Even though credit cards are popular modes of payment, users need to keep a few pointers in mind while spending through these. Otherwise, they may find themselves in substantial debt. Here are some tips to follow –
Pay card bills on time – Missing a deadline for your credit card bill payment results in considerable interest charges on your dues. Thus, paying on time is the best option.
Pay the full due amount – Instead of servicing just your minimum due amount, ensure you pay the complete due sum. Failure to do so can lead to increased financial strain in the coming months.
Withdrawing cash should be avoided – Credit card owners must avoid withdrawing cash through it in ATMs. Such withdrawals attract hefty interest charges. Only some cards, such as the Bajaj Finserv RBL Bank SuperCard, provide interest-free periods on cash withdrawals. If you withdraw cash and repay the same within this period, you would not need to pay additional charges as interest.
Limit credit utilisation to under 40% - Do not utilise all of your available credit limit just because it is available. Remember, you need to repay the same as well. The safest option is to limit utilisation to less than 40%. This should simplify the repayment, while also improving your credit scores.
Utilise reward points effectively – As you spend using such cards, you tend to gain attractive rewards and offers. Ensure you utilise such points while they are valid to earn hefty cashbacks and other benefits.
Keeping these pointers in mind shall help enhance user experience while ensuring optimum credit utilisation.
