Five Tips to Make Credit Cards Work for You, Not Against YouEstimated reading time: 3 minutes

Five Tips to Make Credit Cards Work for You, Not Against You

Posted on Thursday, July 25th, 2019 | By IndusInd Bank

Are steep annual fees, escalating monthly bills and a dwindling credit score causing credit card woes for you? If yes, worry not, because you are only one amongst a teeming lot. Most of us apply for a credit card hoping it’ll be the Messiah that’ll bail us out of messy finances. Sadly, only a few find their dreams translating into reality. If you are caught in a similar flux, read on for five top tips to make sure your credit card proves to be only a boon and never a bane.

Make Timely Bill Payments

Tip number one is pretty obvious and for good reason. One of the most common reasons for being caught in a debt trap is skipping regular bill payments. It could get particularly chaotic if you own multiple credit cards and have several deadlines to meet. The best way to make your credit card work for you is to be punctual with bill payments. Set reminders or fix a date so you’re not skipping payments. If you’re irregular, you’ll only be making it worse by having to pay high interest charges.

Understand Your Limits

Your credit card limit, set by the bank, is the maximum amount you can spend with your credit card. Although most banks do make exceptions for some large purchases, you can never be sure if your request will be approved. It could also affect your credit history and scores, thereby hampering your future prospects of a larger credit limit. Do remember that your total and available credit limits are different. The former is what you can spend without being charged a penalty, while the latter is the amount available for you to spend.

Track Your Spending

The most obvious move from understanding how much you can spend is to actually know how much you spend. This will also help you plan where you want your money to go. The easiest place to start is by regularly checking your account statements. You could be in for a surprise here, with records of some pretty unnecessary spends! Some people find that they greatly benefit from using an app to organize expenses and stay within budget. But if this isn’t your thing, you can always rely on the humble spreadsheet to keep track of your expenses.

Take Advantage of Rewards

One of the biggest benefits of owning a credit card is the attractive rewards and deals on offer. But are you tired of hotel deals and gift vouchers that are of no use to you? A great tip for making the most of your rewards program is by playing it smart. For instance, shop at select retailers that allow you to pay for purchases with all or part of your reward points/cash. However, do take care to not spend more than you can afford. Also, try to use only one card that offers the best deals. The more the cards you use, fewer the rewards you can gather on each.

Choose Cards with Extra Perks

The last tipcomes as no surprise, yet it is sad how little we concentrate on ‘choosing’ theright card. To start with, determine what you need based on your spendingpatterns. If you plan on paying the full bill every month, look for one with along grace period. Also, choose a card that offers rewards you can be sure ofusing. Some other things you should look out for are no transaction fees and azero percent interest rate for at least the first year.

Armed with thesetips, you can be sure of making your credit card work like it should. There areplenty of advantages to reap with just that little bit of discipline andattention. For starters, using your credit card responsibly contributes toincreasing the credit score. A high credit score is the easiest way to buildcredibility, allowing you to enjoy perks like low-interest rates. So why wait,go right ahead and transform your credit card into a trump card!

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