Financial Inclusion

Tips to use credit card as useful financial tool

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credit-cardCredit card is an innovative financial tool, provided it is used smartly. If one is not careful enough in its usage, it may translate into a financial disaster.

American author and socialist Edward Bellamy first wrote about the concept of using a card for making purchases in his 1887 novel Looking Backward.

Though it came from an Utopian writer, the concept remained with financial innovators and has now become an everyday reality. Since using one requires careful considerations, here is how one can draw maximum benefits by following some tips.
1. Paying your dues
To avail interest free period offered on the credit card, one should ideally keep the dues nil.
Moreover, paying the due amount in time can save one from a lot of financial stress.

2. Don’t fall prey to postpone syndrome 

Even if the credit card statement says that you need to pay only a certain per cent of the overall due amount, try to make the payment in full.

Postponing the payment to next month comes with a price — monthly interest as well as late payment fees. At the same time, your debt increases if you continue using your card.

3. Cash mess 

If you withdraw cash using your credit card, be ready to pay more. The credit card provider will not only charge you one-time fee, but you also end up paying high interest charges. So, keep this option pen only for emergency situations.

4. Get peace of mind, choose EMI option 

Always try to transfer your balance to Easy Monthly Installments. This will ensure that you pay  your debt easily on less interest charges.

5. Avoid reward point trap 

Never over spend to earn some more reward points. It’s not worth it, literally.

6. Auto-debit payment helps

If you are an organised person and like to pay your credit card dues on time, go for auto-debit options to pay your credit card bills automatically. This will save you worrying about late  payment fees.

7. Read your statements carefully

Not many credit card users check their statements regularly. But keeping a watchful eye on the charges levied on you can help you check your spending habits and also the interest rates  charged by the bank.

8. Score scare 

Make it a point not to exceed your credit card limit, as this may affect your credit history and score. This may also create trouble for you to get long-term loans from reputed banks.

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