In the past few years, payment tools like credit cards have become one of the most widely used financial instruments in India. As per data published by RBI, institutional lenders recorded an approximate value of Rs.50,311 for credit card spends in August 2020. Given such remarkable statistics, it can be safely concluded that these financial instruments have successfully catered to the short-term financial requirements of users. Not to mention, they significantly increase the purchasing capacity of individuals too.
Moreover, these payment instruments can also be considered as an upgrade to the conventional borrowing process. They come with a cash advance feature that allows individuals to withdraw cash from credit cards, which enables them to gain access to funds instantly without any hassle. Nevertheless, one can further derive multiplied benefits from these cards with thoughtful use.
5 Easy tips for efficient use of a credit card
Although these payment tools come with various benefits, it is essential for all users to know how to use a credit card wisely to avoid any negative impact on their credit scores. Here are some pointers that can help individuals to use their credit cards more effectively:
Make monthly bill payments in time
Credit card issuers impose high-interest rates on the outstanding balance if a bill payment is delayed even by a day. Hence card users must ensure to make their payments in time to avoid paying such interest and additional charges on the balance amount. Notably, failing to pay the outstanding balance in time can also take a toll on the credit score of an individual.
Carefully go through the credit card statement
All credit card users must know how to read a credit card statement correctly. The statement includes a detailed representation of all the transactions, outstanding payments, the remaining credit limit, and more.
Additionally, it provides critical information concerning the reward points that card users can claim for a given period. Keeping these factors in mind can help users take the necessary step forward, such as redemption of the reward points within time, to avail of enhanced benefits.
Utilize the promotional offers and rewards
A credit card comes with various benefits like lucrative joining and milestone bonuses. One can also earn cashback, gift vouchers, discounts, and more.
A user can thus use his or her credit card to make purchases that offer such incentives and accumulate reward points which he/she can utilize to avail these benefits.
Avoid cash withdrawal from credit card
While the withdrawal of cash from a credit card is an innovative facility that can prove crucial during emergencies, card users should try not to make frequent cash withdrawals from their cards. It is because card issuers impose heavy charges on each such transaction completed. Moreover, there are no grace periods associated with these transactions.
However, there are a few innovative financial instruments such as the Bajaj Finserv RBL Bank SuperCard which offer a cash withdrawal facility with zero interest charge. Individuals can thus withdraw cash from a credit card from an ATM and be assured of no interest levy on the amount for up to 50 days.
The card issuer also makes financing hassle-free with their pre-approved offers which are available on an extensive range of financial products such as credit cards business loans, personal loans, and more. You can check your pre-approved offer only with your name and contact number.
Know your renewal and joining fees
Most credit card issuers impose joining fees and renewal fees which can come as a surprise if one isn’t aware of the fee structure associated with the card. Hence, it is imperative that individuals enquire about the renewal fees and joining fees that might be levied by their card issuers.
These payment tools with suitable credit limits can help fulfill one’s daily spending requirements without much hassle. Nevertheless, one must also devise strategies to ensure timely bill payment to maximize the benefits that accompany.