How To Manage A Credit Card On A Low Income?
Want to apply for a credit card but your income level stops you from doing it? Not to worry, we will help you through it. Now, even individuals with a low level of income can apply for a credit card. All you need to figure out is how to manage credit cards with your income level. There is no hard science behind it, you just have to make decisions very sensibly while using a credit card. You can not go reckless when it comes to a credit card. Here are some tips through which you can manage a credit card on a low income:
Analyze your spending habits: before applying for a credit card you need to analyze your spending habit. Depending on these only you can apply for the credit card that complements them and your financial health also. See which credit card can serve you the best, for instance, cashback credit cards, rewards credit cards, fuel credit cards, or travel credit cards, etc. then only apply for the one.
Question yourself: The most important step is questioning yourself whether you actually need a credit card or you are just applying for the sake of it. You need to see every aspect of getting a credit card to complement your financial health. Then you can apply for it and if it does not then do not go overboard and get yourself in trouble as you will have another expense to bear.
Secured credit cards: You can go for a secured credit card when you have a low salary. All you need to do is maintain a fixed deposit with the bank for some time after that you can apply for a credit card. There are fewer chances that your application for a secured credit card will be rejected. Managing these credit cards is easier as there is no joining and renewal fee and you just have to pay the credit card dues on time.
Lifetime free credit cards: Another way to manage a credit card on a low salary is by applying for lifetime free credit cards. These credit cards also do not have joining and renewal fees. You can enjoy all the perks and benefits of these credit cards by repaying the credit card bills on time.
Credit Utilization Ratio: It is advisable not to utilize the credit limit of more than 30% of the pre-approved credit limit. Keeping the Credit utilization ratio low can help in various ways like it can help you in getting a new credit card in the future as it will help in building a good credit score.
Setting the spending limit: You can set the spending limit according to your income so that you will be notified on reaching a specific limit. This will refrain you from spending recklessly. You can also keep a track of your spending habits and control them to maintain a good standing account.
Clearing credit card dues timely: To avoid the high-interest rates you need to clear the credit card dues timely. Carrying forward the last billing cycle outstanding to the next one can burden you with a high rate of interest. So, it is advisable to keep the credit card dues clear timely and never miss the due date. Frequently defaulting on a due date also impacts your credit score negatively.
To conclude, low salaried employees can also apply for credit cards and can manage them very easily by following the above-mentioned tips. You can apply for the rewards credit cards that are lifetime free for example: Flipkart Axis Bank credit card, Amazon Pay ICICI Bank credit card, etc. These credit cards are highly rewarding and ideal for low salaried individuals. Using a credit card wisely will surely help in building a good credit score and sound financial health. Also, you need to clear your head from all the myths about credit cards that only certain people having a certain level of income can apply for a credit card, that is not the case. Managing a credit card can be very easy if you read the most important terms and conditions first to know all about the hidden fees. Keep the credit card dues clear and low credit utilization ratio and you will be good to go.
Comment down your suggestions for managing a credit card with low income.