Business Expert advice on how to use your credit card...

Expert advice on how to use your credit card wisely


The credit card market in India is estimated to appreciate at a CAGR of 25% between the year 2020 and 2025. However, although credit card usage has increased significantly, the awareness of credit usage is critically limited. Also, many cardholders still perceive such cards as a line of credit which they can use without much repercussion.

However, before sending in your credit card application, here are some tips to follow for smart credit handling.

  1. Only spend as much as you can repay

Although this may seem obvious, most cardholders tend to go overboard on their credit card expenses. Keep in mind that you would need to repay the amount of money you spent in the following month. Thus, consider your payment capability thoroughly to determine how much you can spend using your card and stick to such a discipline.

  1. Limit big-ticket expenses to the onset of the billing cycle

If you are planning a significant expense with your credit card, it is best to do so in the initial period of your billing cycle. For instance, if your billing cycle is from the 1st of October to the 1st of November, ensure that you limit your big-ticket purchases to the first ten days of the billing cycle so that you can utilise the maximum period to repay the used credit.

  1. Pay the full amount and not just the minimum due amount

When considering how to use a credit card wisely, ensure you pay the total amount due instead of just the minimum amount due. It is because although paying the latter will result in restoration of your card’s credit limit by an equivalent amount, it will leave an adverse impact on your credit rating. Thus, whenever possible, service the entire credit card bill within the due date.

  1. Take advantage of the available reward points

Before submitting your credit card application, consider the types of reward points such a card offers. Some cards provide sizable point earnings on specific types of expenses, such as flight ticket bookings, fuel purchase, hotel bookings, and much more. If you are a frequent traveller, ensure you opt for cards where reward earnings are maximised in case of travel-related expenses, and likewise as per your spending priority.

The Bajaj Finserv RBL Bank SuperCard, for instance, provides an opportunity to earn sizable reward points every year. Cardholders can save up to Rs.55,000 through these benefits alone.

The NBFC issuing the card also provides pre-approved offers to ensure ease of availing credit. These offers are available on a range of credit options, including business loans, personal loans, credit cards, etc. You can check your pre-approved offer by providing just a few essential details, such as your phone number and contact information.

  1. Turn on auto-debit facility

If you have trouble remembering your credit card bill due date, linking your savings account to the credit card is the best recourse. Before completing a credit card application, set up your savings account with required funds to repay any planned credit card expenses. With auto-debit facilities turned on, the due amount would be deducted from this linked account on a predetermined date.

Choosing the right credit card for oneself is the most significant step that can limit liabilities from such cards. Some of these payment tools are geared for specific types of expenditures. Compare the various credit cards available online. From interest rates to the credit limit, you should consider every aspect before availing a card.

Regardless of the credit card uses, one can reduce his/her immediate liabilities by converting the outstanding dues into EMIs. However, do not use such a facility too often as doing so can hamper your CIBIL score. Wise usage of cards, along with punctual payments, can not only improve your credit rating but also assist you in availing an increase in your credit limit.

After a year or two of responsible handling of credit card debt, issuers are more likely to provide better offers and credit limits to you. Contrarily, poor debt repayment may lead to an excessive financial burden and negative impact on your credit profile.


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