For some people credit cards are boon and for some bane. My life was almost ruined by credit cards before I gradually realised how to use it smartly.
But, there is some respite now as I know how to manage credit cards. I know there are so many people like me out there who are finding it hard to deal with the credit card debt, so I really like to share my top 7 smart tips to use your credit cards smartly.
Knowing Your Card Better
Before you finalise any credit card, make sure you have done enough research work. In case, the utility bill is the key component of your total monthly spend, make sure you choose a credit card that offers a cash back on utility bill payment instead of miles or reward points. If you go to your hometown by air once in a year, make sure you use co-branded card offering you miles, which can also get you free tickets as well.
When you receive your new credit card, make sure you have spent some extra time reading the terms and conditions. If you are using a credit card for years and you are not aware of the rules, you can always request your bank to send you a copy of the terms and conditions. This will also help you in getting familiar with the reward policies.
Low Credit Limit
It is important to keep a tab on your credit card’s credit limit. Make sure you open your credit card account with a company that offers highest credit limit possible. High credit limits, even if you don’t use them, will add merit to your credit score and will prove handy in improving it as well.
Closing Credit Card Accounts
Even if you don’t use your credit cards frequently, make sure you don’t close them in a hurry. Keep these accounts as long as you can. If you really want to close them, then make sure you do it over a period of time. If you choose to close too many accounts too quickly, then this will affect your credit score significantly.
Rotate Usage Of Multiple Credit Cards
It is a smart move if you are using different credit cards for varied expenses than using the only card for most of your purchases. Make sure you use each card at least once in six months.
Some credit card companies can also close your account if they feel you are not using your card. In such cases, it can also affect your credit score. You can avoid this situation; all you need is to keep using your credit card at regular intervals.
Always Pay On Time
You should make your best efforts not to encourage too much credit card debt. Make sure you pay your dues on time and don’t forget to keep rotating your cards. When you pay off your dues on time, it will cause a spike in your credit score.
Ask For A Lower Interest Rate
If you have always made your payments on time, you can use this track record and ask your bank officials for a better bargain. You can request them to lower your interest rate by mentioning the good track record you have with the bank. Make sure you keep following up on regular intervals with your bank and you may just get what your desire.
Before you redeem your reward points, it is advisable to first visit the website of your bank and check the reward catalogue there. Reward points, offered by your bank, can fetch you an extensive range of options, from a hot balloon ride to a gift voucher to a car. If you are looking to get the most from your credit card, here are some things you need to know.
- Consider reward points as bonus perks on your credit card. Make sure you are not making purchases just to collect points.
- Make sure you are aware of the fact that reward points do have an expiry date. It is important to redeem them before they expire.
- If your credit card account has an outstanding balance, then converting your points into cash is the smartest decision you can take. Conversion to cash can be a smart choice as it lets you save money that you’d otherwise have to spend towards your credit card bill.
- It is important you have paid your credit card bill in time so that you don’t have to pay for the delayed payment fees or interest on your credit card. In addition, this will also make your reward points worth the value.