Creating a Budget Using Your Credit Card

A happy family looking at a credit card.

Many people associate budgeting with a checking account, but you can also budget by paying for daily expenses and bills with a credit card. Credit cards can help you manage your expenses, build credit and earn cash back or rewards.

How a Credit Card Can Help You Budget

You may be wondering if creating a budget with a credit card is responsible, especially if you were raised to believe you should only use credit as a last resort. Believe it or not, credit cards can help track your spending and serve as the foundation of a simple budget. Piedmont Advantage Credit Union can help you manage your credit card spending with helpful budgeting tips.

Most people already use some form of plastic to make their purchases, so instead of putting all your transactions on a debit card, consider adding a credit card to your arsenal. The simple decision to use a rewards credit card can make a huge difference in what you get in return. Some credit cards allow you to use these points for flying, store discounts and even cash-back rewards.

The Piedmont Advantage Visa Platinum Rewards card earns you ScoreCard reward points with every qualifying purchase. You can cash in these points for deals on all kinds of purchases—including name-brand merchandise, home furnishings and appliances, high-tech gadgets, travel and vacation packages, gas and more.

Provided you can afford the purchases you’re charging, using credit cards can both benefit you financially and give you peace of mind. Some credit cards include travel insurance, which covers interrupted flights and cancellations. Other cards offer coverage for rental cars, so if the vehicle is damaged during your rental period, you won’t have to worry about using your car insurance policy. Others even offer roadside assistance, which may help you eliminate other paid services like AAA.

Create a Credit Card Budget Spreadsheet

Now that you have a better understanding of the benefits of using a credit card, it’s time to use it to your advantage by developing a credit card budget worksheet. A budget spreadsheet can give you a better understanding of your current spending habits, while listing areas you should cut back on. Here are three simple steps to turn your credit card statement into a helpful budgeting spreadsheet.

  1. Track Expenses

Making purchases with a credit card provides you with documentation that reveals where your money is going. If you are using your credit card to pay monthly bills or make regular purchases, you’ll get an itemized list on your monthly statement or right in your account. You can easily transfer this list to your credit card budget spreadsheet. This will give you an overview of your spending history, which will help you develop your new budget.

  1. Categorize Spending & Bills

Now that your expenses are laid out in your spreadsheet, it’s time to make sense of them. Some credit cards allow you to categorize transactions by type right through their apps or websites. Signing up for e-Statements from Pacific Advantage Credit Union gives you quick access to all your account information and transaction history to help you keep tabs on your budget.

You can also do this manually by creating a new category on your spreadsheet and labeling your transactions, or by use a budgeting tool like Mint. This allows you to see how much you are spending in certain categories and makes it easier to identify areas where you’re overspending. For example, if your daily coffee runs are really adding up, you may consider cutting back and making coffee at home most days.

  1. Compare Spending to Income

Whether you plan to budget weekly or monthly, credit cards allow you to track your past purchase activity as often as you’d like. It’s helpful to designate a specific day (e.g., the last Sunday of the month) to total up these purchases and assess the health of your budget.

For further understanding on where you stand financially, add up your expenses and compare this number to your total your income. If your monthly spending is lower than your income, you are doing something right. You may even consider funneling more money into a savings account to build an emergency fund. Piedmont Advantage Credit Union offers a variety of savings accounts to suit your individual needs.

  1. Make Adjustments

Credit cards have built-in budgeting tools, which allow you to set customized spending limits to help prevent overspending. Perhaps your credit card spreadsheet makes you aware that you are overspending on groceries. In this case, you can use your credit card to limit your spending on groceries so you can continuously improve your financial health. You can also use your credit card budget worksheet to outline how much you want to spend in certain categories.

Advantages of Creating a Credit Card Budget

Creating a credit card budget is not only easy, it’s extremely advantageous to your financial health. It only requires one checking account, tracks your spending accurately, builds credit, racks up loyalty points based on your spending habits and, as a result, brings more cash flow into your wallet.

As a rule of thumb, make sure you can always pay off what you charge to your credit card each month. This will help prevent you from going into debt. Be sure to pay your bill on time each month, and only utilize up to 25% of your credit limit to maintain a healthy credit score.

Now it’s your turn. Create your credit card budget spreadsheet to keep better track of your transactions and reach your financial goals. For further assistance, please feel free to contact us or visit any one of our branches across North Carolina. At Piedmont Advantage Credit Union, we can help you find the right credit card or budgeting tools for you.

Piedmont Advantage Credit Union in North Carolina offers valuable banking solutions including checking accountssavings accountsmortgagesauto loansCDsIRAs and more. Bank online, with our mobile app, or visit one of our conveniently located branches in Winston-SalemEdenMooresvilleCharlotteGreensboroWilmington and Kenansville, NC.

Back to top