Finance

5 Effective Uses of Credit Card that No One Knows

11:10 PM RAWAT 0 Comments


Credit card usage has increased in India in the last few years. According to a survey conducted in October 2018, the Indian financial market has more than 41 million credit cards in circulation today.
However, a majority of these cardholders are unaware of how to use credit cards in the most beneficial manner. Credit card dues are among the most common form of debts accumulated in the Indian lending market. Card users require a certain level of in-depth knowledge on how to best utilise them.

Here is a look at some of the most effective ways to best use your credit card:

1.      Utilise reward points
One aspect that many credit card users tend to forget is the reward points system for these cards. These redeemable points can help make substantial savings on purchases. Do not forget to ask your card issuer regarding how to use a credit card reward points. Some cards offer points which you can redeem during travel, while others may lead to lucrative discounts during shopping and so on.
2.      Use credit card according to billing date
Suppose the next billing date for your card is August 10 and you decide to purchase a product using the card on August 9. Doing so will cause the price of the product to be included in the bill you must pay on September 10.
However, if you purchase the product after the billing date, for instance on August 11, you will have to include the credit in the statement for the next month. Therefore, the product’s expenses will be included in the bill for October and not September. It is vital to know about the important aspects of credit card bill payments.
3.      Credit cards to build a better credit rating
Your credit rating depends on how well you handle credit. Effectively using a card will allow you to improve your credit score if it is low. With better credit rating, you can avail several loans in the future, as well as avail higher credit limit on your card.
The most important thing to keep in mind when considering how to use credit cards to improve credit score is that you need to pay your bills on time. Additionally, pay the full bill and not the minimum amount. Ensure your credit utilisation is lower than 40% of your credit limit.
4.      Take advantage of cash back offers
Some of the best credit cards in the Indian market, such as the Bajaj Finserv RBL Bank SuperCard, offer cash back on every purchase made using the card. Therefore, the use of a credit card can lead to thousands in savings every year. Some cards offer substantial cash back on ticket bookings, while others offer the same on expenses incurred for dining out. Pick the card according to your lifestyle and enjoy the maximum savings.
5.      Availing a loan against the credit limit
During an emergency, time is of the essence and so is money. However, a quick source of funds may be difficult to find. At such a time, you can opt for a loan against your credit card. The best credit cards in the market allow you to repay these loans in 3 or 6 months, as affordable EMIs.
Learn more about how to use credit cards before you opt for one. Doing so will help you avoid defaulting and incurring huge debts from the card.

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