7 Smart Tricks To Efficiently Use Your Credit Card

Working on the basic principle of ‘buy now, pay later’, the credit card seems to be the perfect solution for financial crunch. While few years ago, credit cards was perceived to be meant for the privileged few, now more and more people can afford having credit cards. The reason for its immense popularity is that it provides instant financial freedom and is safer than carrying hard cash. 

Credit cards significantly increase your purchasing power, but many times, people just end up picking a credit card to make the most of the lucrative offers pitched at the time of sale. Credit cards are rewarding only if you know how to smartly manage them. Also some people are hesitant to get credit card and prefer debit cards to save themselves from the interest charges. But there are smart ways to reap the full advantage of having credit card while enjoying various rewards and offers that not only saves money but also offers easy access to several lifestyle benefits.

Credit cards come with loads of financial benefits which can only be availed by knowing these 7 smart tricks to efficiently use your credit card:

1. Limit Your Spending In Accordance With The Credit Limit

The credit limit allocated to you is the maximum amount that you can spend using your credit card without being charged any penalty. Just ensure that you keep your spending within this set limit and choose a credit card that allows you a limit of three or four times more than you usually spend every month. If you want to avail complete benefit of having credit card without worrying about the over-limit fee, then try to reduce the credit utilisation.

2. Make The Most Of Reward Points

Getting a credit card just for collecting reward points is useless. If you make purchases with your credit card and make timely payments, then you will be able to enjoy cashbacks and reward points. You can easily redeem your reward points for getting coupons for travel, movies, restaurants, hotel reservations, customised holiday packages, online shopping, etc. Banks nowadays have come up with cashback offers on making utility bill payments, grocery shopping and much more that you can easily use for quick savings on regular basis. 

3. Get Complete Knowledge Of The Fees Associated With The Credit Card

There are several kinds of fees or charges that accompany credit cards like joining fees, annual fees, cash advance fees, late payment fees, reward point redemption fees, etc. You must thoroughly understand the kind of credit card you are being pitched and opt for ones that demand low amount of charges and provides incredible benefits. With increasing competition from rival banks and swelling demand for credit cards, banks have come up with credit cards having low interest rates and fewer fees to attract more customers.

4. Make Full Payment Before Due Date

Banks offers grace period to make payments for spending made in a particular billing cycle. They don’t charge interest during this period, which may vary from 30 to 60 days. In order to get benefit of the grace period, you must ensure that payment for the previous billing cycle was made on time or having a credit card will become more of a liability.

5. Get EMI Facility On Your Credit Card

If you don’t want to utilise your current income or savings for making big purchases like laptop, washing machine or a television, you can easily use your credit card for making the purchase through EMIs. It actually turns out to be more economical in comparison to personal loan. In fact, nowadays, the interest free EMI option available via the ecommerce websites has catapulted the demand for credit cards by multi-folds.

6. Make Wise Decisions While Choosing Discounts & Offers

While credit cards are often sold with tempting offers, one must look for credit card that gives them long term benefits that is compatible with their spending habits. If you are a person who loves apparel shopping or buying latest electronic gadgets or going to restaurants, go for credit cards that either provide you significant discounts on any of these or benefit you with handsome reward points. Choosing a credit card that blends with your lifestyle or spending patterns is indeed a smart deal. 

Recommended: Advantages and Disadvantages of Credit Cards

7. Focus On Building Good Credit Score

One of the smart tricks to efficiently use your credit card is avoiding being a defaulter in making timely credit card bill payments. If you have not maintained good payment history, the credit reports get marked negative, and this can make banks hesitated to lend you loans.

If you repay your credit card bills before due date, you certainly build a positive credit score with the bank. A good credit score can offer various benefits such as it puts you in a position to negotiate with your lenders to waive processing fees and get access to credit on cheaper interest rates.