Setting Card Limits To Other Payment Methods: Five Ways You Can Avoid Using Credit Card Frequently
If you need to manage debt repayments, reducing credit card usage is a good option.
Having a credit card means you can splurge a bit without putting your bank account under undue stress. Though the idea of repaying the amount is often a buzz at the back of your mind till the payment's due date arrives and you realise that repaying your credit card dues may end up putting you in financial problems.
The key to managing your repayments is to moderate your credit card usage. By using your card infrequently, you can ensure that your finances are in order and your dues do not snowball into a debt trap.
How To Avoid Frequent Credit Card Usage
Avoid maxing out your card: Credit cards have a certain threshold in terms of how much is available to cardholders. If you max out your card and go over the threshold frequently, you can lower your credit score. This will create problems if you want to get a new loan or card in the future. It will also increase the payments you have to make every month.
Monitor your card usage: Look at your credit card usage reports to get an idea of what constitutes your major expenses. Cut down on any unnecessary expenditure. Tracking your expenses can help you take advantage of any offers by the lender as well. You can centre your payments around an interest-free period or just after your bill is generated to maximise the benefits of the credit card.
Stick to a budget: The most important thing about moderating credit card usage is to create a budget and follow it. This can enable you to avoid impractical or unnecessary expenses that you might have utilised your card to pay for.
Use other payment methods: Avoid using credit cards for every little thing. Stick to other payment methods at stores or other places to reduce the number of times you utilise your card.
Set card limits: You can also ask the lender to set limits on your credit card. This will ensure that you do not go beyond a certain point and minimise your card usage automatically.
By reducing your card usage, you can ensure your credit score is good and you can pay back your dues without any stress. A favourable credit history and limited card usage can help you get a loan or another credit card more easily in the future, since you will be seen as a responsible borrower.
Lastly, analysing and moderating your credit card utilisation can make you financially prudent and enable you to manage your finances effectively.
