How To Use A Credit Card Wisely- 7 Tips



Adding a credit card to your wallet is an important decision but using it wisely tops the list. You need to use your credit card wisely so that you can maximise the benefits. The first and foremost important thing is to have the right credit card and then use it in such a way that you can earn incentives in return. You need to compare credit cards online so that you can choose the right credit card for yourself. In this article, we have covered 7 tips on using a credit card wisely that you must know. Keep reading to kick start your research.

  1. Choose the right credit card: To use a credit card wisely, you must have the right credit card. With that being said, it becomes more important for you to select the right credit card. For this, you need to first identify your needs and spending habit and then start choosing the credit cards which compliments them. Then compare the selected ones to narrow down your choices to one credit card.
  2. Use the card to earn rewards: Read carefully the rewards program of your credit card so that you know on which spend categories you can earn rewards. Use your credit card for those transactions only which allows you to earn reward points. Using a credit card wisely to earn rewards will help you maximize the benefits of your credit card.
  3. Know all the charges: You must use your credit card in such a way that you do not fall into the trap of hidden charges. Before start using your credit card, you need to read the most important terms and conditions so that you know which transactions can cost you more than required. Say, for example, withdrawing cash from an ATM using your credit card will charge you a processing fee, so it’s better to avoid using your credit card at ATMs.
  4. Redeem rewards before they expire: All reward programs on credit cards have a definitive period in which you can redeem the rewards. Try and redeem your earned rewards in that time frame only as after that they will expire. Redeeming the rewards before they expire helps you to maximise the benefits on your credit card.
  5. Pay dues on time: This is the most important aspect when it comes to using a credit card wisely. Instead of paying the minimum amount try to pay the due amount in full and on time as it will save you from interest charges. Moreover, not defaulting on the payment of dues will help in building a good credit score.
  6. The low credit utilization ratio: To build a good standing account you need to maintain a low credit utilisation ratio between 30% - 40%. Using a credit card beyond the provided limit will attract overdraft charges and it will negatively impact your credit score. Setting a threshold limit on your credit card can help you to maintain a healthy credit utilisation ratio.
  7. Check credit card report/statement regularly: It is advisable to check the credit card report or credit card statement every once in a while. Doing so will keep the errors and omissions at bay. Moreover, you will be able to report the errors and omissions immediately.

Bottom Line:

To conclude, using the above-mentioned 7 tips can help you in using your credit card wisely and thereby helping you make the most out of your credit card. Having a good standing account increases more chance of you getting a new credit card/loan in the future. It increases your credibility.

Do share your tips on using a credit card wisely in the comment section.

Comments

Post a Comment

Popular posts from this blog

How To Get A Good CIBIL Score Without Any Credit History?

Image
A credit score or CIBIL score signifies your credit behavior and shows how you have performed while paying back the loans or while using a credit card. All these activities are stored in the form of credit history and this history is used to set a matching score for your profile. A good CIBIL score increases your chances of getting a loan or a new credit card. But what if you never had any loan or used a credit card? Simply put, what if you never had a credit history? Well, the simplest way to answer this is that you will not have any credit score. There would be no numbers in your score, rather it is shown as NA or NH (No history).  In this article, we are going to talk about the ways by which you can get a good CIBIL score in case you don’t have any credit history.  Apply for a Credit Score: The first and the simplest way to start building a good credit score is to get a credit card. A credit card is one of the best financial products ever made. The card is issued with a prefixed cr
Read more

The Benefits of a Cash Back Credit Card

Image
Cashback credit cards have gained popularity as one of the many types of credit cards available to us. With their numerous benefits including convenience, security, and rewards, credit cards have become an essential part of our daily lives. Specifically, cashback credit cards are gaining prominence for their ability to offer rewards in the form of cash back for purchases made using the card. In this discussion, we will explore the advantages of using a cashback credit card.   Rewards for Everyday Spending The primary benefit of a cashback credit card for Indian consumers is the rewards for everyday spending. Firstly, cashback credit cards offer a percentage of the purchase price as cashback. Additionally, the cashback can be earned on all purchases or specific categories such as fuel, groceries, or dining out. For example, if you have a cashback credit card that offers 1.5% cash back on all purchases and you spend Rs. 75,000 a month, you can earn Rs. 13,500 cashback every year. This i
Read more