6 Financial Habits a Secured Credit Card can Help You Build a better Lifestyle

A secured credit card is that sort which holds a cash deposit as a security against the credit card. This deposit is maintained in a collateral account, which can be forfeited by the company in case the cardholder fails to pay his bills. Unlike other cards, it doesn’t let the holder get carried away with his expenses as he has something immediately at stake; it helps to build some great financial habits. You can also check out the credit cards offered by Standard Chartered and find out more online.

Secured credit cards can help you to be in strict financial discipline. Source: Techno

1. Checks Compulsive Credit Usage

It helps you to manage your credit line and use it in a way that would not portray you as an unsuitable borrower. You may use the maximum of your utilization ratio, which is the amount of credit up to which you may use compared to your available credit. Still, it is always wise to regulate your expenses. Secured ones are most suitable for the payment of small purchases each month or average installments.

Paying off small amounts on regular intervals creates more value for the cardholder in the market than if he/she makes a huge purchase, almost margining on the limit.

2. Customize Your Accounting System

Secured plastic money provides you with various money management tools and options from which you may choose to keep an account of your card. Sometimes paper statements are challenging to preserve and, once lost or damaged, cannot be retrieved easily. In that case, you may request your bills to be sent at your e-mail id or even manage accounts from your smartphone. All your queries and transactions are but a click away.

If, on the other hand, you prefer to have hard copies of statements, you may have them as well. It handles your comments according to your convenience.

3. Always Be Alert About Your Credit

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Based on the activity of your plastic money, it is viewed by credit bureaus. The monitoring tools are useful for the understanding of your financial behavior. You can spot mistakes and build strategies to improve your score.

A regular viewing and analysis of your account will also keep you alert of any unauthorized activity of the plastic money. In case of fraud, you will have an entire financial history to preserve your claim. Even sometimes, the bill that you receive from your company may, due to some error, display the wrong amount, you need not panic or helplessly pay the erroneous amount. You can refer to your record and seek help from the plastic money issuer’s customer service.

4. Improving Your Credit History

In the case of a secured card, credit history plays a dominant role. The amount of deposit money depends on the history of the card applicant.

Your value is based on the calculation of all of your oldest and most recent credit card accounts. Thus a person with several contemporary card accounts would have lower points than a person with a more past account.

You may own several unsecured cards, but having one secured card saves you from falling into a spree of convulsive expenditure.

5. Generates a Habit Of Saving

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In today’s world, we have become impotent in distinguishing between our needs and wants. We are always on a lookout for a material purchase to make us feel good, and thus it becomes challenging to save funds for long-term goals. Since acquiring secured plastic money requires a deposit, it provides one with the impetus to keep. It could be an effective beginning of learning to curb one’s expenses.

One can also make lifetime investments through a secured card and have assets or some other more substantial goals. Keep a tab on your balance and points to plan effectively on such intentions.

Track Your Budget

Many cardholders complain of having an outstanding debt. Paying off this debt becomes a huge burden and often compels them to take loans on much higher interest. That is simply because the users fail to incorporate budgeting in their daily activity list.

Secured plastic money, on the other hand, can make you learn how to keep track of your budget and subsequently monitor your purchases. You must also remember to pay your bills on time and not neglect them. If you are too busy, you can install apps on your smartphone, which would remind you to pay your bills on time every month. These apps also come with budget regulating advice and tools.

Contrary to popular belief, getting secured plastic money does not require many efforts. Although it depends on your credit history, you can always improve it with your secured card. The benefits, as mentioned earlier, can only be reaped through a secured credit card. Stop spending unnecessary money with your regular plastic money only to repent later, instead get a secured card soon.