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Credit card companies have become an integral part of the largest consumer markets. And each credit card company is eyeing the attention of the public. Each card issuer has a different number of benefits and cashback offers.

A credit card is one of the easiest and most preferred payment methods. With correct usage, one can get the maximum benefit and enjoy cashback and reward points with more benefits.

Those who have to use the credit card facility for the first time always feel empowered.

There is a saying that with great power comes great responsibility. Maintaining a credit card is a great power, as the user’s credit score, future eligibility to apply for loans and credits, and many more factors depend on how efficiently you use your credit card.

Here are a few tips on taking control of their credit card.

1. Utilisation of reward points

Almost all credit cards offer sign-up benefits and reward points on their first purchases. These benefits come in many forms, like vouchers, coupons, zero EMI offers, etc. One should judiciously use their credit card to get the maximum advantage.

Reward points can be accumulated and then redeemed in cash or via tie-ups within the stipulated time. But, to ensure eligibility for rewards points, one must always make payments on the outstanding bill amount.

2. Joining and renewal fees

Credit cards come with certain charges, both visible and hidden. One needs to be aware of all credit card information such as fees structures and choose only those cards which have reasonable charges. A few credit card companies also provide reversal of fees in a few scenarios. Such reversal benefits can save a lot of annual fees.

3. Small cards only for big uses

Most people tend to use their credit cards for every purchase they make. The credit card limit is usually reduced and one might not be able to utilize the card when during need. Hence, it is always advisable to use a credit card for big purchases as small purchases can lead to a large bill without tracking.

4. Promotional offers

Luring customers with ‘offers’, and ‘discounts’ is a new trend for most banking instruments. Credit card companies tend to attract attention with offers that come with a lot of terms and conditions. It is always better to scrutinize these offers and then fall for them if necessary.

5. Low credit utilization ratio

A smart user will always keep one’s credit card balance 50% lower than the credit limit. High balances on credit cards may affect credit scores leading to failure of eligibility for future credit offers. Also, once these balances are carried forward to the following month, the financial budget that one follows will get affected drastically. Hence, maintaining a low credit utilization ratio is always advisable.

6. Maximise the minimum

A good credit score always speaks for itself, and this happens by not keeping anything outstanding in the billing department of a credit card. Making payment of the minimum amount every cycle is not sufficient. It is always better to make the full payment or at least more than the bare minimum.

7. Deal with high-interest credit cards first

Firstly, maintaining a credit card with low-interest rates is the key to financial maintenance. But the interest rates change every year and every season hence if one has more than two credit cards, the one with the highest interest rate should be dealt with first. This is a strategic approach to all debt issues and problems. For this one needs to create a plan and follow time frames to not always be in debt.

8. Time and tide wait for none

Most credit card users ignore that timely credit card payments can help a great deal in maintaining proper records. Accrual of credit card payments can lead to several financial problems. Hence, timely payments of outstanding credit card dues can help a lot in maintaining the financial balance.

Points To Remember

A credit card is an instrument with excellent financial learning and usage, but the ability to cover all liabilities within a stipulated time is the only way to have a healthy credit card. The mantra is simple—spend what you can pay back.

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