You know how, at any laden dinner table, your eyes always seem to be bigger than your stomach? Well, on certain sale days, your eyes can seem bigger than your wallet. The difference, though, is that overloading your dinner plate means you’ll just fill up the compost bin faster — but overloading your credit card will give you indigestion that can last for months.
Fortunately there are financial antacids you can take to keep your credit from becoming bloated while binging the blowout buffets of deals on offer. (For the other problems caused by rich food, try Beano.)
Read the fine print
We’re paying more attention to the nutritional information on food labels because they warn us about fat that can clog our arteries. Well, we should do the same with our credit card agreements. Make sure you know how interest is charged, and what your rate is, because that stuff can stop your heart instantly.
The Financial Consumer Agency of Canada, a federal regulatory department, uses the example of a flat screen TV. It’s pricetag of $1,000 TODAY ONLY!!! sounds great. But put it on plastic and pay the minimum each month and it will take you almost 11 years to cover that bill — at a cost of $989 in interest. Pass the Tums!
To get a handle on your true costs, try the agency’s credit card payment calculator.
Fill your plate strategically
To get the most value from a smorgasbord, you need a plan: a small portion of potatoes leaves more room, on the plate and in your stomach, for the goodies like shrimp. Similarly, the non-profit Credit Counselling Society encourages us to map out a strategy before we hit the mall.
Use an online budget tool to decide the size of your plate. One big-ticket item — even at a great price — might cover the whole thing, leaving you no fiscal room for the little dessert-like things. Society president Scott Hannah recommends spending no more than you can comfortably repay within three months. As with eating, every mouthful is going to require time to work it off.
Step away from the table
No matter how good the food is, or how plentiful, you need to take breaks from eating; you can only undo so many buttons on your jeans, after all, The same is true when shopping. Force yourself to take a rest. “Bad decisions happen when you’re tired and when you’re hungry,” says the credit society’s Hannah.
So give yourself a time limit for your deal-hunting, then put down the credit card and step away from the cash till. (And never undo your jeans in the mall, unless you want to get to know the security staff.)
Freeze some for leftovers
The beauty about freezing leftovers is that they can be enjoyed on a day in the future if you’ve saved some from that day you cooked up a storm. You can do likewise with your credit cards. Don’t max them out on a crazy sales day. Leave yourself a little room on your credit limit, to cover future emergencies and contingencies (like going wild at all the sales that will come in the months ahead).
Watch out for fast calories
Scarfing down a chocolate bar gives you a sugar rush, then turns your thighs to mush. Similarly, drawing a cash advance on your credit card gives you a quick hit of energy, followed by a hard hit of interest. It’s the equivalent of a loan, with interest being charged from the moment you took the money. So your new tablet is costing you more money every second until it’s paid off. The better plan? Hit the ATM instead. And munch on an apple to stabilize your blood sugar.
Don’t take your time at the table
The longer you sit at the dinner table, the more tempted you will be to keep eating. When it comes to credit card balances, the longer you take to start paying them off, the easier it gets to keep postponing the pain — and the deeper the hole can get. So pay your balance in full if you can. If not, be sure to make at least the minimum payment. And you don’t have to wait for your statement to arrive; you can start making payments any time you’d like.