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Credit cards are the perfect choice in case you are facing a cash crunch. Unlike debit cards, credit cards have a grace period attached. When you purchase a product or service through a credit card, you are not immediately out of funds. You can use the product or service, and the actual payment happens only at the due date of the credit card bill.
5 Ways To Keep Track Of Your Credit Card Spending
The booming market of credit card users has enticed banks and NBFCs to offer specialized, unique, and custom made credit cards to suit all your needs.
Though credit cards appear so attractive, it is important to keep track of the spendings of your card. Here are five ways to ensure that your credit card expenditure is accounted for.
Set a Limit
- It is ideal to make a budget and stick to it. This way you will have complete control over your finances.
- You can decide your monthly expenditure in tandem with your income. Post this, shift your expenses to your credit card.
- You can also set aside a small amount every month for your shopping. This will help you get into the habit of valuing your income.
Classify expenses
- Understand the difference between revenue and capital expenditure. Accordingly, classify your expenses. Revenue expenses are your recurring, monthly expenses such as grocery, medicine, electricity bill, etc.
- Capital expenditure, on the other hand, is a one time expense. For example – Diwali shopping to buy an electronic appliance would be a capital expenditure.
- Use your credit card wisely for these expenses, and this will help you track your expenditure on the card.
Clear your dues
- Always pay your entire monthly bill. Do not fall for the trap of paying only the minimum.
- Paying the minimum amount should be done only in dire circumstances and not as precedence.
- Clear your entire credit card bill and analyze your expenses accordingly.
Rewards and Bonus
- You may also adjust your rewards and bonus towards the payment of your bill.
- Else, you can smartly utilize these points for your shopping itself.
- Keep a track of the offers on your card and use the points you earned in the best possible manner.
- It would also depend on the credit card variant you have.
- For example – some credit cards are solely for cashback offers, and others offer discounts on products and services.
- Opt for a card that is best suited for your needs.
Monitor the statement
- All the financial institutions offering a credit card generate a monthly statement.
- They also have an online platform where you can create a login ID and password.
- Make sure that you regularly check your billed and unbilled amounts to track your expenses.
- You can also use the SMS alert generated every-time the card is swiped.
- It would also help you compute the amount that you have billed on the card.
In conclusion, credit cards are available in plenty. They are easy to use, convenient, and offer great deals and discounts. However, it is important to use them with caution and discipline.