How to Avoid Credit Card Overspending

A shopper hidden by shopping bags and purchases.

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Overspending with your credit card is so easy. You walk into the store, fully intending to get just one thing, and before you know it, you've spent 10 times what you planned. Dealing with the consequences of overspending isn't fun by any stretch of the imagination.

The problem with overspending, particularly with credit cards, is that it leads to big balances that can hurt your credit score, make it harder and more expensive to pay off your balance, and get you into debt. After overspending, you have to face the reality of what you spent and adjust your spending to make up for your accidental indulgence. The good news is you have complete control over your credit card spending and with some guidance, you can avoid overspending.

Don't Forget That You Have to Pay It Back

With credit cards, there's such a disconnect between making purchases and actually paying for them that you hardly even realize you're spending money. You don't feel the pain of the purchase the way you would if you were using cash, which is one of the reasons that people tend to overspend with credit cards.

This tendency was demonstrated in a 2001 study conducted by Drazen Prelec and Duncan Simester of MIT’s Sloan School of Management. The study found that participants were willing to pay more for a purchase, specifically tickets to a basketball game, when they used credit cards over cash.

There's also a certain je ne sais quoi with credit cards that stimulates spending. In the 1980s, a series of experiments conducted by Richard Feinberg showed that the presence of credit card logo, for example in a store or on a website, encouraged consumers to spend more. It's like the logos were a trigger for spending, similar to the way that Pavlov's dogs began to expect food when he rang a bell.

Avoid thinking of your credit card as free money, remembering that you'll have to repay whatever you purchase. Hold yourself accountable for what you spend on your credit card, spending as if you were actually using cash.

Consider Your Current Balance Not Your Credit Limit

If you've managed your credit well and have a good income, your credit card issuer will reward you with a bigger credit limit. You don't have to use all your available credit just because it's there. While more available credit expands your purchasing power, having a big credit limit isn't the same as having a lot of money in the bank.


Using too much of your available credit can negatively affect your credit score, especially as your balance creeps higher toward your credit limit. Ideally, your balance shouldn't exceed 30% of your credit limit.

Since paying your balance in full is the best way to avoid getting into too much debt, let your current balance influence how much you spend. Set your own personal credit card spending limit spend based on your income and other expenses, not only on your credit limit. Monitor your credit card balance, not just your available credit, to be sure you're not exceeding the spending limit you've chosen based on what you can afford to pay back. You can ask your credit card issuer to lower your credit limit if you that will help you keep your credit card spending in check.

Be Cautious Juggling Multiple Credit Cards

Generally speaking, the more credit cards you have, the easier it is to overspend. Multiple credit cards increase the amount of credit available to you and give you more opportunities for spending. Multiple credit cards also mean you have to manage your balances among all the credit cards and take more caution with keeping your combined balances within your personal spending limit.

It's hard to say how many credit cards are too many, but for a lot of people, one credit card is enough. When you're tempted to open a new credit card, consider why you're interested. Is it to get additional perks, to better manage your finances, or are you looking for ways to spend more money?

Leave Your Emotions out of It

Did you realize you're more likely to spend more money when you're sad? A 2008 study funded by the National Science Foundation, proved that people spend more when they're sad by showing subjects either a sad clip or a neutral clip, then allowing them to make a purchase. Those who were shown the sad clip were willing to pay almost 300 times more for their purchases. It's possible that participants were unaware of how their emotions decisions affected their spending decisions.

Stress, sadness, anger, jealousy, and boredom can all lead to overspending. If you're upset, postpone shopping trips until you are in a better mood so your emotions don't cause you to overspend.

Use Your Credit Card Only for Things You Would Have Purchased Anyway

This rule is counterintuitive for many credit card users. People tend to think that credit cards are for purchasing things they can't afford. This is one of the reasons so many people are in debt over their heads — they've used credit cards to artificially extend their purchasing power. Use your credit card for purchases you would have made anyway, not for things that you ordinarily would not buy because you could not afford them. 


A good rule of thumb is to purchase only what you can afford to pay in full each month. That way, you're never forced to carry a credit card balance that's outside your means.

Let Your Financial Goals Guide Your Spending Decisions

Overspending will almost always hinder you from your financial goals. The impact may not be directly or immediately recognizable, but too much overspending will definitely affect your progress towards your goals of paying off debt, building up savings, or retiring early. Consider where you want to be financially in the next 5, 10, even 25 years. As you face spending decisions, consider whether your choices will help you reach your financial goals or make it harder to reach them.

Leave Your Cards at Home

No credit card, no spending, right? Your willpower may not be strong enough to overcome retailers' million dollar marketing tactics. Carry your credit card only when you're shopping for a specific purpose — buying groceries (with a list) or purchasing a new appliance. Otherwise, you risk using your credit card to fund unplanned purchases.

If you're prone to credit card overspending, you have to take control of the situation. Put your credit cards away until you could become more disciplined with your credit card spending. Some credit cards have a freeze/unfreeze option that allows you to temporarily lock your credit card so it can't be used. Preventing yourself from using your credit card helps protect your credit and your finances period forcing yourself to use only cash and debit cards will help you avoid the problems that come from overspending with credit.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Kluwer Academic Publishers. "Always Leave Home Without It: A Further Investigation of the Credit-Card Effect on Willingness to Pay."

  2. Journal of Consumer Research 13. "Credit Cards as Spending Facilitating Stimuli." Page 199.

  3. National Science Foundation. "Misery, Not Miserly."

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