Credit cards- the so called 86×54 mm enchanted card help you do wonders financially. When used smartly, you get paybacks such reward points, travel offers, shopping bonuses and many more inciting offers. Credit card has become one of the most important payment tools in India, yet poorly understood. Every year hundreds complain about the excessive charges as consumers overlook the terms and conditions that come with the card. To make most of your credit cards and avoid any mistakes while using card, checkout the following list do’s and don’ts:
Log your transactions :
Tracks your transactions with mobile and email alerts and anytime you receive any alert make sure to look through the full alert. If you find any unauthorized transaction call and inform customer care about the transaction.
Verify your credit profile Annually:
Your credit card providers share your credit card repayment details with various other credit agencies which in turn rate your credit score. This score conveys your financier how likely you will pay your loan. More the score, higher is the chance to get your loan approved.
Remember your credit cards details:
It is advisable to know your credit details in case of theft or loss of card. Under such circumstances, you can instantly report your credit card provider and block your card before your card is misused.
Fill in yourself on credit card misuse:
Always stay informed of all kinds of risks and rackets related to credit cards and know about the ways to avert them.
Keep within 30% of your limit:
Maintaining your low balances brings your credit score in consideration. Keeping your credit score decent helps you while picking loans. Keeping 30% within the credit limit gives low balances which is manage as compared to high balance and a bonus of having good credit score.
Analysis of monthly statement:
Go through your monthly transactions statement thoroughly. It may not be as accurate as you presume. Check for your purchases and the amount you are charged is exact or not and inform of any unauthorized transactions. Inform you card provider of any disputed error within 60 days.
Use little & modestly with quick pays:
Use your credit card for pre-planned purchase with lowest interest possible so that can you pay under agreed timeframe. In correct usage, credit card has proved to be cheaper than loan, but if payments are not made quickly, you can be drowned in debt.
Be credit Card critic:
Credit Card critic are people who ensures to get deal with minimum borrowing possible. These are cheapest and best way to use credit card. The only way to achieve this is to stay organized and maintaining a good credit score.
Pay more than monthly minimum repayment ASAP:
MMR is the amount to be paid off your balance each month. Lenders keep it low as they hardly pull through the debt amount. But, it is beneficial to pay more than your monthly minimum repayment as soon as possible.
Check before spending abroad:
When on vacation abroad, you will be tempted to pay your expense through your credit card and ponder over later. But when the time comes you regret this decision as many card companies have the policy to add foreign currency fees on the transaction made you made on your overseas trips. Therefore, be careful while making any card swipes on your vacation.
Credit card companies make money from lending:
While making any transaction through credit card keep your payments on time and don’t surpass your credit limit. Any breaking of the terms and conditions may cost you penalties. Missing any payment also reflects on your credit score and would make it harder for to get loan in future.
Never miss card payments:
Credit cards are lent us interest free money for 45 days. Along with this we are provided with rewards on our purchases. On untimely payments, penalties are charged. To avoid these additional fees and enjoy the rewards, repay your credits timely each month.
Avoid paying minimum:
Try and repay the entire bill monthly and avoid extra charges. Paying minimum amount can cost you the interest you have borrowed. Avoid increasing your credit amount with more purchases. If there is any shortage of money, avoid making any transaction with card until you can pay the charges.
Not ever fully utilize credit limit:
You effect your scores when you exhaust your credit card limit. Not only your credit score is effected, you also have to pay extra charges to your credit card issuer. It is prudent to use only 50% of the limit you are sanctioned by the company.
Don’t share card information:
Never share your PIN or credit card password with anybody, not even your customer care executive. Be cautious while sharing information on a phone call because there can be chances of third party over hearing your conversation.
All sites are not to be trusted:
Be careful while using your credit card for online shopping or any other purposes. Always check for authentic and genuine website before making any transaction. Avoid using your credit card information on public computer or broadband and protect yourself from being a victim of information theft.
Don’t apply without reading provisions:
Don’t apply for any credit card just for the name of the company of it design. Go through the terms and conditions thoroughly and the rewards and offers that comes with card. To get the best deal of all, compare amongst various credit card providers.
Avoid using for daily purchases:
Don’t use your card for regular items like food, clothing, and other necessities. This will become a habit and would be difficult to keep track on your expenditure and ultimately lead you to debt. For regular purchases, use cash or debit card.
Don’t buy if you can’t afford:
If you cannot afford that expense at present, you might be able to pay for it after a month when your statement comes. So, it is better to avoid buying things that is not possible for you to pay off.
Don’t close without knowing the impact:
Closing a card with balance or substantial credit history can affect your credit score. So, before closing any card keep the credit history and balance in mind and check if there is any other option that can save you from closing a card with good credit history.
Avoid applying for multiple cards at once:
Applying for multiple credit at the same time can make you look desperate and lower your score. Instead, research for the one that perfectly suits your and requirement and apply for one card at a time and then further you can apply for any other you want, but not all at the same time.
Never use it for cash withdrawals:
A strict NO. However tempting it might seem, never ever withdraw cash from your credit card. This will put a hole through your card for a very long time, plus the debt that that has to be paid off and extra charges added to them.
Follow these Do’s and Don’ts and easily manage all your investments with EASY LIFE PERSONAL FINANCE SOFTWARE.