Some term it “invisible money” while others call it “cash advance”. Many euphemisms are used to justify and mask the evils of spending on credit.

Credit cards have brought us much convenience by allowing cardholders to purchase items based on their own financial restraint. However, this trust is broken when cardholders do not have practise financial planning. That is when we hear about gross over-expenditures, individuals mired in debt and people landing themselves in deep shit you never fathomed possible. To avoid such a predicament, here are some important tips and advice that you should keep in mind the next time you swipe your card:

1) Always Spend Within Your Limits

Just 2 months ago, Straits Times published a finding made by Credit Counselling Singapore (CCS), on the top 5 reasons why people get into debt. Guess what? Overspending topped the chart. In other words, cardholders need to develop a strong self-discipline to curtail the urge to splurge. Allocate a portion of your monthly salary for savings and expenses. Manage your cash flow and plan out a monthly household budget that you can tap on for spending.

2) Don’t Drag!

Attempting to repay overdue debts and loans is akin to climbing up a slippery slope, one which is seemingly possible to scale but almost insurmountable. If you are unable to pay up your debts/instalments promptly, your initial debt burgeons due to the substantial interest incurred. . Thus, you are advised to pay your debts/ installments in full and timely to avoid penalty charges or additional interests. If you are not capable of clearing your debts due to cash flow problems, inform your lenders and request for assistance.

3) Financial Courses

You may not be aware of this, but there are many non-profit organisations out there which provide free financial informational talks and education programmes. Credit Counselling Singapore (CSS) is one of these organisations which aims to educate and promote a better informed borrowing society. If you are already in debt, do not attempt to solve the problem yourself. Contact CSS or any other relevant organisations for credit counselling to work out a repayment plan with the banks.

Do check out their website for more information :

4) Think Further

More often than not, we always see the family members of the debtor implicated in one way or another. So before you decide to swipe your card, first ask yourselves these few questions:

  • Do I really need this?
  • Do I have the budget catered for this?
  • Will I be able to pay off?

As a learned and rational adult, a simple cost-benefit analysis (pros and cons list) can be utilised. If most of your answers are “No”, then I suggest that you think twice, no, thrice, before buying.

5) Keep To Just A Few Cards

Some of us may be excited when banks send us invitations to apply for new credit cards. Learn to say “No”. Chances are, you already own what you need and with having too many credit cards, you can easily lose track of your spending. So to prevent yourself from overspending, limit the number of cards you have!

A credit card is like a double-edged sword. It is an all-in-one hassle-free money proxy but if used carelessly, it is can deal a financial fatality. At the end of the day, always remember that the troubles you face also extend to your friends, families and loved ones around you. Think about them before you make another reckless decision!