Credit cards are a great alternative mode of payment offering several benefits over debit cards and liquid cash. If used sensibly, a credit card can help optimise your personal finance, provide a substantial amount of funding to meet your requirements, and also improve your CIBIL score. Financial institutions have various loyalty programs that reward you as you transact using your credit card.
How to Use a Credit Card and Its Reward Points Wisely
As a cardholder, you should know how to use a credit card properly to enjoy its various features and benefits. Several factors play a crucial role in its usage; here are 7 such tricks to follow.
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Pay the total due amount in time
You should always pay the outstanding due amount in full and within the due date. It is a guaranteed way to avoid accumulating excessive debt on your account. Timely repayment will also improve your credit score as credit bureaus will consider you a responsible borrower. Lenders may also offer you an increase in the limit of your credit card.
Paying only the minimum due amount will carry over your outstanding balance to the next bill. Over time, this can result in a significant debt which can become problematic to clear off.
Tip: Create a budget and keep your credit card expenses within that limit. It is one of the fundamental tricks of how to use a credit card and avoid accumulating unnecessary debts.
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Utilise the grace period
The grace period is a gap between the end of a billing cycle and the due date of the next payment. It allows you to clear the outstanding credit card dues without paying any interest.
Proper utilisation of the grace period can help you save a significant amount of money on interest. However, if you carry an outstanding balance from the previous billing cycle, your credit card issuer may not provide you with the flexibility of an interest-free period.
Tip: ATM cash withdrawals with most credit cards in India include both processing fees as well as interest on the amount withdrawn. However, you can opt for credit cards like the Bajaj Finserv RBL Bank SuperCard which offers you an interest-free period of up to 50 days with ATM cash withdrawals.
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Use a direct debit system
Setting up a direct debit system ensures you do not miss or get delayed on your credit card’s payments. It automatically debits the due amount towards your credit cards account before the due date.
Tip – You can link your credit account with NACH (National Automated Clearing House) to avail direct debit facilities. It is a nationwide, government-backed system designed to facilitate recurring payments.
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Use it at trusted merchants only
Maximise your credit card transactions through merchants who have tie-ups with your credit card issuer. It ensures you earn the maximum amount of reward points as well as benefit from guaranteed security.
You can manage your finances and improve your CIBIL score once you learn how to use a credit card properly. Also, you will earn a substantial amount of rewards which you can later redeem to enjoy discounts, complimentary services, gifts, etc.
For example, Bajaj Finserv RBL credit card reward points can help you save a considerable amount against your purchases through various discounts and offers. You can save up to Rs. 55,000 every year and enjoy accelerated rewards at the same time.
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Utilise it before the expiry date
Reward points usually come with an expiry date. Redeem those beforehand to make the best of discounts or gifts.
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Choose the places to redeem
Certain retailers provide more discounts and offer against credit card reward points. These are online and offline shops which have partnered with your credit card issuing company. Utilize these retailers to maximize the number of reward points.
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Look for welcome gifts
Various financial institutions provide huge reward points as a welcome gift upon joining. You can redeem these to avail various discounts and benefits on future purchases.
When you sign up for the Bajaj Finserv RBL Bank SuperCard, you get up to 20,000 reward points. Bajaj Finserv also provides pre-approved offers on personal loans, home loans, business loans, and a range of other financial products. These offers make the process of availing finances easy and save time. You only have to share some necessary details online to know your pre-approved offer.
Credit cards are one of the quintessential financial tools in modern economy. Knowing how to use credit card and its reward points can help you utilise it wisely and earn the maximum benefit against the money you spend.