Finance

5 Tips to Use Your Credit Card Smartly

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It can be carried easily, everywhere, to facilitate your transactions. It also offers expenditure tracking to help you avoid going off-budget. Here’s everything you need to know to make the most of your credit card.

1.     Avoid certain charges with the best credit card

Pick the best credit card to help avoid unnecessary or hidden charges. If you’re afraid you might overuse your card, go for one with zero over-the-limit fees. Then you won’t be charged even when you purchase beyond your credit limit. You can also opt for a card offering interest-free cash withdrawals from ATMs for a specific period from the date of your card issuance. Moreover, you can get a credit card with no annual fee for a certain period or, even better, for a lifetime.

2.     Repay credit dues regularly

Make the best use of your card’s interest-free grace period (beginning from every billing cycle’s end to the due date of repayment) to make all your card-based purchases free of charge. Then pay off your credit dues in full within the due date. This can save you from incurring late payment fees, with interest charges as per the APR (annual percentage rate). Even if you pay late, a credit card with the lowest interest rate can minimize such charges. Otherwise, you can go for credit card EMIs to repay in smaller amounts over a longer repayment tenure and at an interest rate lower than that of your card.

3.     Earn rewards and incentives

See if your credit card offers reward points without expiry or charges whenever you use it to spend. You can redeem the points to buy gift cards or vouchers at select merchants or access other offers. Also, make use of credit card cash backs or discounts on your online purchases. Some of them might be limited period offers. So, keep track of them to use them before they expire. Besides, check if making some of your purchases online may earn you more rewards.

4.     Improve your credit score

The best benefit of credit cards is that they help boost your credit score when you regularly pay the bills on time. If you’re a newbie, get your first card to start building your credit score. Keep using the card continuously for the given period to carry out transactions and repay credit dues regularly in full to maintain a healthy credit score. Good credit history can help you in multiple ways, including easy loan approval.

5.     Keep your card safe

Never share your card details like PIN or CVV or transaction verification codes like OTP with anyone, not even people you trust. If your credit card is stolen, the lender’s money and not your own money will be at risk. Besides, chip technology is highly efficient to help prevent hacking of your card data. Nevertheless, report the case immediately and apply for a new card. For unauthorized transactions, promptly dispute any charges to have them investigated and reversed.

Read all the terms and conditions of your credit card to maximize its offered benefits and minimize any risks with awareness.

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