No one wants to be reminded by their bank that using a credit card too much is a bad idea. It’s a rule of thumb that everyone knows, but often avoids because a credit card is a major convenience. After all, who wants to always carry cash for everyday purchases?
However, it turns out that “revolvers”—people who carry a balance on their credit card each month with revolving credit—can save some money by being reminded every once in a while by their bank about the downsides of using credit cards.
Researchers at the Urban Institute found that email reminders from your bank or a banner ad on its website can become big enough annoyances to get credit card users to cut spending by 2 percent.
One message reminded credit card holders to use cash for a purchase of less than $20. A second message highlighted the fact that credit cards add 20 percent to the cost of something with revolving credit.
The first message led to an average savings of $104, and up to $173 for revolvers under age 40. The second message had less of an impact, saving people under 40 an average of $160.
There are other small ways consumers can remind themselves to use their credit card less. Budgeting apps or reminders set up on your phone can help you automate savings, for example, by automatically moving money into a savings or retirement account.
Your bank‘s app or website may also allow you to set text or email alerts when your account balance is low. Your credit card may be able to do the same thing, sending you an email when you’ve spent over a certain amount on a purchase, or letting you know when you’re near your credit limit.
The America Saves program sends periodic text messages to participants with savings tips and words of encouragement. Apps such as Hiatus and Trim help consumers stop automatic renewals on their credit cards that they may have forgotten about.
If you carry a revolving balance on your credit card, you’re not alone.
Data from TransUnion, a consumer credit reporting agency, shows that about 133 million people have at least one credit card with a balance. The average credit card debt rose to $5,247 in the second quarter of this year, up from $5,197 in the first quarter.
To start lowering your credit card debt, make more than the minimum payment each month. Until you start using only cash for purchases of $20 or less, that’s one of the best ways to tackle credit card debt.
