Monday, January 18

Different ways to maximize your credit card usage

Credit cards have found greater preference among users in the present days with the proliferation of e-commerce platforms and the convenience of digital payment. The benefits of credit cards include discounts, reward points, and cash back’s, among others. It must, however, be kept in mind that one needs to have a disciplined approach while using credit cards. Else, it might just lead a credit cardholder into a debt trap. It is important to know certain specific tactics such as how to check credit card statement to maximize benefits from credit cards.

Few tips to keep in mind to get the most out of credit card

  1. Pay in full

Ensure that the outstanding debts are paid in full at the end of each billing cycle. While one can choose to pay the minimum amount due or carry the debt over to the next month’s statement, doing so would lead to substantial interest charges. Besides interest on your dues, taking advantage of this carry forward facility can also lower the credit limit on your card until the dues are paid off.

For example, if one’s credit limit is Rs.3 lakh, and he/she decides to spend Rs.70,000 in one month. Carrying this due amount to the next month’s statement will cause the individual’s effective limit to be Rs.2.30 lakh.

  • Avoid credit card cash withdrawals

Whenever you are withdrawing cash against a credit card, there are substantial changes that have to be borne by the credit cardholder. Credit card cash withdrawal should ideally be the last course of option as it comes with a high-interest charge along with a one-time fee for such cash.

  • Avail loan after building an impressive credit history

One can opt for unsecured personal loans against credit cards as well. For instance, Bajaj Finserv RBL Bank SuperCard extends interest-free loan against credit card by converting the pre-approved limit. The cardholder receives instant cash for upto 90 days.

Many financial institutions provide pre-approved offers to its customers to make the application process hassle-free and fast. It may be offered with financial products like a personal loan, business loan and more. You can provide basic details like name and contact number and check your pre-approved offer.

However, such a loan should be availed only if there is an emergency. Usually, a considerable rate of interest is imposed on such loans. It is important to go through all terms and conditions diligently and be clear on charges levied.

  • Maintain regular check of credit card statement

For all the purchases you have made during the credit cycle, the expenditure should be tallied in the credit card statement. It will not only ensure that the customer has been charged the correct amount but also helps to identify if there has been any unauthorized transaction. Preserve the receipts till the expenditure is verified against the credit card statement. If you are considering ‘how to check credit card statement’, these following things should be noted –

  • Duplication of charges
  • A high or unusual amount of charge
  • Charges levied by unidentified sources
  • Any alteration in direct debit amount

These pointers are vital if you are thinking about how to check a credit card statement.

  • Put payments into auto mode

Moreover, another important tip to get the most out of your credit card is to link a credit card with your savings account. It ensures that bills are paid on time without any intervention of the cardholder. This way, late payment fees can be avoided, and the credit score is also not negatively affected.

Following these basic pointers ensure that you use a credit card wisely. However, it is important to note that delays in payments and overspending can put a severe strain on finances. Hence, it is best to choose such a credit card that meets the spending habits of the cardholder.