Finance

What are Do’s and Don’ts of Using Credit Cards Effectively

This will help you enjoy the benefits of the interest-free period against your transactions and also improve your credit score. This way, you will be able to avoid any late-payment charges and penalties which the bank might charge in the event of non-payment. You can set auto-pay for minimum payment as well as for the entire amount due. By making these big-ticket transactions in the first few days of the billing cycle, you can get up to 50 days to make the payments.

This will help you identify any fraudulent transactions or any errors and get them rectified as soon as possible.

By paying the single minimum amount due, it can take you up to 48 months to pay off the dues. Keep this option only for the times of emergency when you are unable to repay the entire outstanding amount. Instead, pay the entire amount due as soon as you can. Or, make use of the option of converting the outstanding dues into EMIs.

Time your purchases:

If you are planning to make any big-ticket purchases such as smartphones, electronics, or air ticket bookings, then you should time your purchases according to the billing cycle. By making these big-ticket transactions in the first few days of the billing cycle, you can get up to 50 days to make the payments.

Understand the terms and conditions:

This goes without saying, you must thoroughly read the terms and conditions of your Credit Card.

Redeem your reward points:

Most Credit Cards offer you reward points as a welcome gift, on spends, on achieving a certain spend threshold. However, these RPs come with an expiry period. For instance, with HDFC Credit Cards, this period is two years. So, make sure that you use your accumulated reward points before they expire as per the redemption program offered by your bank.

Meet the annual spend threshold:

Unless you have a Lifetime Free Credit Card, your Credit Card will have an annual fee that you must pay at the start of the year. But you can easily avoid this annual fee by ensuring that you meet the specified annual spending threshold specified by your bank.

Insist on making the payment yourself and make sure that no one is overlooking while you enter the PIN.

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