No matter how hard you try, planning your monthly home budget is no piece of cake. But if you're not careful, the cost of your monthly home expenses can add up quickly. One effective way to take care of these expenses is through a credit card. This is because credit cards provide instant access to finances whenever you need them. And since you can make repayments later, it gets you some time to arrange funds.
More importantly, credit cards come with a slew of features and rewards that can help you save money if you know how to use them well. Curious how? Well, here are four ways you can use a credit card to smartly manage your monthly home expenses.
1. Keep Track of Your Spending
Making a budget is one of the first steps to start managing your home expenses effectively. This involves having a clear understanding of all your monthly obligations, your recurring expenses, and savings.
With a credit card, however, all the transactions you make using the card are recorded in your credit statement. These are sent to you every month, giving you an overview of all the transactions done within the billing period. This helps you identify both the necessary and avoidable expenses, helping you plan your budget better each time.
2. Make Bill Payments on Time
Did you know you can automate monthly bill payments on your credit card? The monthly bills for utilities like gas, electricity, telephone, etc., can be deducted automatically from your card, provided you set up the facility. What’s more, if your credit card has a reward program for paying utility bills, you can also earn rewards like cash back, points, or miles on bill payments.
3. Quick Withdrawals for Emergencies
No matter how carefully you prepare for the future, the truth is: life happens! In such situations, a credit card can give you access to emergency funds almost instantly and meet your needs in no time. This is because you bypass the documentation and approval time involved in securing large funds.
Remember, the amount you can withdraw is set by the card issuer and is usually a percentage of the approved credit limit. So, if you’re planning on withdrawing a large sum of money using a card, make sure your credit limit is appropriate.
4. Comfortable Repayments Through EMIs
If you’re facing a financial emergency and don’t have the funds to repay the dues immediately, you can opt for a pre-approved loan under the credit limit. Doing this blocks the card limit temporarily until you repay the loan.
Here, loan repayments are also in the form of EMIs, and the interest rates are decided by the card issuer based on your credit profile. The biggest upside is the fast processing and disbursal times involved in getting these loans, which is especially useful during an emergency.
Managing home expenses has never been more convenient, thanks to credit cards! With the introduction of the online application process, applying for a credit card and getting one takes less time than before. Once you have a credit card, you can use it for a range of purposes from bill payments to budgeting, and even giving access to quick funds. And with internet banking, all of this can be done on the go.