Credit cards can be a clever way to manage our day-to-day finances. By channelising expenses, i.e. from shopping to dining, travel to paying rent and bills, and more, earn some benefits from your spending. While enjoying the perks, it is equally important to set credit limits for varied reasons. Your card provider will provide a limit but go a step beyond fixing your own spending limit. From budgeting and saving to building healthier credit scores, setting a limit will be beneficial. Here are a few benefits:
Limit overspending and manage finances better
Setting a limit on your credit card can help you control overspending. It can be easy to lose track of expenses, but a predetermined credit limit can help you stay on track. There are many expense-tracking apps to alert you when you are about to cross your set limit.
Improve your credit score
Credit cards are a great tool to boost your credit scores if you keep your credit utilisation in check. Credit utilisation is the percentage of available credit used, an important factor in improving your credit score. By keeping your credit utilisation low (under 30- 40 %) and paying your credit card bills on time, you can improve your credit scores and make yourself more attractive to lenders.
Conclusion
You may want to indulge in shopping, dining, and entertainment from time to time. But taking control of your credit card spending will let you enjoy the benefits that come along with it. Always ensure you set your own spending limit and take control of your finances.
You may want to indulge in shopping, dining, and entertainment from time to time. But taking control of your credit card spending will let enjoy the benefits that come along with it.
