People are comfortable using Credit Cards today. The demonetization exercise has resulted in people using Credit Cards more than ever before. Therefore, it is necessary for people to manage their Credit Cards better. These 7 tips will help you do so efficiently.
The best way to manage your Credit Card is to pay your dues on time. It is better to pay the entire dues on or before the due date to avail the benefit of the interest-free period. However, if you are not able to do so, ensure to pay as much as possible over and above the minimum amount due mentioned on the bill.
Remember, this will result in attracting interest on the outstanding amount. Try to clear the entire outstanding as early as possible because paying the minimum amount due every month will cost you a lot. Understand your spending habits and cap your credit limit to an affordable sum. Once you become comfortable with the Credit Card mechanism, you can request the bank to increase your limit.
Do you have a massive amount due on your Credit Card account? You should get rid of this burden quickly. It involves dealing with your finances smartly. One way of doing it is to control all incremental unnecessary spending on the card. Otherwise, you end up paying more towards clearing the Credit Card debt.
Another option is to opt for a Credit Card Balance Transfer. The balance transfer facility involves applying for a new Credit Card and transferring the debt from the existing card to the new one. Some banks offer this balance transfer facility at 0% APR (annual percentage rate).
Remember that the interest rate concession will be for a specific period within which you should adjust the debt. Once the period is over, the bank might start charging you interest at regular or even higher rates. It is better if you do not use Credit Card to clear your debt. Balance transfer of your card outstanding will help you save money and also build up your credit score.
Do your research correctly when you apply for Credit Cards. The card that works for your friend may not necessarily work for you. It depends on your lifestyle and purchasing habits. If you are a frequent traveler, a co-branded travel card is the right one for you. On the other hand, a shopping and cashback Credit Card is the best for a compulsive shopper. You should also concentrate on the Credit Card charges before applying. It is advisable to take the help of financial service providers like http://www.mymoneymantra.com to provide you with the Best Credit Card Offers.
Knowing your credit score before applying for the card is beneficial. Banks approve Credit Cards for people having credit scores higher than 750. In case your score is not above that level, it is better to improve your score before you apply for a Credit Card. The rejection will further dent your credit scores further.
We have seen that a good credit score is necessary for the approval of your Credit Cards. It is essential to develop good credit card habits to maintain your credit score. Ensure that you do not spend more than 30% of the limit on your Credit Card. A higher credit utilization ratio (CUR) is not financially prudent.
It is better to master the use of one card before applying for multiple cards. Managing numerous cards successfully can help improve your credit score.
Repaying your Credit Card bill on time is vital. Availing a direct debit facility from your savings account can save you the trouble of having to remember to make the monthly payments on time. You need not worry about paying your bills on time anymore. Technology will do it for you.
Do you need to buy an expensive gadget? Your Credit Card can help you do so. You can take advantage of the EMI (Equated Monthly Instalment) facility. Almost all Credit Cards have this facility wherein you can break up the purchase into affordable EMIs. In the absence of the card, you would have to Apply for a Personal Loan or a consumer loan. The Credit Card enables you to make such big-ticket purchases easily, without having to manage multiple payments and due dates every month.
Winning reward points is one of the benefits of using a Credit Card. However, you should utilize these reward points well. They come with an expiry date. The reward points vanish after the expiry of the said period. Manage your reward points well by taking advantage of the benefits. Some cards have facilities that allow you to pay a part of your next card bill with these reward points.
These 7 useful tips can help you manage your Credit Card efficiently. Use them wisely and improve your credit score in the process.
Also Read: Benefits of Owning Co-branded Credit Cards
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