If we use a credit card responsibly, it can actually relieve stress by helping us cover unexpected costs and budgeting for things we cannot pay for right now. However, if we over-rely on our credit cards, or give in to impulse buys, we can max out our credit cards and end up accumulating debt. This is why it’s important to keep your credit card balance below your credit limit. If you tend to use up your credit limit, your minimum payments become too large and your credit score is at risk.

 Here are a few tips to keep your balance in check and get the most out of your credit card.

1. Set your credit card limit
   
   Set a reasonable limit for your card. It’s so easy to do this, you can do it on your App or online banking. This will encourage you to choose carefully what you want to buy at a store and even online. Try not to increase your limits as this will simply tempt you to spend more than you afford to, again.
   
   
2. Keep your balance lower than your credit card limit
   
   Next, try to keep your balance below this limit you’ve set for yourself. You can set yourself personal credit limits, based on your income, expenses, and savings. Keeping your balance low also benefits your credit score. It’s reflected in your credit utilisation ratio, which is a comparison of the amount of credit that you use against the amount of available credit. Having a lower ratio improves your credit score.
   
   
3. Check your available credit before swiping
   
   It helps to know how much credit you have available before spending. Not only will it help you budget and prioritise the items on your shopping list, but it’ll save you from a “card declined” situation at the till.
   
   
4. Get the right mindset
   
   Try not to think of your credit as free money. Don’t forget, you have to pay back whatever you spend! Instead, think of it as a tool to help you budget, and use it in conjunction with cash. This will help you to stop relying on your credit card and budget for cash purchases. You could also try reserving your credit card for certain kinds of purchases — preferably purchases that cost less, like groceries.

Did you max out your credit card?

If you’ve pushed the limit on your card, don’t panic. Now’s a good time for a new start. Consider your spending habits and your budget.

Your best bet is to stop using your credit card and paying the outstanding balance in full. Then, leave it at home when you go out. Opt for cash or your debit card when you’re out for groceries or other essentials. You could also consider getting a more affordable credit card, one that lets you earn interest on a positive balance. This should motivate you to pay your balance.