Many people
think using credit card means jumping into a dark abyss. Everyone wants to
avoid credit card debt. But, judicious use of credit card can take you out from
many difficult situations. You can build up your credit score. The good credit
score will help you to get loans at lower interest rates. However, for that,
you need to follow certain easy and smart tricks highlighted in the blog. So,
are you ready to learn?
1.
Pay off Balance: Firstly, paying off the
credit card balance monthly is important. In fact, this is the only way to keep
yourself away from high interest rates. Never fail to pay the balance.
Otherwise, you’ll end up spending more. Credit cards of some banks demand high
penalty rates for skipping the monthly payment. However, paying off the full
statement balance maybe tough for you at times. In such situations, try to
payout at least the minimum amount. Missing a single payment means a
significant drop in your credit card score.
2.
Consider Financial Status While Purchasing: Never purchase more than you can afford using your credit card. If
you don’t have enough balance in your credit card, pay in cash. Avoid buying
impulsively with your card. Don’t get trapped in a debt spiral by going on
buying beyond your affordability.
3.
Track Your Purchases: You may
accidentally get into credit card debt. To avoid it, check the credit card
report every month. Buying small items may seem okay to you. But, when you
calculate the overall cost in buying them, it will snuck up on you. So, it’s
better to use your card only for heavily priced items. Pay in cash to buy other
items.
4.
Set Some Limit: Every credit card has a
spending limit. But, if you don’t have any controlling power, ask your bank to
give you a card with lower limits. It may not sound good to you. However, this is
a great way to stop your spending habit. Moreover, look for perks that you can
enjoy using the card. Also, avail the rewards it is offering. There are various
kinds of rewards like cashbacks, discounts on plane tickets, hotel loyalty
points, and so on. Take only those rewards that you can pay completely and you
don’t need to pay the interest.
5.
Pay the Interest Timely: Make the
payments on time without a miss. Though you know its importance yet if you
remain engaged in some other work, you might forget to pay the balance on time.
Give priority to paying the bills of credit card monthly on time. You can set
up a notification on your smartphone to get reminded about the payment every
month.
6.
Understand Customer’s Agreement and Closures: Read your customer’s agreement and closure thoroughly. Make sure
that you’ve understood every word written there. Go through the fine print
after opening a new account for credit card. Understanding the terms is
important to know the bank’s rules and regulations regarding your chosen credit
card. It will tell you everything such as the payment date, interest rates,
penalty charges, and other needed information. If you didn’t understand any of
these agreement, feel free to clear your queries. Never sign any agreement
without understanding.
7.
Check Monthly Statements Thoroughly: Many
a time, transaction and billing mistakes can occur due to various reasons. So,
spend some time to check the credit card monthly reports properly. Find out the
mistakes or error. Ask the professionals to resolve the issue immediately. Sometimes
fraudulent activities like identity theft can also lead to major mistakes in
your credit card report. Ultimately, it will harm your financial status
immensely. Therefore, it’s better to take action when you still have time in
your hand.
8.
Avoid Using Your Credit Card Over the Sea: Involving credit cards to do transactions abroad is fine. But, it
is a costly-affair indeed. You’ve to pay certain conversion charges while using
the credit card abroad. Besides, if you’re using the card at any ATM, you’ll
ended up paying more. Most of the times, these conversion charges ranges
somewhere between 3-5%. However, there’s a way out. You can use forex card to
enjoy reduced costs of items while travelling overseas.
9.
Never Close Old Credit Cards: Did you
know that 15% of your credit card score is calculated on the basis of your
credit history’s length? If your credit history is long enough, the credit
score improves considerably. Additionally, a closed card will lower the limit
of your card. Even if you do not increase your spending, the utilization ratio
of your credit card will increase automatically.
10.
Don’t Ignore Annual Fees: Scoff at giving $75 out to keep the credit
card? Well, you shouldn’t. Never consider the annual fees. Rather pay attention
to the perks like sign up bonus and many more. When you get juicy cashback for
using that card, you won’t mind paying the nominal amount as annual fees.
11.
Always Choose Credit Card Over Debit Card: Some credit and debit card looks almost similar. But the way your
issuer treats it varies greatly. Moreover, their payment processing methods are
also different. You’ll also get more attention from your bank if your credit
card is lost in comparison to a debit card. When your bank has to deal with
credit, you’re likely to get refunds quickly.
12.
Don’t Share Your Credit Card Details: Scammers
are around. They always look for new ways to hack the credit card details of
its users. Update your knowledge about different kinds of tricks hackers are
trying. At the same time, they have to beware of new threats. Never share your
CVV number, PIN, OTP, expiry date with anyone. Try to swipe the cards only at
ATMs and POS.
Strictly follow
the steps shared above. Using credit card isn’t a bad thing, if you’re using
your brain. Just make sure that you’re on the safe side even while fulfilling
your needs with it.
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