How to use a credit card wisely?

Getting a credit card is as difficult as using it wisely. A credit card can either prove to be your friend in need or it can become the biggest nightmare, it all depends on how you use a credit card wisely. Keep reading to kick start your research.

Use a credit card wisely


Hereunder are some important tips that you can follow in order to use your credit card wisely.


Choose the right credit card: You can only use a credit card wisely when you have the right credit card. Analyze your needs and spending habits and then choose a card that matches them. So that after receiving it you can earn the benefits instead of just increasing the expenses.


Earn rewards/cashbacks: Know the rewards program of your credit card. Use your credit card to earn the reward points/cashbacks. Being mindful of the rewards program, use your credit card only for those transactions that allow you to earn incentives in return.


Redeem the rewards: Rewards come with an expiry date. In order to use your credit card wisely and to make the most out of it, redeem your rewards points as soon as possible once you are eligible for the redemption because they will expire if you do not redeem them.


Pay more than the minimum amount: Thinking of paying just the minimum due amount so that you can avoid the interest charges. Then you are wrong, paying the minimum due amount will only help you to avoid the late payment charges. Do yourself a favor and pay more than the minimum due amount as it will take some load off your shoulder while paying the rest amount with the interest charges.


Pay the credit card dues in full: Frequently defaulting on the credit card payment can affect your credit score negatively. So, pay your credit card dues in full and on time as well. If you forget the due dates then you can register for the auto-debit services. On every due date, the credit card dues will be debited from your account automatically and it will also help you in building a good credit score.


Maintain a low credit utilization ratio: Never ever use your credit card more than the approved credit limit as it will affect your credit score adversely. It is advisable to maintain a credit utilization ratio between 30% – 40%. You can set a threshold limit on your account so that on reaching that limit you do not use your credit card for further transactions.


Avoid withdrawing money using ATMs: Only during the times of emergency use your credit card to withdraw cash from ATMs. Withdrawing cash from ATMs attract a cash advance charge. We know you would not like to get charged for such a transaction but that’s a credit card issuer policy. So avoid using it at an ATM as much as possible.


Know all the fees and hidden charges: Read the most important terms and conditions leaflet of your credit card so that you can be aware of all the fees and charges before you apply for a credit card. You would not like to have a credit card that costs you a fortune.


Immediately report lost/missing credit card: Once you become aware of the fact that your credit card is lost or missing then immediately report the same to the credit card issuer as it will protect you from any fraudulent activity that can happen on your account.


Track your credit card statement: Every now or then you must keep checking your credit card statement so that you know all the transactions that are made using your credit card. If you find any error or omission in your report/ credit card statement then you can immediately report the same to your credit card issuer.


Read More on How to choose a credit card for the first time?

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top
Scroll to Top