There’s no doubt that credit cards have changed the face of financial freedom, but you know some crucial credit card rules to ensure you make the most of it. Credit cards have always been tempting as they provide many benefits for almost every expenditure.
But they are like double-sided swords, and if not used carefully, they can cause significant harm to your finances and creditworthiness. To avoid this, remember these crucial credit card rules for using.
Make Repayments on Time
If you forget to pay before or on the due date, it can cost you significantly, as delaying your bill payments even by a day can attract interest charges and late fees. If you are wondering, ‘What if I pay the minimum amount on a credit card?’, the answer is that you can. But you should not make it a habit because of the following reasons:
- You avoid only the late payment charges, and the outstanding amount will attract interest
- The issuer will revoke the interest-free period, so your future transactions will attract interest from the day of the transaction
- Your utilisation will continue to increase, affecting your creditworthiness
As such, it is a good habit to either put payment reminders on your mobile or choose the auto-pay feature to avoid late repayments. Paying off your bill within the credit cycle will also help you avoid hurting your credit score.
Create a Budget to Spend Mindfully
A credit card makes your life easy but can cause discomfort when you overuse it. You must focus on your budget, include your expenses carefully, and schedule your significant purchases to avoid potential debt later.
Making a budget well aligned with your needs and capacity is a good way to ensure you can manage the repayment. Monitor your credit card statement to know your spending habits, and use a calculator to plan your budget accordingly.
Be Well Versed With the Offers and Rewards System
Credit card issuers offer a myriad of benefits with their cards, and tracking them can be overwhelming. However, it is necessary if you want to get the most from your card. Issuers partner with various service providers and offer discounts, cashback, or complimentary services, among others. By keeping an out for these, you can get more from your payments.
Issuers also offer rewards for almost every transaction you make. These rewards will depend on the issuers, the card type, and the type of transaction. Make sure you know these conditions to get the maximum rewards. You also need to track the validity of these points so that you can redeem them. Generally, you can redeem the points for:
- Gift vouchers
- Discounts
- Statement credit
- Cashback
Use Your Credit Card Safely
Convenience is the most significant advantage of using a credit card for daily expenses. However, as technology evolves, so does the possibility of more scams. To make sure your transactions are done safely and personal details are well protected, you need to use your card carefully.
While issuers offer EMV chip-based cards, you need to be vigilant too. The chip embedded in your credit card encrypts all the data, preventing duplication and tampering. What you can do is:
- Set strong PINs and passwords, and don’t share with anyone or write anywhere
- Check surroundings before entering any sensitive information
- Ensure the website is safe and genuine before making the payment
- Report any unauthorised use immediately and block the card, if needed
Avoid Cash Withdrawal Using Your Credit Card
Although most issuers allow you to withdraw cash using your credit card, it is not advisable. This is because withdrawing cash using your credit card attracts hefty charges and has no interest-free period. That said, withdrawing during an emergency is alright, but make sure you can manage the repayment.
Maintaining discipline while using this tool and following the primary credit card rules to protect your wealth is essential. Being aware of the important aspects can help you elevate your credit usage experience hassle-free. Some things you should keep an eye on are:
- Credit limit
- Billing cycle
- Due dates
- Credit score
- Annual fees
- Interest rate
- Cash advance fees
- Additional fees
If you are looking for a credit card, apply for the One Credit Card. It is an instant credit card that lets you spend freely with its payment options. You can track your payments, due dates and EMIs on the One Credit Card App. Set limits, get exclusive offers, and manage your credit card using the mobile app. This way, you stay informed about your credit usage and can manage it well What if I pay the minimum amount on a credit card.
You can earn 5X rewards on your top two spend categories and enjoy great offers on food, dining, entertainment, utility bills, and travel expenses. Apply now and make the most of this lifetime-free credit card.
