In an already fluctuating economy, recession can be a hard pill to swallow, especially when your finances aren’t secured.
You could be on the verge of unemployment or be living in a constant state of uncertainty. With such a fear looming over your head, it becomes an absolute necessity to sort your finances at the earliest.
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During such circumstances, effectively managing your credit card could be of great help. Additionally, by devising a good strategy to manage your finances, you could increase your chances of surviving through recession.
Here’s how you can make use of your credit card wisely during a recession:
Keep a Tab on Your Credit Card Usage
Instead of spending your money on unnecessary purchases that can be held off until after recession, it is wiser to use your credit card as an added emergency fund. You can use this to pay off necessary bills and cover for any unexpected expenses without worrying about the cash.
Set Up Payment Alerts
To refrain from going way overboard with your expenses, you can set an alert on your credit card payments. Everytime you exceed a certain limit, you will be notified, thus keeping your expenses in check and saving yourself from spending beyond your limit.
Avoid Carrying Your Credit Card Balance to the Next Month
When a balance is carried forward, additional interest is accrued. This will only aggravate your financial situation. Which is why, it is preferable that you clear out all your dues at the earliest and avoid being charged an interest on carrying your dues over to the next month.
Set-up Automated Bill Payments
With the ongoing recession, you do not want to be burdened with the added stress of missing out on your credit card due dates. This would levy a penalty for late payment. Hence, setting up automated payments will ensure your payments are made on time and evade any needless charges.
Pay-off Any Existing Credit Card Debt
A recession could quite easily topple your credit score. Therefore, it is crucial that you pay-off any existing debts as soon as possible. Additionally, you could cut back on expenses that are not of grave importance and direct the surplus towards paying your debts off. Furthermore, you could make use of the debt avalanche or the debt snowball method to strategically clear your debts.
Minimise Credit Card Debt
A debt tends to put a damper on your savings. All the credit that you earn is gradually used towards paying off debts from the past. Therefore, it is important that you pay off your credit card debts as soon as you can.
Opt for a 0% APR Credit Card
Some of the best credit cards give you the provision of a 0% annual percentage rate or APR that can be extremely advantageous, if you’re looking to avoid interest charges on your balance transfers or payments. A 0% APR acts as an introductory offer wherein you will not be charged any interest on the purchases you make. This can help you steer clear of any additional fees that you might be subject to.
Plan a Budget
A well-planned budget can help you keep a track and put a leash around your expenses. This will help you decide what expenses you can cut back on. With the SBI Pulse Credit Card you will be able to save up on charges through waivers on fuel spends, milestone benefits, rewards points and more.
Make Use of Reward Points
The best credit cards are those that provide a wide variety of offers and rewards that you can benefit from. One such example is the SBI Pulse Credit Card that offers up to 10 points on every ₹100 that you spend over dining, entertainment and pharmaceutical purchases. Making use of such rewards will give you a steady payback that you can utilise to minimise your overall outlay.
Maximise Your Cashback
There are credit cards that offer cashbacks on purchases made under select categories that can help you counteract the consequences of inflation. Owning such credit cards especially when you make frequent purchases can help you earn cashback on your transactions.
Make the Most of the Perks Offered by Your Credit Card
In addition to rewards and cash backs, credit cards also offer perks such as insurance cover, fee waivers, lounge access, add-on cards, complimentary memberships and more. The SBI Pulse Credit Card is equipped with all these features that can help you utilise your credit card to gain maximum benefits.
Build a Fund for Emergencies
It is always good to have a safety net to fall back on. Saving up a little every month can prove to be quite the saviour when recession is dangling over your head. An emergency fund thus built will be able to sustain you for a short duration of time and keep you from going beyond your set credit limit.
Seek for Help When Required
If the impact of the recession has pummelled your financial state to an extent that requires immediate attention, you must not be reluctant to seek the necessary help. You might be able to talk to your credit card provider and negotiate a payment plan that is lenient.
A recession coupled with the trepidation of inflation, can induce stress and anxiety. Nevertheless, it might bring in some ease to know it’s not too late to undo the damage. Adopting the management measures stated above effectively, could help you combat recession and emerge victorious. Nonetheless, it is of vital importance that you utilise your credit card sensibly and be sure to manage your finances in a rational manner.
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