Tip For Using Your Credit Card For Your Advantage
A lot of people admit that due to the fear of overspending, they do not use a credit card. Credit cards may turn out to be a night for the careless users and instant of you using a credit card it might turn the other way around. Given below are some tips and tricks that would help you to make a wise usage and turn to own the best credit cards as an advantage for you.
Your spending habits should determine your choice of credit card
Most companies come up with credit cards that woo customers by offering higher reward points, cash-backs, and discounts. It is essential to analyze your spending pattern to determine the choice of credit card that would provide maximum benefits whenever you use it for transactions. For instance, if you are a regular air traveler, then consider a credit card that comes with offers like free air miles, free lounge access, and hotel vouchers on your every credit card spending. Spending through your credit card on petrol pumps could also help you gain reward points as you contribute a good sum of your monthly expenditure to that as well.
Using a credit card for day to day spending
Reward points can significantly reduce your purchasing cost, discounts, and cash backs offered. To improve your credit history, it is a good point to make use of your credit card regularly. You can improve your credit score by paying all your credit card bills on time and avoid hefty interest charges being imposed on you. You can also convert your bills into EMIs for easy and effective payment in case you are not able to pay full amount in due time.
You can also own more than one credit card
In case you are thinking of enhancing the maximum reward points to avail the maximum benefit, you can just go for owning more than one credit card. It will also help you to divide your spendings with multiple credit cards. It would also minimize your credit utilization ratio and hence improve your credit score.
Don't forget to redeem your credit card's points before they expire
Make sure to redeem your credit card points before you lose the opportunity to as they come with an expiry date. Thus to make the most of your credit card, be wise enough to redeem the credit card points.
Don't forget to make good use of interest-free credit period
The interest-free credit period is the period between the date of a credit card transaction and the due date of its payment. 20 to 52 days is the general time period it exists for. In case if the repayment is made before the due date, then no interest is charged in such situations. You can also understand it as until this time your card issuer finances your spends for free during this period. Thus, you need to plan your spending through credit card, in such a way that you enjoy maximum interest-free periods on them.
Go for a higher credit limit
In case you have a credit utilization ratio of less than 30-40%, there are good chances for you to get a higher credit limit. This ratio estimates the proportion of your total credit limit used by you. Credit bureaus may significantly alter your credit score on breaching the 30-40% limit regularly. If you are breaching this level frequently, it is high time for you to ask your bankers to increase your credit limit. A financial emergency can be handled with ease with an increase in your credit limit.