For many hard-working professionals, having a credit card is a testament to your ability to earn a good amount every month. Not only is your credit card a symbol of your skills and abilities as a financially independent adult, but it’s also one of the most valuable tools if you’re well-aware of how to use it. Similarly, being irresponsible with your credit card and prioritizing your needs over your wants will lead to a world of problems.
While there’s no problem in having a bit of balance in your credit card that you can slowly chip away on, there are many individuals who are too caught up with the moment and end up spending more than they should be. You don’t have to look far for examples of this type of behaviour because many average citizens carry a staggering amount of credit card debt. The problem here is that the figures show that the figures for each citizen are growing every year. In fact, many Singaporeans have a debt of around 76,000 dollars in 2020 alone. With each passing year, many households struggle to keep up with the amount of credit being inflated as years pass.
Since credit card and financial management is an important aspect of success, what are some things that you can do? Here are some crucial ways to get what you deserve without having to spend a fortune and racking up your credit card balance.
Go for the Best Deals
First and foremost, the most effective way of using your credit card is by being patient and looking for the best deals, rather than just spending out of impulse. Although many individuals are quite cognizant that they shouldn’t be spending too much on purchases that are not planned or necessary, a good percentage of the population will still make unplanned purchases.
In fact, a certain study has shown that around 52% of millennials, which comprises the majority of young working adults, will make impulse purchases than any other generation. It’s also known that an average shopper will make around three unplanned purchases for every ten stores (either offline or online) that they visit.
If you’re susceptible to making unplanned purchases, you might want to consider being patient and waiting for deals. Waiting for sales means that you can significantly decrease a good percentage of what you will spend.
The same premise can be said when looking for a credit card in line with your quality of living and your monthly earnings. If you’re going to look for the best deals for products and services, you’ll need to ensure that you have a credit card to enjoy monthly instalments and cashback for various products and services. Fortunately, you can utilize credit card deals.
Don’t Go for the Minimum
Another important strategy that will usually fly over people’s heads is to make full payments instead of just going for the minimum every month. Suppose you don’t want to be part of citizens’ data with a staggering amount of balance. Paying your bill in full every month means that you won’t have to deal with increasing interest.
Although this may seem challenging, this is a better choice than dragging your balance for months or even years. Simultaneously, paying the minimum can negate the sales you usually go for, especially when the sale is around 20%, and you have an 18% charge.
Treat Your Credit Card as an Extra
Last but not least, you should treat your credit card as an extension of your budget rather than treating it as your main source of sustenance in the long run. Having a disciplined mindset when it comes to finances can do wonders for your budget. Much of this strategy will involve listing down all your budget then separating some of what you spend with your on-hand funds with those you use with your credit card. Then, you work through what you determine is your spending limit. This can help you get some rewards from some of your purchases.
Most experts would suggest monitoring your account at least once a week or twice a month. This can help paint a bigger picture of what you can do for your budget.
As you can see, having a credit card can work to your advantage if you are alert and aware of your spending. Although having a credit card might seem like you already have the purchasing power to get what you want, that doesn’t mean that you should purchase these products and services. At the end of the day, being disciplined can give you a financial advantage.