Dealing with financial uncertainty can be challenging but owning a credit card can be useful when it comes to making payments during a financial crunch. Though they are often perceived as a negative instrument, because of the debt and overspending tendencies that it creates. However, this is a little unfair because falling into debt is often a product of your own deliberate decision to overspend.
Most credit cards nowadays provide you with the power of plastic money as well as a slew of other benefits. Some of the key benefits of using a credit card include convenience, ease, rewards points, and bonus points.
What is a Credit Card?
It is an offering by the financial institution that allows the borrowing of funds from a pre-approved limit for your finances. The credit limit is decided by the institution supplying the card based on your credit score. Higher the credit score, the more your credit limit will be. The repayment of the amount borrowed should be done within the stipulated time to avoid penalty charges.
One of the advantages of owning one is the easy conversion of your purchases into EMIs for easy repayments. The Bajaj Finserv co-brand credit card allows one to avail of an emergency Personal Loan for an interest-free period of up to 90 days on their credit limit. You can apply online with the credit card app from Bajaj Finserv.
Read Also – 6 Reasons Why to Opt for a Credit card
So, the question remains, how does one utilise their card in a way to avoid the burdening of debt & to ensure you are making the most of the facility? Here are some useful tips to help with the same:
- Full repayment of your bill on the due date to avoid penalty charges
One should ensure they are repaying their due amounts in the stipulated time frame. One of the key benefits of owning a credit card can be the ability to repay the amount later, thus being very useful when it comes to emergency expenses. You are only required to make the minimum payment, which is a percentage of your outstanding balance, by your card issuer. While this might seem to be a more convenient and cost-effective option than paying the full sum due, it will cost you money in the long run.
- Keep track of your bills & expenditures
Make sure to periodically check your bills and the expenditures you are making with your credit card. Keeping track of your expenses can help in making sure you do not go beyond your credit limit.
- Use your Reward Points
Make sure you redeem your reward points before the expiration. Many credit card lenders offer reward points on certain transactions which seldom come with an expiry. Make sure to redeem those points to avail discounts on your transactions.
- Be aware of all the offers & discounts
Keep track of all the offers & discounts offered by your lender. In addition to cashback or travel incentives, several credit cards provide extra benefits. Make sure to use all of them. If you have any questions about the benefits of your credit card, go to your credit card app and check your agreement, or call customer service.
- Download the mobile app
Download the credit card mobile app offered by the company to keep track of your payments. You can access your account at any time to check your balance, available credit, payment status, report a missing or stolen credit card, and more. Most of this may be accomplished via your phone’s browser, but applications are frequently designed to be quicker and easier to use on mobile devices.
This being said, most credit card companies are invested in people who are prompt with their payments and hold a good credit score. You can ensure you maintain a good credit score by making timely payments of your due amounts. Although there are circumstances where closing a credit card makes sense, such as paying an annual fee on a card you don’t use or paying a high-interest rate, you should first understand how your credit score would be affected. Rest assured, when used sporadically and prudentially, a credit card can be an asset.