How to Use a Credit Card Wisely?

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How to Use a Credit Card Wisely?

How to use a credit card wisely
  • Highlights

  • Instant cash to fund your needs

  • Paying your dues on time

  • Checking your credit card statement

  • Paying outstanding credit on time

Providing instant cash to fulfil your short-term financial needs, a credit card is a modern-day need. In fact, new-age credit cards known as SuperCards not only give you instant funding in an emergency, but also allow you to convert your pre-approved limit into a personal loan at competitive interest rates.

Bajaj Finserv offers 6 exciting SuperCards to fund your instant requirements easily.

How to Use Credit Card?

However, it’s essential to use your credit card smartly to avoid penalties that can impact your credit score. Here are five essential tips to use your credit card smartly.

Pay Your Credit Card Dues on Time

Paying your credit card bills on time is the cardinal rule of using credit

cards. When you use a card, your issuer pays on your behalf. Usually, the card issuer gives you a certain time within which you need to clear the outstanding amount.

Though there’s a minimum repayment amount, paying which you can avoid penalties, it’s better to clear off the dues within the stipulated billing cycle.

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Bajaj Finserv RBL Credit card

Check Your Credit Card Statement

While you may know the outstanding amount you need to pay, it’s advisable to check your credit card statement every month. Your card statement outlines your transactions, the available limit, the outstanding dues, the rewards points earned, etc.

Additional Read: How To Use Credit Card Reward Points

The statement helps you gauge your spending pattern and take the required measures in case of overspending.

Set up Your Own Limit

While your credit card gives you a limit beyond which you can’t spend, financial prudence calls for setting your own limit. It has twin advantages:

 

- It prevents you from making large-ticket purchases

- You have a lower amount to pay back which is easy and convenient

 

By setting your own limit, you can keep a check on overspending using your card.

Set up Direct Debit to Pay Outstanding Amount

Setting up a direct debit to pay the outstanding amount of your credit card ensures you are able to pay the dues you owe towards your card on time. This not only saves you from paying penalties but also improves your credit score.

Additional Read: How To Pay Off Credit Card Debts

While opting for a credit card, make sure it’s linked to your bank account so that the amount gets deducted automatically without you having to worry about making the payment. A convenient and hassle-free way to make sure you never default on your outstanding dues.

Additional Read: Credit card against fd

Limit Swiping Credit Card at Atms

There are occasions when you need to swipe your credit card at ATMs. However, note that there are some fundamental differences in the way you use your card while paying directly to your merchant at the point of sale and swiping it at ATMs.

When you use the credit card to withdraw money from ATMs, interest is levied instantly on the amount withdrawn. Along with this, there are transaction and service charges. Hence, it’s advisable to limit swiping your credit card at ATMs.

However, SuperCards charge no interest on the amount withdrawn from ATMs for a certain number of days. Only a flat processing fee is charged.

Additional Read: National Common Mobility Card

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