The convenience of the plastic money in the form of the credit card has emerged as a blessing especially for salaried people. But, not all know using it correctly.
Using a credit card properly and in a smart way is the way to go if you don’t want to fall into a debt trap, improve Credit Score and pocket many benefits.
Hence, if you are relying more on many types of credit card for making all types of small and big-ticket payments, you should know some ways of using it correctly. Read on this post to know some easy yet vital ways that will help in your effective credit card usage.
Here’s How You Can Use a Credit Card Smartly
The facility of going cashless with extra payment time
You can use a credit card to make your monthly payments towards multiple bills. The good thing about it is that you don’t need to have any amount in your savings account to use the credit card limit to make payments. What’s more, you get extra time to repay the utilized credit card limit.
Check the billing cycle and ensure to make all payments within a cycle to defer the payments for next months and also get extra time for payment. Example – If your billing cycle starts on 10th of a month, you should make all payments after 10th.
Split your expenses into EMIs
If you have made any large expense and think that its payment may affect your monthly budget, then the way out is converting it into EMIs. Most of the banks let you convert a transaction of Rs.3,000 and more into EMIs. This way, you can pay an exact EMI amount + applicable interest and manage other monthly outlays easily.
Save more by using your credit card more
People refrain from using credit card limits thinking it may lead to overspending. However, you can smartly plan your expenses and pay for them via a credit card to receive cash back, deals, discounts, reward points and other benefits. Some credit cards may give you free movie tickets, fuel surcharge waiver, cash back and reward points on every spending. All these credit card benefits can help you save more on a yearly basis.
Some credit cards such as the Bajaj Finserv RBL Bank SuperCard can offer you 20,000 reward points as a welcome bonus. You can redeem them later to get exclusive discounts on your future payments.
Have poor CIBIL Score? Let credit cards rescue you
You may be involved in the poor management of a personal loan or a home loan and may be bearing the brunt of poor CIBIL Scores. Hence, the best way to improve your financial health will be choosing the right card, utilizing the credit card limit under 30-50% and paying the bill in full. You will not only get fantastic benefits for spending on your credit card, but it will also lead to the improvement of the Credit Score.
You can use a credit card for managing cash emergencies
When you are stuck in a situation where you need to book an urgent flight ticket, spending out of your salary might hamper your budget. Even liquidating an investment vehicle like Fixed Deposit may also take time to dispense cash. Therefore, the best thing would be using the credit card and funding the needs immediately. You can always convert your expenses into EMIs so that you can pay it off easily. Also, there is a pre-approved loan available against your credit card’s unused limit, which you can apply for and get instantly. Ask your lender for the loan on credit card facility if you want some cash. It will also prevent you from withdrawing cash from an ATM using your credit card and coughing up massive expenses.
You are now aware of some of the vital tips that you can follow and use a credit card prudently. Now, you have all the reasons to use a credit card for all your expenses and making the most of it as discussed.
The only thing is keeping an eye on the credit card limit, spend what you know can repay and pay the total amount due and not the minimum amount due.
Bajaj Finserv offers pre-approved offers on credit cards, EMI finance, personal loans, business loans, loan against property and other financial products.
Opting for such a deal may simplify your journey towards loan approval and disbursement and can make it fast.
You can share some of your basic information such as your name and mobile number to check out your customized pre-approved loan offers.