How to manage credit card spending

By Liv Steigrad 13 August 2019 3 min read

According to the Reserve Bank of Australia, there were 19.1 million credit card accounts in Australia in 2018. That’s almost one per Australian adult, though of course, some people don’t have a credit card at all, and some people have more than one.

The total balance of all those accounts is $45.5 billion, but the total credit limit is just more than triple that, sitting at around $136.5 billion, with $29.5 billion of it accruing interest.

Yikes!

If you don’t want to be one of the scary numbers above, read on for some tips and thoughts on how to manage your credit card spending.

Set low limits

Credit card companies sometimes tempt you into signing up for their cards with high maximum credit card limits. Why sign up for a card with a $1,000 credit card limit when you could sign up for one with a $5,000 credit card limit, right? Not quite.

Having a high limit isn’t necessarily a good idea.

Credit cards can be helpful for managing cash flow, but if you’re spending more than you can afford, you could end up in a stressful debt situation.

Not to mention, a higher limit could impact your credit score.

Don’t worry about whatever the potential maximum is on your card. Work out what you could actually afford to top out at and set that (or an amount below that) as your credit card limit. You can usually do this online (via online banking) or call up your credit card provider and do it over the phone.

Don’t forget you have to pay the money back

Whatever you do end up spending, don’t forget you have to pay it back.

Whenever you’re considering a purchase, instead of looking at your credit card limit, look at your bank account balance. Just because you can spend $1,000, doesn’t mean you should.

It might be helpful to pause and ask yourself:

“If this money was in my savings account, would I still spend it?”

Because at the end of the day, it’s still your own money that you’re spending, now or later.

Leverage your rewards

One of the benefits of having a credit card is the rewards systems. Travel insurance, points, cashback… they’re all attempts by the credit companies to woo you as a customer.

And sometimes, the rewards can indeed be worthwhile. Sometimes, you can even leverage those rewards to help manage your credit card spending.

Getting cashback? Don’t think of it as free money to spend. Instead, put it straight towards your credit card debt and pay it off sooner. If you get points that you can use to buy vouchers, why not buy vouchers for shops you know you actually shop at?

Hey, you’ll be reducing future shopping expenses you might have put on the credit card!

Set up spending alerts

Whether you’ve set yourself a spending limit or not, setting up spending alerts can be a useful tool to help you keep track of where you’re at.

For instance, getting a notification that tells you you’re halfway to your limit might be enough to stop you buying that extra thing you were thinking about… or it might tell you that you’ve spent less than anticipated, and can afford a little treat for yourself!

Make (more) regular repayments

The best way to manage credit cards is to repay them in full every month. At the very least, you should make the minimum payment (noting you’ll likely be charged interest if you only make the minimum payment).

If you struggle to make sure you have enough for your payment each month, or if you’ve got a larger credit card debt to pay off, you could consider making smaller but more frequent payments.

For example, if your credit card requires you to pay $200 a month as a minimum, you could schedule a weekly payment of $50 instead. That way the money will have been deducted from your account and you won’t be tempted to spend it.

Be careful juggling multiple credit cards

For some of us, it can be a little too easy to get multiple credit cards.

While it might be tempting to have more than one, especially if you want particular rewards, some of the downsides include that it may be more complicated to keep track of it all — and you could overspend.

Let’s say you have a monthly spending budget of $1,000, and three credit cards with monthly limits of $500 each. If you max them all out, you might be in over your head.

It could be pretty easy to keep track of your spending on one card but not the other and not realise that you’ve gone over what you can afford.


Whether you’re thinking of applying for your first ever credit card or you already have one, we believe it’s imperative you do your best to manage your credit card spending. Good luck.

Words by
Liv Steigrad Right Chevron

Liv Steigrad is a creative copywriter with a background in psychology. She specialises in cheeky web copy, and can drink an espresso and go straight to sleep.

How to manage credit card spending