Getting a credit card is not so simple. But now-a-days you can get a credit card easily with few tricks. Now the main topic is that how to handle that credit card smartly.
Today we will learn 6 incredible ways to use credit cards smartly. Hello friends, how are you all? Hope you all enjoy it well. Today we will know about credit cards and the right way to use it.
Before getting a credit card you must think about how to use a credit card smartly?
If used responsibly, a credit card can be a very very useful financial tool that helps you when there is no any financial help available during your critical time.
There are some may benefit of using a credit card, while it has also a dark side, that can make you trouble a lot. Consistent payments of your credit card bill can improve your credit rating/ CIBIL score amazingly.
Credit cards often offer rewards for your offline and online purchases. It gives you a 0% interest rate for a short period of time i.e. up to 50 Days (depending upon different Banks’ Terms & Conditions).
Its dark side is, if your credit spending gets out of control, you may face a financial problem. Don’t be greedy. Follow these amazing credit card tips to help avoid those common problems:
Tips to Use A Credit Card Smartly
1. Pay your credit card bill every month.
You should avoid paying interest on your credit card purchases by paying the full amount each billing cycle. If you pay the full amount within the last date of the bill, you’ll enjoy the benefits of using a credit card without interest charges.
2. Use the credit card for necessary needs, not wants.
A credit card should be used carefully. Don’t frivolous purchases when you want, it can make your debt serious. You should always keep in your mind that a Credit card should be used in emergency situations, such as in medical, study fees due, etc.
Always use the credit card when you have money to make such expenses, neither don’t use it. As it is just like a temporary loan to yourself.
3. Never skip a payment.
Pay your bill every month in time before the last due date. Missing a bill payment could result in a late fee, penalty interest rates and a negative impact to your credit score.
One more important thing is that, never pay the Minimum Amount of your Credit Card Bill, it will badly drag you to debt.
4. Use the credit card as a budgeting tool.
If you’re confident you can use a credit card responsibly and pay off the balance every month, try using it as a budgeting tool. By making all of your purchases with your credit card, you can see exactly how much you’ve spent at the end of the month. Of course, you should only do this if you know you can pay off the balance each month. To make sure your credit card spending doesn’t get out of hand, never charge more to your card than you have in your bank account.
5. Never Use Credit Card On ATM
Keep in mind always, not to use Credit Card on ATM. It debts you more. All Credit Card companies charge huge interest (up to 35℅ ) on the amount you have withdrawn from the ATM. So it is better to borrow from your friend rather than withdraw from ATM.
6. Use a reward card.
If you’re using a credit card for most or all of your purchases, it makes sense to use a card that offers rewards. Not only can you avoid paying interest, but you’ll also earn rewards such as cash, airline miles or retail points.
7. Stay under 50% of your total credit limit.
One way to keep your credit score healthy is to keep your credit utilization ratio under 50%. This credit utilization ratio is the percentage of total available credit that you’re using. For example, if your limit is Rs.1,00,000 you should keep your balance under Rs.50,000.