Credit cards are particularly useful instruments for personal finance management since they allow users to conveniently make purchases on credit and efficiently manage their cash flow. Financial companies provide these cards, which let you borrow money for purchases or cash withdrawals up to a set amount as long as you commit to pay back the loan plus any associated fees or interest. Using credit cards wisely can have a big impact on your creditworthiness and financial flexibility.
Liv, recognized as UAE’s premier digital bank, brings a fresh perspective to the traditional credit card experience. Intended for use as tools for improving your financial health rather than merely for making purchases, they are tailored to the needs of the financially aware and technologically capable customer. They provide a range of advantages designed to satisfy the needs of the contemporary consumer, including creative features that assist in tracking financial objectives and managing expenditure, as well as rewards and cashbacks on regular purchases. Liv’s credit card strategy places a strong emphasis on value, security, and simplicity, which makes them an appealing option for anyone trying to improve their money management in the digital era.
Understanding Credit Score
A credit card is a financial instrument issued by banks, allowing users to borrow funds within a pre-approved limit for purchases or cash withdrawals. The issuer grants a grace period for repayment before interest is charged. The way you manage this credit—timely payments, staying within credit limits, and the length of your credit history—directly impacts your credit score. This score is a numerical expression based on your credit history, indicating to lenders your reliability as a borrower.
Benefits
A high credit score opens the door to numerous benefits. It enhances your eligibility for loans, potentially secures lower interest rates, and improves your chances for credit card approvals with higher limits and better rewards. Essentially, a strong credit score reflects financial responsibility, making you a desirable candidate for lenders.
Advantages with A Liv Card
Choosing a Liv credit card brings its own set of advantages. As UAE’s leading digital bank, Liv offers a modern, seamless banking experience with features designed to empower users. Their credit cards are tailored to encourage smart spending and financial wellness, offering rewards that align with your lifestyle and spending habits. Moreover, Liv’s digital-first approach means managing your account and tracking your credit score can be done with ease, directly from their app.
Tips to Improve the Score
Improving your credit score is a strategic process. Here are some effective ways to enhance your score, especially when using a Liv credit card:
Be Smart: When given a credit card, a lot of people frequently find themselves unable to control their spending patterns. Although credit cards come in handy when money is tight, this benefit doesn’t always translate into something positive. This is because, despite your initial belief that you would have enough money to cover the costs, you wind up exceeding your limit due to excessive spending. Aiming to keep your balance under 30% of the limit is the best course of action in this situation. Additionally, timely payments are essential; even one late payment can have a negative impact on your credit score.
Ensure the Information is Accurate: It is important to maintain the details on your card as every application for a loan calls for a hard inquiry by the bank. This can further impact your credit score, albeit for a short period. Whether it is Liv Bank or any other financial institution, it is mandatory for them to examine your credit history during the application process as the approval is determined on this. Also, it is best to avoid multiple loan applications at once as that can also cause issues.
Limit Loan Applications: Every loan or credit card application triggers a “hard inquiry” by lenders, which can slightly reduce your credit score for a short period. Financial institutions, including Liv, examine your credit history during the application process. Submitting several applications in a brief period may be interpreted as financial instability by lenders.
Verify Card Information Accuracy: The correctness of your credit report information is vital. Any inaccuracies can negatively impact your credit score. Make it a habit to check your credit report regularly for any mistakes or inconsistencies and promptly report them for correction.
Manage Joint Accounts Carefully: For those with joint accounts, it’s important to remember that the financial behaviors of one account holder can affect the credit scores of both parties. Both individuals should engage in prudent financial practices, recognizing that any financial missteps could detrimentally affect each other’s credit scores.
Conclusion
When used sensibly, credit cards may be an effective tool for managing your finances and raising your credit score. Selecting a Liv credit card makes you a partner in your financial path as well as a payment tool. Keep in mind that raising your credit score is a journey, not a sprint. It necessitates regular, prudent money management. Through adherence to these rules, you can progressively raise your credit score and take advantage of all the financial opportunities that are open to you.
Football fan, doer, audiophile, Swiss design-head and collaborator. Making at the junction of beauty and elegance to create not just a logo, but a feeling. German award-winning designer raised in Austria & currently living in New York City.
