In modern times, cards are widely used and are highly beneficial. However, if you are not smart about credit card usage, you may find yourself in financial trouble.
Here are five tips to help you manage your cards smartly.
-
Make the full payment on time
Credit cards eliminate the need to make cash payments for your purchases. As a result, you may buy several things using the cards. However, you must remember that you need to pay the money on or before the due date. It is common that you may pay only the minimum due amount because of lack of funds. The balance carried forward entails finance charges, which are very high. As a result, you may find yourself in a debt trap when you fail to make timely payments in full.
-
Read the terms and conditions
One of the most important things to use a credit card smartly is to read the terms and conditions. You must not rely only on the sales personnel. Knowing about terms and conditions before you apply for the card is very important. Some cards may levy charges if you do not spend a certain annual amount using the same. Moreover, card companies may waive annual fees based on your spending. Understanding these terms is important to manage your cards efficiently.
-
Do not be afraid
Tech-savvy youngsters in India are apprehensive of using their cards. Often they are afraid of misuse especially in case of online transactions. However, when you use your cards on secure sites that are verified, you may be assured of not losing your confidential information.
-
Check your monthly statement
When you receive the monthly bill statement, you must review all the transactions and charges. In case you notice any discrepancy, immediately report it to the card company. If there is a transaction that you have not executed, bring it to the notice of the service provider. It is recommended to set up mobile alerts to prevent fraudulent use of your card. Moreover, you may use such alerts to know when you are approaching your credit limit.
-
Use the correct card
Most cards provide reward points whenever you use these to make any payment. Additionally, specific cards like travel, dining and entertainment, shopping, fuel, and others are available. The reward points may be redeemed for various things. You must choose the right cards based on your spending habits to maximise your benefits through such reward points.
In addition to eliminating the need to carry cash, cards are beneficial in building your credit score. When you make timely payments and stay within the credit limit, it is positively reflected in your credit score. A higher score has several benefits especially when you want to avail of a loan.
Follow the aforementioned tips, use your card smartly, and enjoy maximum benefits.