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Five Ways to Get the Most From Your Credit Cards

Five Ways to Get the Most From Your Credit Cards

Thanks to increasing affluence, more and more Indians are warming up to the idea of owning a credit card. It is estimated, there are over 24.5 million credit cards in India, with thousands more issued every day. On the number of transactions front also, we are witnessing an exponential growth. It is estimated, the number of credit card transactions grew by over 27% between March 2015 and March 2016, which will only increase further.

But at the same time, it is seen many people don’t make wise financial choices with their credit card. They don’t keep track of their spending or they are not aware of the credit card charges or perks and benefits that come with the card. Many people neglect paying their interest on time are eventually forced to pay heavy penalties. All these risks can be avoided if you learn to manage your credit card properly. Here are five tips to help you make the most of your credit cards.

Get your interest rate lowered

Sometimes, if you request the bank, they’ll lower the interest rate on your credit card, especially if you are longtime customer and have paid your dues on time. Please note, the bank won’t do it unless you ask. It is possible this request will affect your credit scores because some banks consider it as a new credit card request. If you want to get around it, make discreet inquiries with your bank about their altering interest rate policy and then take a decision.

Change the due date for payments

You don’t have to take the due date offered to you by the bank. You can protect yourself from payment delays by asking the bank to change the due date to a date that is more suitable to you and your paycheck. Please note, this facility might not be available in a few banks but generally, most of them do offer this service.

Avoid penalties altogether

The gist of a credit card is they give short-term loans at low-interest rates. But if you don’t pay the interest on time, soon you will be looking at a pile of expensive debt. The secret to using a credit card smartly is, to benefit from the perks while avoiding penalties. So always make timely payments. This way, you will not only avoid penalties but also avoid rate hikes in lieu of the penalties. Some companies also take away the rewards customers might have accumulated, when they incur penalties, so take care.

Use the rewards carefully

A lot of people use credit cards more frequently than they have to because they want to accumulate rewards. So essentially, they are funding their own rewards. But this is a bad decision. The way to go about it is to not even think about the rewards. For this, you have to start using the card normally and very carefully. Don’t monitor the rewards. Let them build. Check them once in a few months but not so infrequently, that they expire.

Find the hidden perks and take advantage of them

Credit card companies usually offer benefits like traveler miles, cash back, and points to clients for using their credit cards. But there are a few other perks that may not be well known but are equally valuable. These benefits might change, depending on the credit card company. For instance, some banks offer an extra year of warranty on certain products, when you buy them with their credit card. Others offer free travelers’ services like travel insurance, roadside coverage and even purchase protection.

The best way to find out more about such tips is to read your credit card’s offer document carefully. There may be some details there, that won’t be publicized by the bank but which can benefit customers if they know them, nevertheless.


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