Have you ever asked yourself if you’re making the most out of your credit card? Are there more benefits to these than what you are getting? To reveal the truth, there is more to credit cards than meets the eye! All you have to do is learn more about credit cards as you continue to use them.
A credit card is a modern-day financial tool that can benefit users as well as lenders. However, the smart way to make the most out of a credit card is to use it responsibly. If you are smart with its usage, you can maximize your savings and gain multiple benefits at the same time.
Here are some credit card tips and tricks that can help you maximize the gains out of them:
- Choose a credit card as per your lifestyle:
Different credit cards cater to different lifestyles. These offer various benefits and reward programs accordingly. Various credit cards are designed specifically for travelers, shoppers, first-time users, high net-worth individuals, etc.
To maximize benefits from your credit card, always aim to align it with your lifestyle. For instance, if you mostly use your credit card for spending on groceries and household shopping, go for a credit card that offers discounts on the same. If you are into travelling, find a card that offers cheaper flights tickets and discounted hotel bookings. Those who enjoy premium benefits should look for a credit card that gives high-end benefits like free golf lessons, luxury resort stays, etc.
It doesn’t make sense to have a card that offers benefits that are never going to be used. You may opt for a travel card, but if you use a flight only once a year, you will not gain out of your credit card as much as you would expect.
- Opt for multiple credit cards:
Since every credit card has its own set of benefits, owning multiple credit cards can help in maximizing the benefits. The benefits of various cards put together can add up to several savings. For instance, you can go for a credit card that offers rewards on groceries and another that has travel benefits for buying airline tickets. This will help you to tap into various reward programs and maximize benefits.
- Choose cards with different billing cycles:
Ensure to have a gap of at least 12 to 15 days between the billing cycles of different credit cards that you own. With 2 cards that have different billing cycles, you will be able to use one credit card for the first 15 days of the month and the second one in the latter half of the month. It will also allow you to use the grace period of both the credit cards and have more time between your credit card usage date and the bill payment date.
- Look at your card as a budgeting tool:
Try to make all your spending using your credit card. This will help you to know exactly your monthly spending and the various categories of expenditure you have every month. Simultaneously you’ll also continue to earn rewards for all your expenses.
You should only do this if you have the capacity to pay off the entire bill on time and each time. Never spend more than what you can afford else you may land up in a debt trap without realizing it.
- Monitor your card statement and track credit score:
If you frequently use your credit card, the best way to make the most of it is to regularly check your card statement. This will help you to know all your expenses and highlight any false charges that may have been applied. It will give you a true picture of how much you have spent and whether you can afford it.
Regularly check your free credit report online to know your credit score and credit behavior so far. The credit score listed in your credit report is calculated by a credit bureau. Frequently checking your credit report can help you to check the accuracy of the report. In case you have missed any EMIs or credit card bill payments, your credit report will reflect the same.
Credit card usage tips for first-time users
Here are some tips on credit card usage for first time users:
- Always spend within your budget and avoid overspending with your credit card because of the easy availability of funds
- Watch out for mobile alerts and keep a tab of your spending through the card. This will help you to stay within a budget and alert you in case you are approaching the credit limit
- Always pay the credit card bill on time every month. If you only pay the minimum amount due, it can result in high-interest rates being charged on the remaining balance.
- In case you are unable to pay the entire credit card dues, ensure to pay as much as you can. Try to convert the remaining balance into EMIs as soon as you can. This will save you from additional charges and allow a lower interest rate.
While making the most of your credit cards, try to avoid depending entirely on them. With credit cards, it is easy to get into a debt trap and difficult to get out of it sooner. Hence, the best credit card tip for maximizing benefits is to check your spending, be disciplined and be aware of all the features of your card.
Get the most value out of your credit card. Learn these credit card dos and don’ts to gain maximum benefits while ensuring a good credit score.