Previously, credit cards were a luxury and were only available to an elite few; however, today, a large number of people can afford a credit card. The reasons are that the card gives you financial freedom and is more secure than cash. Credit cards enable you to purchase now and pay later. It comes in handy during a financial crisis. If you need more than that, credit cards also come with various offers and rewards that can help you save money and gain access to lifestyle benefits.
Credit card benefits are advantageous, but you can only get the most out of them if you use credit card wisely. Do you know how to use your credit card wisely?
Here are five tips to find out about how to use your credit card wisely:
- Select and Use the Appropriate Credit Card
Selecting the credit card benefits for your needs can be challenging given the abundance of available credit cards. Making decisions about credit cards solely based on agent or friend recommendations or choosing only cards for which you have been pre-approved may not turn out to be wise choices. Therefore, it is advised to compare the various cards that were shortlisted carefully then apply for credit card online.
It makes sense to choose a primary credit card, which is typically lifetime free and offers consistent rewards across shopping categories if you use a credit card for the first time. If you already have a primary credit card, it is advised to consider your needs before selecting the co-branded credit card that can provide you with the greatest number of benefits.
Prior to swiping the card, it’s equally important to review the credit card benefits and merchant offers in addition to selecting the appropriate credit cards. Making the most of credit card benefits requires using the proper credit card at the appropriate time.
- Stick to the Budget When Spending
A tried-and-true strategy to prevent overspending is to create a yearly budget, divide it into monthly, weekly, and daily budgets, and stick to them.
However, when you use a credit card, the money doesn’t come out of your pocket at the time of the purchase, so you tend to spend more than you had planned. Card holders are tempted to shop more while forgetting about the debt they have accumulated. They keep building up debt in a cycle that eventually makes it challenging to repay.
Therefore, you should refrain from making unnecessary purchases with your credit card, including small indulgences, large purchases made through EMIs, retail therapy, etc. Spending carelessly on your credit card(s) can trap you in debt, and it may be difficult to escape from such a precarious situation. As a result, it’s important to maintain financial discipline over your credit card usage and stick to your spending plan.
- Check the Accuracy of Your Monthly Statements Carefully
A great way to keep track of your spending is to frequently review your credit card statements, either online or when they come in the mail. It can assist you in identifying unusual transactions. And that might shield you from scams.
If you do discover an unauthorised charge, notify your credit card company right away. You can stop any unauthorised spending in your name the sooner you become aware of and report credit card fraud.
- Take the Required Safety Precautions
Online and credit card-related frauds have grown as a result of the pandemic’s increased use of digital banking platforms and plastic cards. You should exercise the necessary caution to protect yourself from credit card fraud.
Due to the ease with which fraudsters can access sensitive information such as your personal information, credit card number, CVV, One Time Password (OTP), etc., your credit card is susceptible to unauthorised activity.
Here are a few methods that credit card fraudsters frequently use:
- Access to the credit card physically (lost or stolen credit card)
- Your credit card is swiped (using Point of Sale (POS) equipment)
- Malware Phishing Attack
- Taking your email information
- The theft of your documents
- Take Full Advantage of Reward Programs
Every time you use a Bajaj Finserv RBL Bank credit card to make a purchase, this credit card company awards you with a reward point. When you have earned enough points, you can get the money back on your subsequent purchase. The reward points they accumulate when using their credit cards are frequently completely forgotten. Such reward points or coupons are only good for a certain amount of time. The best time to use your rewards points and coupons, which will let you stray slightly from your spending plan, is during the holiday season.
You can use credit cards to purchase items and services that you cannot currently afford but that you will be able to pay for soon. But maintaining financial discipline is essential if you want to use your credit card wisely. It is advised to only swipe your credit card after carefully considering how you will use the good or service. Furthermore, make sure you have a repayment strategy in place before using your credit card. When making large purchases, it makes more sense to create a financial plan and invest in carefully chosen mutual funds rather than using your credit card.