When it comes to making payments a credit card is probably one of the most consumer-friendly options. It offers several benefits ranging from convenient and secure payments to instant credit and added benefits such as discounts and cashback, all instantly, in a single swipe of your card.
However, if you underutilise your card, you may not be able to experience all the benefits that come with it. By cultivating just five positive consumer habits, you can emerge as a savvy Credit Card user and derive the most value from your card.
Unlock several opportunities – from earning rewards, air miles and cashback to accessing credit and making secure purchases. In a nutshell, continue reducing expenses while boosting your lifestyle.
5 tips to manage your Credit Card spending
1. Plan your expenses
Having access to credit is a great way to manage cash flows better. However, it can be tempting at times to spend beyond your means. The best approach is to create a spending budget that accounts for all your yearly needs, wants, savings, insurance, investments, and other expenditures.
Be sure to track your expenses so you stay on budget. Once you know exactly how much you need to spend every month, this data allows you to plan Credit Card spending better.
2. Put all spending on your Credit Card
When you shop using your Credit Card, you instantly earn reward points or cashback. You can redeem reward points in exchange for products, gift vouchers, or air miles. Hence, it is advisable to use your Credit Card to make as many purchases as possible because you earn rewards on every purchase late.
Don’t forget to redeem your reward points in exchange for important purchases or travel expenses. On the other hand, you can leverage monthly cashback made by the credit card provider to your account to make more purchases. Over time, cashbacks significantly reduce the impact of your spending.
3. Always pay your entire bill on time
Always pay your Credit Card bills in full and on time. Try as much as possible to avoid only paying the minimum amount. Penalties accompany late payments. On the other hand, non-payment results in accrued interest.
Hence, you lose any cost advantage because you end up paying much more than the original price of the product or service you purchased. The best practice is to automate your payments. You can improve your credit score, which makes you eligible for higher credit limits and better consumer privileges.
4. Take advantage of the EMI feature
You may only be able to sometimes afford all your monthly needs through your current month’s cash flow. In such a scenario, it is advantageous to use the Credit Card EMI (Equated Monthly Instalments) feature.
For purchases of a larger ticket size, instead of making a lump sum payment, choose an instalment plan that aligns with your yearly cash flow. You can meet your needs without running into debt.
5. Seek out exclusive deals
With a Credit Card, you are eligible for a host of exclusive deals on categories like food and dining, travel, healthcare and lifestyle products, and electronics. Take advantage of such offers to enhance your lifestyle while also reducing your monthly budget.
Look up the offers in your card statements or on your service provider’s website and be sure to use your card to make the purchase!
Your Credit Card opens a window of opportunity to enhance your lifestyle while saving on expenses. Following these tips can help you maximise the potential of your Credit Cards and make the most of your spending.