Another year is upon us and while many of us are still going strong trying to turn our resolutions to reality, a few of us may want to just take a step back and quietly reflect on the year gone by. The dawn of a new year holds many possibilities in terms of the direction and shape we want to give to our future lives. This includes our finances too.
If you’re tired of that sinking feeling every time you hold a Credit Card bill or get annoyed by those reminders to pay your annual fee even when you haven’t spent a dime on your Credit Card, it’s time to take a hard look at your finances. Or to be precise, your Credit Cards.
Over the years, as your expenses and needs have grown, you may have accumulated cards that, on second thought, you may never need. Credit Cards may make your wallets lighter but not if you’ve hoarded a whole stack you probably won’t ever use.
While you may be on track with your New Year resolution to lose those inches around the waist, don’t ignore your wallet that may have become heavier due to negligence.
Additional Reading: No Annual Fees On These 3 HDFC Bank Credit Cards
Step 1: Discard Cards That You Will Never Need
As Marie Kondo advises, start your tidying up exercise by placing all your things in a heap so that you can take a good look at all the stuff you’ve accumulated over the years. Emptying your wallet by laying its contents on your table may reveal a ton of junk like old receipts, business cards, multiple Credit Cards etc.
Now may be a good time to ask yourself this question -“Do I need so many Credit Cards?” When you were just starting your career and saving was a top-priority, you may have opted for Credit Cards that offered generous cashback on dining, shopping or freebies like free movie tickets or shopping vouchers from UCB, Amazon etc.
However, over the years, your needs and lifestyle have changed. Cards offering perks on grocery shopping, free lounge access, savings on dining bills etc. may hold more appeal and rationale for you now. Take a hard look at your pile of Credit Cards and identify cards that don’t match your needs and priorities.
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Step 2: Pause And Reflect
You may find this step a little challenging given that you’ll need to do some soul searching with what you really need vis-à-vis what you want in life. Take a careful look at your pile of Credit Cards and ask yourself how many of them you use regularly? There may be some Credit Cards that you rarely use but pay annual fees for every year.
If you really plan to hold on to them, check with the Credit Card issuers if they can waive the annual fee for you. Banks generally don’t but they might consider your proposal if you have a good payment record and have been a long-standing customer. While there’s no downside to having multiple Credit Cards, if you’re in the habit of paying just the minimum due amount, you are overlooking the fact that the outstanding balance on each of those cards will snowball into a hefty amount and add a high interest to that, which will leave you cursing yourself for biting off more than you can chew.
Additional Reading: Are There Credit Cards Specifically Designed For Women?
Step 3: Prioritise Your Credit Card Needs
Take the following steps towards prioritising your Credit Card needs:
- If you’ve recently purchased a big-ticket item using your Credit Card and paying instalments towards it at 0% interest, then check the number of instalments left on this repayment plan and consider closing this Credit Card once you’ve completed the repayment.
- Take note of your Credit Card networks. Ola, every now and then, offers good discounts on ride payments made through Visa. MasterCard offers great lounge privileges across both domestic and international airports. It may be a good idea to carry a card of each.
- How much do you spend on groceries in a month? Some cards like the YES Premia and IndianOil Citi Platinum Card offer great rewards on grocery shopping. Crunch some numbers to see which card gives you the most cashback or rewards on your everyday expenses.
- Do you drive to work? In this case, it may be worthwhile to get a fuel Credit Card like the IndianOil Citi Platinum Card that gives you generous reward points on fuel spends.
- What do you do for entertainment? If your weekends are all about fine-dining or chilling out at a pub, you need a Credit Card that offers good savings on your dining bills like the HDFC Bank Diners Club Black Card, YES First Business, IndusInd Bank Platinum Aura Edge Credit Card etc. If going to the movies sums up your weekend plan, opt for cards that give you free movie tickets like the Kotak PVR Gold Credit Card, Kotak PVR Platinum Credit Card etc.
- Do you travel frequently? Then your perfect travel companion is a travel Credit Card that will let you earn rewards points that you can redeem for free upgrades or flight tickets.
De-cluttering your Credit Card portfolio will help you gain a clearer picture of the Credit Cards that you will need and can afford to discard in 2019. This will not only help you save on annual fees for cards that you never use but will also orient your expense pattern to make best use of your Credit Cards.
Want to de-clutter and get your hands on a new card? Just hit the button below: