Credit cards are a convenient way to pay for your purchases. It allows you to buy goods and services now on credit and pay for them later on. Credit card offers a large number of benefits to its users in the form of reward points, discounts, and attractive cash backs, which help in reducing the cost of your purchase. Though there are several benefits of using a Icici credit card, it is very important to use it smartly. Given below are some of the ways to use it smartly:
Pay All your Bills on Time
It is very important to pay all your credit card outstanding bills on time to avoid any penalty charges. Not paying credit card bills on time might lead to a debt trap. The best way to avoid any late payments is to opt for an ‘Auto Debit Mode’.
Avoid Cash Withdrawals at ATM
Never use a credit card for withdrawing cash at ATM, as you have to pay heavy interest on it from the day you withdraw it to till the time you repay it. Interest on the withdrawn cash using a credit card is calculated on daily basis. As you know credit card carries an extraordinarily high rate of interest, you should not use it at ATMs. Instead, you can transfer money from credit card to your e-wallet like Paytm etc. and then transfer that money to your bank account.
Keep a Track of Credit Card Statement
It is important that you check your credit card statement every month so that you know your spending and you don’t end up spending beyond your credit limit. Credit card statement contains the name of the vendor, the amount you spend and date. You can check and curtail your spending’s on less important items in case you are running low on budget. Hence, the credit card statement helps in better financial planning.
Joining Fees and Annual Fees
Credit Card carries an annual and joining fees. This fee varies across credit card issuers. Some cards are available with nil joining or annual fees. You should look for a credit card with zero or minimum credit card fees so that your benefits outweigh the fees paid by you.
Choose Reward Points as per your Spending Patterns
The credit card comes with amazing reward points. You earn reward points on all your purchases. It is very important you choose credit card as per your spending pattern, as otherwise, you won’t be able to use reward points. Like if you travel less, a credit card offering reward points on traveling is of no use to you. You can instead look for a credit card which offers reward points on shopping or dining.
Read Credit Card Terms and Conditions Carefully
It is very important that before selecting any credit card you read the document containing terms and conditions carefully to avoid any confusion at a later stage. You can read terms and conditions online and seek the help of the bank’s credit card representative in case you are not able to understand anything.
Additional Reading: Why you should get a credit card
Keeping the above points in mind will surely help in taking maximum benefit of using a credit card and also your credit score will start improving. You can apply for a credit card through different online aggregators.
Author Bio: Tushar Sharma is a financial advisor with an experience of more than 6 years. He has worked with top-most financial firms and has been a visiting faculty at many reputed institutes in India. Currently based in Delhi, Tushar Sharma is a passionate writer and loves sharing his knowledge on the subject.