I know this article may hit someone negatively, but this is to those who earn less than a 1 Lac (net) a month.
If you have not read my previous article on - Advice to young working professionals who are starting their credit journey. (Advice no one asked for; CIBIL 802)
- Go and check it out. If you are new to the credit game.
Now on with this article. Note: I am no writer, and this could be a poorly written article.
Why am I discouraging any prospective premium credit card seeker, whose monthly net income is less than 1Lac, from applying for such premium cards? Simple answer: Because you cannot afford such cards.
Over the weekend, I came across multiple articles on this forum, wherein OPs are asking how they can get premium cards (such as Amex Plat, HDFC Infinia/DCB, Axis Magnus/Reserve) while their monthly income does not support the lifestyle needed to reap the benefits of such premium cards (that usually come with higher-than-average annual membership fees).
I don’t want to sugar coat harsh realities of life. Your hard-earned money is to maximize your wealth and not to waste it for illogical reasons. I know this is such a materialistic thing to say but so is expensing using credit on things you may not even need. We all have been taught about the difference between needs and wants early in our teenage years but somehow, we forget such lessons in our adulthood.
As rational people, we have one simple job – maximize our wealth. India’s stupid high double taxation is another story for another article.
Now coming to the numbers:
If you are making less than INR 1L a month, then you should not be wasting your efforts on getting premium-tier cards because your monthly expense may not support you to reach the reward points needed to satisfactorily reap the benefits of premium cards – yeah except for airport lounges – which are also available on almost all mid-tier cards.
Time gone will never comeback. A rupee spent will never come back. So, respect your time and money well. Don’t spend if you don’t need to just for the sake of reward points.
For ease of calculation let’s say you make 1L a month. Following is how I think you should manage your expenses:
With an expected monthly expense fund of 30-35% = INR 30k-35k. How many of your expected expenses do you think you’ll be able to make using your credit card? Think wisely if you can even achieve certain milestones?
You should not fall into unnecessary spending loop. Read this article - Psychology of Credit Card Spending: Understanding Overspending and Strategies to Stop It
I am going to keep this article open-ended and let members of this community comment and share their thoughts on what they think the right type of credit card should be for someone with maximum monthly expense of 30k-35k. Maybe stick to a good mid-tier card?
1RC
If you have not read my previous article on - Advice to young working professionals who are starting their credit journey. (Advice no one asked for; CIBIL 802)
- Go and check it out. If you are new to the credit game.
Now on with this article. Note: I am no writer, and this could be a poorly written article.
Why am I discouraging any prospective premium credit card seeker, whose monthly net income is less than 1Lac, from applying for such premium cards? Simple answer: Because you cannot afford such cards.
Over the weekend, I came across multiple articles on this forum, wherein OPs are asking how they can get premium cards (such as Amex Plat, HDFC Infinia/DCB, Axis Magnus/Reserve) while their monthly income does not support the lifestyle needed to reap the benefits of such premium cards (that usually come with higher-than-average annual membership fees).
I don’t want to sugar coat harsh realities of life. Your hard-earned money is to maximize your wealth and not to waste it for illogical reasons. I know this is such a materialistic thing to say but so is expensing using credit on things you may not even need. We all have been taught about the difference between needs and wants early in our teenage years but somehow, we forget such lessons in our adulthood.
As rational people, we have one simple job – maximize our wealth. India’s stupid high double taxation is another story for another article.
Now coming to the numbers:
If you are making less than INR 1L a month, then you should not be wasting your efforts on getting premium-tier cards because your monthly expense may not support you to reach the reward points needed to satisfactorily reap the benefits of premium cards – yeah except for airport lounges – which are also available on almost all mid-tier cards.
Time gone will never comeback. A rupee spent will never come back. So, respect your time and money well. Don’t spend if you don’t need to just for the sake of reward points.
For ease of calculation let’s say you make 1L a month. Following is how I think you should manage your expenses:
| Monthly Allocation | Range % | |
| Investment Target | 35.0% | 40.0% |
| Expected Expenses | 30.0% | 35.0% |
| Misc. Expense | 15.0% | 20.0% |
| Liquid Savings - Rainy Day Fund | 20.0% | 5.0% |
| Total Income | 100.0% | 100.0% |
With an expected monthly expense fund of 30-35% = INR 30k-35k. How many of your expected expenses do you think you’ll be able to make using your credit card? Think wisely if you can even achieve certain milestones?
You should not fall into unnecessary spending loop. Read this article - Psychology of Credit Card Spending: Understanding Overspending and Strategies to Stop It
I am going to keep this article open-ended and let members of this community comment and share their thoughts on what they think the right type of credit card should be for someone with maximum monthly expense of 30k-35k. Maybe stick to a good mid-tier card?
1RC
