use credit cards

7 Smart Ways to Use Credit Cards to Get Ahead Financially

Individuals these days do not limit themselves to just owning and using a credit card. They instead look for ways to use their credit cards as a tool to stay ahead financially. This indicates that people are becoming financially responsible with each passing day as the economy slows down. 

Thus, just knowing how to use a credit card is not enough. You must know how to use it smartly to make the most out of it and move ahead towards your financial goals.

7-point guide on how to use credit card smartly

The utility and value of a credit card increase when the customer knows how to use it to his/her benefit. Apart from paying or withdrawing money, you can also use your credit card to do more with it and become financially smarter.

Here are 7 great ways on how to use a credit card the best way –

  • Choose the right card for the right transaction

If you own multiple credit cards, you must know when to use which one. For instance, if you have a travel credit card, you should remember to make use of it while booking flight tickets, hotels, etc. You can not only avail discounts but also earn accelerated reward points on the credit card.

  • Take advantage of the grace period

Mostly, the grace period is of 30 days. However, with certain financial institutions, this can further be extended to 45 days.

You can make an expensive purchase at the beginning of the grace period and take advantage of it entirely. Make sure you need to know your credit card information well to maximise its benefits.

  • Set up your own credit limit

The issuer will fix a certain amount as a credit limit on your credit card usage. As a financially responsible individual, you must ensure to spend well below that limit.

You can plan your expenses accordingly so that you do not end up spending the utmost amount within the credit limit. 

Keeping your expenses under 30% of your credit limit will improve your CIBIL score quickly.  

  • Pay Your Bills on time

Not paying credit card bills within deadlines will call for penalty charges. This will not only pile up your financial liabilities but also hamper your monthly budget. You must clear off your total amount due, which helps boost your CIBIL score.

  • Check credit card statement frequently

Even if you know the outstanding amount to be paid at the end of a month, it is wise to check the credit card statement from time to time.

This will help you know your spending patterns better and rectify them in case of overspending. As a responsible cardholder, you must know how to read your credit card statement correctly.

  • Redeem your reward points

A well-informed cardholder will know how to use a credit card reward points wisely. Starting from exclusive shopping vouchers to attractive discounts on flight and hotel bookings, a lot can be availed by redeeming these reward points.

  • Limit cash withdrawals from ATMs

Paying a merchant directly through your credit card and withdrawing cash from ATMs are not subject to the same charges.

When you withdraw money from an ATM, you will be required to pay a transaction fee and processing fee along with interest chargeable. You can minimise such liabilities by reducing cash withdrawal from ATMs. 

However, credit cards like theBajaj Finserv RBL Bank SuperCardoffers interest-free cash withdrawals from ATMs for up to 50 days.

Credit cards are an ideal financial tool, the benefits of which can be maximised if you implement the above-listed points in your day-to-day financial dealings. Credit card information is one of the primary things you must enquire about and plan your card usage accordingly.

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