Our top picks of timely offers from our partners

More details
Rocket Mortgage
Learn More
Terms Apply
Rates recently increased and could continue to rise - look into refinancing with one of our top picks
CIT Bank
Learn More
Terms Apply
Earn 14x the national average with a Savings Connect account. Member FDIC
Learn More
Terms Apply
No late fees, no monthly service fees, and get paid up to 2 days early with direct deposit
BMO Harris Smart Advantage™
Learn More
Terms Apply
$300 bonus after meeting deposit requirements - offer ends October 1st
Rocket Money
Learn More
Terms Apply
Track your spending and net worth, and cancel unwanted subscriptions
Select independently determines what we cover and recommend. We earn a commission from affiliate partners on many offers. Read more about Select on CNBC and on NBC News, and click here to read our full advertiser disclosure.

5 tips to make sure you don't overspend on your credit card

Credit cards can be a great asset, but they may tempt you to overspend. Here are 5 tips you can follow to make sure you don't overspend on your credit card.

Getty Images

Credit cards are essential for building credit, but only if you're smart about how you use them. The best credit cards offer generous welcome bonuses, rewards and added perks that may tempt you to spend more than you can afford. In order to make a credit card cost-effective, it's crucial to make payments on time and in full to avoid incurring big interest charges.

Below, CNBC Select reviews five tips to follow in order to avoid overspending on your credit card.

1. Only spend what you can afford to pay off right now

When you pay with a credit card, it's easier to spend more than if you pay with cash since you're not handing over any physical money. You don't have to stop and think about whether you have enough in your wallet to cover your bill.

To avoid spending more than you can afford, set some boundaries for yourself. You can turn on alerts so your card issuer will inform you once you've hit a certain dollar spending limit, whether that's $200, $500 or $1,000. You can check your balance daily to make sure you don't go over a certain amount. It can also be helpful to treat your credit card like a debit card, only spending up to the amount you have in your checking account (although ideally less, as you likely have other bills to pay).

2. Avoid impulse purchases

Also known as the 72-hour rule, avoiding impulse purchases is a great way to prevent overspending. When you scroll through social media, you may see ads for apparel or merchandise that tempt you to click and buy something on a whim. These ads are banking on impulse purchases, which can come at your downfall if you purchase things you don't need — and can't afford.

Before purchasing an item from an ad or promotional offer, consider whether you really need it or just want it in the moment, and if you have the money to pay for it. If the item falls within your budget, still wait 72 hours before completing the purchase. Save the item in a note or bookmark it and wait to see if you remember after three days. In some cases, you may forget about it altogether, thus saving you money.

3. Start tracking your spending

Tracking your spending can help you better understand where your money goes each month. Once you know how you spend, you can create a budget that lists all your fixed expenses, such as rent/mortgage, cell phone, groceries and savings. Then you can see how much money you have leftover for flexible expenses, such as restaurants, clothing and entertainment costs.

This budget should then help you understand how much money you can afford to spend each month, so you don't overspend. For example, if you calculated that you have $500 leftover for various unfixed expenses, you can divide that up however you want. That may be $200 for dining out, $100 for clothing, $150 for entertainment and $50 for random purchases. Regardless how you divvy the money, this helps provide guidelines for how much you can afford to spend on non-essential items.

4. Don't let rewards tempt you

Many credit cards offer welcome bonuses that can be worth over $500 if you meet the spending requirements. But if you overspend just to earn a bonus, you risk racking up debt and high interest charges that can counteract any rewards you earn.

The same goes for credit card rewards programs that earn cash back, points or miles. For each dollar you spend, cards may offer anywhere from 1X rewards to 25X rewards. While these rewards can be a great perk, you can get into debt if you spend more than you can afford. Using points to purchase a plane ticket is only a good deal if you're not paying high interest on your credit card balance.

5. Avoid store credit cards

It can be tempting to sign up for a store credit card when it comes with so many exclusive discounts. Unfortunately, these cards usually come with high variable interest rates, which can negate any savings if you're carrying a balance. Avoid the temptation to take advantage of a new discount offer by not signing up for a store card in the first place.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
Plenty of rewards and benefits including 4X points per dollar for dining at restaurants worldwide
Enjoy an intro APR on purchases plus, Discover will match all the cash back you've earned at the end of your first year.