Tips to Manage And Spend on Your Credit Cards Efficiently

Credit cards are a boon in today’s age when cashless transactions rule the roost. However, the ‘buy now, pay later’ concept often results in misuse. Individuals don’t use their cards effectively and end up paying very high fees and charges. If managed properly, a credit card is a tool which not only lets you do credit transactions, it also promises attractive rewards. However, these rewards are guaranteed only if you use the card efficiently. Do you know how?

Many don’t and so here are some tips to manage your credit card spends so that it works for you, not against you –

Make use of the credit card statement

The credit card statement is issued for a reason, make use of it. Read the statement to track your spending and to monitor the purchases.

Revolving credit is available but stay away from it

Credit cards have a revolving credit feature. You can pay a minimum amount of the bill and carry forward the balance to the next billing cycle. While this feature might be helpful in a financial crisis, there is the interest factor to be taken into consideration. The carried forward balance attracts interest from the first day of the next billing cycle. The interest rates are quite high and so you should say stay away from the temptation of revolving credit.

Stick to the due date for paying credit card bills

Make it a point to pay off the bills on time. Missing the due date results in the levy of interest which increases the amount due. It also hampers your credit score. Avoid these possibilities by paying the bills on time. A better option is to pay your bills through the ECS facility. Every month, your bank account would be automatically debited with the credit card bill and you can avoid the hassles of remembering the due date and paying late charges.

Understand the different between the credit card limit and your budget

A very common mistake which many of you make is getting carried away while shopping or using the credit card. Though your credit card limit might permit the splurge, your budget might not. Always use as per your budget limits. Don’t let the limit dictate your capacity to spend.

Make use of the card’s billing cycle

Every card’s billing cycle is, usually, for a month. It starts on a specific date of the month and ends one month later. You are also given a due date to make the payments which is, usually, 10 to 15 days from bill date. So, if the billing date is 8th March to 7th April, the due date might be 20th April. The card spends do not attract any interest till the due date. So, if you buy anything on the 9th of March, you have till the 20th of April to clear the dues. Make use of your card’s billing cycle to enjoy maximum interest-free credit period.

Use the reward program

Every credit card promises rewards based on your spending. You can earn reward points, access to airport lounges, free air tickets, discount vouchers, gift coupons, etc. Use the reward program of your card to the maximum. These are the free benefits which give you extra value.

Choose a card suitable to your spending pattern

There are different types of credit cards available in the market. Some cards are good for lifestyle spends while some are good for travel. Some promise elite benefits while some are good for the business. Choose a card which suits your spending pattern. If you are frequent traveller, a travel-oriented credit card is good. If you spend more on lifestyle and entertainment, choose a card which offers the maximum lifestyle benefits. Always know the card you buy and buy a card which suits you.

Shalini is a finance expert with more than 15 years of experience in Banking and Financial Services Research and Consulting. She has a passion to create informative content on credit card , loans and investments for borrowers and investors in India.

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