A lot of us have one or more Credit Cards in our wallets, which we are more than happy to flash out for different types of purchases. Credit Cards have witnessed a recent surge in their popularity due to the push from the Government to popularise digital payments.
Additionally, now various banks are rolling out their Best Credit Cards offering additional cashback, rewards and benefits on specific usage which has led to a significant increase in their popularity. If used judiciously and smartly, Credit Cards can be a great asset.
Tips to Utilise Credit Cards Judiciously
Make Payments on Time
Make sure that you pay your card bills on time. Not making payment on time will lead to significant charges in the form of Late Payment Fees and would also impact your credit score. So, if you are bad at remembering dates, it is better to set your card’s bill payment on Auto-Debit from your savings account.
This way you will never be late for making payment against your bill. If you are unable to make the payment in full, at least make the minimum payment to avoid the penal charges. Do not wait until the last date, make the payment as soon as your invoice is generated to avoid last minute rush.
Keep Credit Utilisation Under Control
Ensure that the total amount utilisation against your Credit Card is always under 30%. If it is more than 30%, this has a negative impact on your credit score. Try and make the payment of the bill in full. Otherwise it will be carried over to the next month and would again affect your credit score.
Make Payment in Full
Every Credit Card comes with an interest-free period, ranging from 15-60 days. If you repay the entire amount due within this period, you will not be charged any interest. This could mean significant savings for you as otherwise, you need to pay interest on the entire amount due, which could be as high as 42% per annum.
Do Not Withdraw Cash Unnecessarily
Unless and until it is an absolute emergency, do not withdraw cash against your Credit Card. Firstly, the charges are very high for the same,andsecondly, it will reflect poorly on your credit score. So, instead of taking out cash to purchase stuff, it is better you pay the bill through Credit Card and instead earn reward points for the same.
Use Your Credit Card Judiciously at International Locations
If you travel to international locations frequently, then you must keep a close eye on your card usage as the charges for payment in foreign exchange can be very high. It would be better if you can get best Credit Card for international usage or prepaid FOREX card for your foreign trips, as they enable you to make payments in foreign currency at significantly reduced charges.
Check Your Statement Regularly
Always keep a close eye on your Credit Card statement. There could be some charges that you may not be able to understand, so if you find any such transactions in your statement, then get in touch with the customer care and ask for clarification. If these charges had been charged wrongly to your account, the amount would be refunded back to you.
Written By Reshma RawatAssistant Content ManagerCredit Cards, Credit Score, Personal Loan, Home Loan, etc.
Reshma Rawat is a passionate writer with a decade of experience in writing for a variety of domains (finance, technology, lifestyle, e-commerce, real estate, etc.). Currently, she is working as Assistant Manager - Content @MyMoneyMantra and writes blogs & webpages on financial products (loans, credit cards, insurance, government financial policies, mutual funds, etc.).
