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Credit cards have revolutionized the way we manage our finances. Credit cards have replaced cash flow in the market. The many features and benefits available on it have made our shopping experience even better. Given that credit cards increase our spending power. But it becomes even more important to use them responsibly.
It can sometimes be challenging to manage credit card bills, especially bills if you have a low income. But here we are giving you some useful tips, which will help.
Which challenges?
Managing finances on a low income can sometimes be difficult. Especially when it is common to manage expenses with limited cash flow. In such a situation, credit card can prove to be very helpful. But, managing credit card payments can sometimes be a struggle. It may happen that you have to pay only the minimum amount due. This can lead to increased interest, which is higher for credit cards and can cause financial stress.
Even one unpaid bill can potentially turn into a huge debt after interest is accrued. If it is not resolved in time. This can result in a cycle of debt, which can destroy your wealth and make you financially unstable.
what can you do?
To effectively manage low-income credit cards, you must first create a budget. Give priority to necessary expenses in that budget and avoid unnecessary expenses. Using your credit cards responsibly can help you establish a credit history and build your credit score. Both of these things can help you get access to credit in the future. On that note, let's look at some tips that you can follow to manage your credit cards in the best possible way.
limit credit limit
If your income is low, chances are that you might be swiping your credit card frequently to meet your expenses and sometimes overspend. When you don't have cash, the temptation to spend can lead you to spend more than the recommended or approved credit limit. Avoid doing this and keep your credit utilization ratio (CUR) below 30%. For example, if your credit card has a monthly limit of Rs 1 lakh, make sure you do not exceed 30% of that limit, which is Rs 30,000.
Spending more than this limit can adversely affect your credit score and negatively impact your credit habits. Additionally, pay your bills on or before the due date and use cash when possible.
Even one unpaid bill can potentially turn into a huge debt after interest is accrued. If it is not resolved in time. This can result in a cycle of debt, which can destroy your wealth and make you financially unstable.
what can you do?
To effectively manage low-income credit cards, you must first create a budget. Give priority to necessary expenses in that budget and avoid unnecessary expenses. Using your credit cards responsibly can help you establish a credit history and build your credit score. Both of these things can help you get access to credit in the future. On that note, let's look at some tips that you can follow to manage your credit cards in the best possible way.
limit credit limit
If your income is low, chances are that you might be swiping your credit card frequently to meet your expenses and sometimes overspend. When you don't have cash, the temptation to spend can lead you to spend more than the recommended or approved credit limit. Avoid doing this and keep your credit utilization ratio (CUR) below 30%. For example, if your credit card has a monthly limit of Rs 1 lakh, make sure you do not exceed 30% of that limit, which is Rs 30,000.
Spending more than this limit can adversely affect your credit score and negatively impact your credit habits. Additionally, pay your bills on or before the due date and use cash when possible.