Using credit cards for daily purchases is an excellent option if you want to maximise your savings. There are several benefits of using a credit card, such as:
- Reward points on every eligible transaction
- Discounts at partner stores/platforms
- Cashback offers
- Fuel surcharge waiver
On one hand, you can save while buying your monthly groceries with discounts and cashback. On the other hand, you can ease your big-ticket purchases with easy-to-avail EMI options. Thirdly, earning points means you save more on future purchases or get discounts on your bill.
Understanding Credit Cards
When it comes to choosing a flexible financial tool, credit cards are the most common option.
Here are some key features of a credit card:
- Allows you to make purchases now for which you can pay later
- Used for booking tickets, planning vacations, paying bills, and managing various expenses
- Enables cash withdrawals, although this can be an expensive option
- Helps you to handle all your payment-related tasks efficiently and safely while offering perks like zero liability for fraud, insurance covers and lounge access at airports and railway stations
If you start relying on credit too much, you will end up accumulating debt. However, if you use your credit card responsibly, you can enjoy the benefits of using a credit card. The key is to be mindful.
6 Tips to Use Your Card in the Right Way
Here are a few tips which can help you use your card effectively and maximise the rewards without falling into a debt trap:
- Pick the Ideal Card
The best way to start your credit card journey is by finding the optimal card. To select the correct card:
- Assess your requirements
- Check out the features offered by your credit card company
- View the fees for annual maintenance and the interest rate on unpaid balances, apart from other charges
If they match your requirements, sign up for that card.
- Make a Budget and Stick to It
It is essential that you set a monthly budget for your credit card and stick to it unless there’s an emergency. This will help you remain in control and not spend recklessly.
- Pay Your Credit Card Bills on Time
Making timely bill payments is advisable, as missed payments attract:
- Higher Interest Rate
- Late Fees
- Penalties
If you are unable to pay the full outstanding balance, make sure to pay at least the minimum payment due.
- Review Your Credit Score Frequently
It is your responsibility to maintain a good credit score and work towards improving it. A good credit score is anywhere above 750. If you miss a payment, be sure to review your credit score as soon as you’ve paid off the balance. Using a credit card responsibly helps you build a great score.
- Avoid Cash Advances
A cash advance is a useful feature, but you must use this facility only in dire circumstances, as it attracts a hefty interest rate on the amount withdrawn.
- Keep Your Credit Utilisation Ratio Low
Your credit utilisation ratio should be below 30%. This will indicate that you do not rely upon credit too much and will help boost your credit score.
6 Benefits of Credit Card Usage
Want to know what credit cards bring to the table? Check out various benefits of using a credit card, such as:
- Payment Flexibility and Convenience
Whether it is your utility bills, OTT subscription or mobile payments, you can make recurring payments with ease using a credit card. Moreover, you can turn your big-ticket purchases into EMIs.
- Enhanced Credit Score
By using your credit card responsibly and paying your bills on time, you have chances of increasing your credit score. A good credit score:
- Increases your chances of getting higher credit limit
- Improves the chances of getting lower interest rates on future loans
- Reward Points
Some cards offer higher points on certain transactions, such as online shopping or groceries. You can redeem points for shopping discounts, to pay bills or to order products from the rewards catalogue.
- More Cashback
While some credit cards offer more reward points, some offer cashback. The latter results in instant savings, and you can choose a card based on the features you like.
- Travel Benefits
If you go for a travel credit card, you can enjoy benefits associated with travel such as:
- Lounge Access
- Travel Insurance
- Priority Boarding
- Discounted Fight Tickets
- Hotel Discount
- Fuel Surcharge Waiver
You can also get waivers on fuel surcharge at partner gas stations with credit cards. If you choose fuel card, you can get exclusive deals and discounts on fuel purchases, too.
Use your credit card with caution to unlock the benefits listed above. If you want to apply for a credit card that offers a wide range of benefits and makes it easy for you to manage spends, consider the One Credit Card. This card has zero annual and joining fees and guarantees 5X rewards on your top two spending categories, like dining, shopping or travel.
Its full-stack mobile app, the OneCard App, allows you to check offers near you via GPS and take advantage of loads of discounts. Apply now to enjoy these perks at your fingertips!
