You may have faced a situation, where you need immediate funds to cater to an urgent household, but don’t have enough cash in your bank. Or perhaps, you may want to consolidate your debt, but cannot avail a personal loan. A credit card is your most-trusted financial ally in such situations.
It enables you to overcome short-term monetary requirements with instant financing, to address your diverse needs.
What is a credit card?
A plastic card issued by financial institutions, a credit card allows you borrow from a pre-approved limit. The limit is decided by the institution issuing the card based on your credit score and history. Generally, higher the score and better the history, higher is the limit.
How do credit cards work?
When you use a credit card for any transaction, the merchant fee, on your behalf, is paid by the financial institution issuing you the card. You can make as many transactions as you want within your approved limit.
You get an account statement each month summarising the transaction details of your card. The statement also highlights the following:
• Available limit
• Minimum payment due
• Payment due date
• Interest and fees charged
However, keep in mind that you need to pay back the amount utilised from your card within a stipulated period to your issuer, which is generally 30 days. If you fail to do so, your issuer levies an interest that keeps on compounding until the due payment remains outstanding.
Credit cards work like an interest-free loan if you repay on time. Here’s how you can use a credit card and make the most of it:
1. Compare: There are multiple credit cards available today. Look for the one which offers great benefits and suits your needs.
2. Apply: If you are above 18 years and meet certain income parameters, you can apply for a credit card online.
3. Use: Once your credit card arrives and gets activated, swipe it or use it online for any transactions you make.
4. Enjoy: Enjoy the grace period between your purchase and the actual payment date. The cycle for credit card payments can range between 30 to 90 days.
5. Earn: Get rewarded for using your credit card. Earn points, cashbacks, discounts, rewards for each transaction you make.
6. Get: With a card like SuperCard, get an interest-free Personal Loan of up to 90 days.
7. Repay: Receive your monthly statement with a list of transactions. Pay the due credit amount on or before the payment date to avoid any late fees or penalty charges.
8. Convert: You can also convert your big purchases into EMIs and repay over a period of time.
9. Repeat: Make fresh purchases each month, get rewarded, and repay when due.
That’s all! Using a credit card is that simple. Just keep a track of your spending and spend what you can repay.
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