5 Smart ways to use your credit card

There is a huge rise in credit card usage by people. It provides financial freedom and is more secure than hard cash. They also let you buy now and pay later. It thus helps in a financial crunch. If this is not enough, credit cards also come bundled with various offers and rewards which save you money and provide access to various saving Credit cards are one of the smartest ways to make payments and if used properly, can help build a great credit score, which will be helpful eventually in the future.

  1. Protection against fraud –

If you are not careful enough while using the credit card a hacker might steal all the car details and use your card. Scammers keep finding new ways to defraud credit card users. One must educate oneself and be aware of new threats. To avoid such crimes you should go for two-factor authentication wherein you get an OTP on your mobile phone or email ID to approve any card transaction. You get SMS alerts every time your card is swiped, so if you notice any unauthorized transaction, block your card immediately by either calling the customer care service of the bank or via Net/mobile banking.

  1. Always Pay In Full Before The Deadline –

Paying in full before the due date is the smartest way to use a credit card. Also, credit cards offer a grace period to make payments. This is an interest-free period to repay all dues. Banks usually grant a grace period of 30 to 60 days. Make sure not to carry forward any balance from the previous billing cycle, or else you will never get the benefit of grace period. This acts like a short-term loan without interest if you can pay outstanding dues by your bill payment date.

  1. Transactions limit –

Always set a transaction limit on your credit card. If you have a Wi-Fi-featured credit card just take a single tap and the money is debited. So, it’s a good idea to set a low limit (about Rs.1,000-2,000) for such tap transactions while higher amounts will require swiping the card and your PIN. Be extra careful about international transaction limits. International usage will not require an OTP, which is very risky. So, if you aren’t traveling abroad or making an overseas purchase, deactivate the international use on your card. It can be reactivated whenever required.

  1. Pay attention to the joining and renewal fees –

Credit cards have joining and renewal fees. However, some cards have no fee. When looking for a card, pay attention to the fee structure. Experts say that it is better to opt for cards that do not offer any joining or even annual fees. This can be done as many cards don’t charge these fees. The fee if charged, should be reasonable and outweighed by the card’s benefits. Moreover, many cards allow a fee reversal if you spend a certain amount annually. Look out for this reversal benefit to save on the annual fees.

  1. Credit Card And Reward Points –

Do not avail of credit cards just for the sake of reward points. However, if you effectively use credit cards, you can end up enjoying a lot of benefits and reward points including cash back. You can avail of exclusive concierge services for holiday packages, gift delivery, movies, travel, and even hotel reservations. Banks offer cashback on utility bills (electricity/water), and grocery purchases if you use credit cards. Use it to your advantage.

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