9 essential habits before, during and after obtaining a credit card

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Using a credit card is more than a way to pay for things. It’s an essential part of your financial life, and it can make or break your budget if you’re not careful.

That’s why we’re here to help.

We’ve put together the best tips before, during, and after applying for a credit card in this blog post so you have all the information you need to start building good credit habits from day one.

Secure credit cards will help you build your credit rating

A secured credit card can help you get your first credit card if you start out without any credit.

A secured credit card is for people who do not have or have a damaged credit history. A cash deposit is required to open a secure credit card account. Deposits are generally equal to the credit limit.

Singapore’s minimum deposit for secured credit cards is S $ 10,000. The credit limit is usually around this amount or a little less. The credit limit of most secured cards increases as you deposit more.

Failure to pay on time may result in the loss of your deposit. The good news is, if you regularly pay on time and keep spending well below the card limit, you could be building good credit in as little as a few months.

Typically, your issuer will then upgrade the account to a standard unsecured card. They can also allow you to apply for a standard credit card and close the secure card.

Find the best credit card for you before you apply

By law, credit card issuers post their interest rates, annual fees, overseas transaction fees, and other fees on their websites.

Before deciding which credit card to sign up for, you should use the information provided online. Learn all you can about each map.

You can find credit cards with no annual fee which are a great starting point for a regular credit card.

It is important to note that card issuers check the credit score every time you apply for a credit card. This type of investigation is known as a difficult investigation. These difficult credit applications can hurt your hard-earned credit score, so it’s a good idea to manage it. Apply only for firm credit applications for cards that match your credit criteria.

Set a budget and follow it

Credit cards can make shopping more accessible. But you shouldn’t be using them to buy things you can’t afford.

It is essential to have a realistic idea of ​​how much you can spend in a month and what you can afford.

Consider using a budget like the 50/30/20 method. You spend 50% on necessities like rent and food and 30% on wants but not needs and 20% on savings and debt repayment. Stick to your income, spend and save efficiently.

Keep a record of your purchases

A great first step is to figure out how much you can spend. Then use the app or website that came with your card to track purchases throughout the month.

Once you have reached your spending limit, do not use the card until it has been fully paid for. Discipline like this helps build credit and keep debt at bay.

The credit card app or website allows you to track your account at any time. You can log in online at any time to access your account details. Check your available credit, make sure your payments have been validated, or report a lost or stolen card.

Keep track of credit card purchases with the credit card mobile app. Check your bill regularly. It’s easier to make budgeting fun when you see your spending habits.

Don’t exceed your available credit limit

It can be tempting to charge as much as possible on your card, but it’s essential not to.

It is essential to keep track of how much of your credit limit you are using to determine your personal credit score.

Having an excessive credit card balance and having a balance for several months can hurt your score. Also, it can pave the way for lifetime debt.

Maximize the use of your card

You must use your card to prove your financial health to legal lenders and credit card companies. Plus, keeping it active will prevent your card issuer from closing your account.

Optimize your card by using it reactively, but keep your credit utilization rate below 30%. Use the credit card to add variety to your credit history. Aside from a personal loan from a legal lender like the Lucky Plaza money lender, a credit card is a great addition to the package.

Pay the bill in full each month

While high interest rates on credit cards can be overwhelming, you won’t have to pay interest if you consistently pay the full amount owed on time.

Many credit cards offer grace periods. You will not be charged interest during a grace period as long as the balance is paid on the due date.

The grace period varies from card issuer to card issuer. Most cards offer a three day grace period. Understand your card’s grace period by checking its terms and conditions.

You shouldn’t feel like you’re late if you’re a day late, so don’t give up on the refund.

Payment of the minimum refund is still acceptable if you can make it in the next few days. But do your best to pay off your debt in full to avoid significant interest charges. Paying only the minimum repayment means you can avoid the late payment penalty, but interest charges will accrue.

Pay your bills on time

Not only do you have to pay the full bill, but you also have to make sure you pay on time. The majority of credit card issuers charge a massive late payment penalty. Payment history represents 35% of your credit score. If you consistently miss a payment, your credit history will be at stake.

You can lower your interest rate by paying all of your bills on time and increasing your credit score over time.

To avoid missing your due date, set a reminder for yourself every month. If you set it up in your phone or calendar, it’s more likely that you won’t miss it. You can also set up automated payments to make sure you don’t miss any fees.

Take advantage of the additional benefits

Many credit cards offer additional benefits, such as cash back or travel rewards. Check the benefits of each credit card. You can also call your card customer service to find out more about your benefits.

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