LiifeHabit #5: Use Your Credit Card for Daily Essentials + Repay Regularly
Benefit: Use a credit card for your daily essential purchases like fuel and grocery shopping. Then, build the habit of paying your credit card off regularly, which will open doors to loans and mortgages.
Plus, by using your credit card, you’ll keep your money in the bank, earning interest for up to 2 months – a nifty trick known as “float.”
Keeping tabs on your expenses becomes a breeze when you regularly access your credit account to make payments. Effortlessly stay on top of your financial game!
Overview: Use your credit card for daily essential items, and make it a habit to pay off your credit card every two weeks or each month depending on your realistic budget.
Be sure to stick to below 30% of your credit card limit to improve your credit score. Don’t use automatic payments, the action of going into your account helps you keep track of your expenses.
LiifeHabit Guide
Use Credit Card for Essentials + Repay Regularly
- Set Your Budget for Essentials: Set your budget for essentials. First, identify your necessary daily expenses such as groceries, fuel, and transportation costs. Then, allocate a specific amount of your income to cover these essentials each month. Ensure you prioritize them before allocating funds to discretionary spending.
- Stick to Below Your 30% Credit Card Limit: To adhere to the 30% credit card limit, aim to keep your outstanding balance below 30% of your available credit. Use your daily essentials budget to determine when this limit will be reached each month.
- Make it a Habit to Repay Credit Card Expenses: Make repaying credit card expenses a regular weekly or monthly habit. Use your daily budget to know how much you’ll spend every week, every two weeks, and each month. Use this budget to determine when you’ll need to pay off your credit card to stay below your 30% limit. Don’t set up automatic payments. The active part of paying your credit card off at regular intervals means you can keep track of your expenses.
- Set up an Alert System: Contact your credit card issuer or use your online banking platform to establish notifications when your balance approaches or exceeds the 30% limit. These alerts will help you monitor your spending and take timely action to ensure you stay within the recommended limit. If you stick to your budget and habits, this shouldn’t happen.
- Use Your Bank’s Phone Application: Download your bank’s phone application to easily pay off your credit card and manage your expenses. These applications offer a convenient and secure means of doing this.
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