John Mark
Is there an easy way to manage your credit card spending? Owning a credit card is very convenient to avoid the hassles of handling cash. Plus, you get the rewards points and enjoy the discounts and privileges from the credit card company.
So, how does one manage their credit card spending wisely?
Don’t spend beyond your means.
The reason why some cardholders accrue large amounts of debt is because they don’t have a plan. Without a clearly defined strategy for tackling debt, they maintain unhealthy spending habits and face increasing interest charges and late payment fees. If you’re in the same rabbit hole, reassess your approach and set a new monthly budget. If you don’t particularly like budgeting, be sure to check out our seven tips for creating a budget you will stick to. Once you’ve determined your exact expense and cash flow, you should be able to create a fund dedicated to card payments.
Of course, if you have a flexible credit card, keeping up with the bills shouldn’t be a problem because you have the freedom to decide when and how much you want to pay. AUB credit cards, for instance, lets you choose not just the number of times you want to make payments every month, but also the exact due dates. You can also get to choose a fixed minimum payment amount, depending on how much you can afford to pay on your chosen payment dates. It’s all up to you and your budget.
Always pay in full. If you can not pay the full amount, settle at least the minimum amount due.
There’s no doubt that credit card minimum amount due is helpful when you want to stay on top of payments while sticking to a budget. But keep in mind that the monthly interest rates are computed based on your average daily balance (ADB) within the statement cycle. In other words, using your cards frequently and paying only the minimum amount due or any amount less than the total balance will result in high interest. Until you pay the balance in full, it will just keep on increasing.
So whenever you can, always pay in full the total amount due.
Use it everyday for convenience instead of cash. You will get Rewards points, plus, perks and discounts from the promos of the credit card.
Other than its convenience, one of the best ways to maximize the use of credit card is to earn rewards. Some cards now offer as much as 6% back on selected purchases. Credit card rewards options are almost endless. Different cards also offer higher rewards in different spending categories.
On top of earning rewards, a huge benefit of using credit cards is the discount you get with your bank’s exclusive merchants. In fact you’d find these discounts from hotel bookings, dining discount, spa etc. So if you know your spending habits and which type of merchant you patronize, you can be sure to find a card that fits.
Use it for emergencies, accidents, and other unforeseen events.
Not everything qualifies as an emergency situation such as a once-a-year clearance sale for the latest gadget. While it’s true that credit cards are convenient for huge purchases you may not be able to afford at the time, using credit cards as an emergency fund also have its advantages.
When you are a victim of a natural disaster and find yourself temporarily without a home. That is a good time to use a credit card. Even if you have an emergency fund, it may take some time to get them. So for the meantime, a credit card is a good buffer during these times. The same is true for medical emergencies especially for procedures that your insurance won’t cover, using your credit card is better while you deal with your insurance company later.
Always pay on time, to avoid late payment fee charges.
A minimum amount due is the amount you need to pay on or before the due date of the bill. But do keep in mind that interest will apply if you pay any amount that is less than the total amount of the bill.
If you’re having trouble remembering your due date, choose a card that lets you select a payment schedule that is easy to remember such as with AUB Credit Cards.
Pay your credit card at your own terms – here’s how!
AUB Credit Cards offer flexible payment options. The bank lets you select how many times to pay (fixed weekly, semi-monthly and monthly), when to pay (between 1st to 30th) for monthly payments; 15 pre-defined due dates for semi-monthly payments; and (Mondays – Sundays) for weekly payments and how much to pay Php250 – Php3,000 for Easy and Php1,000 – Php9,000 for Classic, thus making it easier for you to settle your credit at your most convenient time.
