A credit card can be a useful financial tool when used responsibly. But if your credit spending goes out of control, it could pose a problem as the accumulated interest on outstanding payments can add up to a lot.
In this article, we look at essential tips every credit card user must know and follow to make the most of their credit cards.
- Use The Credit Card For Needs, Not Wants- A credit card should be used carefully to fulfil a core necessity. For example, if you are an online shopper, there are dedicated cards for online shopping that can let you earn bonus points. Or, if you drive long distances and fuel costs become a burden, consider opting for a co-branded petrol card. However, you may want to ensure that you do not use the credit card on frivolous purchases, which could lead to debt.
2. Avoid Withdrawing Cash On Your Credit Card- While credit cards offer the facility of withdrawing cash, you must use it as a last resort only in case of absolute emergencies. Regarding the credit card as a temporary loan to ensure you are careful of your spending. Repay the amount through your credit card app to decrease or avoid interest charges altogether.
3. Remember To Encash Your Reward Points On Time- As a credit card holder, you may get emails or messages from the credit card provider regarding the accumulated reward points on your credit. These reward points come with an expiry date and must be utilised within a stipulated period. You can reap the maximum benefits of owning a credit card by redeeming these points at select outlets or online.
4. Use The Credit Card As Budgeting Machine- If you are confident that you can use your credit card responsibly and not indulge in unnecessary spending, you can use it as a budgeting tool. It is recommended to never charge more on your card than you have in your bank account. At the end of the month, you should be able to pay off the balance. By making purchases with your credit card, you also get the convenience of viewing all your transactions in one place. You can download the analytics of your monthly expenses from the credit card website or app and monitor your spending.
5. Stay Under 30% Of Your Total Credit Limit- You can keep your credit score healthy by maintaining your credit utilisation ratio under 30%. This ratio is the percentage of the total available credit that you use. For example, if your credit card limit is Rs.2,00,000, you may want to maintain a balance under Rs. 60,000.
If you need immediate funds, you can also opt for a personal loan through instant loan app. Bajaj Finserv Experia App is a simple, easy-to-use, and quick loan app that lets you manage all your investment and post-loan services at one place. The personal loan app allows you to decode your financial history by easily applying for pre-approved and recommended offers, specially customised for you. You can obtain high-value loans of up to Rs.25 lakh and enjoy a flexible repayment tenor between 12 and 60 months. In addition, the app requires minimal documentation and offers a quick loan disbursal process.
The process of availing a personal loan is very simple and quick with various pre-approved offers from Bajaj Finserv. You could inquire about pre-approved offers on personal loans, home loans, business loans, and various other financial products. You can check out your pre-approved offer by sharing a few basic details like your mobile number and email ID.