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How to use your first credit card smartly? Follow these simple steps


Received your first credit card? Are you excited to make that first swipe? What should you buy? How much to spend? Here are some simple tips to help you manage your first credit card smartly.

5 Tips & Tricks To Use Your First Credit Card Smartly

Credit Card is pretty much an unsecured loan. If used responsibly, you can meet many of your needs and wants comfortably. Splurging leads to huge outstanding amounts and mounting interests that could finally lead you to a debt trap.

Follow these 5 tips & tricks to make the best use of your first credit card!

  1. Secure Your Card With A Strong Password & PIN

This is the first and foremost thing you need to do as soon as you get your card. With so many cyber criminals on the prowl, you have to ensure your card safety by updating the PIN number and online login password. Choose a strong password and don’t share it with anyone. Beware of phishing emails and SMSs to avoid fraud or theft of your card.

  1. Use The Card Only For Needs, Not Wants

This additional spending capacity you have received can be quite tempting. But remember, this needs to be repaid and if not repaid on time, there are going to be interest charges. Avoid impulsive shopping and use it only for basic needs. It can be used to pay off utility bills that are soon due but buying those flashy shoes on sale can be put off for later.

Experts advise you to limit your credit utilization percentage below 30% of your income. This is a reasonable quantity that will help you to manage your credit card debt easily. Having large balances on all of your credit cards may harm your credit score. Furthermore, if you carry these large sums over from month to month, your interest expense will rise.

  1. Pay Off The Entire Balance Every Month

Never spend more than what you can repay the next month. Be mindful of your income and spend only as much as you can repay. Never keep any outstanding amount on your credit card balance. The interest rates are anywhere between 40-45% p.a which can result in very high debt accumulation.

Paying simply the minimum amount required is insufficient because it will result in interest charges. This is a bad debt management method that will lead to a lot of credit card debt. Pay little heed to the minimal amount owing and make it a point to pay off your entire credit card payment every month.

  1. Never Miss A Payment

Worse than not paying the entire bill amount is skipping payments. The interest charges and late payment fees are very high with credit cards. Your credit card payment will be due on the same date each month, which makes it easy to keep up with your payment due date.

If you are preoccupied with work or other obligations, you may miss your payment due. You can avoid late credit card bills by setting up automated payments ahead of time. To eliminate this difficulty, you can set up an auto-debit from your bank account for the minimum payment and, if possible, for the entire sum. However, make sure you have adequate money in your bank account before the payment is due. Otherwise, you’ll be charged a late fee or an ECS Bounce Charge.

Paying on time is particularly significant because your payment history is the most important factor in determining your credit score, which is a three-digit figure used by lenders to analyse your credit utilization. To maintain your credit score high, make it a point to pay off all of your credit card bills on time.

  1. Make Optimal Use Of Your Credit Card’s Rewards Program

Credit card issuers use reward points to reward you for using their cards. Most credit cards offer 1 point for every Rs.100 spent. This 1 reward point is equivalent to Re.1. These reward points can be utilized in a variety of ways, including purchasing merchandise from a catalog, adjusting the points against your bill amount, purchasing fuel, and earning air miles. The problem with reward points is that they expire after 2 to 3 years of accrual. As a result, you must constantly keep track of the earned points and redeem them at the appropriate time to reap the most benefits. Don’t let them go to waste.

Credit cards reign supreme in the world of digital payments. Aside from convenience, credit cards provide a variety of other benefits such as rewards programs, cashback rewards, merchant discounts, airport lounge access, and many more. Credit cards, when used wisely, can help you manage your finances more comfortably. The most significant benefit of using a credit card is the ease it provides. You don’t need to carry large amounts of cash with you to pay for your daily purchases.

Now that you’re aware of the numerous advantages of a credit card, apply for one and begin taking advantage of the numerous bonuses and rewards that come with it.





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