Undoubtedly, a credit card comes along with several benefits such as high cashback, reward points, complimentary lounge access, long credit-free periods, insurance covers, etc. However, not every credit cardholder is aware of how to utilize these benefits to the core and maximize them. Here, we have listed down the top 7 tips to maximize the benefits of your credit card.
(i) Choose a Card as per Your Need: Different types of credit cards offer different benefits that may or may not be suitable to your spending needs and patterns. Thus, to make the most out of a card, you must first analyze the benefits you are looking for and your spending habits. For instance, if you are a regular traveler, a travel credit card is a good option for you, however, if you are a frequent shopper, you must get a shopping credit card or an online shopping card if you specifically shop online. You can also consider getting an all-rounder credit card, or multiple credit cards to avail of different lifestyle benefits.
(ii) Compare Credit Cards: After analyzing the type of benefits you are looking for, and choosing the card type, you must shortlist and compare the cards before getting one. For instance, if you are looking for a credit card for benefits on fuel spends, you must compare two fuel cards on the basis of the benefits they offer, the fee they charge, and even the brands they are associated with. For this, you can rely on marketplaces that can help you compare and apply for credit cards online as getting information across cards and credit card providers becomes easy.
(iii) ) Know the fees & charges: It often happens that credit cardholders consider annual and joining fees as important factors in choosing a card. However, it must be noted that it is not necessary that a zero annual fee card is good, or a high annual fee card will offer extensive benefits. At times, the benefits offered by a card might not be equivalent to the fee charges, thereby, instead of focusing on the fee, you must focus on the range of benefits offered on the card. The best credit card for you is one that offers benefits by justifying the fee & charges and also matches your spending patterns.
(iv) Read MITC in detail: Credit card users often go through the MITC to check important fees & details, such as annual fee, joining fee, finance charges, etc. However, the MITC contains information beyond these charges that could help you understand your card better. You must check if your card is a lifetime free credit card or not, whether there is a minimum threshold for reward redemption, reward points expiry, additional insurance covers offered, etc. Knowing such details may help you use your card better, for instance, if you know the expiry date for your reward points, you can avoid losing your reward points and can redeem them before they expire. Thereby, it is advisable to go through the card’s fine print, by reading the terms and conditions in detail.
(v) Ensure Paying your bills on time: The best feature a credit card offers is a long credit period of up to 50 days. Thereby, in a way, you borrow funds to make purchases and repay them without any interest. However, this feature is beneficial only if you pay your credit card bills on time. Otherwise, you end up paying high charges on your bills such as finance charges and late payment fees.
Also, timely payments of credit card bills is a good move towards building your credit score, whereas failure to pay your bill on time could do otherwise. By paying your bills on time, you are not only borrowing funds interest-free but also building your credit score.
(vi) Avoid paying the ‘Minimum Due Payment’: When it comes to credit card bill payment, credit card issuers allow paying either the total amount due or the minimum amount due. It is one of the most common credit card myths that you can pay only the minimum amount due and continue using your card without any financial repercussions. The fact, however, is that you must always pay your credit card dues in full. When you pay the minimum amount due, you are not only charged with interest on the remaining unpaid balance but also on the new purchases until the payment is made in full. Thus, it is advisable to make full payment of your credit card bill instead of partial payment, as that can save you from interest charges and ultimately from a debt trap.
(vii) Keep an eye on ongoing credit card offers: Credit card issuers often, in collaboration with popular merchants and brands, run offers such as discounts, vouchers, cashback, no-cost EMIs, etc. To maximize the benefits of your credit card, you must keep an eye on the ongoing offer on your card along with limits and expiry dates. These offers could help you save a lot on your expenses. Most credit cards offer runaround festivals and shopping events such as Amazon Prime Day Sale, Flipkart Big Billion Sale or Myntra End of Season Sale, etc.
Conclusion: Every credit card comes with one benefit or another, that can be utilized only when you act wise and thoughtful while using your card. While it is good to maximize the benefits associated with a card, you must also ensure using the card responsibly as per your financial ability and requirements.
Suggested Read: What are the New RBI Credit Card Rules?
