Make Credit Card Your Ally

Make Credit Card

Credit cards can offer you loads of benefits if you know how to use them wisely. They let you transact on credit, have reward points on your spending, give you attractive discounts at partner outlets and also allow you different gift vouchers and privileges. While it is true that defaulting on your credit card incurs very heavy interest payments and hampers your credit score, if managed properly, your credit card can become your best friend for financial transactions. Here are some useful tips for making your credit card an ally –

  • Avail a card most suitable to your spending pattern

Credit cards come in different variants. You get specialized cards for shopping, lifestyle transactions, travel, business, etc. Before opting for a card, assess your spending pattern. If you are a frequent traveler, a travel card would be the aptest choice for you. If, on the other hand, lifestyle expenses dominate your expenditure, choose a lifestyle card. Choosing the right card would give you the maximum benefits.

  • Pay your card bills on time

Credit card bills have a monthly cycle. They are generated on a particular day of every month and thereafter you get an additional period to pay off your bill. Timely bill payments reflect positively on your credit score and also help you avoid huge interest payments. So, when the bill is generated, always pay it within the due date and you would have no problem with your card.

  • Pay the minimum amount due in case of a financial crisis

If you face a financial crisis and have insufficient funds to pay off your credit card bill, don’t panic. You can pay the Minimum Amount Due (MAD) which is the minimum amount of bill which should be paid to avoid non-payment penalties. By paying the MAD you can revolve the outstanding balance to the next month. Remember, however, that revolving credit attracts interest. So, try and pay off the entire outstanding amount as soon as possible.

  • Control your shopaholic nature

Just because your credit card allows you credit transactions, don’t be tempted to splurge. You would have to pay the bills in the future. Control your impulses when shopping and spend only what you can afford otherwise you would be looking at a huge bill which would ultimately lead you to a debt trap.

  • Avoid cash withdrawals

Though credit cards allow ATM withdrawals, avoid them. For withdrawals, your debit card is the best bet as credit card withdrawals attract substantial interest payments on the amount withdrawn.

  • Utilize your reward points wisely

Reward points are earned on the transactions done using the card. Use these points wisely. Some cards allow you to redeem your accumulated points to pay off your credit card bills. This is a good choice. Others offer you gift vouchers, gifts in kind, discounts at specified outlets, etc. Use your reward points to access these privileges provided by your credit card.

A credit card is not only a means of payment. It can promise you much more. Use the above-mentioned tips and make your card your ally in all of your financial transactions.


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