Use your credit card at a physical store or online
When buying a product at a physical store, you can use your credit card by swiping or tapping it on the card machine at the billing counter. When shopping online, using your credit card will require you to fill in information like:
Make the most of the grace period A credit card grace period constitutes the billing period of 30 days along with an additional 15-20 day window between the statement generation date and the payment due date. This means that the total interest-free period can extend up to 50 days. This helps cardholders make high-ticket purchases when the billing period commences taking advantage of the full grace period.
Use the right card for the right purchase If you have multiple credit cards, make sure you use the right one based on your needs. For example, use a fuel credit card if you spend a considerable portion of your income purchasing fuel. You can earn reward points, apart from getting a fuel surcharge waiver. Use your travel credit card to book flight tickets, hotels, and more.
Opt for a personal loan during emergencies Credit cards like the Bajaj Finserv RBL Bank SuperCard enable you to convert your unutilised credit limit into an emergency personal loan at a nominal interest rate. This helps you meet urgent needs with ease.
Convert your purchases into EMIs One of the exceptional uses of a credit card is that you can convert your purchases into EMIs and repay them at your convenience.
Shop online to earn the most reward points Credit cards usually give you 2x reward points when you shop online.
Redeem your reward points You can redeem your reward points to get discounts on flight tickets, hotel bookings, and more. These points can also get you exclusive shopping vouchers, recharge vouchers and even cashback. Accumulated reward points can even be used to make down payments on big-ticket purchases.
These simple tips on how to use credit cards can help you get the maximum benefits out of your credit card. But always remember to pay the total amount due on your card within the grace period to avoid incurring additional interest charges on the outstanding dues. Doing so will also improve your credit score significantly.
Conclusion
Correct and responsible use of credit cards can be advantageous, but irresponsible use can pose a risk to your financial standing. It is important to consider some fundamental principles while using credit cards, such as spending only what is affordable, settling bills promptly, and paying the entire balance each month. Above all, it is important to choose a credit card that works for you, as what may suit your family or friends might differ from what is best for you.
Paying the balance in full has great benefits. If you wait to pay the balance or only make the minimum payment it accrues interest. If you let this continue it can potentially get out of hand and lead to debt. Missing a payment can not only accrue interest but hurt your credit score.
Never borrow more than 20% of your annual after-tax income. Keep your monthly debt payments to less than 10% of your monthly after-tax income. Keep track of your purchases and don't buy expensive and unnecessary impulse items.
When you tip with a credit card, you write the amount you wish to tip on your receipt, then sign the receipt to confirm the total amount (tip + bill) to be charged to your card. Unlike cash tips, credit card tips are processed and paid out to the service provider at a later date.
Character, capital, capacity, and collateral – purpose isn't tied entirely to any one of the four Cs of credit worthiness. If your business is lacking in one of the Cs, it doesn't mean it has a weak purpose, and vice versa.
To improve your credit score using a credit card, make on-time payments, pay off your balance in full each month if possible, keep your card utilization under 30%, avoid applying for too many cards in a short period and don't close accounts that cost nothing to keep open.
Bottom line. If you have a credit card balance, it's typically best to pay it off in full if you can. Carrying a balance can lead to expensive interest charges and growing debt.
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