5 Tips for Beginners to Use Credit Cards Wisely
A credit card is a plastic money that comes in handy. So, its wisest use is to let it facilitate your various payments anytime, anywhere. This includes paying all kinds of bills, shopping, booking tickets, and more.
Here are five other tips for beginners to use credit cards sensibly.
#1 – Keep Using Your Credit Cards
Compare different credit cards and get the ones that best suit your needs. Once satisfied with the chosen cards, ensure to use them to: consistently
- Facilitate your payments quickly and instantly.
- Keep your accounts open.
- Avail of the rewards and offers on purchases that pop up from time to time.
- Build a credit score.
- Boost your credit utilization and credit score.
#2 – Pay the Balance in Full and On-Time
Credit cards issue a statement every month that contains the minimum payment amount and the due date to clear it. It’s best to pay the entire balance (not just the minimum amount) by that date to:
- Avoid interest charges on unpaid dues or late payments.
- Improve your credit score. This can help you be eligible for being granted loans and getting credit cards with higher credit limits. A good score can also help you get a low-interest credit card, reducing your interest burden.
#3 – Use Credit Card Rewards
Check if your credit card offers reward points for every rupee spent using the card. Then avail of these points to get gift vouchers, cashback, and various other benefits!
You can maximize your use of the rewards if your card offers the following additional benefits:
- Up to 10X reward points.
- No maximum limit of the credit points.
- No expiry date of reward points. So you won’t lose them ever not have to use them in a hurry.
- Zero redemption fees on using the rewards.
- More credit points on online card-based transactions than offline ones to encourage spending safely at home while earning more rewards!
#4 – Finance High-Value Purchases Smartly
You may feel that the offered line of credit on your card isn’t enough to finance big purchases like a laptop. Then consider doing the following:
- Take a loan against your credit card.
- Pay it back in no-cost EMIs within the given repayment tenure.
- Learn the minimal processing fee charged for converting the zero-cost EMIs.
- Check if you can get a cashback percentage on your first EMI transaction.
#5 – Avail of the Offers at Partner Merchants
Check if your credit cards offer great deals on various categories of purchases associated with partner merchants.
Then make the most of these offers and discounts on:
- Lifestyle and shopping like purchasing branded bags, clothes, jewelry, etc.
- Healthcare and wellness like ordering medicines online
- Food like ordering fresh lean meat online
- Dining at five-star restaurants
- Booking movie tickets
- Education and upskilling like annual academic subscriptions
- Travels like hotel bookings
- Services like legal
Read the terms and conditions of your credit card document to know all the features and charges. Also, check any benefits like no annual fees. Awareness can optimize your use of the card!