Tracking where your money goes is one of the most fundamental and effective ways to help manage your finances. By knowing exactly what your monthly, quarterly, and annual expenses are you can do a better job of creating and sticking to a manageable budget. You can also more easily and accurately identify opportunities to save money – ways that you might otherwise be unaware of – so tracking credit card spending is a smart policy in a variety of ways. These days credit cards make it exceptionally easy to keep track of all your expenses and expenditures, with tools that are absolutely free to use. So if you know a few handy ways to take advantage of that – using available cardholder tools and resources – it can make you a more proactive and savvy money manager and consumer.
1. Establish an Online Account
One of the first and best steps to take if you want to track your credit card spending is to establish a secure online account that is tied to your credit card. Anyone who is already a credit card customer can do this by simply going to the credit card company’s website and navigating to the section for card members. If you aren’t sure how, just call the customer service number printed on the back of your credit card.
You’ll need to set up an account with a unique, personal log-in name and password, and once you do that you can browse around and see what customer service features are offered. Among the menu of card member benefits you will probably see many digital tools for tracking your spending in ways that you might not otherwise be able to do.
2. Set Balance Limit Alerts
In your online account one of the best spend-tracking tools is credit card balance alerts that keeps tabs on your spending and let you know when it starts to add up to a hefty balance. Usually under “preferences” there will be a place where you can opt-in or opt-out of email and text message notifications and alerts from the credit card company. Most of them offer to notify you whenever you are approaching your credit limit.
Say, for instance, that your credit card limit or the amount you can charge is $1,000. Most people might set an alert to let them know when they have spent close to that much – maybe $900 or $950 worth of charges. But you don’t have to use it that way and you can be as creative with this feature as you like. If you want to boost your credit score, control your spending, and stay on top of your budget and payments, for instance, then you might set the alerts for $200 – despite having a $1,000 line of credit. That way you’ll be prompted whenever your balance hits that threshold so you can pay it down again – instead of getting a bad surprise and a big bill at the end of the month. Determine your own spending limits based on your budget and other preferences, and then set up the account so that you receive a text or email whenever your balance hits those amounts.
3. Download the Bank’s App
To make access to your online account and all those spend-tracking features more convenient, use the credit card company’s smartphone app. That ensures that 24/7, from anywhere in the world, you have a way to instantly check your balance, your recent purchases, your pending charges, and the itemized details of your spending. Tracking your spending is right in the palm of your hand with a cardholder app. These bank-created apps have extremely hardened security protocols and world-class protection from hackers, so you can use them with confidence.
Typically these credit card apps can be downloaded and deployed across a variety of different platforms, too, so that you can use them on all of your different mobile gadgets that are Wi-Fi capable. But just make sure your mobile device itself is secure. You never want to transact financial business on a phone that isn’t password protected, for example. If you lose your phone or it is stolen, be sure to notify the credit card company immediately so they can safeguard your account and issue a new card.
4. Scrutinize Your Monthly Statement
While many cardholders don’t bother to look at the itemized purchases on their monthly statement, others take advantage of these statements to track their spending right down to the penny. We all know how hard it is to hold on to credit card receipts all month. You accidentally toss one out when you unpack the groceries, forget to pick one up at the gas station, or you split the cost of a restaurant meal or bar tab between friends and a month later cannot recall what your portion of the bill you charged to your plastic. But your credit card company definitely tracks your spending, because if they didn’t they wouldn’t be profitable. So use your itemized statement to track your purchase transactions and simplify your financial life.
Another very important reason to study your monthly statement and check each charge – no matter how small that expense may be – is to avoid fraud and theft. There have been international crime syndicates that made millions of dollars, before being arrested, by skimming small amounts of money from hundreds or thousands of different credit card accounts. You may see a charge of a few dollars in your monthly statement and not recognize it. Many people never notice that because they don’t check their statements, and others may see it and just go ahead and pay it because they assume it is legit.
But it could be an illegitimate and even illegal charge to your account. If those happen month after month it could wind up costing you a great deal of money. For that reason, read through your monthly statements, line-by-line. It only takes a couple of minutes. Circle or highlight any charges that you do not recognize or that appear suspicious. Then call your card’s customer service to verify that they were expenditures you actually made or to report them as fraudulent.
5. Analyze Quarterly Reports
Many cardholders make the mistake of never tracking their spending habits over any lengthy period of time. But monitoring quarterly spending patterns can highlight weaknesses in your money management in a very revealing way. That helps you gain spending oversight clarity that you might not get from just studying monthly statements. That’s because most of us forget what our tracked expenses from last month or two months ago were. So we only focus on the past 30 days, as reflected in our current statement. But one of the most important ways to track spending is to look at what happens each fiscal quarter.
That’s how businesses and accountants track spending, for instance, to make informed spending decisions or to see exactly where their biggest expenses or ways to save money occur, so they can adjust their budgets or revenue strategies accordingly and stay on track for the year. You don’t need an accounting department to generate insightful monthly expense reports that help you make educated financial projections. Just refer to your free quarterly credit card statements and you’ll find a wealth of great data.
6. Compare Annual Statements
Whether you are an individual cardholder or you run a business and have a business credit card that provides extra-detailed spending and tax information at the end of the year, your year-end statement is a goldmine of information to help track spending. Using the printed statements or those easily accessed online, you can get a complete report that details your spending over the entire year. Expenditures will be broken down by spending category, too, with combined annual totals that give you a great snapshot of your spending. You can also use your online account to access the annual statements that are archived there.
That’s a fantastic tool, for instance, if you need to provide your insurance company with proof that you owned something – and what it was worth when you bought it – in the event of a loss due to theft, fire, or some other unforeseen event. You can use the same kind of evidence gathered from annual statements to bolster your case if you are ever audited by taxing authorities and need to prove that the business expenses you claimed were legitimate. If you are going through a divorce and the attorney requests validation of the cost of a particular item in your household inventory, all you need to do is consult these annual statements – as long as the item was bought using a credit card.
Maybe you are selling your car, and want to prove to the buyer that you did regular auto maintenance. To do that you need receipts from automotive shops or mechanics. As these examples illustrate, there are all sorts of instances where being able to quickly put your hands on a long-forgotten receipt can be really helpful, so use your annual statements to track your spending – even if the expenses occurred years ago.
7. Take Advantage of Blueprint Features
There are many credit card companies that have their own unique systems for helping you track your payments. One of the first to introduce this kind of feature called it a blueprint, and that’s a good way of explaining how it works. Each different credit card company will have a slightly different version of the program. But they all basically prioritize your repayment schedule and map it out like a financial blueprint. Then they integrate automatic tools that help you keep tabs on that activity. That might mean that they show you a pie chart of your expenses and payments, for instance, or that they automatically apply part of each of your payments to the categories of purchases you request.
Or they may calculate where each payment will have the greatest impact on helping you pay off your balance faster, and then apply your payments accordingly. While these features are primarily designed to help you manage your repayments, they are also an interesting tool for helping you track your credit card spending. Even if you aren’t interested in managing your repayments, you may be able to “reverse engineer” the data that the bank provides you, in order to track your spending patterns over time and see a clear picture of where your money is going.