Credit Card Usage Tips: If your income is low, managing credit cards, especially bills, can sometimes be challenging. But we are giving you some useful tips here, which will help.
Credit cards have revolutionized the way we manage our finances. Credit cards have replaced cash flow in the market. The many facilities and benefits available on it have made our shopping experience even better. Given that credit cards increase our spending power. But using them responsibly becomes even more important.
If you have a low income, managing credit card bills, especially bills, can sometimes be challenging. But we are giving you some useful tips here, which will help.
Which challenges?
Managing finances on low income can sometimes be difficult. Especially when managing expenses with limited cash flow is common. In such a situation, credit card can prove to be very helpful. But, managing credit card payments can sometimes be a struggle. It may happen that you have to pay only the minimum amount due. This can lead to interest accrual, which is high for credit cards and can cause financial stress.
Even a single unpaid bill can potentially turn into a large debt after interest is accrued. If it is not resolved on time. This can result in a cycle of debt, which can destroy your wealth and make you financially unstable.
what can you do?
To effectively manage credit cards with low earnings, you must first create a budget. Give priority to necessary expenses in that budget and avoid unnecessary expenses. Using your credit cards responsibly can help you establish a credit history and build your credit score. Both of these things can help in getting access to credit in the future. On that note, let’s look at some tips that you can follow to manage your credit cards in the best possible way.
Limit credit limit
If your income is low, chances are that you might be swiping your credit card frequently to cover your expenses and sometimes overspending. When you don’t have cash on hand, the temptation to spend can lead you to spend more than the recommended or even approved credit limit. Avoid doing this and keep your credit utilization ratio (CUR) below 30%. For example, if your credit card has a monthly limit of Rs 1 lakh, make sure you do not exceed 30% of that limit, which is Rs 30,000.
Spending more than this limit can adversely affect your credit score and have a negative impact on your credit habits. Additionally, pay your bills on or before the due date and use cash when possible.
Even a single unpaid bill can potentially turn into a large debt after interest is accrued. If it is not resolved on time. This can result in a cycle of debt, which can destroy your wealth and make you financially unstable.
what can you do?
To effectively manage credit cards with low earnings, you must first create a budget. Give priority to necessary expenses in that budget and avoid unnecessary expenses. Using your credit cards responsibly can help you establish a credit history and build your credit score. Both of these things can help in getting access to credit in the future. On that note, let’s look at some tips that you can follow to manage your credit cards in the best possible way.
limit credit limit
If your income is low, chances are that you might be swiping your credit card frequently to cover your expenses and sometimes overspending. When you don’t have cash on hand, the temptation to spend can lead you to spend more than the recommended or even approved credit limit. Avoid doing this and keep your credit utilization ratio (CUR) below 30%. For example, if your credit card has a monthly limit of Rs 1 lakh, make sure you do not exceed 30% of that limit, which is Rs 30,000.
Spending more than this limit can adversely affect your credit score and have a negative impact on your credit habits. Additionally, pay your bills on or before the due date and use cash when possible.
