CREDIT CARD TRACKING WILL HELP KEEP YOU OUT OF DEBT
There was a time when credit card tracking became a big part of our monthly budget because like most people our bill was far more than expected.
In fact, most people tend to shop with plastic more often than they use cash simply because it’s easy to do and widely accepted in Canada.
The problem with using a credit card for all of your purchases means it’s very easy to overspend so when you get your bill it can be depressing.
When you use cash the premise behind it is when it’s gone, it’s gone so there are no surprises for your budget.
This is also why using budgeting cash jars is a suitable budgeting target for some people who find that cash keeps them from overspending.
I Need Help With Credit Card Tracking
Dear Mr CBB,
I’m a 30-year-old single woman who budgets her money but I’m not that great when it comes to using my credit card.
Every month no matter what I try I get larger than expected credit card bill in the mail that I struggle to pay in full.
My last credit card statement was $550 which was a surprise to me even though I’m a frugal shopper and was being careful.
I guess I shop more than I think I do but need to get this under control before it gets out of hand.
Right now I was able to pay $4oo on my credit card so I have a bit more to pay before it’s paid in full.
My interest rate on the credit card is 19% which seems high to me but that’s what was offered to me at the time.
I know you will probably tell me to cut it up and stop using it but I like to use it for rewards points and shopping perks.
However, I also find that not having to go to the bank for cash far easier as credit cards are accepted almost everywhere.
I do keep a bit of back-up cash in my wallet but only for times that a shop doesn’t accept a credit card or debit card.
I’m not computer savvy and find that my online credit card statements are frustrating to understand at times.
What do you suggest is the easiest way to keep track of what I’m spending on my credit card each month?
Check Credit Card Status By Tracking It Yourself
You are not alone with the fight against overspending on your credit card so this is a great question to address.
First off, I want to say that we have been in your shoes and it wasn’t until we read the fine print on our credit card statement that we took a stance.
It’s almost shocking to know how much interest is being charged to people who don’t pay their credit card bill in full each month.
There were times before budgeting that thought we were being careful with our expenses only to find out we weren’t.
It’s so easy to tap plastic these days that unless we adopt some sort of credit card tracking plan we most likely will spend too much.
No matter if you have a budget or not credit card tracking is essential to the success of your financial health.
Credit Card Pending Transactions
You can still spend more than you earn even if you are budgeting because I’ve seen it happen before.
When I log online to track my credit card my PC World Elite Mastercard status sometimes doesn’t always show pending purchases which can be misleading to many cardholders.
What is credit card pending transactions?
Pending transactions are deducted from your available credit, are not final, and may differ from the posted amount.
Pending transactions cannot be disputed and generally post with-in 7 days.
For example, if you just made a purchase it may take time for your credit card company to process and post it to your account.
That means that the amount you see as your available credit might not be actual as pointed above, it may differ.
You have to check back every day which can become frustrating when all you want to know is how much you’ve spent on your credit card.
Credit Card Spending Tracker
I know many people including ourselves get mobile notifications when our credit card has been used and it shows us how much was purchased.
This is a great credit card tracking mobile alert which also tells you if you’ve spent over the threshold that you created in your settings.
What I don’t find that it does is tell you how much your current bill is and perhaps that’s because they want you to keep spending.
I don’t know and maybe there are credit cards out there that will offer up a credit card tracking mobile system without having to check an app.
We don’t have our credit card on a mobile app only because if we want to look up anything we do it on our laptop at home.
Even so, those pending expenses have to be factored in and they don’t always show right away or they can be easily missed.
Before I begin I want to talk about the minimum payment on your credit card statement.
If you only pay the minimum payment you are paying far more in interest than you will ever imagine.
For those of you who may be attacking your credit card balances with the Snowball method of paying off debt, this may be a viable option.
When you are not doing so it’s important to pay the bill in full and to stop spending if you find this is not possible.
What is a credit card minimum payment?
Any past due amounts, plus: your statement balance if $10 or less, or the greater of (a) $10 (b) 2.2% of your total statement balance (5% for new accounts issued to Quebec residents as of July 1, 2019), or (c) The interest charges and fees billed on the current statement plus $1. – PC MasterCard
Credit Card Limit
When I received my first Canadian credit card my limit was only $5oo for the month since I was new to Canada and a student.
Over the years I was able to build credit in Canada which allowed me to increase my credit card limit.
The great thing about credit cards is that you can request a credit card decrease.
One of the reasons this may be a viable option for someone who can’t control their credit card tracking is less available credit.
You can’t spend any more than you aren’t allowed to spend so if you decrease your credit card limit this is a starting point.
When we started using our excel budget one of the steps in our budgeting mini-series became all about receipt tracking.
Almost every business I make a transaction with offers me a receipt and if they don’t, I ask.
I want to track what I’m spending for budgeting purposes and you should too.
