more than I could afford to pay in full each month. In fact, I can only think of one possible month in these last 13 years of having a credit card that I carried a balance over from a previous month (other than a couple times we’ve used 0% credit cards).

Are Credit Cards Good or Bad?

There’s certainly a heated debate out there about whether credit cards are good or bad. There are some that generalize that the credit card companies are the only ones that really win (they make millions and millions of dollars on credit card interest after all!). There are others that love credit cards and are able to reap the benefits without any downsides.

I totally understand both sides of this discussion.

After all, having access to a credit card means you don’t have to wait to buy things that you really want, but can’t yet quite afford to pay for yourself. It’s simply too tempting for a lot of people, especially those lacking in experience with money (and self-control). And, of course, there’s always the temptation to justify purchases based on thinking we deserve things because we work so hard or that our income will go up in the future and it won’t be a big deal to pay it off later.

If you’ve struggled with credit card debt in the past or present, it really may be best to avoid it at all costs. The interest rates and late fees are just too high to make them worth taking that risk. You have to know yourself personally.

However, I believe that there are many people that can use credit cards completely responsibly. I completely disagree with Dave Ramsey’s opinion (even if he does try to state it as a “truth”) that “responsible use of a credit card does not exist.”

I fully realize that credit card debt is a problem in the United States due to the prevalent focus our society places on materialism and immediate gratification.

I also know that there are many, many people that do not have issues with having additional credit available to them and are financially savvy enough to avoid the traps of debt.

The arguments against using credit cards rely on one underlying theme: the psychology behind money. Studies have proven that people spend more when paying with plastic than with cash.

The real problem is ultimately that many people don’t view spending with credit cards the same as they view parting with cash.

Hacking Credit Card Psychology

As someone who has definitely never paid more than $20 in credit card interest EVER, but has earned thousands of dollars in cash rewards alone, I don’t buy it that avoiding credit cards is the solution, at least not for a significant number of people, especially those that read personal finance blogs (wink wink).

Further, I absolutely insist that not only does responsible use of credit cards exist, but that I do not spend more by using credit cards for purchases than I do when using cash. Why?

I always look at my bank account balances and offsetting credit card accounts TOGETHER, never separately.

For example, if I have $5,000 in my checking and savings accounts and $2,000 currently on my credit card, I view this as having a $3,000 cash balance.

I am a meticulous expense tracker and always know (within a couple days of transactions at most) exactly how much I have in my bank accounts and also on my credit cards. I use YNAB for my budgeting, which treats credit card transactions the same as cash or debit transactions, essentially tying up your money as soon as it’s spent even if you use a credit card that isn’t due for a month or more.

My focus is on the actual spending itself, not on the method of spending or when I will actually have to pay the cash.

I have effectively changed my mindset to adopt a view that all spending (credit, debit, cash) is equal and made the link between swiping the plastic and money leaving my bank account regardless of the fact that this isn’t actually what is occurring in reality.

Are Credit Cards Right For You?

By tracking my expenses and monitoring my bank and credit card balances together, I am able to reap the rewards of credit card benefits without the downfalls of paying interest charges and overspending. Some of these benefits include:

  1. Convenience: I never have to worry about having enough cash on hand for expenses, running to the bank to make sure I have enough cash for groceries or shopping that week or dealing with envelopes of cash.
  2. Safety/security: The laws protecting credit card users are more comprehensive than those for debit card users. And, of course, you have protections from your money being stolen that you don’t have if you carry cash only.
  3. Credit building: Even if you are anti-debt, your credit score is still used for certain things like determining your insurance rates, potentially getting hired by a future employer and more. It’s important to build up good credit for so many reasons other than just getting more debt! Both mine and my husband’s credit scores are in the 800’s and this is due in large part to our responsible use of credit cards.
  4. Rewards: I estimate that over the last decade, I’ve made at least $4-5,000 on credit card benefits and rewards, mostly in cash. And this is even with living outside the U.S. for several years, a time during which we used our credit cards much less frequently.

Who Should Use Credit Cards?

