Beginner’s Guide To Use Credit Card Wisely

With the COVID-19 pandemic continuing for the second year, the income of a large chunk of salaried people has been impacted. Even those running their own businesses have been trying hard to maintain a stable and regular income due to recurring lockdowns and other restrictions on the movement of people and goods. In these trying times, people are increasingly resorting to using credit cards to meet immediate expenses on household needs, medical emergencies, and even other scheduled expenses like marriages.

Though credit cards can help people tide over urgent financial crunch, they demand careful handling as even a small carelessness in paying the debt can land users in big debt. Also, breaching the credit card limit affects the credit profile of users, reducing the chances of getting a bank loan later.

Here are a few suggestions on how you should make the most of your credit card.

Time your purchases: All credit cards have a standard billing cycle. Try to maximise the interest-free period by making your purchases just after the credit card bill is generated. If you purchase right after the credit card bill is generated, you can enjoy 45 interest-free days or more. But there’s a catch: your outstanding amount should be nil.

Clear bills before the due date: Paying a credit card bill before the due date improves credit profile and ensures increased benefits from the credit card provider such as better offers on personal and other loans. Impressed by your credit profile, the card provider can also increase your spending limit.

Do not use credit cards to withdraw cash: New card users often tend to withdraw money from ATMs using credit cards. Don’t. ATM withdrawals using credit cards attract heavy charges and from the very first day.

Auto debit: The interest charges on late payment of fees are quite high. To avoid incurring charges on delayed payment, try paying automatically from your account. Doing so will allow the banker to withdraw the credit amount from your account automatically on the due date.

EMI: If you are faced with a stressed financial situation, ask your lender to convert the outstanding credit card bill into EMIs. It will help you in reducing the debt burden and you can pay the bill in easy instalments.