We all love using credit card. Frankly speaking, I have been using it from a long time and this has taught me few good lessons in life. In today’s date majority of urban population uses credit card and most of us don’t use it in the right way.
I was definitely at the wrong side for a long time. Despite the leverage of using it anytime anywhere, I did not know to use it effectively. Here, I am trying to say if we use it at right place then it is a boon but, as we start misusing it becomes a curse of debt.
There are better and smarter way and avoid mistakes and get benefits of holding a credit card. Some people suggest to get rid of it and you will not end up in debt. But I believe money needs to be used wisely without restricting ourselves by going on a financial fast. Here are some of the tips I would like to share.
No Cost EMI Options for Bigger Purchases
Initially I use to buy everything on my credit card and then pay bills every month. That was definitely not a wise idea. Because without even realizing I would end up spending more than my capacity and regret later. A large portion of my salary was going into just paying the credit card bills. It totally kept me away from saving anything.
Later I realized it can be used for bigger purchases and save money on interest. There are “no cost EMI” options available at most of the e-commerce giants as well as retail stores. We can utilize this option and save interest amount. Also sometimes they offer additional discount on particular card. So you get to save more on that shopping.
Earn From Rewards And Cashback
Almost every credit card company gives reward on every transaction. These reward points are converted into money or air miles depending upon the type of card you own. After accumulating certain points we get to redeem them against our purchase.
It not just allows us to pay less for the purchase but also get points on the same purchase. I personally have bought few items for free on some stores just by using these points. All we need to know, which card would be suitable for our needs.
Set a Limit For Expenses
Credit card already comes with a limit but it is very important to know how much should we spend every month on credit card. Setting up limit for ourselves saves us from spending way too much higher than what we could afford to pay next month.
If we do not set a limit then it is very tough to control the expenses and it ends up in a larger bill to be paid. Earlier I did not think of setting up a limit and every month I was paying more than my capacity from my salary. I could not save a single penny unless I learnt to set a limit for my expenses on credit card.
Choose Your Card Wisely
It is very important to choose the well suited credit card. Suppose if you travel a lot and go on foreign trips frequently, then it would be a good idea to get a card with zero or least foreign transaction charges.
Similarly if you love to shop online and offline then get a card with payback benefits. There are cards with zero annual maintenance charges. You can get a card with annual charges if you know this will be beneficial and you are getting facilities which you will be using frequently.
Pay your bills on time
Paying bills on time is one of best way to use credit cards more efficiently. It saves us from paying unwanted interests. Banks charge compound interest on the remaining amount if we just pay minimum due. You will have to pay bigger amount and its a bad habit to keep piling up the dues.
To ensure you don’t end up in debt, the bills should be paid before due date.