An all-weather friend, credit cards give you instant access to funds when required. Owning a credit card in modern times is more of a need than want.
While you can borrow from your card, within the approved limit, as and when required, these tips will help you maximise your credit card benefits.
1] Pay the outstanding amount within the interest-free period
When you use your credit card to make any purchase, you get an interest-free period, within which you need to pay back the outstanding amount.
This period varies across card issuing companies. Payment of the outstanding amount within the interest-free period improves your credit score, essential for availing loans in the future.
Also, note that when you use your card at the beginning of the interest-free period, you get more time to repay and vice-versa.
Hence, try to use your card at the beginning of this period to ensure you don’t carry forward the outstanding amount in the next billing cycle, thereby attracting a penalty.
2] Avoid using credit cards to withdraw money from ATMs
Withdrawing money from ATMs using a credit card is an expensive affair. The interest-free period available otherwise when you use your card at a merchant outlet using a POS terminal doesn’t apply when cash is withdrawn from an ATM using a credit card.
Interest is levied right from the moment you withdraw along with ATM transaction and service charges which can significantly push up the final payable amount.
Hence, it’s prudent to avoid using credit cards at ATMs. However, some cards such as the Bajaj Finsrv RBL SuperCard allows interest-free cash withdrawals from ATMs for up to 50 days, charging only a processing fee of 2.5%.
3] Opt for a card that allows you to avail an emergency loan
Financial prudence warrants being prepared for an emergency by setting up a corpus. However, because of multiple commitments, it’s always not possible to do so. In such a situation, your credit card can be of immense help if it allows you to convert the limit into a personal loan with easy repayment options.
This is where the Bajaj Finserv RBL Bank SuperCard is different from normal credit cards as it allows you to convert the outstanding amount into a personal emergency loan and get cash for up to 90 days. Also, you can repay the loan in 3 easy EMIs.
4] Accumulate reward points
On every credit card transaction, you get reward points that you can redeem to receive discounts later. Ensure you don’t redeem points as soon as you get them.
Accumulate your points and redeem them to receive bigger rewards on your purchase or travel. At the same time, when you apply for a credit card, it’s essential to check the validity of the reward points.
While some credit card issuers provide points that are valid for life, others may have a limited validity period.
Thus, with these simple tips, you can maximise the benefits of your credit card and get the most out of it.