Credit cards have become a popular financial tool which not only help you manage your expenses, but also give numerous benefits like discounts, bonus prizes, reward points and exclusive offers. It is important to learn how to use your credit card smartly, so as to prevent any misuse or falling into a debt trap.
If handled smartly, credit cards can help foster a CIBIL score. By keeping track of your credit card transactions and payments, you can provide a substantial boost to your credit score. Here are 5 important tips to use your credit card wisely and take better control of your finances:
1. Pay your bills on time
This is a must when taking on a credit card payment. Pay your credit card dues within the stipulated time period. Missing the deadline means you have to pay hefty interest in addition to the outstanding amount. Also, every time you miss your payment, your credit score takes a hit.
If you earn a steady income, enable a direct debit to ensure your credit card bills are paid when they should be. This will prevent incurring any late payments and enable you to have a healthy CIBIL score.
2. Keep your credit utilisation ratio low
Only utilize a portion of your credit limit each month. Keep it at 10-30% on an ongoing basis. Having more than one credit card will help spread your transactions and build up stronger credit over time. By keeping the balance low, you’ll look responsible on your record. This activity will also help you keep a handle on preventing debt.
3. Review credit card statements
Many people fail to keep tabs on their statements. They figure that all they need to note is the total amount due, and neglect to focus on the itemized breakdown of charges. The statement will keep you abreast on other details such as your credit limit, rewards points earned and how much has been spent.
4. Take on security measures and be aware of scams
Credit cards simplify the payment process, but many do not realize how often fraudulent activity takes place. Never disclose your card number, CVV, and PIN to anyone and keep these details secure. If you use the card to purchase products online, make sure you’re on a website that has site encryption and further security measures integrated in the system.
5. Redeem your reward points in time
Swipe your credit card and earn money back at the same time. By making transactions at the gas station or movie theater, you can accrue points. If you’re a good budgeter and pay your bills, use your credit card often. You can earn reward points and further gifts by making everyday purchases. Keep in mind the expiration date of your points so you don’t miss out on great savings.
Apart from the above points, it’s also prudent to identify your spending pattern and apply for the right credit card that suits your needs and provides maximum benefits to you. For example, the Bajaj Finserv Credit Card comes loaded with many industry-first features.
Further, you can attain exclusive pre-approved offers on credit cards and other financial services from Bajaj Finserv to get added benefits and discounts. Just share a few basic details to know your special offer.
