A credit card can be a valuable tool if you know how to use it wisely. On treating your credit card irresponsibly you can rack up a lot of debt, ruin your credit score and much more. Credit Cards have always offered best of the privileges and convenience to the users. Hence to help you avail all the benefits and privileges that a credit card offers, we have listed down 6 ways in which you can maximize the benefits of your credit card.
How to Maximize the Benefits of your Credit Card?
Every single penny you spend on a credit card, can earn you points in return which can be used for shopping, travel and other expenditures. However, a majority of people are still unaware of the benefits that a credit card offers. Hence, in order to maximize the benefits of your card, follow the below mentioned ways.
1. Choose the card best suited for you
Before opting for a credit card, it is very important for you to completely know about the card, including its features, reward points that the card offers, discounts on other purchases and more. It is also significant to read the fine print and compare the additional credit card benefits like lost card liability, purchase protection and more. You need to compare the different credit cards available so you can make the most of the associated rewards and benefits.
2. Sign up perks and bonuses
There are many credit cards available that offer you with a great deal of sign-up bonuses hence benefiting you in a variety of ways. You need to compare all the different cards provided by different issuers and look for the one that suits you best. The bonuses usually range from cashback to free hotel stays and points that you can use for air tickets.
3. Online Shopping can help you with Interest-Free period
Using your credit card online for shopping and other expenditures can increase your chances of earning rewards. Any purchase made via your credit card issuer’s portal can help you earn extra points or miles. Usually the credit cards come with an interest free period which ranges between the period of 20 to 55 days, depending on the type of card chosen. It is advised to choose the card with a long interest-free period so that it becomes easier for you to get adequate money to pay the bill before the payment due date.
4. Keep a check on your credit score and credit utilisation ratio
The credit score is the primary determinant of your credit worthiness. Missed or late payments can evidently pull your score down, lead to a bad credit history and eventually the financial institutions become hesitant in accepting the credit card application. Hence it is advisable to always keep a check on your credit score. It is significant to keep a check on how much you are spending irrespective of the fact that you possess a high credit limit or not. The credit utilization ratio also affects your overall credit health hence a higher utilization ratio cannot be considered good even if your repayment history is decent.
5. Track and redeem your reward points
Credit cards with reward points often give you the flexibility of redeeming your reward points and purchase something from the bank’s rewards catalogue. Make sure you utlize them in the right way. The reward points earned from a majority of credit cards expire after a pre-stated period. Hence do ensure to keep a track of your reward points and redeem them before their expiry.
6. Check your credit card statement regularly
It is very important to have a regular check on your credit card statement. Also do keep your purchase receipts safely as it will help you in effective check. If in case you ignore your credit card billing statement, chances are you can miss your payment due date or the important announcements related to changes in your credit card terms. Make sure to check your credit card statement every time you make a purchase.
It is a cliche that a credit card tends to increase your purchasing power but it is equally important to note that overspending and delayed payments can adversely affect your credit history. Hence it is always advisable to choose the credit card that not only caters to your spending habits but also positively impacts your credit history. Hence before choosing the one best suited for you, make sure to understand all the related terms and conditions and carefully leverage to extract the best and maximum possible out of it.