Beginner’s Guide to Getting the Maximum Benefit from your Credit Cards

Over the past few years, as our financial system is evolving and moving ahead towards a cashless economy, there is a concern among the people to use financial tools that promotes it. Credit card becomes one of the vital means for business as well as salaried individuals for everyday expenditure and commercial transactions. Contrary to the popular belief that our country is debit driven, credit cards are gaining popularity among avid users for its ease of use, better repayments options, and other profitable packages. The conventional apprehension regarding the use of credit card is generally because people are less financially savvy regarding its mechanism and utility schemes.

Looking for maximum benefits from your credit cards then check these ways:

Rewards on regular transactions

While we have often seen most of the credit card offering some or other rewards and discounts on the premium transaction, but in reality, most of the transactions we do are to meet our basic requirements like groceries, paying rents, commuting, etc. Now if credit cards reward these transactions then not only we save those brownie points but also get a chance to do some savings. Credit cards of different banks and NBFCs provide these benefits to their users. Some credit card offer discounts on commuting apps, some offer a discount on travels in railways and metros, while others pay in the form of Cashback on credit cards for utility purchases.

Use/redeem reward points wisely

There are numerous rewards points that credit card companies offer to their users. To maximize the benefits of these reward points, a user should know the trick of using them judiciously. While it entirely depends on the choice and utility of the user, certain hacks can be helpful for you. If you wish to pay an outstanding bill, then you can instantly use these points. Otherwise, you can accumulate the reward points and use it according to your feasibility in paying hotel bills or purchasing an electronic appliance. There are discounts, gift vouchers, and rewards points that can be redeemed later. So be wise and review the card before these facilities get lapsed.

Cash withdrawals

People often overlap the concept of withdrawal in a credit card with that of a debit card. But here comes the major distinction, while debit card enables a user to get some free monthly transactions, the credit card has two types of charges involved- the one-time fee and interest rate. Remember that this financial tool should be used for carrying other forms of transactions and withdrawing money should be the end resort.

Swap the different credit cards

Users possessing two credit cards should consider modifying the billing cycle on any of the one cards. This gives access to a wider window for your bill payments. You will get a vast range on the interest-free period. So if any emergency scenario arises then, you are free to select between the two that has more interest-free period days on it.

Turn on the auto-debit mode

To make sure that outstanding bills are paid timely, it is recommended that your bank account is linked to the credit cards. Since there are times when you simply forget to make the payment on the due date and becomes an unintentional victim which immediately gets reflected in the credit ratings. To avoid such circumstances, it’s pretty much safe to turn on the auto-debit mode of your bank account. But be assured that the sum debiting should always be higher than the minimum balance amount.

Balance Transfer/ Personal Loan

Now, with facilities like balance transfer, a credit card user can smoothly transfer the outstanding balance amount from his present credit card to the new one having lower rates of interest. This is impressive as it allows you to save some money on the interest rate levied on the credit card. Aside from this feature, you can utilize your credit card for procuring an unsecured loan. But this should be done only in cases of emergency as interest rates are comparatively on a higher side for personal loans that revolves around a credit card.

Clear all the payments

This is one of the basic things related to a credit card. One must make a habit of clearing all the due debts within the stipulated period. Delaying the payment attracts a higher interest rate on the next billing cycle. Besides, every card comes with an interest-free period which will cease as soon as there is any delay in making the payments. Also, interest rates will be charged on the next purchases you made with the credit card along with the remaining balance. Hence, a user must be prompt enough to make the payments on a timely basis.

While it’s a complete stereotype notion that credit card is detrimental, simultaneously we can’t forget that any delay in payment and overspending can create havoc on the entire budget of your household. Select the credit card that connects well with your expenditure patterns. Now there are cashback credit cards offered by some banking institutions that help you to earn instant reward points while you spend on purchases.

You can also read: How to have a smart spending plan