Credit cards can prove to be exceptional tools of paying for your transactions by offering you reward points, discounts, and privileges. At the same time, they can become a curse if you don’t use them wisely. Credit cards come attached with high-interest charges which are levied if you delay the payment of your outstanding dues. Moreover, as these cards allow credit purchases, you might overspend and end up in a debt trap. That is why it is essential to use your credit card wisely so that you reap the maximum gains and keep the negative aspects of it at bay. Here’s how you can use your card wisely –
- Spend within your means
The first rule to remember is that you should always spend what you can afford. Just because your credit card allows you credit transactions, you should not splurge. Though your transactions would be approved, you would find it difficult to pay for the credit card bills which incur after your splurge. So, make a budget and always stick to it so that you can resist overspending and afford the bills which are later generated.
- Maximize your reward points and other privileges
Credit cards award reward points on each transaction that you do. Moreover, there are accelerated reward points at specific transactions too. Try and maximize the reward points which you can earn from using the card. Also, get these points redeemed wisely for maximum benefits. Moreover, there might be other privileges associated with your credit card like free lounge access at airports, fuel surcharge waiver, joining bonus, memberships, etc. Know the benefits associated with your card and use them to the maximum.
- Always pay on time
There is a billing cycle for your card when your bill is generated and dispatched to you. The bill also contains the due date within which you are required to clear your dues. Payments done within the due date would not attract any penalties or charges. However, if you miss the due date, there would be heavy late payment charges which would be an additional cost on you. Moreover, it would also damage your credit score. So, to avoid late charges and also to maintain your credit score, always pay your credit card bills on time.
- Clear the bill in full
Paying the bill on time is not enough. You should also pay the entire dues and clear the bill. Credit cards allow you to revolve your credit by paying the minimum amount due. Though you can pay the minimum amount due and carry the remaining outstanding balance to the next billing cycle, the balance would attract high-interest charges. Moreover, any new credit would also attract interest. So, avoid revolving your credit and clear your bill in full.
- Don’t withdraw cash from ATMs
Credit cards allow you cash withdrawal facilities which let you withdraw cash from an ATM. Avoid this facility as it incurs very high charges. Try using your card for your transactions and if you need funds, use your debit card. Credit cards are meant for cashless transactions and use them for that only.
These are the points which tell you how to use your credit card wisely. Remember these points for maximum benefits on your cards.
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