How Much Is Your Eating Hurting Your Credit?

Yeah yeah yeah, overeating isn’t great for your body, and it can take a toll on your wallet if you’re dining out a lot. You’ve heard this before — but do your eating habits have an impact on your financial health?

They could.

Food and money are a dangerous pair, because maintaining self-control in these categories can be a struggle. Blowing past what’s reasonable to consume or spend will put you in all sorts of trouble.

Eating Your Way Into Debt

Anyone who tracks his or her spending knows how much it costs to regularly eat at restaurants. Ordering lunch to the office every day or having dinner out every weekend can really add up, and if you’re using a credit card to cover every bill, it can be easy to let your appetite overtake your budget.

You’re at risk for overspending even when cooking at home. Grocery bills make up a huge part of most people’s monthly expenses, and it takes a lot of effort to keep those costs down. Sometimes it’s easier to make one huge shopping trip less often and risk letting food go bad, rather than shop every few days for fresh produce. Not everyone wants to time trips to the grocery store to take advantage of the best sales and coupons. But if sales and reducing food waste keep you from going over your food budget (and as a result, keep you from going into debt), it may be worth your time to search for deals.

What’s the big deal about spending more than is necessary on food? For starters, putting extra money toward a habit of restaurant dining or high-end grocery store shopping could take away from your ability to pay other bills, leading to possible late payments and even collection accounts. If you compensate for overspending by putting everything on a credit card to pay later, you could push your credit utilization rate high enough to hurt your credit scores. (That’s the amount you use of your available credit, and you want to keep it as low as possible. Lower than 30% is good, lower than 10% is best.)

Spending (and eating) within your means is the simplest way to avoid debt.

Security Risks

You probably don’t think much of handing your credit card over to a server at a restaurant, even though you likely wouldn’t do the same thing with any other stranger. We trust restaurant employees because we expect that their employers trust them and that they value that relationship, but it’s not unheard of for wait staff to steal patron’s credit card information.

There’s not a lot you can do about this. You can choose to pay cash, rather than let someone take your credit card out of your sight, but other than that, the most important thing to do is monitor your accounts. Otherwise, you put yourself at risk for identity theft, which is not only a headache but can also hurt your credit.

You likely won’t be held liable for fraudulent charges on your credit card, but in the time it takes between card theft and when you dispute the charges, the fraudster could max out your card and hurt your credit utilization. And if the thief copied a debit card, rather than a credit card, you may be out of money you may need to meet other financial obligations.

(In addition to monitoring your financial accounts, you may also want to monitor your credit scores for identity theft, which you can do for free using the Credit Report Card — a tool that updates two of your scores for free every month. Any unexpected change in your scores could signal identity theft and you should pull free copies of your credit reports to confirm.)

Rewards You May Not Want

Many rewards credit cards offer some attractive rewards for spending on restaurants, fast food and groceries. These rewards can tempt you to spend more than you need to to max out your reward potential. Unless you pay your credit card bills in full each month and have a solid sense of self-control, rewards credit cards aren’t for you, because they incentivize spending. The credit card that gives you cash back on restaurant and grocery store purchases may be extremely tempting for food lovers, but if those rewards lead you to spend more on food than you can afford, the rewards aren’t worth it.