Tips to Use A Credit Card Smartly

7 Amazing Tips to Use A Credit Card Smartly

Today we will know 7 incredible ways to use credit card smartly. Hello friends, how are you? Hope you all will like it. Today we will know about credit card and the correct ways to use it.

Before getting a credit card, you must think about how to use the credit card smartly?

If used responsibly, credit cards can be a very useful financial tool that helps you when there is no financial support available during your critical times.

While there may be some benefits of using a credit card, it also has a dark side, which can cause you a lot of trouble. Consistent payment of your credit card bill can improve your credit rating/CIBIL score dramatically.

Credit cards often offer rewards for your offline and online purchases. It gives you 0% interest rate for a short period i.e. Up to 50 days (depending on terms and conditions of different banks).

The dark side of this is that if your credit spending goes out of control, you may face financial problems. do not be greedy. Follow these amazing credit card tips to help avoid those common problems:

Tips to use credit cards smartly

1. Pay your credit card bill every month.

You should avoid paying interest on your credit card purchases by paying the full amount each billing cycle. If you pay the full amount within the bill due date, you will enjoy the benefits of using a credit card without interest charges.

2. Use credit cards for essential needs, not for desires.

Credit cards should be used wisely. Do not make unnecessary purchases whenever you want, this can make your debt serious. You should always keep in mind that credit cards should be used in emergency situations, such as medical expenses, study fees, etc.

Always use a credit card only when you have the money to make such expenses and not use it. As it is like a temporary loan for you.

3. Never miss a payment.

Pay your bill on time every month before the last due date. Missing bill payments can result in late fees, penalty interest rates, and a negative impact on your credit score.

Another important thing is that, never pay the minimum amount of your credit card bill, it will drag you badly into debt.

4. Use a credit card as a budgeting tool.

If you’re confident you can use a credit card responsibly and pay off the balance in full each month, try using it as a budgeting tool. By making all your purchases with your credit card, you can see how much you’ve spent at the end of the month. Of course, you should only do this if you know you can pay off the balance each month. To make sure your credit card spending doesn’t get out of hand, never charge your card more than your bank account.

5. Never use credit cards at ATMs

Always keep in mind that do not use credit cards in ATMs. This gives you more credit. All credit card companies charge heavy interest (up to 35℅) on the amount you withdraw from ATM. So instead of withdrawing money from ATM it is better to borrow from your friend.

6. Use a rewards card.

If you’re using a credit card for most or all of your purchases, it makes sense to use a card that offers rewards. Not only can you avoid paying interest, but you’ll also earn rewards like cash, airline miles or retail points.

7. Stay under 50% of your total credit limit.

One way to keep your credit score healthy is to keep your credit utilization ratio below 50%. This credit utilization ratio is the percentage of your total available credit that you are using. For example, if your limit is Rs.1,00,000, you should keep your balance below Rs.50,000.

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