Smart Ways to Use Most of Your Credit Card

There is a reason credit cards are no longer luxury items – they are easy to use, they provide add-on benefits, they give extra purchasing power, and they provide the easiest way to build a healthy credit score.

Many credit card providers in India offer reward programs, enabling you to earn discounts, cashbacks, reward points, and more. Credit cards can be exceptional financial tools if you know how to make them work for you. Read on if you want to know the smart ways to make the most of your credit card –

Don’t go over your budget

When you apply for a credit card, you can open a world of financial benefits, but you need to set a realistic budget for what you need to spend every month and ensure that you don’t go over the budget. Pay off your balance or as much as you can before or on your due date to avoid penalties. A credit card can help you save money, but you have to use it wisely.

Pay your balance

Your credit card statement provides details of expenses charged to your card and payments due. It is a sound practice to pay the entire due amount in full every cycle and not just the minimum amount, to avoid interest charges.

Automate your payments

Let’s face it – everyone is busy with the hustle and bustle of life! With multiple monthly payments, it can be challenging to keep track of every due amount. To avoid getting levied with a late fee, make sure you automate payments towards your credit cards.

Time your spending

Every credit card comes with its billing cycle. If you make purchases at the beginning of your billing cycle, you can take the rest of the days to pay it back – with no interest.

Build a good credit score

One of the smartest ways you can build your credit score is through credit cards. If you are just starting or trying to rebuild a poor credit history, make purchases every month, but pay them off before your due date.

Redeem rewards

Lenders such as IndusInd Bank provide credit cards that come with rewards that don’t expire. So, take full advantage of the reward program. Accumulate as many reward points as you can and redeem them for cash at your convenience. The best part? You can use the cash to pay for the outstanding balance on your credit card statement.

Avoid fees when you can

Choose credit cards that come with no annual fees or recurring fees to maximize your savings. For instance, IndusInd Bank offers zero joining fee or annual fee on select credit cards.

If you are disciplined enough, you can get a credit card to complement your budget. Use this strategy and pen down your monthly budget, and then use your credit card as per your affordability. Remember – it can be a great financial tool if you know how to use it smartly!

“Prakhar is a, writer, and author of the new novel We Were Already There.” If your work has won any prestigious awards or earned bestseller status, make sure to mention that here, too.