How to Enjoy Maximum Benefits of Credit Cards in India?

Usage of credit cards has become quite common in India; nowadays almost everyone has a credit card and enjoys spending through the card. It adds to the status symbol and is also a great comfort when you make cashless payments.  However, one must use the Credit Card judiciously; else it may turn into a nightmare rather than a benefit.

Let’s look at some of the time tested ways to make the best use of Credit Cards and learn how to reap maximum benefits of cashless transactions:

Select the right Credit Card

This is the most important aspect of efficiently using a Credit Card. Always avail a Credit Card as per your needs. Analyze your spending pattern and figure out which type of Credit Card will best suit your needs. For example, if you are a frequent air traveler, then a credit card which gives you free miles would be the right choice. If you are a movie buff, then a Credit Card that offers free movie tickets is the most suitable. If you are a shopaholic, then a Card with extra shopping discounts would match your requirements. Getting a card as per your usage will ensure you utilize the card to the fullest.

Use multiple cards

You could also use multiple cards for enjoying special benefits provided by each card. This way you can enjoy travel discounts, shopping benefits, fuel recharges and extra reward points to the fullest. However, you must be wary of not applying for all the cards simultaneously as it may reflect as a credit hungry behaviour in your credit report.

Try to reap annual fee waiver

A lot of Credit Cards extend annual fee waiver after you cross a benchmark of spends. If your card has such a feature, try to capitalize on that and get the Annual Fee waived off and save the amount.

Encash on your Reward points

Every card these days comes with a Reward Points plan wherein each retail spending earns you certain reward points. These Reward points can be accumulated and redeemed at a later stage. An advisable decision would be to keep a check on your Reward Points’ scorecard and redeem it against available merchandise or discount coupons.

Exploit your grace period

A credit card will typically give you a 20 days grace period post the statement is generated to pay back the amount without any interest being levied. Hence, if you look at ways and means to exploit this to a maximum interest-free tenure, you will be able to save your amount as well as interest until such time. If you were to make all major purchases or expenses from your card around the first week of the billing cycle, then you would get the entire remaining month till the bill is generated plus the grace period of 20 days to pay back before you are being charged any interest. You can plan the purchase and enjoy free credit for 40-50 days this way.

More swipes than cash advances

Try to avoid withdrawing cash from your Credit Card as it attracts comparatively much higher interest than a normal purchase and swipe on the card. If you use your Credit Card to make a payment at any e-commerce site or any swiping machine, you get up to 50 days of interest-free period to pay back the amount, whereas, with a cash withdrawal on the card, interest is charged from the very first day itself.

Apart from the above techniques on saving more using your Credit Cards, you could also follow the below mentioned hacks to ensure that usage on your cards is optimized and effectively managed:

• Always pay your Credit Card dues on or before time.
• Even if you can’t pay the total amount due, pay back at least 5% of the due amount which is the minimum due and let the rest of the balance revolve to the next billing cycle.
• Always keep a count of transactions done on your Credit Card and immediately inform the bank if there is any level of suspicion or unidentified transaction observed.
• Avoid withdrawing cash from Credit Card, instead swipe the card for any purchases made.
• Don’t overspend on your card limit. Try to keep the “spends” within 50 % of the maximum Card limit. Remember, by over exploiting your Credit Card; you will only add more expenses for yourself in the future.

Credit Cards are definitely a comforting factor and a great relief to have when you want to purchase what you desire. However, it will add value to your life only if you use it judiciously and don’t misuse it. Hence the above points need to be kept in mind while using plastic.

Also Read: 6 Benefits of Having Multiple Credit Cards

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