Best 5 tips to manage your credit cards

BusinessBest 5 tips to manage your credit cards

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Best 5 tips to manage your credit cards

Credit cards can be a double-edged sword that needs to be managed efficiently. It can help you in times of need with headroom for spending by offering an interest-free window for 30 to 45 days. At the same time, if you are not able to manage it efficiently, you can end up in a debt trap. It is important to handle credit cards properly so that you can make full use of the several benefits it offers.

Here are the best 5 tips that can help you manage your credit cards better:

Read also: Govt working on SOP for Kisan Credit Cards for fisherfolks

  • Set an ideal credit limit

Always notice the limit that you have on your credit cards. You can adjust the credit limit on your credit cards based on your requirements. A very high credit limit would tempt you to overspend on things that you may not need. At the same time, a very low credit limit will prove to be a hurdle when you are making some big-ticket purchases.

It is suggested that you maintain an ideal credit limit based on your requirements and usage. An ideal credit limit will help you in managing your credit card expenses more efficiently.

  • Always pay your dues in full on time

This should be the golden rule of managing credit cards efficiently. You should always pay your dues in full before the due date rather than opting for the minimum amount due. By not paying the dues on time in full, you would attract a high rate of interest ranging from 30 to 40% per annum along with other finance and late fee charges that would burn a hole in your pocket.

Non-payment of dues would also result in impacting your credit score negatively. It is always better to pay your credit card dues before the due date in full.

  • Check credit card statements regularly

You should make it a practice to check your credit card statement regularly. This would help you in tracking your expense pattern and notice in case any additional charges are being levied by the credit card company.

It is a good practice to check your credit card statements so that you can stay on top of your financial position. It helps in tallying all the purchases made in the last month so that you are aware of where you are spending your hard-earned money.

  • Avoid cash withdrawals

One of the biggest mistakes people make is to treat your credit card like your debit card which you can use at the ATM to withdraw money. You should avoid cash withdrawals on the credit card and not treat it as an ATM card.

By withdrawing cash from your credit cards, you are pushing yourself into a debt trap. Most credit cards levy a high rate of interest straight up and the cash withdrawals do not have an interest-free window, unlike the purchases you made using a credit card. You should not use your credit card for cash withdrawals as the withdrawal amount would soon balloon up with interest and will end up costing you a lot more.

Read also: HDFC Bank can now issue new credit cards; shares rise

  • Use free offers and rewards

Several offers and rewards are offered by various merchants for using a credit card. It is important to be aware of such rewards so that you can make full use of the free offers and rewards.

You should not end up in a trap of making purchases because of the rewards and offers that are running on the card. It is better to be aware of the rewards and offers that are available and make purchases that help you make full use of these offers.

These are some tips that can help you manage your credit cards better. A bonus tip is that you should not hold more than a few credit cards as it can become tough to handle the payments deadline of too many credit cards. It takes a lot of patience and determination to avoid the temptation of swiping your credit card too often.

It is important to practice discipline in your financial behavior so that you do not end up in a debt trap. You should avoid making these mistakes that have been outlined above so that you can protect your financial position and your credit score.

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