A Credit card proves to be the best and most important factor that can help you in improving your credit score. Also, it can also adversely affect your credit score if you do not use it carefully. Think smartly and use your credit card to your advantage.
Below are some pointers that will help you in using your credit card in the right way.
Wide usage
Use your credit card only for small and regular purchases. Doing this will help you in tracking all your expenses over a given period. Use your card in every possible manner like paying utility bills, making online reservations, online purchases, and insurance premiums. In this way, you can use the credit-free period and earn maximum points.
Do not consume more than your credit limit. Usually, people make purchases beyond the credit limit as the pain of paying the money is postponed to a future date. Therefore, it is necessary to stay conscious while using your credit card.
Pay your credit card bill on time
Paying your card bills on time is the right way to minimize the default. This will help you in avoiding the late payment fee. Even in case of any emergency, try to pay the minimum amount pending.
Don’t use too many cards
If you do not use more than one credit card, even then there is always a risk of losing it. Therefore, one should have one or a maximum of two credit cards.
Do not borrow on cards
Remember that the card is not an additional source of money. It is only a way of using the present funds in an effective way. In there is an emergency, then opt for a Personal Loan rather than credit card withdrawals. The rate of interest offered on a personal loan is less than the loan against the credit limit.
Monitor your credit limit
It is always beneficial to have a maximum credit limit as reduces the risk exposure. Always stick to a self-determined credit limit and reject the credit limit increase proposals from your card provider.
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Terms and conditions
It is necessary to read all terms and conditions before using a credit card facility. There are always some hidden terms and conditions that you need to consider.
Do not pay a card surcharge
Never pay a card surcharge as the providers are not allowed to ask for a surcharge on the customer purchases.
Cash backs and reward points
Use your reward points wherever possible. Make sure that you think of them as an extra bonus and do not get obsessed with them.
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