Tips on How to Use Credit Card Smartly

 

You need to be very smart when using a credit card. You can accrue benefits or losses depending on how cautiously or carelessly you use a credit card. There are people out there who use a credit card without getting into a debt trap, wonder how? Not to worry, we will guide you every step of the way. You can apply for a credit card online as well as offline at your convenience. You can find the best credit cards in India that suits your profile. After receiving the credit card you need to be very cautious while using it. Keep reading to know how you can use a credit card smartly.

Top Tips on How to Use A Credit Card Smartly:

1. Don’t cross the credit limit: It is advisable to not use a credit card beyond the provided credit limit. Maintain a good credit utilization ratio. The credit cardholder should not use a credit card more than 50% of the given credit limit. Utilizing credit cards more than 50% affects the credit score badly.

2. Avoid default in credit card bill payment: Many people either forget to pay their credit card bills or ignore to pay them. Not clearing the dues on time affects the Credit history negatively. On defaulting, credit card bill payment reflects the defaulter in your credit history for many years which can make it difficult for you to get a new credit card or to get a loan from the bank. So, make sure to always pay your credit card dues on time and one thing you can do is to opt for an auto-debit facility. Auto-debit clear your dues every month on a selected date and you do not have to keep reminders to pay the credit card bills. 

3. Pay more minimum balance: You can avoid high-interest rates by paying double the minimum balance. You can also pay the outstanding balance in full, if you don’t have funds available to pay the full balance in one go, at least pay more than the minimum balance. In doing so you will not be burdened by the heavy interest rates at the time of paying the rest due balance later on.

4. Avoid withdrawing money using an ATM: While withdrawing cash from the ATM, the bank charges a cash withdrawal fee. You would not like to pay extra for withdrawing cash. As much as you wish to withdraw cash from an ATM, do not. 

5. Clear dues of high-interest credit cards first: Always clear your dues of the high-interest credit cards first because there is a chance of falling into a debt trap if you do not clear the dues of these credit cards first. 

6. Joining fee & renewal fee: While applying for a credit card look at the joining fee and renewal fee structure and select the credit card that suits your profile and which is affordable. There are credit cards that have lesser joining fees than renewal fees. 

7. Make the most out of rewards: On receiving the credit card, you get certain welcome benefits which you can avail of by using a credit card in such a way. Carefully read the credit card features and benefits so that you can make the most out of the credit card. You can use your reward points earned on the credit card by paying the outstanding balance of your credit card with it. 

8. Immediately report the loss/missing credit card: In an unfortunate event of credit card loss/missing, the credit cardholder must report the same immediately either using a netbanking account or by contacting the bank through customer care numbers and get their credit card blocked. Blocking a credit card reduces the chances of fraudulent activities happening on your account.

9. Use a credit card to make big purchases: The credit cardholders not only use credit cards for small purchases rather he/she should use the credit card for big purchases. This will help in building credibility and improve your credit history.  

10. Thoroughly check the promotional offers: Before using a credit card for a promotional offer think twice if you need it or not. Do not use your credit card just for the sake of it. Read the promotional offer thoroughly before purchasing it. 

11. Do not share your credit card information: Credit card details like account number, card number, PIN, CVV, etc are very confidential information and you should not share it with anyone, not even with your friends and family. There are many frauds out there who impersonate themselves as bank employees so that they can obtain confidential information. This can cause loss to the credit cardholder. 

12. Keep updating passwords & PINs: It is advisable to keep updating your credit card internet banking password and your credit card 4-digit PINs once every 6 months. Do not store these pieces of information in your phone as there are chances your phone can get hacked. Set passwords and PINs of such combinations that no one can guess. 

Bottom Line

The above-given 12 tips on how to use a credit card smartly can definitely help you to not let you fall into the possible debt trap. Using a credit card sensibly and responsibly can accrue the most benefits to its holder. Keep a tab on your spendings so that you do not overspend and cross the credit limit. Do not forget to pay your credit card bills on time. Following the above-given tips can also help you in building a good credit history. 

The rewards and benefits of a credit card are amazing and to enjoy them you need to be careful in using your credit card. You can not swipe your credit card carelessly anywhere. Apply for the best credit cards in India that matches your requirements.