Use Credit Card Features to Control Your Spending Habits

In response to new and more stringent regulations regarding consumer protection, credit card companies have unveiled a whole range of new card features that are intended to help you manage your money and track your expenses. Some of these cards – like Chase Freedom, to name just one – are pretty helpful, especially if you have a hard time keeping up with your monthly purchases, sticking to a budget, or figuring out exactly what is the best way to quickly and effectively pay off your credit card balances and save more money.

Most of these new menus of features include on that allows you to isolate a specific purchase and pay it off sooner in order to avoid paying excessive interest. Or you can list some everyday expenses for recurring purchases like groceries or gas, and the card will put those into a special category and let you pay them off each month – even while you're carrying other purchases over as an outstanding balance. These features will not make you a better consumer without your input – because all they will do is help you organize your expenses, keep track of them in a more understandable way, and avoid paying too much interest. It's still up to you to make payments on time and control your spending habits or impulses. But with a little motivation these tools can do wonders to help you get your finances squared away.

The best thing to do to really leverage credit card use to your advantage is to use all of these new features while also using a card that has some good perks. It's important to find a card that matches your spending or your lifestyle, too, because what rewards one consumer may not do much to help somebody else. If you never go out to eat in restaurants or travel very much, for example, it doesn't make sense to apply for cards that reward you with frequent flier miles or double points for eating in selected restaurants. But if you buy lots of gasoline and also shop inside the gas station for buying things like beverages, your daily newspaper, and your lunches while you're on the go, then a gasoline company credit card with rewards might be just the ticket. Some of them give you rebates on all your purchases including those inside the store – not just ones made at the gas pump – so the idea is to tailor your credit card to your own unique spending patterns.

But do read the credit card rewards terms and guidelines carefully. Some rewards may not kick in until you've spend a certain dollar amount, for instance, or you may have to spend a certain amount every month in order to qualify for special perks. Many frequent flier programs will have expiration dates on them, for example, so you need to keep the card active by using it at least once in awhile – otherwise you risk losing your rewards. Most cards reward you a lot more for shopping with specific merchants on their list, and there are cards that limit how much cash back you can earn – whereas other cards set no caps and have no expiration dates.

If you are one of those credit card customers who never carry a balance and always pays your entire credit card bill off before the due date, then you probably don't have much use for spending and budgeting controls. But you may still enjoy some of the features offered by your card company. You can use the categorized annual expense reports, for example, to help you itemize your business expenses for tax purposes – and you can analyze your spending patterns and habits to look for new ways to save.

There are also some simple customer preferences you can set up through your online credit card account, so that whenever you approach a certain spending threshold you get an email notification to let you know you're about to max-out your budget. You can pick whatever threshold or dollar amount you like, too, so that if even if you have a credit limit of $1,500 you can get “approaching your credit limit alerts for whatever amount you want. If you decide you only want to charge a maximum of $150 a month on that card, for example, then despite the fact that you have a credit limit that is 10 times higher you can get alerts each time your spending or balance exceeds $150. That might be handy if you are trying to stick to a tight budget or wean yourself off of the habit of charging everything to plastic. Those alerts are also great for security reasons. You can be notified whenever the spending on your card hits a certain dollar amount with a 24-hour timeframe, for example. So if someone steals your credit card information and goes on a buying binge you'll be alerted before they get too far out of control.