People can’t resist using credit cards these days as credit card companies are offering many exclusive rewards and benefits along with providing their customers with a Credit limit. Individuals with a high income mostly find it easier to manage credit cards as compared to people having a low income. But with responsible financial behavior, even low-income individuals can manage credit cards very well and avail all its benefits. However, it requires some planning and you need to be very responsible to do so. If you are also earning low and want to have a credit card, but are confused about whether you’ll be able to manage it or not, you need not worry. We are here with some best tips to help you manage a credit card on a low income. Read on to know those tips and make sure to follow them:
Calculate Your Monthly Expenses & Make a Plan
Before making any transaction using your credit card, make sure to calculate your net monthly expenses. After considering all your necessary expenses, make a proper plan and prepare a budget of how much you are going to spend on your credit card. Make sure to keep this budget realistic, i.e, it should be no more than you can afford and not less than your requirements. If you have a low income, it is the most important thing to include only the required things and not to include any unnecessary spending. You will need to be very responsible are careful towards credit card usage so that you don’t find yourself in a poor financial condition afterward.
Just strategizing a budget is not enough, but it is even more important to stick to it. Credit card issuers often come up with exciting offers and deals to make the cardholders spend more and more in order to avail the benefits of the offer. But, with a low income, you need to ensure that you don’t overspend due to these offers as you also need to pay later what you spend. Overspending is the most common mistake most credit cardholders make as they consider credit cards as easy access to money and don’t realize that they are getting stuck under unmanageable debt. So, you need to think twice before spending your money on any unnecessary thing as it will not only hurt your credit score but will also lead to your poor financial health.
Don’t Miss the Payment Due Dates Ever
If you already have a low income, even a small amount of loss can hurt you badly. In such cases, if you miss or delay a credit card payment then you will have to pay interest and late payment charges as well. So, it is always better to make your payments on time in order to avoid any extra charges. If you can’t make the full payment by the payment due date, you must pay at least the minimum amount due. However, you will still be charged the interest on the remaining amount but you can avoid the late payment fee.
Make The Best Use Of Reward Points
These days, all the credit card issuers offer some or the other type of rewards to their credit cardholders on making purchases using their cards. Some cards offer you rewards points, some offer cashback and some of them offer Air Miles/CV Points, etc. So whichever type of credit card you are using, just make sure that you are making the best use of these rewards. If it’s a reward credit card, check for all the redemption options your bank is providing and redeem your earned reward points against an option that seems to be the most beneficial and useful to you. Also, redeem your points before they expire. If it’s a cashback card then the redemption process will be hassle-free as the cashback is automatically credited to your account in most cases and it never expires. If your card rewards you in the form of Air Miles then you can save a lot on your travel-related bookings so don’t forget to redeem your earned miles whenever you plan a travel.
If you have a low income and you think that you can’t manage a credit card, it is not always true. You can perfectly manage a credit card on a low income, provided that you keep all the above points in mind and follow them. Credit cards will not hurt your financial health but will save you money by providing rewards if you use them responsibly and make all the payments on time. However, it is highly advisable for you to go with the zero/low annual fee credit cards as you can save more by doing so. If you have any further doubts regarding the topic and you are still doubtful about whether you should get a credit card on not, make sure to write your queries in the comment section below. We will surely be happy to help you!