Are you headed towards applying for a credit card in India? Congratulations! A credit card is now one of the most essential financial tools in India. As you read this, there are more than 30 million active credit cards in India, and people apply for it daily.
A credit card comes with a credit limit as per your eligibility which you can use to pay for your expenses and other needs. You can pay the bill 40-50 days after the transaction and even pay in EMIs in case of a big-ticket purchase. This way, you can streamline your monthly expenses while still being able to buy any product.
However, not many people know the advantages of credit cards such as credit card reward points and ways to use it smartly. Here is an article that will help you avail the advantages of a credit card by using it smartly and by following some tips. Read on!
5 tips to use advantages of credit cards smartly
- Spend in smaller amounts and pay in full
Do not use your credit card to buy anything that you don’t think would be able to repay by the end of your billing cycle. Keep the spending on your credit card under control and pay the total amount due in full. It will ensure that you won’t fall under the trap of carrying a balance on your credit card and paying the high-interest amount.
- Never fall in the trap of paying the minimum amount due
Your credit card statement will feature two types of payments – total amount due and the minimum amount due. The minimum amount due is a certain percentage of the total amount due, which you can pay. However, the remaining amount will keep coughing the interest. If you pay the minimum amount due, you won’t be counted as a defaulter and won’t be reported to CIBIL authorities. But, you will need to pay a higher amount which will also comprise of interest until you pay it off.
- Set up a direct debit for the credit card bill payment
It is crucial to pay the outstanding amount on your credit card always if you wish to maintain a robust Credit Score. When you have a strong CIBIL Score, it will open the door to grab future loan approval at a lower rate and help you to repay smaller EMIs. Missed credit card bill payment or defaults can affect your Credit Score for sure. Hence, you should play smart and set up the auto debit facility for making the bill payment for credit cards without missing the due date.
- Keep an eye on the credit card reward points
One of the incredible advantages of credit cards is that it offers you a reward point for every spending made on it. For example – your credit card issuing company may give you 1 reward point for every Rs.100 spent on the credit card. The higher is the value of your transaction, the higher will be your reward points. Hence, you can keep an eye on your credit card reward points and redeem it from time to time. This way, you may redeem at a later stage and get exclusive discounts on future transactions. It is better to redeem your credit card reward points before they expire. As a result, you should keep an eye on reward points that are about to expire soon.
A leading credit card service provider such as the Bajaj Finserv RBL Bank SuperCard comes with 20,000 reward points as a welcome bonus on sign up. You can use the credit card reward points later to enjoy huge discounts on transactions.
- Stay clear of frauds
Using a credit card may give you relief to make payments on time even when you don’t have enough funds in your savings account. But, it also comes with a risk of your credit card information being compromised. Hence, you should shop only on a website that starts with https:// and not http://.
The advantages of credit card are many, and if you can manage it in a smart manner, you can easily stay confident of not falling into a debt trap. Just use your credit card smartly by following the discussed tips and build a good CIBIL Score.
If you wish to apply for a credit card, the lenders such as the Bajaj Finserv offers pre-approved offers on credit cards, EMI finance, home loans, and more. Going for it will enable you to process your loan application faster and hassle-free.
You can share some of your basic information such as your name and contact details to check out your pre-approved loan deals right away.