A Kardashian credit card habit on a pauper's budget

The Kardashians are renown for their indulgent lifestyle, and while credit cards are an accessory rather than a monetary requirement for the reality stars, the rest of us run the risk of falling into miserable credit card debt if we even try to keep up with their extravagant spending.

So how do you look a million dollars without sending yourself into credit card debt? Here’s a clue. A credit card is a great resource but it’s not your answer. Sure, armed with a shiny new credit card you can head out and get into that real Kardashian stuff – like Gucci and Prada clothes.

Here’s another clue. You’re likely to get yourself way over your head in debt if you try to keep up with the Kardashians and fill your Donna Karan wallet with a variety of maxed-out credit cards or keep upping the limit on your one favourite piece of plastic.

When you’re just starting out in the wide world of finance, sticking to a low, say $500, limit on your credit card is the best thing you can do. As your financial savvy grows, it’s tempting to increase that dollar limit but in most cases, it can just mean more retail therapy and more debt. The astute can foresee wheels starting to turn, as the cycle of debt takes hold. There is absolutely no justification in the theory of increasing your credit limit just because you can.

The larger the limit on your credit card, the easier it becomes to put all your expenses on the card and possibly spend more money than you can afford. After all, you’ll have much more time to pay it off, won’t you? The reality is that the banks are raking in the money by charging you interest. This makes that bargain shopping not so much of a good deal after all. What’s more concerning though, is the mindset that credit card money is “free” money. It’s not, so keep it in check.

As time goes on, your bank will typically offer you a credit limit raise. If you are living with a manageable credit card but perhaps need more funding for a special purpose, it’s fine to go ahead and raise the limit. However, if you are quite happy with the limit you have already, it’s not a crime to say “no”. Living within your means is better than living hocked up in debt. Unless, of course, you happen to be like the Kardashians and live on celebrity endorsements alone!

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