Here are some important questions to ask yourself before shopping with a credit card:

1. Do I really need this?
Let’s be honest: many things we buy as consumers we never really NEED, so you should definitely prioritize your spending. Make sure you have room left in your budget for the necessities (i.e. groceries, prescriptions, electric/heating bills, etc.) before you spend on things you WANT. A new pair of shoes doesn’t typically fall in the list of things you need, unless of course you have none to wear! Every purchase you add to a credit card will add up if you do not pay in full at the end of the month.

2. Will I wear this more than once?
Sale items are always very tempting but are also usually impulse buys. A pair of jeans for $19.99 is very tempting. However, if you are only buying them for the price but don’t think you will wear them more than once, what is the point? Make sure you are going to get the most out of what you buy. You don’t want to be stuck with a bunch of unwanted purchases just because they were on sale at the time. Again, every purchase on a credit card will quickly add up; with interest rates likely to negate any “savings”.

3. Do I have something similar to this already?
Consumers tend to repeat purchases out of habit or personal preference. Is black t-shirt is very similar to another black t-shirt that you already own? If you are in a crunch for money, don’t spend on things that you might already have. Do laundry more if you love that black t-shirt so much, but it is a waste to double up on something you already have (or something that looks almost identical). It’s not much fun seeing multiple, yet similar purchases on your credit card bill. It’s like a bad case of double-vision. (And double-cost!)

4. Is the brand name worth it?
Brand names frequently carry an association of quality with them…but they also have a hefty price tag! Sometimes, you can get the same quality for a lot less if you choose a less popular brand. Even so, if you’re planning to purchase this with a credit card you might just choose to wait until you have the cash to pay for it.

If you feel like to purchase things just for the sake of it, leave your wallet in the car and do some window shopping instead. It is always better to save your money than regret a foolish purchase at the end of the month when your credit card bill arrives. Use your credit card wisely and you’ll actually be able to do more shopping, not less.

Photo: Álvaro Daniel González Lamarque

Related Articles:
Sites to Shop if Avoiding E-Bay
When Teens Stop Shopping, It’s Time To Worry
How to Recession Proof the Holiday Season

Further Reading

• How to Pass Your Own Stress Test (0)
• How to Save More, Automatically (0)
• Shred It Up: Which Financial Docs Can Go Now (0)
• The ABC’s of Budgeting and Finance : P – T (0)
• Are You in Denial About Your Money Matters? (0)

Tags: Brand, Credit card

This entry was posted on Thursday, October 23rd, 2008 at 6:10 am and is filed under Credit. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.