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9 Tips to Save Money With the Smart Usage of Your Credit Cards

The Economics Times reports a 27% surge in usage of credit cards with a total of 48.9 million credit cards in circulation as of May 2019 up from 38.6 million the previous year. As per reports, there have been an accounted Rs.6 lakh crore spent using credit cards in the fiscal year 2018-19. The growing transactions through credit cards, on one hand, show its popularity while on the other hand, raises questions about wise utilisation of credit.

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Customers might make financial mistakes that can cause them monetary loss and hence wise utilisation is a must for customers. As a result, the following tips will come handy in making financially sound decisions.

Tips to save money by smart utilisation of credit cards

Tip 1: Understand the concept of reward points and welcome bonuses

Welcome bonus is an assured value of reward points offered to a customer based on their eligibility, whereas customers can accumulate reward points for each of their eligible spends. Customers should be well aware of how to redeem their credit card reward points so that they can accumulate the entitled benefits with it. Customers can earn cashbacks, qualify for vouchers or redeem reward points in specific purchases. Knowing the rewards that accompany a credit card will help customers save more.

Tip 2: Pay bills before the due date

How to pay credit card bills is an important concern that customers should make themselves aware of to avoid accumulating outstanding debt. Customers should be informed about the bill due date and make payments in full before the due date to avoid attracting interest.

Tip 3: Avoid paying the minimum due amount

It may appear to customers that paying minimum due amount is sufficient and can save them from the accumulating debt, but the case is not so. Paying only the minimum due amount every month will leave the remainder as outstanding, which in turn will attract interest rates.

Tip 4: Check credit card statement carefully

A credit card statement is generated after the completion of a billing cycle that includes information of all expenses made during that period. Customers should check the statement thoroughly for any discrepant transactions. In case it is so, they can dial the credit card customer care number and raise a complaint against the same.

Tip 5: Check various fees associated

Most credit cards may charge customers with an annual fee or joining fee. There are numerous other penalty charges and fees associated as well. Users need to have a complete idea about such charges to use the credit card beneficially.

Therefore, make sure to acquire information about the same before applying for credit cards.

Tip 6: Convert big purchases into hassle-free EMIs

Customers can save more on big purchases by converting them into easy and hassle-free EMIs if they have a deficit of funds. Converting into EMIs will make it easier for the borrower to pay the bill amount every month.

Tip 7: Avail a card as per spending habit

Customers can save more by making a wise decision about the credit cards they avail. Few credit cards may work in favour of a frequent traveller while another might better benefit a daily commuter. Making sure to avail a credit card that matches the requirements is vital.

Tip 8: Keep track of the billing period and make big purchases at the start

Credit card bill is generated for an entire billing cycle, and customers have up to 50 days to repay the credit availed, including the grace period. But, the purchases made towards the end of the billing cycle are liable to be included into the next bill minus the total number of days included under the billing cycle. Therefore, customers planning and making big purchases at the beginning of the billing period will have more time to arrange for funds and repay the credit availed. Customers acquiring cards like the Bajaj Finserv RBL Bank SuperCard can extend their benefits beyond and save more.

Tip 9: Limit credit utilisation ratio

Exhausting the credit limit can negatively impact a customer’s financial standing as issuers may charge a higher rate of interest in this case or may reduce the credit limit for a customer noting their spending and bill payment habits. It is advisable to not spend above 60% of the available credit limit, the user may be considered credit-hungry resulting in a depreciating credit score.

Keeping these tips in the back of mind, dealing with credit cards will get easier. Users who adhere to these financial habits are more likely to benefit from them and will be able to save money courtesy the numerous benefits offered by such cards.

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