Credit cards have emerged as an attractive option to pay off your expenses via short-term debt. These cards are incredibly useful when used in a disciplined manner and managed effectively. When you apply for a credit card, read the associated terms and conditions. Knowledge about your credit limit, the due date, and the interest rates on overdue amount will help you make informed decisions and manage your card well.
Things to Know About Your Credit Card
Before you start using your credit card you must know about its billing cycle, the credit card reward points, their redemption rules, and validity. Here are certain terms you need to know:
- Billing Cycle: The billing cycle of a credit card may vary from 27 to 31 days. During this period, you can use the card for making any bill payments or shopping or for making any other expenses. All these transactions are added to your credit card bill that is generated on a specific date every month.
- Minimum Amount: This is the amount you need to pay on or before your credit card bill due date to maintain your account. Thedue amount over and above the minimum amount will attract interest charges.
- Interest Charges: These charges are applicable on the unpaid due amount from your credit card bill.
- Reward Points: A reward point is an incentive offered by banks to itscustomer every time he uses the card to make some expenses or transactions. These points can be collected and redeemed for gift vouchers, merchandise, and attractive offers. Do check out the conditions for getting these credit card reward points redeemed and their validity.
Tips to Manage Your Credit Card Efficiently
Once you are aware of the terms and conditions of using your credit card you can manage your expenses efficiently. Here are certain tips to manage your credit card:
- Keep your card and its PIN safely. This will help you prevent fraud and misuse of the card.
- Try to pay off the full bill every month instead of paying only the minimum amount. This will prevent undue debt and related interest costs.
- Do not make late payments. Even a single late payment can hurt your credit score and attract high-interest charges.
- Remain within your credit card limits. Your credit card comes with a certain sanctioned limit that is decided by your income and ability to pay. So, ensure that you use your credit card accordingly and do not exceed the sanctioned limit.
- Choose a card wisely.The best credit cards are the ones whose annual costs are not extremely high. So, go for a card that does not have an annual charge or not does not levy additional charges on cash withdrawals.
- Redeem your credit card points- you should keep track of your accrued reward points and redeem them to avail of attractive discounts and other available offers.
Proper knowledge about your credit card’s features and terms and conditions and its disciplined use is recommended.