If you are using payday loans to handle your routine expenses, it is important to understand that managing these spending is quite essential. Stats reveal that payday loans are the leading cause of financial distress among US consumers.
It takes a while to overspend your credit card; you simply walk to a store and start buying things that you have not planned. But at a later stage, it becomes quite difficult to deal with the adverse effects of overspending. It is high time to understand that overspending can cause big harm to your credit score and you may soon get into debt. Hence, it is important to learn methods to ensure quick control of your payday loan spending.
Below we have highlighted a few tips for managing credit card spending:
- Lower your credit utilization ratio:
In general terms, the credit utilization ratio defines a relationship between your aggregate spending limit and your credit card balances. For instance, the $5000 credit limit with a $2000 balance on a card leads to a 40% credit utilization ratio. The rule of thumb says that this ratio should not rise above 40% for a longer time duration. When it goes high, it starts hampering your credit score, and it further leads to several negative consequences for your personal and financial life. In order to avoid the side effects, prefer to limit yourself to 30% and leave room for emergency situations.
- Make full credit card payments per month:
The most trusted method to balance your credit utilization ratio while avoiding expensive interest rates is making full payments for your credit card balances per month. The most effective spend-control strategy says that users should not make expenses more than the comfortable repayment limit per month. This idea of efficient credit repair will help you avoid persistent debts on credit cards.
- Look for rewards to boost your financial health:
There is a wide range of credit cards offered by different financial institutions and depending upon the type of credit card you own; it is possible to get various offers from time to time to improve your financial health. The available rewards can be further used to buy various discounted gift cards for the stores where you love to shop. It is important to stay tuned to the latest reward offers and stay up to date about their expiration date so that you can make the best out of them.
- Set up security and spending alerts:
We are part of a technologically influenced world where it becomes much easier to track spending through mobile apps. You can set reminders for your monthly spending by creating some threshold ranges. At the same time, it is important to use security alerts to ensure that your credit card is not being used for fraudulent transactions online. It can help you to avoid unwanted overheads.
Credit cards come with a lot of benefits and risks. If you do everything right, you can benefit from free flight tickets, vouchers, and various other lucrative offers. They build your credit score and make you creditworthy in the market. But if you miss your payment by mistake, you are levied with extra charges (which could have paid your 15 days bill at least)! Handling credit cards is an art and this post talks about amazing credit card secrets which every cardholder should know!
You can get a fee waived for a lower interest rate if you ask: If you are one of those credit card users who accidentally missed the deadline by one day then you deserve a chance to be spared. Credit cards have an automated mechanism and if the payment is not credited until the due date then they charge you a late payment fee along with interest and taxes. If you missed it once in a blue moon (which banks can also verify at their end) then you can ask for a waiver or decrease in interest rate. All you need to do is to call their help desk and explain the genuineness of the delay!
You can upgrade your card: When you apply for the credit card for the first time (which means you don’t have any credit history), the issuers provide the base credit card which is low on offers and free on membership! But after you start using it, do you know you are eligible for the upgrade in a meter of 6 months? Your bank might not tell you (because they are busy with other things, let’s give them the benefit of the doubt) as they are benefitted by offering you a card that is low on benefits! But you can visit the online portal and apply for the upgraded version at no extra cost!
You can discontinue your credit card after the sign-up bonus: Most of the users assume that they are obligated to keep the credit card because they were rewarded with a sign-up bonus! This is a myth! No condition states that you are obligated to keep your credit card for a certain period! You can close the account after you have received your sign-up bonus, coupons, etc. if you are doubtful, don’t hesitate to ask the credit card issuer company!
Credit card is the gateway to free travel: there are a few premium cards that are reserved only for those with the best credit scores. These cards are loaded with travel offers as they provide you with regular bonuses in terms of miles on your spending which you can use to book flight tickets.
Bonus tip: As credit card holders, we often are hesitant and shy in asking the issuer to waive the fees or cancel the credit card! This approach is not beneficial, and you should rather come out as a strong and independent fellow justifying your ask.
These simple and trusted tips can help you to stay free from the additional burden of credit card debts. Moreover, it helps to enjoy a luxurious lifestyle with perfect financial management.
