Have You Ever Lowered Your Credit Card Limit?
I’m going against the trend here. I have decided that I want to lower our credit card limit. Right now our Discover Card, which is the credit card we use for most of our expenses, has a $2,500 credit line. So far, due to big purchases (contacts + tires for my Honda Civic) our bills have been pretty high >$2,000. I did a quick calculation and realized we have been going over budget by $1,000! My eyes nearly came out of my sockets.
See, I have been noticing quite a psychological dilemma, a trap I thought I was going to be immune to after reading all the horror stories of credit card debt! When we purchase something, instead of thinking we don’t have money to pay for it, I think we have money, there’s a $2500 limit. Sigh, this is really really bad!!!
I was scared of getting a credit card for this very reason. The rewards don’t matter, if we end up spending more money! So, for the next billing period I’m going to ask Discover to decrease our credit limit. I want to go extreme and say $1500 should be our max, but am thinking a limit between $1500 and $2000 (maybe $1750?) will be a good in between limit.
Have you noticed your spending go up when using a credit card?
There are certain positives of having a credit card. Discover has a great portal and offers pretty good rewards for a couple starting out in their financial journey. I like how they add 1 year warranty more to any electronics purchased with the card. We are, also, building up credit, which we will need in the future when we want to purchase a home. But it’s really important to watch your spending. Having a credit line, might make you feel more secure.
I have to say we have been a wee more lenient because we are now earning more. But I want us to avoid lifestyle inflation as much as possible. Here’s a shameless plug.