You can stretch your Rupee and benefit from a number of great side benefits by getting the most out of your credit card. Nevertheless, credit cards should be respected because they are designed to benefit you, provided you spend the money on them in the right way. It is important to be organised and diligent in order to avoid losing money and get the most credit card benefits.
Some ground rules:
- Make sure you never miss a minimum payment. The damage to your credit doesn’t stop there; you’ll also have to pay interest. This brings us to rule number two about credit card benefits.
- One must always pay the balance in full each month. In the first place, you should not be using a credit card if you cannot afford to do this. You can avoid interest charges by paying the balance in full. Paying interest on your credit card completely negates any rewards you receive, and you will lose money in the long run.
You should choose the best reward card or credit card benefits you can get, but it will depend on what’s available to you. Some cards offer cash rebates, while others offer points or miles. You need to break it down into percentages. What percentage of your money are they returning to you in the form of reward points in Travel credit cards for every Rupee you spend while travelling?
Make sure you read the fine print to find out if there are any limitations. You may be able to get 3% cash back on your first Rs. 6000 spent with some credit cards. A return of less than 1% will apply to anything beyond that. A monthly budget of 600 might sound good if you only spend 600. If you spend Rs. 50 000 a month, what happens? Maybe you’d be better served by a card that pays 1.5 or 2% everywhere. It is important to consider whether the card has a total reward limit if you spend over a few thousand per month. Rewards cards with unlimited points are available now.
Some cards offer a fixed percentage on everything plus bonus points on certain classes of merchants. For instance, you may get double points or cash back on purchases of groceries or gasoline. You may even have the option of choosing the categories that will pay bonuses. You should get a card that rewards your habit of shopping at home improvement stores if you do a lot of home improvement shopping.
Having multiple rewards cards on hand can sometimes be advantageous if they give bonus offers across different categories. If, for example, you use one card for groceries and gasoline and another for restaurants, you can use one card for each.
As a final consideration, consider what you’ll receive when redeeming your rewards. There is a card that pays you 1000 points per Rupee, but if you can only redeem them in their online store for smaller items that cost 10,000 points, it isn’t as good a deal as it seems. Depending on how you spend it, you may prefer cash because it’s easily measurable, or you may prefer points for saving for a trip.
Some useful card hacks for building your rewards points
- Using UPI for new sites or transactions under Rs. 100 is easy since you can track expenses without revealing card information everywhere (BHIM, Google Pay, Phone Pe, PayTM, your own bank’s UPI).
- Replace the cards in a few intervals, even if some banks charge you Rs.100 or so, so the cards are better protected. With your net banking app, it is just as easy.
- The cards should be split into two parts after expiration and destroyed
- Try to avoid normal EMIs as much as possible, but use interest-free EMIs when possible
- Take advantage of your credit cards to earn points and discounts online or offline. Cards (both credit cards and debit cards) are usually discounted by online retailers such as Amazon and Flipkart.
- Keep your credit score high by using credit cards less than 50% of the time.
- Using apps like Cred to make payments will allow you to get points while being convenient at the same time.
- Use different credit bureaus like TransUnion CIBIL, Equifax and Experian to check your Cibil score for free every three months.
- One must avoid credit card withdrawals.
- There are limits on free transactions varying from bank to bank, so use debit cards on ATMs issued by the same bank.
- It is never a good idea to keep the PIN of your debit card and the credit card the same. A different PIN might help you avoid credit card withdrawals if you accidentally insert a credit card into an ATM.
- If you don’t intend to use your card internationally, block international transactions.