At one time, credit cards were financial instruments used primarily by the wealthy. Later, card issuers learned that there is tremendous demand for these products among consumers at all income levels, including modest spenders.
Sadly, many banks began to market inferior products to people at the lower end of the income scale. These products can have high interest rates, punitive terms, and offer few benefits.
Fortunately, cardholders with modest spending requirements can still find excellent products with reasonable terms in order to enjoy the same convenience and security afforded to all credit card users. Nevertheless, these modest spenders should be using a card that’s right for their needs.
What modest spenders should look for
Modest spenders who don’t use their cards for a large amount of purchases should avoid cards that have an annual fee. Cards that do have an annual fee can be a good value, but only for people who spend enough to earn rewards that exceed the cost of the fee.
The good news is that there are still plenty of cards that have no annual fee, but still offer competitive features and rewards.
The Discover it card features 1% cash back on all purchases, plus an additional 4% on purchases from select categories of merchants that change each quarter. In addition, the Bank of America Cash Rewards card features an EMV smart chip, no foreign transaction fees, and 1.5 points per dollar spent on all purchases.
Use your current bank
Another smart way for modest spenders to choose a credit card is to find one that is offered by the bank where the cardholder already holds a savings or checking account. In this way, cardholders can view all of their transactions from one website, and make a payment simply by transferring funds from one account to another, rather than writing a check to another institution.
Most retail banks will offer their customers basic credit cards with no annual fee and possibly a simple rewards program.
Modest spenders want few fees
Modest spenders should consider cards that are have been simplified and include few fees, since these costs can have a major impact on a cardholder who doesn’t spend heavily.
The Citi Simplicity card has no late fees and no penalty interest rate, so cardholders will not be greatly impacted by the penalties of an occasional late payment. The PenFed Promise card from the Pentagon Federal Credit Union goes a step further for modest spenders by having no fees of any kind, including annual fees, cash advance fees, or foreign transaction fees.
When you’re on a tight budget, you need a credit card that will deliver the maximum convenience and performance for the least possible price. By focusing on simple products and those offered by the place that customers normally do their banking, modest spenders can choose the best product for their needs.
I personnally dont like credit cards but sometimes people need a fast fix for problems they should not be gigged just because they are in need.
I think it is better to use debit cards. If you don’t have it, don’t spend it.
Using debit cards won’t help if you’re trying to build your credit. Nor do they have protections as robust as a credit card in the event of fraud/ unauthorized charges.
What worked for me was getting a secured credit card with a low credit limit from a credit union (which tend to have better rates than banks), that way even if I DID max it out (I didn’t), I always knew I could pay it from my checking account since the limit was so low. And only using it for essential, recurring expenses (gas, groceries, etc)—
Thanks for sharing! How long have you been using the secured card? Do you plan on trying to convert it to an unsecured card or raising the limit?