Knowing how to use and use credit as a financial management tool will help you succeed, whether you’re a student getting your first credit card or a newcomer starting your life.
According to Amit Brahme, senior director of newcomer and cultural client segment at Royal Bank of Canada, that by managing a credit card well you’ll be able to keep finances in check, and you’ll also reap the benefits of increasing your credit score. “And, with many credit cards today, you can take advantage of rewards points or cash back that the card offers,” he added.
The following are three best practices for using your credit card to control your spending:
Track your spending
You can keep track of where and how much you spend by looking at your monthly credit card statements, which include a record of all the purchases you’ve made with your card. These insights can help you identify areas where you need to reduce your expenditure and determine how much you should budget each month for things like groceries and gas.
Pay your balance in full each month
You won’t be charged interest if you pay off your credit card debt in full each month, so it can help you stick to your budget.
Use your card wisely
Before making significant purchases, think about if an item is a “need” or a “want.” Keep an eye on how much of your credit limit you’re spending. Your credit utilization ratio is the percentage of your available credit that you actually use. As a general rule, you should maintain your ratio below 30%. Better credit management and a more favorable credit history are indicated by a lower ratio.
As a new credit card user in Canada, you can save money by using your credit card benefits to the fullest and managing your spending carefully. There are easy ways to get the most out of your credit card, whether your goal is to raise your credit score or maximize your benefits.
Learn more about saving money on your credit card at: https://newscanada.com/en/3-money-saving-hacks-for-new-Canadian-credit-card-users-135698
Reference: https://newscanada.com/
Image by @Drazen Zigic of Freepik
