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1 Crazy Credit Card Tip That Really Works

You have most likely heard various suggestions for controlling your credit card spending ranging from turning your credit card into a Popsicle to picking up the scissors. But are those tips really helpful or are they bad financial advice? Here is the scoop on four common suggestions for managing credit card spending.

Freezing Your Credit Card

It's actually a pretty simple and effective idea. You put your credit cards in a bowl of water and then put the bowl of water in the freezer. The idea is that it prevents you from making impulse purchases because you have to wait for the ice to melt before using the card again. A search reveals many accounts of people who have literally put their cards on ice and attest that the magnetic strip will work. However, if you microwave the block of ice in an attempt to get at the card quicker, then there is a good chance the strip will no longer work. There are really no drawbacks to this strategy.

Cutting Up All of Your Credit Cards

Hold the scissors! If you cut up all of your cards, even if you do not cancel them, the account will eventually probably be closed due to inactivity. This could actually decrease your credit score and make it more difficult to get credit in the future. Optimizing your credit use is a much better way to handle multiple cards. Another solution is cut up all cards but one or two and either use the freezer method or give the card to a family member for safekeeping.

Giving Your Credit Card to a Friend or Family Member

As long as you give your card to someone who is extremely trustworthy and will not charge purchases to your account, this can be a good solution in the short-term. Sit down with the trusted friend or family member and give detailed instructions on when they should give you the card, such as a broken car or medical emergency. Make sure that you pick someone who will be immune to your sob story in case you decide that you just have to go on vacation to the beach this summer.

Lowering Your Credit Limit

It seems like a good idea because then you will be forced to keep a low balance, but actually lowering your credit limit can decrease your credit score. According to MyFICO.com, about 30 percent of your credit score is based on your credit utilization percentage, which is the amount of credit you have available compared to the amount of credit you have currently used. If you have a high credit utilization percentage, then your credit score will decrease.

While these solutions can be helpful as you are learning to effectively manage your credit and stick to your budget, it is important that you use these strategies as a stepping stone to gaining will power and practicing good credit management.

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