Though created differently, all credit cards have a limit. The credit limit dictates the maximum amount an issuer allows a borrower to spend on a single card. Ideally, your balance should fall below the limit. You see, maximizing your credit card can hinder you from making additional charges.
Employ these tips to ensure that you spend less than your credit card limit.
#1: TRACK YOUR SPENDING
It goes without saying that awareness of your spending habits will help you control your credit card usage. Monitor your billing statements by checking your balance in the bank’s online app or website. Staying on top of your spending will help you foresee any event leading up to going beyond your limit. Thus, you must adjust your expenses accordingly.
#2: CHECK YOUR BALANCE REGULARLY
Before making a purchase, check your available credit balance using your bank’s mobile app. If your credit card issuer does not have an online app, call the bank instead. You can find the contact details at the back of your plastic card.
Doing so lets you determine whether you should postpone your purchase or to pursue the checkout counter on the spot.
#3: DO NOT INCREASE YOUR LIMIT RIGHT AWAY
Say that you have been constantly spending beyond your credit card limit. You may think that the logical step to take is to ask for a limit raise. However, asking for a limit raise within six months of receiving it can indicate that you are having financial difficulties. Issuers may be less willing to trust you with more credit.
Waiting for bank to automatically increase your credit limit is the best option. This way, you will be able to employ strategies dedicated to spending within your means.
#4: STICK TO THE THIRTY PERCENT
The easiest way to stay within your credit card limit is to provide a cushion. Keeping a cushion of about 30% of your actual credit card limit helps you avoid going overboard. For instance, Mary has a credit card limit of S$5,000. She must not swipe her card after hitting the S$3,500 mark.
This threshold must apply to all of your credit cards and not just the banks you owe huge money too.