For some people, having a credit card is like magic. It gives them free credit and helps them reach their goals and fulfil monetary needs faster than anything else. But people need to be aware that along with its many benefits comes the danger of spending too much, even on your Best Credit Card.
We must all have some idea of how quickly a habit of spending too much can lead to a financial mess. For some people, it doesn’t take long to get into debt traps too.
So follow these tips if you tend to be financially indisciplined when it comes to credit card spending:
Keep track of how many credit cards you use
There is a good chance that you have more than one credit card in this day and age. One may give you cash back when you buy gas, and another may let you use an airport lounge. But did you know that having too many credit cards at once can make it hard to keep track of your spending and give you bad dreams? It is recommended that you stick to one credit card that gives you the most benefits for the kinds of purchases you make most often. If you can’t use just one card for some reason, use one card for most of your purchases and limit the other card to certain things. But if you think you can split your spending between two or three cards, it makes sense to keep that many cards because it keeps you from going over your limit.
Only use your available credit limit.
Best Credit Card does give you the freedom to spend, but you should only use about a third of your available credit limit on average. Because going over 40% of your credit limit can hurt your credit score and make it go down. High credit usage makes the user look like they want more credit which could mean they won’t pay their bills, which makes it harder for them to get more credit. To do this, you can use a debit card and other things to keep this percentage between 30% and 40%.
Don’t use up too much of your credit.
The ratio shows how your total spending limit compares to the amount you owe on your credit cards. A lot of experts say that your CUR shouldn’t be higher than 30-40%. Because ratios that are too high can hurt your credit score, a bad credit score can hurt both your finances and your physical health. So, to be safe, you should always aim for a CUR of 30-40%, which gives you more room to cover unexpected costs.
Set spending alerts
No one wants to overspend and end up paying super high Credit Card Interest Rates, right? So, when you set spending alerts, you can respond to how you spend in real-time. You can also set a threshold limit on your credit limits. This will make sure that you don’t spend more than the limit you set for yourself. You can set a limit on how much you can spend on your credit cards and also set up security alerts that will look for suspicious spending patterns.
If you can, put off shopping. If you’re feeling sad or down, it’s best to hold off on shopping until you feel better since bad feelings often lead to a shopping spree. So, the next time you’re feeling down, it’s best not to shop.
Use your Best Credit Card to buy things you were already going to buy: If this is your first time using a credit card, it might feel like you are spending someone else’s money. You do have to pay back the money, but if you buy something just because you can because you have a credit limit, it will come back to haunt you in a few days. So, you should spend money on things you were going to buy anyway, no matter how much you paid for them.
Always remember your financial goals.
You should know that spending too much is a sure shot way to take your mind off your financial goals and also incur hefty Credit Card Interest Rates going as high as 40%-50%. So make sure you use your credit card wisely by asking yourself if the things you buy will make it tougher for you to achieve your financial goals.
Use the interest free period prudently.
Utilise your credit card as a tool to your advantage during the time when you don’t have to pay interest. Best Credit Card holders have a certain amount of time to pay their bills without being charged Credit Card Interest Rates.
Check your monthly statements.
If you have a credit card, you will get a statement in the mail every month. Most people don’t give their credit card statement more than a quick glance, but reading it every month is one way to make sure you don’t pay fraudulent charges, incorrect Credit Card Interest Rates or some other charge which should not be applicable or levied on you.
Take your credit cards out of online shopping sites.
If you remove your credit cards from every online account, especially shopping sites, you will be sure not to spend too much, which can make a big difference. When your card is saved, it’s easy to buy things without giving them much thought. But if you have to type in your card number by hand, it takes a lot more work on your part, which might make you think twice about what you’re buying.
Credit cards are a must in today’s world, and they aren’t all bad if you know how to utilise them. In the end, it’s up to you not to give in to the urge to spend beyond your capacity to repay. In all, a good spending habit can for sure be helpful to you to get the most out of your Best Credit Card, and remaining disciplined with repaying bills will ensure you don’t incur high Credit Card Interest Rates too.