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How to stop overspending on credit cards

By Garrett

May 10, 2017

As a money nerd and financial coach, I love discovering things that have the potential to change how we think about money. Sometimes it’s a concept, such as the importance of reframing how we think of Needs vs. Wants. It can be as simple as a quote – “Man must choose whether to be rich in things or in the freedom to use them” (damn, that’s deep).

Most recently, it was a tool I came across called Debitize – a free online service that allows you to treat your credit card like a debit card.

Here’s the one-sentence rundown: You link your credit cards and checking account to their service, and every time you make a purchase on your credit card they pull that amount of money from your checking to cover that purchase (and will also pay off your credit card bill automagically at the end of the month).

Why is this such a potentially awesome tool? Well, in an un-scientific study based on conversations with clients and friends, many of us use our bank account balance as a barometer for whether we can spend money on something. We look at our checking accounts, see that there’s $1,500 in there and say “that should be enough for brunch!”

The problem with that approach is that some or all of that $1,500 should be allocated for other things, like rent, utilities, unexpected expenses, etc. It’s quite possible that you shouldn’t be using any of that money to buy brunch. But if you don’t have a budget, and haven’t proactively chosen how much money to spend in any given category, all you can go off of is that pot of money in your account.

This is why the process of moving money out of your checking as you spend on your credit card is so clutch. It allows you to see the direct impact of your credit card spending reflected in your bank account.

Part of what makes credit cards so potentially dangerous is it can feel like you’re not spending your own money – you buy things and your checking account balance stays the same. Sure, your credit card balance goes up, but that doesn’t have the same mental affect on curbing spending as seeing your checking balance go down.

So, Debitize helps solve that problem. Great! However, if you’re going to sign up for something that has access to your credit card and bank information, the logical question is: how secure is it?

The short answer is pretty damn secure. Debitize doesn’t actually store that information itself – they partnered with Plaid to handle that (the same company that Betterment, Acorns and Venmo use). So if you use any of those apps, Plaid is in your life already.

If the thought of handing over your information makes you a little nervous, then do a mental pro/con list. Does the upside of spending less and saving more outweighs the potential security risk? There’s no right or wrong answer, as it all comes down to personal preference. Only do what you feel comfortable with baby boo!

And if you have other questions, they do a good job of answering most basic ones about their service in their F.A.Q. section.

That’s it! Hopefully this simple tool can be a game-changer for some of you and help break the cycle of overspending month-to-month.

Lastly – I’m thinking of sending out more emails like this sharing tools/books/articles I’ve come across that I believe would really help you guys and gals. Is that something you want more of? Let me know my hitting reply and sharing your thoughts!

Oh, and just so I state it explicitly: I do not get any kickbacks or fees for recommending this. I just think it’s a badass tool that can help some of you.

Love,
Gare-in Up My Heart

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