How Can I Make The Best Use Of My Credit Card?
Many of the current customers are confused with the features and guidelines of their credit card. This unawareness will result in high charges, absence of advantages and even weaken their credit scores. New customers are heading to banks and credit card providers. But without evaluating whether its specifications are appropriate to your spending style, don't register for a new credit card. Go for a co-branded fuel card that waives the fuel surcharge and has shopping rewards if you are a traveller who uses the car or bike mostly, similarly opt with a card that allows the airport lounge facilities along with frequent flyer points if you are a traveller. For people who make a lot of digital purchases, cards that give higher reward points for online use will comply. Similarly, select a card that gives enticing deals on dining deals if you dine out regularly. Here are some clever ideas for making the best use of a credit card.
Clear your credit card dues fully within the deadline
As well as being the most expensive borrowing alternative, a credit card is a means of free credit. Which means that there is no fee on the credit provided by the bank when you settle credit card payments in full within the time limit. That being said, if the time limit is skipped, not only will you be met with a penalty, but an exceptionally high interest rate on the outstanding balance will also be levied. By spending a minimum of 5 percent of the outstanding amount, you can carry over the balance, but be mentally prepared to pay out 3-4 percent of the due amount each month. It is a wise decision to automate reimbursement for your credit card bill so that the lender does not, even though you skip or miss the last date of payment.
Manage your expenses better, but how?
Like credit cards provide varying advantages and rewards, for specific purposes, you can choose to keep several credit cards. For instance, you may have one reward credit card that offers more yummy treats, another that offers more dining rewards, and another that doesn't incur foreign transaction fees. It's easy to keep registering for credit cards with credit card issuers continually launching new credit cards, with higher incentives and longer discount intervals. In fact, there is a term for individuals who regularly sign up for credit cards for rewards to receive the registration reward. To stop slipping into debt and credit card distress, there is a method to toss credit cards that must be carefully pursued. It will also help to keep those finances apart by getting several credit cards. For instance, for personal expenses, you might use one credit card and another credit card for business activity.
Make the best use of free credit period
The interest-free period on transactions is also maximised across several cards. Using a card where the payment period is the maximum, as a guidance. Assume you have two cards of billing cycles that finish every month on the 15th and the 30th. Use the first card to shop before the mid of the month, and then turn to the second card if you have several credit cards. Turn back after the end of that month to the first card, this will offer up to 40-45 days of interest-free credit for you. One more benefit is that, if you are experiencing a cash pinch, you can transfer the balance from one card to another. Many lenders enable you to transfer outstanding bills for the first 1-2 months and some do not even bill for it.
Go for EMIs if required
By the due date, paying off the entire bill is certainly the right option to go for. And that you can switch your remaining dues into easy EMIs if you are experiencing a scramble. The interest payable is 18-24 percent a year, but as you transfer the balance, it still comes out more than the 3-4 percent you spend per month. You ought to do it in the right manner to reap the perks synonymous with credit cards, such as easy shopping and creating a credit line. Credit card payments can be covered in different forms including paying the full amount, paying the minimum amount and paying interest on the balance or converting the whole or half payment into an EMI. EMIs will help you get the best of it if you pay more than what you can compensate for at one go. Credit Card EMIs can be used at any time, unlike personal loans, if you have the EMI service available on your card and enough balance to cover it.
Don't forget about your credit score
Your credit score is influenced by how you use your card and when you settle your outstanding dues. Don't cheapen your credit record by skipping a due date. When you go for a shopping, stay to a spending target. Before you use your card, especially for high-value transactions, map out a repayment schedule. You might not be worrying about what your lenders are doing as you swipe your credit card to ensure that they recover the amount they just credited to you. But, be sure to secure your credit score when you plan your next payment. Your credit score is a three-digit number used by lenders to determine how likely your debts are to be repaid. A high score will allow you to apply for the lowest interest rates and allow you to lend money for transactions.