I really do understand and sympathize with those that think that credit cards are evil. I just also know that just like so many things in life, we need to take personal responsibility for our actions and know ourselves and our own limits. I love what Jessi Fearon shares about her personal decision not to use credit cards for any reason, even if I have a completely different view as it pertains to my own finances.

That being said, here are the things that I think are a must if you are to use credit cards responsibly:

  • Not have any past existing personal loans or other credit card debt balances outstanding
  • Pay off your credit card balances in full each and every month
  • Track your expenses on a weekly basis at the very least, including monitoring your credit card transactions in a detailed manner
  • Stay within your budget consistently each month

If you don’t follow any of these rules, I would recommend getting your finances under control for a significant amount of time (at least a year is a good rule!) before trying credit cards again. Be sure to use your judgment.

Final Thoughts

I am both an advocate for credit card use, yet still completely against consumer debt. You can use credit cards and not have issues with debt. This has been proven by many people, including myself.

The real facts are these:

  • Studies have proven that people spend 12-18% more using credit versus using cash.
  • The average U.S. household overall has $3,600 in credit card debt but for those that do have any credit card debt at all, the average balance is over $16,000.

However, this doesn’t have to be your reality. If you change your mindset by treating all your spending on credit cards as money leaving your bank account immediately, you can get all of the benefits of using a credit card without the downfalls.

What is your view on using credit cards?


13 Responses

  1. I can definitely relate Kathryn. I jumped on the Dave Ramsey bandwagon in 2011 and went full on. Eliminated our debt, stuck to a budget, got an Endorsed Local Provider for our retirement Investing (huge mistake) and even went credit card free. After 5 years of no credit cards, I realized that credit cards CAN be used responsibly because I’m pretty darn responsible. I might as well reap the benefits of security, convenience and rewards. I like 80% of Dave Ramsey’s advice, but as I’ve educated myself more I’m in major disagreement with him on his investing and credit card philosophies.

    1. I think Dave Ramsey does a lot of good overall, but I wish he didn’t have such an us vs. them mentality about things. I totally agree-his investing and credit card philosophies seem to be dumbed down, assuming people can’t educate themselves well enough and make good decisions on their own. Simply not true!

  2. I agree completely with your post Kathryn. because I have used my credit cards responsibly, avoiding paying any interest, I believe they have helped me achieve a very high Credit Score. This has helped me with lower insurance rates. Collecting interest is so much better than paying it.

    1. That’s so true! I feel that this is one of those things where you are actually rewarded for doing the right thing and being responsible!

  3. Really good advice, Kathryn. I’m with you and use credit cards responsibly, pay off the balance every month, and track usage consistently. Another reason I love using Personal Capital. So easy to monitor credit card and checking account balance quickly and easily.

    1. Automation makes it so easy to check everything often and monitor your cards. It really simplifies life (in some ways!).

  4. “I am both an advocate for credit card use, yet still completely against consumer debt.”

    i’m totally the same way. Let’s use credit cards to our advantage, no annual fees, high points, and pay off our balance every cycle so we win win! For me, whenever I swipe my CC for something, I mentally remember approximately how much I have in the bank as sort of a reminder and a precaution I suppose.

    1. I feel slightly guilty that I’m able to get all of these credit card benefits because I know it’s because someone else is paying high interest amounts, but the opportunity is there for all!

  5. Well stated post. I followed Dave R. to get out of debt then through continuing education I went my own way on investing and using credit cards as tools. Ppl who are in debt should NOT use credit cards because they are likely not responsible enough. Once you are debt free, have an emergency fund and are investing for the long term you generally have built up enough self discipline to use credit in a responsible way that gives you several advantages.

    1. I think Dave Ramsey should just stick to his getting out of debt and financial motivation strengths and not talk about investing at all honestly. I’ve never heard anyone that was happy with using one of his ELP’s for investments or even agree with his statements that you can expect 12% from the market (among others).



I’m Kathryn Hanna-wife, mother of 3 and a Certified Public Accountant. I love to budget (really, I do!) , build spreadsheets and spend money on travel, sewing supplies and good chocolate.


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