Financial Planning with Credit Cards to Control Expenses
Financial planning with credit cards is a good strategy because its use does not always make you wasteful. Credit cards even help you to record and control expenses while managing cash flow well even when it’s tight. Here are tips for using them wisely and with discipline so that credit cards don’t backfire.
Tips of Financial Planning with Credit Cards that Can Help You
- Get Used to It Starting with a Small Amount
Are you a newbie user and have just made a credit card so you’re still not used to using it? You don’t need to move all your expenses directly to your credit card because you can start small. Let yourself get used to it first and then you can add more slowly until you get used to it.
This means you should avoid using credit cards for all expenses, from paying rent to monthly shopping and installment payments. Start using it to pay for gas or maybe buying snacks, and subscribing to streaming platforms. Over time, you’ll get used to its pattern so that later the credit card can be used for bigger things.
- Don’t Register for Many Credit Cards
In using credit cards wisely and correctly so as not to harm your finances, avoid making too many credit cards. You must have a goal before making or registering for a credit card and make sure the goal is clear. Because making too many will only tempt you to keep shopping without paying attention to your financial condition.
A simple guide for credit cards will help you consider its use from all sides. If later it only makes you more wasteful and lowers your credit score, cancel the intention immediately. Aside from being difficult to control, banks will think that you have an unstable financial history making your image bad.
- Use Credit Cards According to Your Needs
Use a credit card not to buy things that you want, but rather use it as wisely as possible for your daily needs. Using it according to your needs will help you save more money for urgent needs in the future. Avoid spending on consumptive things so that your credit card does not run out of limits when needed for emergencies.
Read More: Financial Planning Ideas for Young Adults in Their 20s
- Set a Monthly Usage Limit
You can’t use a credit card without limits, but in order to manage your finances well, this must be limited. Determine the maximum credit card usage limit so you can manage the usage to be less than the maximum amount. The goal is just so that you don’t go overboard in shopping and end up being wasteful.
Credit card knowledge helps in planning your finances because you can adjust it to your ability to pay. Even in terms of budgeting, it becomes easier when you already know your monthly credit card limit. For example, from the total monthly expenses, record your credit card expenses by entering them into your financial plan.
- Use Promos and Rewards Wisely
Rely on the promos or reward points offered by your credit card and use them without being wasteful. Keep buying important things or whatever you need and don’t be easily tempted to buy something unimportant. This can prevent you from being consumptive and rewards are a way to save money if you use them wisely.
- Record All Transactions
Financial management using a credit card can also be done by recording all transactions, no matter how small. To avoid hassle, use a special financial application or use spreadsheets rather than recording manually. This way you will know where your money is going and can help control spending and check monthly bills.
- Avoid Cash Advances with Credit Cards
Smart financial planning with credit cards includes avoiding cash advances because the interest and additional fees are very high. If you want to use it, make sure the cash advance is only for emergencies and not for everyday use. Cash advances can also make your credit score bad and make your image bad in the eyes of the bank.
- Pay Bills on Time and in Full
If you have decided to use a credit card, then try to always pay your bill before it is due. A good and correct payment is 100% or full payment for your monthly bill. Avoid minimum payments so that you aren’t charged high interest and make your credit score bad.
Financial planning with credit cards is considered important and useful because it makes it easier to manage routine bills. Credit cards are a practical payment for paying electricity bills to the internet and subscriptions. You can make monthly budgeting easier because you can combine all bills to be paid at once.
