Getting a credit card is an important decision you will ever make in your life. But what is more important is how you use a credit card. Especially if you are someone who has a low income. It is crucial to understand that using a card responsibly will only make your life easier and help you maximize the benefits.

In this article, we have covered some of the important tips on how to manage a credit card on a low income. Keep reading to kick start your research.

  1. Choose a pocket-friendly credit card: First and foremost is choosing the right credit card. Identify your needs and spending habits so that you can find a card that matches them. Those with a low income should definitely look for a pocket-friendly credit card that doesn’t have a huge membership fee such as lifetime free credit cards, entry-level credit cards with nominal fees and charges, secured credit cards, etc.
  2. Plan your budget: Once you have received the card, now the next step is to plan your budget so that you do not fall into a debt trap. Stick to a 70:30 ratio, with 70% of expenses paid through cash and 30% through a credit card. Maintaining a low credit utilization ratio is the key to building a good standing account.
  3. Cut spending: You need cut down your expenses to the necessary ones only. So that you do not make unnecessary expenses that can lead you to a debt trap.
  4. Pay your credit card bills on time: This is the most important one, you need to keep your credit card dues clear in full every month. You cannot afford to miss any due date as it will affect your credit score negatively. You can register for the auto-debit services and your credit card outstanding balance will be debited from your account automatically.
  5. Use only to earn reward points: Know your credit card rewards program so that you can use your credit card for those transactions only that allow you to reward points. This will help you to maximize the benefits of your credit card. You can redeem the reward points against product purchases, booking flights/hotels, gift vouchers, etc.
  6. Increase your income: You can increase your credit card efficiency by just increasing your income. The more your income will be the more efficiently you will use your credit card. You do not have to feel the situation of a cash crunch ever.

Bottom Line:

To conclude, we hope that you will use the above-mentioned tips while using your credit card. We are sure that these will definitely help you in building a good standing account and a good credit score. Never forget to pay the credit card bills in full and on time and maintain a low credit utilization ratio. Just keep track of your expenses and you will be good to go.

If you have any queries then do comment below, we would try our best to address them as soon as possible.

Additional reading: Best entry-level credit cards in India

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