If you think it’s too much work then you don’t think your finances are worth your time.
You get what you put in and if you don’t then don’t be surprised when the debt starts piling up.
Online Shopping Can Cause Huge Credit Card Debt
If you’re not careful online shopping can also add to your debt load quite easily and why you should track everything.
New research suggests online shoppers are often tempted to spend impulsively, sometimes racking up hefty credit card debt in the process.
Not only are shoppers making a habit out of buying things online, but it’s not uncommon for consumers to spend more money than they planned.
In fact, 42% of respondents said they had blown their budgets while shopping online at some point in the last six months.
Website and Mobile App Downtime
Aside from asking for receipts for credit card tracking keep in mind that websites go down from time to time.
If you are using your credit card when you don’t have access to your mobile app or online banking website you may be spending money that you can’t track until it’s up and running again.
This is why asking for your receipts will always be number one for credit card tracking and for every other expense in your budget.
Don’t let asking for a receipt be awkward as it’s not and a very smart financial move for those wanting to increase wealth and lower debt.
Credit Card Interest Rates
Not everyone gets approved for the credit card they want which means you might find you have a higher than expected credit card annual interest rate.
A couple of suggestions I have are to shop around for a lower interest rate credit card in Canada because you may have missed one that you will qualify for.
You can also see if your credit card company will allow you to consolidate high-interest credit cards with a balance transfer option.
Our PC World Elite Master Card offers a 0.97% interest rate for 6 months on any balance transfer options for new customers.
This is a window of opportunity for you to pay your credit card off in full so you don’t swim in debt for too long.
Credit Card Tracking On Holidays
Another thing to consider is if you plan on using your credit card when travelling out of the country you still need to track your expenses.
It’s so easy to overspend when you are having fun on holidays even if you think you’ve got a travel budget mapped out.
Many of us will just deal with the expense only because we are away from home.
We found ourselves in that situation when we purchased a bucket and spade for our son in Spain so he could play at the beach.
Next time we will pack some toys to bring along with us because paying near $40 was shocking for something we could have bought at the dollar store.
But, in the heat of the moment when you are away from home, it’s so easy to just say yes to plastic.
Another thing to consider is the foreign currency exchange on your credit card statement.
You will need to know what your credit card company will be charging you or else your travel buget will be worthless.
Foreign Currency Conversion Charges
What are foreign currency conversion charges?
When a transaction in a foreign currency is posted to your Account, you will be charged a Foreign Currency Conversion Markup which is a percentage of the amount of the transaction that is charged for purchases and cash advances and deducted from refunds and credits.
The Foreign Currency Conversion Markup percentage is disclosed in your Disclosure Summary.
The Mastercard exchange rate and Foreign Currency Conversion Markup percentage are incorporated into the conversion rate and the Canadian dollar transaction amount shown on your statement. – PC MasterCard
It’s important to check with your credit card company to see what rules they have set out for travelling and foreign currency before you travel.
Even though we are a hard-core budgeting family it still happens to us because we’re human which is why credit card tracking is essential.
No matter where we go we always ask for our receipts so have them handy to add to our credit card tracking sheet.
Don’t be shocked to hear that we brought our budget binder along with us when we went on our recent trip to the UK.
It was easy enough as it’s not too big and it allowed us to continue budgeting while we were travelling.
How To Start Credit Card Tracking
If you own a mobile phone you almost all credit card companies have a mobile app that you can download.
From there you can start credit card tracking although I find that most people won’t do this because it’s out of sight.
It is still a viable option for anyone who wants to know their current credit card balance.
The other option is to log onto your credit card dashboard on your home computer to view a webpage designed for the credit card holder.
This option will allow you to do the same thing as you would get by using the mobile app.
What you have to look out for when relying on either one of the two options above is pending transactions even though they may show in your current balance.
Navigating financial websites can sometimes be overwhelming for people so the next best option is to track it yourself.
We created a simple credit card tracking sheet that you can print and update in your budget binder.
You can also download it to your computer if that’s easier for you and update it as you go like you would for your monthly excel budget.
All you do is ask for your credit card receipt, take it home and input the expense and manually add it up as you go along so you know what you’ve spent .
This option may suit people who don’t fancy trying to wiggle through credit card websites or mobile apps but also as a back-up plan.
Give Credit Card Tracking A Try
To summarize what we discussed today for Maura and everyone else reading credit card tracking is essential to budgeting.
If you find that your credit card bill is higher than expected or you struggle with paying in full each month give credit card tracking a try for one month.
You may find that it helps ease a bit of the stress before the credit card bill arrives because you know exactly how much it will be.
Download your Free Budget Binder Credit Card Tracking Sheet Here!
Discussion: How do you make sure 100% that you are not overspending on your credit card each month? How do you handle going on holidays and using your credit card?
I’d love to read your comments so be sure to leave them below.