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Using Credit Card Statements to Reduce Your Spending

Posted on 02 June 2010 by admin (0)

Last night I held a family meeting chez Gutterson. Why? Because there were a few line items in my credit card statement that I didn’t recognize, and it was time for someone to man-up and explain .. or it was time for me to do some investigation. Now, mind you, I don’t carry balances on my credit cards, but I do keep a close eye on what’s being spent, and so should you. I do this not because I distrust my family – quite the contrary – I do this because it is so easy for fraudulent charges or charges for things no longer in use to be charged to credit cards.

What does this little story about my life have to do with you getting out of debt? Well, in my last blog I suggested that you start keeping your credit card statements and receipts as the first step toward regaining control of your spending.  So, I tell you this story to make my point that taking care of your financial life is something that takes attention and diligence. It’s not something you do once and then never do again. It’s not something you do only when you are in a bad financial condition, it is something you always do. Paying attention to how much you spend and what you spend it on points out the opportunities you have to reduce your spending, alerts you to fraudulent charges, and, importantly, it is an ideal way to teach your kids how to be responsible with money.

So, if you’ve got credit card debt, first take a look at my last blog for strategies to reduce your debt, then read on below for strategies to identify easy ways to reduce your spending going forward.

Go ahead and get out your credit card statements now. You are going to go line by line and look for the top three spending offenders:


We’re all intrigued by the latest toys no matter how old we are. The most recent is the iPad. I have nothing against the iPad (in fact I’m considering buying one), but before you buy that, or a new espresso machine, or a new power tool, ask yourself this question: do I really need this, or am I better off using this money to reduce my debt or increase my savings? In my case with the iPad, I’m thinking my Kindle suits me just fine for the moment and I’d rather have the $800 in the bank.

Auto-Pay Items

This includes all those things that companies so kindly “allow” you to set up to be automatically charged to you credit card on a periodic basis, often at higher prices after the “introductory period”. Examples: gym memberships, magazine and newspaper subscriptions, club memberships. If any of those things are on your statements, consider cancelling the ones you don’t use and shopping around for better deals on the ones you do use. Play the game to your advantage – read the New York Times online for a year then get another introductory rate, or switch gyms for a while and see if you like another one better.

Fraudulent Charges

Are there any line items on your credit card you just don’t recognize? If so, call your credit card company to determine if it’s a valid charge and you just didn’t recognize the vendor name. If it’s not a valid charge, tell the credit card company to cease paying any future charges (they will initiate an investigation), and get the name and number of the company itself and contact them to tell them to cease billing you. With internet shopping especially, it is very easy to miss the sneaky ways some vendors get you to sign up for memberships to clubs that have dubious – if any – value.

Just a final note and follow up to my last blog: I suggested that one course of action if you are truly in over your head with debt is to negotiate a reduction in debt with your credit card company. Since then I have negotiated on behalf of two clients and gotten initial reduction offers of up to 60% of the outstanding balances. Credit card companies have their own reasons for doing what they do, so I can only guess, but my sense is that they would rather get something than nothing. So, if bankruptcy is a real threat, and your credit rating is already damaged, you may want to consider this. Give me a call at 212-308-5495 or send me an email at if you need assistance.

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