A Credit Card is a handy tool if used smartly and cautiously. During the financial crunch, if you need urgent funds, you can use this card to make your purchase or pay expenses, and then you can pay your dues through the monthly repayment schedule. Here are tips on how you can use it smartly:
- Exercise caution during usage
Having a Credit Card might provide a false sense of security, which increases your usage. After you apply for a Credit Card online, track your expenses to avoid falling into a debt trap that can be tough to escape. To monitor your card usage, maintain a diary or a list of costs whenever you use your Credit Card.
2. Set an appropriate credit limit
It is the maximum amount you can spend using your Credit Card. Providers set a limit based on your usage and credit scores. However, you can also request that they set a suitable Credit Card limit by approaching them. Set a limit that stops you from overspending and does not restrict you too much from using your Credit Card. Aim to spend less than 30% of the credit limit to ensure a high credit score.
3. Review your Credit Card statements
Credit Card statements are excellent tools for getting a detailed snapshot of their usage. Go back to your statement frequently to see your transaction history and spot where you can curb your spending. Consider tallying your transactions against an expense log of your own so that no expenditure falls below your radar.
4. Use cashback, rewards, and offers
A Credit Card bundles various offers with it. Reward points, cashback, and vouchers are some offers you can avail yourself of when using Credit Cards. It helps you save over the long run and reduces your overall spending. Moreover, you may also get complimentary airport lounge access if you purchase anything beyond a specific amount using your Credit Card. Meanwhile, the Airport Lounge Access Credit Card can always be your travel ally.
5. Pay your Credit Card bills on time
As a Credit Card user, you should pay your bills regularly and before the due date. Also, make it a habit to pay the entire outstanding amount, not just the minimum amount due. It will improve your credit score, and paying during the credit-free period reduces your interest payable.
6. Get easy Loans
If you urgently need funds, you can use the Credit Card to apply for a Loan from your bank or issuer. Your Loan amount relies on your Credit Card limit and its provider. So, check your credit and cash limit carefully before you apply for a Credit Card online.
Conclusion
Credit Cards are excellent financial instruments for daily expenses if used wisely. With reward points, cashback facilities, and offers, they may be more beneficial than your Debit Card.
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